Business24 Newspaper 30th September, 2020 by Business24 Online

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WEDNESDAY SEPTEMBER 30, 2020

NO. B24 / 107 | NEWS FOR BUSINESS LEADERS

WEDNESDAY SEPTEMBER 30, 2020

‘Cocobod must seek capital locally to support programmes’ By Eugene Davis ugendavis@gmail.com

Dr. Ernest Addison is keeping tabs on the fiