Business24 Newspaper 25th November, 2020 by Business24 Online

THEBUSINESS24ONLINE.NET

WEDNESDAY NOVEMBER 25, 2020

NO. B24 / 131 | NEWS FOR BUSINESS LEADERS

BoG governor backs shift to broader deficit measure

Maritime players want secure waters for trade By Patrick Paintsil p_paintsil@hotmail.com

he surge in piracy and seaborne crimes within the Gulf of Guinea calls for guided policies from government on the blue economy, maritime industry players have said. At a stakeholders’ forum in Tema, they unanimously tasked government to resource the various regulatory and supervisory state agencies in the sector to provide a safe and secure environment for trade. Cont’d on page 3

Dr. Ernest Addison, Bog Governor

By Nii Annerquaye Abbey annerquaye@gmail.com

he governor of the Bank of Ghana, Dr. Ernest Addison, says the Finance Ministry’s treatment of the cost of the financial sector clean-up and energy sector payments as exceptional expenditure—

hence their exclusion from the computation of the fiscal deficit—should be reconsidered from now on. Dr. Addison, speaking at Monday’s Monetary Policy Committee press briefing in Accra, suggested that the practice, introduced two years ago under the International Monetary Fund (IMF)

programme, has outlived its usefulness. “In 2018, when we were under an IMF programme, in order to be able to monitor the budget performance, it was important that we computed the deficit to exclude the energy and financial sectors, Cont’d on page 2

Auto Plaza launches new Hyundai Grand i10 and Creta models

Private sector can support gov’t to reduce infrastructure deficit – Richard Kokoih

he Head of Client Coverage at First National Bank Ghana, Richard Kokoih, has stressed the need for government to work closely with the private sector to reduce the country’s infrastructure deficit. Cont’d on page 3

Inside

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

INTERNATIONAL MARKET USD$1 =GHC 5.7027

POLICY RATE

14.5%

NATURAL GAS $/MILLION BTUS

GHANA REFERENCE RATE

15.12%

GOLD $/TROY OUNCE

OVERALL FISCAL DEFICIT

11.4% OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHC 5.13

BRENT CRUDE $/BARREL

CORN $/BUSHEL COCOA $/METRIC TON COFFEE $/POUND:

$41.26 2.622 1,922.57 329.50 $2,339.27 $109.65

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Editorial / News

WEDNESDAY NOVEMBER 25, 2020

Editorial

How safe is our territorial waters for intra-Africa trade?

n less than two months, the much-promoted single continental trade bloc will take off, ushering in new era of hope and economic transformation for most economies of Africa. This will be a single market for goods and services with free movement of people and capital, and pave the way for creating a Customs Union whilst growing intraAfrican trade through better harmonisation and coordination of trade liberalisation across the continent. As a port country, our seabased infrastructure give fillip to our expectations of the market and how it could be leveraged to promote growth and wealth

of its people but can we say same of its maritime territorial domain? The recent shift in piracy activities from the Gulf of Aden to the Gulf of Guinea—which borders more than 3,700 miles of West African coast, between Guinea and Angola—is something that African port nations should be concerned about. Apart from driving away vessels from calling at the ports, an unsafe maritime domain is a major contributor to the high cost of freight which makes trading on such waters unattractive. Maritime security analysts say that the unsafe nature of the sub-region’s territorial waters pushes up the cost of insurance

on cargo and ships’ crew, which are inevitably passed on to importers and the end consumer. About 45 percent of global piracy occurred in the Gulf of Guinea in the first quarter of this year, according to a survey conducted by Allianz. This phenomenon makes calls on governments across the gulf region to improve its maritime surveillance more plausible. It is incumbent on the national security apparatus, especially the navy, to be equipped, retooled and given the right financial backing to be able to fight this canker as we gear for the single continental market.

BoG governor backs shift to broader deficit measure Unchanged rate

Continued from cover as those were legacy problems that we had inherited. Now that we have finished the programme, given the developments in 2020 in the wake of the pandemic, this is the time to relook at that area— the broader fiscal deficit which includes the energy and the financial sector issues. Over the medium term, we need to redefine the broader fiscal deficit, which gives you a better sense of the burden on the budget,” the governor explained. In October, Finance Minister Ken Ofori-Atta said the financial sector bailout has cost the government GH¢21.6bn since 2018, an amount which is expected to go up given the release of fresh funds to pay investors of failed fund management companies. Although the 2020 fiscal deficit is officially projected at 11.4 percent of GDP, inclusion

of additional financial sector expenses incurred during the year is likely to increase the gap to more than 13 percent of GDP. Nevertheless, the central bank governor said he expects the Finance Ministry to cut the deficit to 5 percent of GDP by 2024, in compliance with the Fiscal Responsibility Act. “The type of shock that we had in 2020 is not something that will easily be corrected. We think that we probably will revert to the fiscal rule in three years. We expect that in 2021, the budget deficit should be around 8.8 percent [of GDP]; [in] 2022, we see a further decline. It’s a gradual adjustment to where we want to be.”

The MPC, in what was its last meeting for the year, kept the policy rate unchanged at 14.5 percent. The governor explained that the pandemic has increased the financing needs of government, and a rate reduction will be a disincentive for investors seeking to buy government bonds. Dr. Addison, who chairs the MPC, noted that the expansionary fiscal stance to address the COVID-19 pandemic has led to deviation from the path of fiscal consolidation. “Looking ahead to 2021, a decisive fiscal correction plan would be needed to contain fiscal risks in the medium term,” the governor said.

WEDNESDAY NOVEMBER 25, 2020

Maritime players want secure waters for trade Continued from cover They implored the government to invest heavily in the operations of the Ghana Maritime Authority (GMA), the state agency entrusted with the safety and security of the nation’s territorial waters for trade and other seaborne ventures. They also demanded policy directions that will finetune the various port reforms, expand the industry and ensure job security of workers. “Realising workable long-term infrastructural projects and commercial activities to drive national growth will require a de-risked environment that can attract investors,” they argued. Though piracy overall has decreased globally, the Gulf of Guinea—which borders more than 3,700 miles of West African coast, between Guinea and Angola—now accounts for 90 percent of maritime kidnappings

Samson Asaki Awingobit, Executive Secretary of the Importers and Exporters Association of Ghana

in the world, according to the International Maritime Bureau (IMB). The region has re-emerged as the global piracy hotspot, accounting for the bulk of global kidnappings reported at sea in 2019, with the number of crew

taken increasing by more than 50 percent to 121, according to the bureau. As at the first quarter of 2020, the Gulf of Guinea had recorded 21 piracy attacks out of the 47 global attacks reported to the IMB, mostly targeting tankers as

well as container ships and bulk carriers. “We want to see the commitment of the central government in terms of resource allocation to the GMA to enable them empower the Ghana Navy and Marine Police to tackle the threats of piracy on our territorial waters,” Samson Asaki Awingobit, Executive Secretary of the Importers and Exporters Association of Ghana, told Business24 in an interview. He emphasised that the security of the nation’s territorial waters was paramount to its successful participation in the African Continental Free Trade Area (AfCFTA), which kicks off in January 2021. “We are now talking about the AfCFTA, but how is that going to be successful if our maritime domain is not well developed? What are the policies in place to cushion potential exporters?” he asked.

Private sector can support gov’t to reduce infrastructure deficit – Richard Kokoih Continued from cover According to Mr. Kokoih, the government must see the private sector as a critical partner in its infrastructure development projects, which should follow the public-private partnership (PPP) model for funding and execution. He said: “the use of PPPs allows the state to minimise costs, shift development risk and managerial responsibility and attract investment. Infrastructure by its nature stimulates growth and jobs, and boosts GDP while creating lasting benefits for communities.” Speaking in an interview, Mr. Kokoih said a focus on infrastructure development can help boost the economy in the post-Covid-19 era. “Infrastructure spend has a strong multiplier effect on the economy in general,” he said. “People need to design, build, finance, operate and maintain these projects for a long time. In particular, some Public Private Partnerships (PPPs) projects have been successful in Ghana, and there is scope to leverage the lessons learnt to drive strategic

infrastructure projects which have high requirements for manpower.” Mr. Kokoih also commented on the Ghana Investment Infrastructure Fund (GIIF), a corporate body wholly-owned by government, set up in 2014 with a mandate to invest in infrastructure projects. Its duty is to mobilise, manage, coordinate and provide financial resources for investment in a diversified portfolio of infrastructure projects in Ghana for national development. Addressing Ghana’s infrastructure challenges will require annual infrastructure expenditure of about $2.3 billion per annum. The country currently spends about $1.2 billion per year on infrastructure with a $1.1 billion gap, which needs to be addressed for accelerated growth and national development. Mr Kokoih said: “We don’t have much time to get things moving. We need to be bold. GIIF among others is expected to focus on sectors such as energy, eco-tourism, education, affordable housing and waste water management. But we need

The Tema Motorway interchange is one of the country's crucial infrastructure investment

to ensure priority is given to those projects which improve the lives of many people. The private sector needs to be consulted too as they stand ready to help.” Mr. Kokoih emphasised that the government should not try to assume the full burden of infrastructure spending. The financial sector, he said, is able and willing to support efforts to improve infrastructure in the country. This, he pointed out, is one key way for government to leverage its available debt capacity, which is quite limited. According to Mr. Kokoih, banks, especially the First National Bank, a subsidiary of the

FirstRand Group of South Africa, have dedicated infrastructure financing teams as well as the expertise to help government and related entities like GIIF achieve its goal. Greater momentum can be achieved if government partners the financial sector, he stressed. In March this year, the International Monetary Fund (IMF) said that despite Africa having very high levels of debt, it should ‘spend’ its way out of economic malaise by expanding fiscal deficits to counter the impact of the Coronavirus pandemic.

WEDNESDAY NOVEMBER 25, 2020

News

WEDNESDAY NOVEMBER 25, 2020

Petroleum hub project includes industrial parks to boost value-addition By Eugene Davis

he Petroleum Hub Development Corporation, whose law was passed by Parliament in October, is expected to facilitate the establishment of industrial parks aimed at promoting the manufacture of downstream petrochemical and chemical products. The corporation, which will oversee and coordinate the development of a petroleum hub in Ghana, will also establish a mechanism to ensure the transfer of skills and knowledge to Ghanaians engaged in activities

The Petroleum Hub Development Corporation will create industrial parks as part of the development of a petrochemical industry in Ghana.

in the petroleum sector. Ghana is expected to rake in US$1.56bn in export tax revenue by 2030 from the development of the hub, which will add value to the country’s petroleum

resources. The development of the hub will include construction of key infrastructure such as jetties, storage tanks, refineries, an LNG facility, power plants,

and infrastructure for offshore activities. The hub will drive the growth of various industries, including petrochemicals, and create 780,000 direct and indirect jobs. Other anticipated benefits are tax receipts from downstream value chain operations and the provision of basic social amenities, such as schools, health facilities and leisure parks. Government is expected to contribute US$6bn of the total investment target of US$60bn, with private capital providing the remainder. The government will also provide the initial basic infrastructure, including land, road and railway networks, water, and electricity.

Telcos’ tax contribution sees 200% jump in 6yrs By Nii Annerquaye Abbey annerquaye@gmail.com

T Business sentiments continue to improve By Joshua Worlasi Amlanu macjosh1922@gmail.com

he Bank of Ghana’s (BoG) latest business confidence survey has shown that business sentiments continued to improve in October, driven by improved company prospects and gradual recovery in demand for goods and services. The central bank’s business confidence index, which gauges the level of optimism among firm managers, improved from 90.9 in August to 94.4 in October. The improvement confirms the results of the third-quarter survey by the Association of Ghana Industries (AGI), whose business confidence index also increased from 86.6 in the second quarter of the year to 96.2 during the third quarter. According to the BoG, consumer confidence has also risen above pre-lockdown

levels, supported by rebounding economic activity following the gradual relaxation of Covid-19 restrictions. Meanwhile, after contracting in March–May, the BoG’s real Composite Index of Economic Activity (CIEA) recorded an annual growth of 10.5 percent in September compared with 4.2 percent a year ago. The central bank noted that the key drivers of economic activity during the period were construction activities, manufacturing, and credit to the private sector. Addressing the press on Monday, BoG governor Ernest Addision expressed optimism about the economic outlook, but cautioned that the government’s rising financing needs in the wake of the Covid-19 crisis posed a risk to macroeconomic stability.

he total tax contribution by mobile network operators as well as other technology companies belonging to the Ghana Chamber of Telecoms reached GH¢3.2bn in 2019, representing a 207 percent increase in the figure recorded in 2013. Chief Executive Officer of the Chamber, Ing. Ken Ashigbey, explained that the contribution which represents nearly a tenth of all government revenues collected in 2019, came on the back of a troubling business environment for its members. “The collection of the taxes has an indirect cost to our members as it makes the product and service relatively more expensive,” he said. The total tax contribution study carried out by the mobile industry association highlights mobile network operators and infrastructure companies’ contribution measured in taxes and other remittances to the government in the year under review. The Telecoms Chamber CEO noted that, in spite of the heavy tax burden, the telecoms industry continues to commit investible funds into capital expenditure to meet customer service quality and experience needs. “Capital expenditure

investment has increased exponentially in the fiscal year, however there is the need for policy to support and enable even more investment by all players into the ecosystem to meet customer demand for mobile services. The mobile industry believes that policy enablers such as tax reforms, tax rebates in relation to import of infrastructure and equipment’s could improve the affordability of mobile technology and services for customers yielding greater strides for all stakeholders in the long-term,” said Ing. Ashigbey said. The study further noted that: “appropriate spectrum management framework [by the industry regulator] will provide needed clarity for more funding into existing and new technologies such as 4G and 5G, which requires further policy direction and support to grow.” Ing. Ashigbey further argued that mobile is the most costeffective way of extending access to ICT, the internet in Ghana as well as driving the government’s digitisation agenda . “It is therefore fundamental to helping our government achieve its objectives of expanding the ICT infrastructure, meeting last mile goals, connecting the unconnected and positioning our economy as a smart and digital ready market towards further growth,” he added.

WEDNESDAY NOVEMBER 25, 2020

News

WEDNESDAY NOVEMBER 25, 2020

EcoCare back campaign to secure equitable income for cocoa farmers By Reuben Quainoo

anaging Campaigner for EcoCare Ghana, Obed Owusu-Addai, has thrown his weight behind an ongoing campaign to eliminate extreme poverty among cocoa farmers in West Africa. “We must clarify the regulatory frameworks governing cocoa production and trade, and engage relevant stakeholders to discuss and develop concrete workable strategies and roadmaps to address pricing challenges in the cocoa sector; with emphasis on guaranteeing sustainable cocoa production” he noted. The Managing Campaigner for EcoCare Ghana made these remarks at an International Cocoa Conference on the theme: “Securing Equitable Living Income for Cocoa Farmers”. The two-day virtual conference brought together participants from Ghana and Cote d’Ivoire. The conference was organised by EcoCare Ghana in collaboration with ClientEarth, Taylor Crabbe Initiative, Fern and Ghana CivilSociety Cocoa Platform (GCCP). The conference was funded by the United Kingdom Department for International Development’s (DfID) Forest Governance,

Markets and Climate (FGMC) Programme. Mr. Owusu-Addai pointed out that cocoa is a very important agro-commodity in West Africa, contributing significantly to the socio-economic wellbeing of many households in the subregion. “ECOWAS member countries accounted for about 68 percent of global cocoa supply in 2019/2020 cocoa season out of global production of 5 million tonnes in the 2019/2020 cocoa season,” he revealed. He stated that figures from the International Cocoa Organization (ICCO) show that Africa’s cocoa producing countries capture just three percent of global chocolate industry revenue. “Although Côte d’Ivoire produced 2.1 million tonnes of cocoa in 2017 (44percent of global output), it brought in just $3.3bn from trade in an industry valued at $103.3bn in 2017” he indicated. According to him, the recent cocoa barometer report, which depicts distribution of the cocoa sector profits along its value chain, observed that an unfair distribution of value and power in the cocoa value chain are part of the root causes of extreme poverty for cocoa farmers in West

Africa. In his view, the cocoa supply chain is increasingly dominated by a select group of large corporations where mergers and takeovers have resulted in just a few companies dominating up to 80 percent of the whole value chain while farmers lack a sufficiently organised voice to be strong actors. “Almost all West African cocoa farmers live well below globally defined poverty levels. In Côte , the world’s largest producer of cocoa, a farmer should earn four times his current income in order to reach the global poverty line of US$2 a day. Despite all the efforts in cocoa at the moment, the core of the problem is still not being addressed; the extreme poverty of cocoa farmers, and their lack of a voice in the debate” he said.

The Secretary, National Board of Directors of WCFO Ghana Chapter, Moses Djan Asiedu, recommended more training on good agricultural practices and concerted extension services to support sustainable cocoa production and improves the lot of farmers. Ghana Civil-Society Cocoa Platform (GCCP) Coordinator Sandra Sarkwah underscored the urgency for consistent advocacy on the challenges confronting cocoa growers and entreated the media to mainstream the cocoa sector in the national agenda. “The cocoa advocacy initiative must be guided by the national interest to engender a holistic improvement at the various stages of the cocoa value chain for the benefit of players and the economy in general” she said.

Committee to look into appropriation of aviation lands inaugurated

he Chief of Staff, Akosua Frema Osei-Opare, has inaugurated a Technical Committee to look into the issues regarding the development of the Aviation Lands at La Transmission station (LA-Ts) and La Nkwantanang at Adenta. This comes after a recent strike action by the staff of the Ghana Civil Aviation Authority (GCAA) to register their protest on the allocation of the lands to the La Traditional Council and private developers. Following a meeting with the Chief of Staff and the Union at the Office of the President on the 15th October, 2020, the Union agreed to call off the strike to allow issues to be addressed. This culminated in the formation of the Technical Committee by the President. Addressing the Committee members, Ms. Osei-Opare said the President has high and ambitious vision for the Aviation Sector and there is therefore the need to tackle problems that serve as threat to the President’s

vision for Ghana becoming an aviation hub in the sub-region. Present at the inaugural meeting were high ranking officers of government, including Minister for Aviation, Joseph Kofi Adda, the Deputy Minister for National Security, Henry Quartey, Chief Directors for Aviation and the Presidency among others. The Committee members were tasked to look into the concerns of the Union and submit their findings and recommendations. The Chief of Staff outlined the Terms of Reference (TOR) for the Committee. The Committee has four weeks

to complete the assignment and submit their Report. Mr. Joseph Mensah Browne Member, Ministerial Advisory Board, MoA Chairman Mrs. Mary Obeng Ghana Institution of Engineers Member Mr. Bernard Forson National Communication Authority Member Mr. Ernest Berkoe Ministry of Employment &Labour Relation

Member Mr. Kwabena Osei Bonsu Dickson Ministry of National Security Member Mr Amin Abdul-Rahaman Ministry of Aviation Member Air Cdre Jacob Ashrifie Ghana Airforce Member Mrs Irene Messiba Ministry of Transport Member

WEDNESDAY NOVEMBER 25, 2020

News

WEDNESDAY NOVEMBER 25, 2020

Switzerland, Ghana sign historic agreement for Climate Action

he Government of Ghana and Switzerland signed a bilateral agreement today, which brings the cooperative approaches of the Paris Agreement to life. The bilateral agreement sets the framework conditions for the cooperation. The first project foreseen will enable clean cooking and solar lighting and benefit up to five million Ghanaian households. The new partnership will enable the adoption of green and low carbon technology solutions across the country resulting in a plethora of social and environmental benefits. The partnership will catalyse private sector investment into Ghana’s national energy access programme (NCEP), complementing the Nationally Determined Contributions (NDC) of Ghana to the Paris Agreement. The NCEP will benefit up to five million households through technologies like improved cook stoves and solar PV installations. Ghana is also exploring further projects under the agreement. UNDP Administrator Achim Steiner stated, “We are proud to have been able to facilitate the dialogue between Switzerland and Ghana, build trust in the process on both sides and offer our technical support in the implementation. We hope this bilateral agreement will enable Ghana’s national clean energy access

programme (NCEP) to fulfil its objectives by abating up to 2 million tonnes of greenhouse gas emissions, providing energy access to millions and head towards a green recovery.” The agreement is the first of its kind that involves an African nation, with Peru being the first country to sign a similar agreement in late October. The statement from the President of Ghana Nana Addo Dankwa Akufo-Addo called on the private sector of both countries to see this bilateral cooperation as a step to further strengthen collaboration between Swiss and Ghanaian companies to identify commercially viable and sustainable development projects over the next decade.

Minister of Foreign Affairs, Shirley Ayorkor Botchway delivered the President’s statement which congratulated and thanked Professor Kwabena Frimpong-Boateng, the Minister for Environment, Science, Technology and Innovation, and UNDP for facilitating the agreement process. The objective of Ghana’s NDC is to reduce emissions by 15 to 45 percent below business-as-usual (BAU) and strengthen climate resilience in close alignment with its development priorities. The NCEP is the core approach to achieving these targets but is conditional upon international support and requires blended financing for implementation. “With this Agreement Switzerland takes concrete steps for the benefit of the environment and sustainable development”,

stated Franz Perrez, Ambassador and Head of International Affairs Division of the Federal Office for the Environment. “Jointly, Switzerland and Ghana set a robust framework for additional investments in climate action and for the adherence to human rights. With the Agreement we signed today, we are not only combating climate change, but also strengthening social aspects in the international carbon market,” he further stated. This agreement will open the doors to commercial projects, empowering national businesses to drive climate action. This cooperative approach that Ghana and Switzerland are undertaking is already paving the way for other countries to explore innovative climate financing solutions, also in line with Article 6 of the Paris Agreement.

Yara Ghana wins Agro Input Company and Agro Input Brand of the Year

ara Ghana limited, a leading name in the fertilizer industry in Ghana has won the Agro Input Company of the year and Agro Input Brand of the year at the second edition of the Ghana Cocoa Awards held in Accra recently. The company’s input package for cocoa which is the Asaase Wura and YaraLiva Nitrabor were shortlisted among other cocoa fertilizer inputs and companies for the two competitive categories and came out tops at the event. The award was received by the West African Regional Director of Yara International, Mr. Danquah Addo-Yobo. Commenting on the award, he stated that Yara Ghana is pleased at the recognition given it especially having won the Input Company of the year award for the second time running and the Agro Input Brand of the year in

the second edition. The company, he said, is encouraged to continue with its support for the cocoa sector through the provision of quality nutrition solutions and agronomic support for cocoa farmers. Yara has played a pioneering

role in the fertilizer input sector of Ghana’s cocoa industry with the introduction of Asaase Wura cocoa fertilizer in 2005. This venture involved a huge investment into an otherwise uncharted territory in the cocoa sector by then, showing Yara’s

commitment to and believe in growing the industry in Ghana. The introduction of the Asaase Wura cocoa fertilizer helped improve cocoa farmers yields and profitably quite significantly. “Results from several demonstration farms across cocoa growing areas have shown that Asaase Wura and Nitrabor package has consistently shown an average percentage yield increase of 50% for the plots that had Asaase Wura and Nitrabor applied compared to the traditional farmer practice plots “ the Regional Director further intimated. Yara Ghana has not rested on its oars but has over the years continued to be of significance to the cocoa farming community through several interventional programs to enable cocoa farmers achieve the best results.

WEDNESDAY NOVEMBER 25, 2020

Feature

WEDNESDAY NOVEMBER 25, 2020

Data Initiatives Worth Exploring in Ghana Part 2

By Kuuku Sam

art one of this article discussed data initiatives such as data commons, data exchanges and marketplaces, and open data platforms in dealing with the challenge of lack of unbiased data in Ghana. In this article, other data initiatives that are being implemented in other jurisdictions are discussed. They include data trusts, data collaboratives, and data commons. Data Trusts Think about all the data recorded, stored, processed, and analysed by ride-hailing services, for instance. The public has little control over what is collected and shared. By establishing data trusts, the general public will have greater control over what is collected, accessed, and used. This does not only help our privacy but also promotes beneficial and equitable use of data in society. According to the Open Data Institute (ODI), a data trust is “a legal structure that provides independent stewardship of data”. The data trustees are therefore responsible to make decisions about what data to share and with whom by the purpose of the data trust and its intended benefits. A data trust is a potential response to allaying the fears about how sensitive data is held by third parties. That said,

there are still questions that must be answered concerning data trusts. What guides the decision-making of the trustees about data collection and access? How can we ensure that trust remains trustworthy? What are the implications of the current regulatory environment on the establishment of trusts? Until these questions are answered, we need to observe and learn lessons from pilots such as the ones ran by ODI focused on tackling illegal wildlife trade, reducing food waste, and improving public services in Greenwich in the United Kingdom.

Watch. This platform provides data and tools for monitoring forests by harnessing trailblazing technology which permits anyone to access close to real-time information about the conditions of forests around the world. Another data collaborative that can be mimic in preventing the spread of COVID-19 is NetHope. This data collaborative has been used to prevent the spread of new Ebola outbreaks in West Africa by acquiring data from the private, public, and humanitarian sectors to chart the path of the virus.

of a data co-operative is Driver’s Seat, a co-operative started by on-demand drivers who collect their combined driving data using an app to gain insights that are usually the secrets of big ridehailing companies like Uber. They can sell this data to city authorities and then share the profits among their members. Data co-operatives offer the opportunities to shift power from big organisations who usually hold data and share as an avenue to directing dissatisfaction toward substitutes that serve the platform economy.

Data Co-operatives

Conclusion

Data Collaboratives

This is also another collaborative data initiative that allows mutual organisations or individuals to own and democratically control data on behalf of its members. The data that is usually collected and shared is based on the interests of the members of the data cooperative. Data co-operatives are worth exploring by startups in Ghana’s agriculture ecosystem. Digital technologies have given rise to a significant number of agribusiness startups who are trying to improve activities along the agriculture value chain. All these startups are collecting data on various kinds of data. Due to the expensive nature of data collection, these startups can team up and collect, own, and control the data collaboratively. An example

The role of high-quality data for development cannot be overemphasized. The government needs data for effective policymaking, efficient allocation of resources, and effective public service delivery. Businesses need data for insight and to create innovative services. The third sector needs data for interventions in the lives of our citizens. It is, therefore, important to explore these data initiatives and see which ones will help us to collect data for national development.

This is a collaboration between participants from different sectors that goes beyond publicprivate partnerships to exchange data to create public value. The participants will usually include private companies, research institutions, and government agencies. To solve the challenges confronting us as a people such as waste management and public health will require access to data which is usually held by the private sector. To harness the benefits of this data, data collaboratives have emerged as a new form of partnership for dealing with the pressing issues in society. An example of a data collaborative is the online platform called Global Forest

Author: Kuuku Sam is Advisor, Artificial Intelligence for Sustainable Development at GIZ and Executive Member, Institute of ICT Professionals, Ghana. For comments, contact Kuuku on 0274 333 510 or at kuuku.sam@ iipgh.org

WEDNESDAY NOVEMBER 25, 2020

News

WEDNESDAY NOVEMBER 25, 2020

Auto Plaza launches new Hyundai Grand i10 and Creta models

Jihad Hijazi

uto Plaza Ghana, the authorised dealer of Hyundai vehicles in the country, has introduced the 2021 Hyundai CRETA SUV and the Hyundai Grand i10 onto the Ghanaian market. The two entry-level vehicles were unveiled at a ceremony last week. Commenting on the two cars, Sales Manager of Auto Plaza Limited, Kwesi Sarpong Peprah said the two cars were introduced as a result of customers’ demands for upgrade over their existing models. According to him, the CRETA SUV has unique features such as a six-speed automatic transmission with a smart-keyengine-push to start and stop button, security immobilizer ignition system, panoramic onetouch power safety sunroof, chrome coated exterior package, among others. The Chief Executive Officer

The Hyundai Creta SUV

of Auto Plaza, Jihad Hijazi who unveiled the vehicle said the second-generation CRETA has been transformed into the ultimate sub-compact SUV suited for the Ghanaian terrain. Building on the success of the first model, the fresh-look CRETA 2021 is more spacious, boasts improved features and utilizes state-of-the-art technologies to meet the complete needs of working professionals, young drivers and families. Central to Hyundai’s vision of delivering a superior experience is performance and the CRETA is installed with highly evolved powertrain engines, bringing incredible power and cleaner emissions. The all-new Creta comes with a choice of three engines. The Smartstream G1.5 (maximum power of 115ps/6,300rpm and maximum torque of 14.7kgf.m/4,500rpm) and the Kappa 1.4T-GDI (140ps/6,000rpm

and 24.7kgf.m/1,500-3,200rpm) are both gasoline engines, providing better fuel economy on the roads. Offering more choice is the diesel 1.5 U2 VGT (DSL) engine, which has a maximum power of 115ps/4,000rpm and a maximum torque of 25.5kgf.m/1,5002,750rpm. To match the performance, Hyundai made a significant improvement to both the interior and exterior including the size. At 4,300mm (length) and 1,790mm (width), the outside of the CRETA is 20mm and 10mm bigger respectively than the first model. Grand i10 Mr. Hijazi stated that the 2021 Hyundai Grand i10 comes with improvements in technology for greater comfort and luxury leading to a new driving experience.

The Hyundai Grand i10

The 2021 Hyundai Grand i10 model has two versions: Hatchback and Sedan. Both have a gas mileage of up to 19.3 kilometers per liter, with a 1.2-liter four-cylinder Driven Power Steering engine. Commenting on the pricing of the two vehicles, Sales Manager of Auto Plaza Limited, Mr. Peprah said the two vehicles are moderately priced adding that there is a flexible payment plan for those seeking who cannot make outright payment. The Chief Executive Officer of Auto Plaza, Mr. Hijazi noted: “Anyone who wants to get one, just come to Auto Plaza. We’re quite known in the industry as making it quite easy for our customers to own a vehicle so we’re quite flexible, we’re offering nice terms and conditions, something that will drive you to come and purchase one of those vehicles,” he said.

WEDNESDAY NOVEMBER 25, 2020

Feature

ood morning, Ladies and Gentlemen of the Media, and welcome to the 97th Monetary Policy Committee (MPC) press briefing, and also the last press briefing for the year. The MPC met last week and reviewed the recent global and domestic economic developments including the outlook for the economy. I present highlights of the developments and the decision of the committee on the Policy Rate. 1. Global growth picked up in the third quarter of 2020, after a sharp contraction in the second quarter. The growth pick-up was supported by the gradual easing of the pandemic-related restrictions and strong fiscal and monetary policy support. In the nearterm, however, the resurgence of COVID-infections in advanced economies, accompanied by the re-imposition of targeted lockdown measures in several advanced economies, is expected to moderate economic activity and slowdown the recovery. The latest IMF World Economic Outlook forecasts a contraction of global output by 4.4 percent in 2020, and a rebound to 5.2 percent growth in 2021. 2. Global financial market sentiments remain positive, reflecting the large fiscal stimulus packages, the continuous supportive monetary policy, and the easing of lockdown restrictions imposed in the first half of the year. Since March 2020, equity prices have rebounded, corporate and sovereign bond spreads have narrowed, while capital and portfolio flows to emerging market and frontier economies

have improved, especially in October. These developments have helped ease pressures on currencies in some emerging market and frontier economies. Sovereign risk spreads for most Sub-Saharan African countries have steadily declined, affirming lower investor risk perception. However, rising debt levels pose a major risk to emerging markets and developing economies in the outlook. 3. Global inflationary pressures remain generally subdued, helped by low oil prices, weak demand, and deterioration in labour market conditions. Consequently, inflation projections have generally been revised downwards in the near term. In Advanced Economies, inflation is expected to remain low. Currency movements and COVID-related supply side constraints are likely to shape inflation dynamics in emerging market and frontier economies, going forward. 4. On the domestic front, the initial growth spurts recorded in June 2020, high frequency economic indicators, monitored by the Bank of Ghana gained some traction due to supportive fiscal and monetary policies and the easing of COVIDrestrictions. After contracting in March, April and May, the real Composite Index of Economic Activity (CIEA) recorded an annual growth of 10.5 percent in September 2020, compared with 4.2 percent growth a year ago. The key drivers of economic activity during the period were construction activities, manufacturing, and credit to the private sector. In addition,

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the Purchasing Managers Index (PMI) which gauges the rate of inventory accumulation by managers of private sector and also captures dynamics in economic activity has increased significantly since the last MPC meeting in September 2020. 5. The latest Bank surveys conducted in October 2020 point to improvements in both consumer and business confidence. Consumer confidence was firmly above prelockdown levels supported by rebounding economic activity following gradual relaxation of COVID-restrictions. Though below pre-lockdown levels, business confidence has shown a steady and gradual recovery supported by improved company prospects and steady demand for goods and services. 6. Inflation pressures from events preceding the partial lockdown of the economy in April 2020 are easing. From an average of 7.8 percent in the first quarter, headline inflation steadily rose in the second quarter and peaked at 11.4 percent in July 2020, driven mainly by the spike in food prices. Since then, headline inflation has trended downwards and is reported at 10.1 percent for October driven by both declines in food and non-food prices. Non-food inflation has declined to 8.3 percent from a peak of 9.9 percent, and food inflation has also declined from a peak of 15.1 percent in May to 12.6 percent in October. 7. Underlying domestic inflationary pressures have continued to moderate. The Bank’s core inflation measure,

which excludes energy and utility, declined marginally. While inflation expectations of businesses and consumers moderated, that for the financial sector inched up marginally. 8. Budget implementation through September 2020 was broadly in line with the revised mid-year Budget estimates following the introduction of fiscal measures to combat the COVID-19 pandemic. Provisional data for the first three quarters of 2020, showed an overall budget deficit of 9.0 percent of GDP against the target of 8.9 percent of GDP. The primary balance also recorded a deficit of 4.1 percent of GDP, marginally above the target of 4.0 percent of GDP. Over the review period, total revenue and grants amounted to GH¢36.3 billion (9.4% of GDP) compared with the target of GH¢35.7 billion (9.3% of GDP). Total expenditures and arrears clearance amounted to GH¢70.9 billion (18.4% of GDP), marginally above the target of GH¢70.0 billion (18.2% of GDP). The deficit was financed mainly from domestic sources. 9. These developments impacted the stock of public debt which was 71 percent of GDP (GH¢273.8 billion) at the end of September 2020 compared with 62.4 percent of GDP (GH¢218.2 billion) at the end of December 2019. Of the total debt stock, domestic debt was GH¢135.3 billion (35.1% of GDP), of which the financial sector bailout accounts for 4.0 percent of GDP, while external debt was GH¢138.5 billion (35.9% of GDP).

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17 CONTINUED FROM PAGE 16 10. Money supply showed significant expansion in the first ten months of 2020, reflecting the complementary monetary policy and fiscal stimulus measures taken to support efforts to minimize the impact of the COVID-19 pandemic. M2+ grew by 30.0 percent, year-on-year compared with 16.3 percent in the corresponding period of 2019. The increase in total liquidity was mainly driven by the net domestic assets of the central bank and the commercial banks. Net domestic assets increased sharply by 36.1 percent year-onyear in October 2020, compared with 17.1 percent in the same period of last year, while net foreign assets moderated by 6.0 percent from 13.4 percent over the same comparative period. In terms of components, the growth in M2+ reflected mainly in currency outside banks and demand deposits. 11. Net outstanding claims on the private sector, which also captures repayments to the banking sector, show some moderation since the beginning of the year. With respect to new advances, the data shows that cumulatively from the beginning of the year, new loans to support economic activity stands at GH¢27.4 billion compared with GH¢21.3 billion for the same period of last year. 12. Interest rate trends on

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the money market reflected mixed developments as yields on the short to medium term instruments eased, but broadly tightened at the longer end. On a year-on-year basis, the 91-day Treasury bill rate declined to about 14.1 percent in October 2020 from 14.7 percent a year ago. Similarly, the interest rate on the 182-day instrument declined to 14.1 percent from 15.1 percent. With the exception of the 6-year bond, yields on the 7-year, 10year, 15- year, and 20-year bonds all increased. 13. The weighted average interbank lending rate, that is the rate at which banks lend to each other, declined to 13.6 percent in October 2020 from 15.2 percent same period last year. The downward adjustment was driven by the cut in the monetary policy rate in March 2020. Average lending rates of banks eased significantly to 21.3 percent from 24.0 percent over the same comparative period. 14. The latest credit conditions survey conducted in October 2020 show a net easing in overall credit stance on loans to enterprises and households. The survey results showed that with the recovery in economic activities underway, demand for loans over the next two months is also expected to rise. 15. The banking sector remains liquid, profitable and well capitalized with strong buffers to

withstand adverse shocks and support the country’s recovery efforts from the pandemic. Asset quality has also improved. The Financial Soundness Indicators and the Banking Sector Stability Index remain in high positive territories. The industry’s CAR of 20.0 percent as at end October 2020 remains well above the regulatory minimum threshold. 16. The latest banking sector data as at October 2020 indicate that total assets grew by 23.7 percent year-on-year to GH¢150.0 billion while deposits also recorded an annual growth of 27.0 percent to GH¢100.2 billion. Total advances also went up by 13.7 percent year-on-year to GH¢47.4 billion over the period. 17. On the external sector, prices of key export commodities have traded mixed in the year to October 2020. Driven by low demand, crude oil prices sharply declined by 36.5 percent from the beginning of year to October 2020. Crude oil prices averaged US$41.1 per barrel in October, compared with US$65.2 per barrel average price in December 2019. On the contrary, gold prices increased by 28.3 percent to average US$1,900 per fine ounce at the end of October. Gold prices have been largely supported by accommodative monetary policy, increased uncertainty, and the global economic slowdown due to COVID-19. Cocoa prices averaged US$2,423.5 per tonne in October 2020, marginally down

by 3.8 percent on a year-to-date basis due to a pandemic-linked drop in global demand. 18. These commodity price developments impacted variously on the trade balance. In the first nine months of the year, total exports contracted by 7.9 percent year- on-year to US$10,790 million, driven mainly by the significant decline of US$1,220 million in crude oil export receipts on the back of low prices. Gold and cocoa export earnings on the other hand, went up by 8.0 percent and 11.0 percent respectively, due to favourable prices and production volumes. Total imports slowed by US$939 million to US$9,244 million over the period, underpinned by significant declines in both oil and non-oil imports. As a consequence, the trade balance recorded a surplus of US$1,545.6 million (2.3 percent of GDP) in the first nine months of 2020, compared with US$1,530 million (2.3 percent of GDP) in the same period of 2019. 19. The current account for January to September 2020 improved marginally, recording a deficit of US$1,267 million (1.9 percent of GDP) compared with a deficit of US$1,497 million (2.2 percent of GDP) for the same time in 2019. The current account outturn was supported by stable inflows in current transfers, especially remittances,

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CONTINUED FROM PAGE 17 and lower net investment income outflows, particularly profits and dividends. The improvement in the current account was offset by lower inflows in the capital and financial account, which recorded a balance of US$366 million for the first nine months of 2020, compared with US$2,273 million in the same period in 2019. This was attributed to the lower-thanprojected inflows from FDIs and portfolio investments. This resulted in an overall balance of payments deficit of US$676 million (1.0 percent of GDP) for the first nine months of 2020, compared with a surplus of US$879 million (1.3 percent of GDP) for the same period in 2019. 20. Gross International Reserves at the end of October 2020 was US$8,627.4 million, equivalent to 4.0 months of import cover of goods and services. This compares with US$8,418.1 million, equivalent to 4.0 months of import cover recorded at the end of December 2019. Cumulatively, the Ghana Cedi as at November 18 2020 has recorded a depreciation of 3.1 percent against the US dollar compared with a depreciation of 10.1 percent same period last year.

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Summary and Outlook 21. To summarise the developments, the Committee noted that global GDP growth rebounded in the third quarter of 2020 after the sharp fall in the second quarter, but is expected to slowdown in the last quarter as rising COVID-19 cases moderate the recovery process. The supportive global monetary policy stance, together with fiscal stimulus packages, is likely to persist over the medium-term to support the growth recovery process. Consequently, global financing conditions are expected to remain favourable in the nearterm. 22. On the Ghanaian economy, evidence from high frequency indicators â&#x20AC;&#x201C; the CIEA outturn for October 2020, improved consumer and business confidence, and strong liquidity flows â&#x20AC;&#x201C; have helped to deliver a faster than expected recovery in economic activity. These flows include payments to contractors, SDI depositors, clients of SEC licenced fund managers, micro and small business loans provided by government through the National Board for Small Scale Industries, and the policy and regulatory reliefs to banks and SDIs. Based on these observations, the Bank maintains

that growth will perform better than earlier projected. 23. The Committee noted that performance of the banking sector remains strong. The sector recorded strong growth in deposits and investments and solvency indicators were significantly higher than regulatory thresholds. Pandemic tail- risks, that is, pandemicrelated impact on non-performing loans, would require continuous supervisory vigilance. 24. On budget implementation, the Committee noted that the expansionary fiscal stance to address the COVID-19 pandemic has also led to deviation from the path of fiscal consolidation. Looking ahead to 2021, a decisive fiscal correction plan would be needed to contain fiscal risks in the medium-term. 25. The Committee noted that inflation has eased following the spike to 11.4 percent. At 10.1 percent for October 2020, inflation is almost at the upper band target. The fiscal and monetary policy measures, which have increased liquidity in the economy, appear not to be impacting inflation, partly due to the existence of the output gap. As a result, the Committee expects these conditions to support inflation to return to its central path by the second

quarter of 2021. 26. To conclude, the Committee noted that macroeconomic conditions have generally improved relative to conditions at the time of the last MPC meeting in September 2020. Global conditions continue to be supportive, domestic inflation is easing, growth prospects are improving, crude oil prices have stabilized, monetary aggregates have expanded but with minimal impact on inflation, the current account deficit is stable, remittances inflow has remained firm, the exchange rate has been stable and reserve buffers continue to remain strong. The key risks are the evolution of the budget deficit and the financing needs to support budget implementation and the uncertainty surrounding the pandemic. 27. Under the circumstances, the Committeeâ&#x20AC;&#x2122;s decided to maintain the policy rate at 14.5 percent. Informational Note The next Monetary Policy Committee (MPC) meeting is scheduled for January 20-22, 2021. The meeting will conclude on Monday, January 25, 2021 with the announcement of the policy decision.

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Markets

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Markets

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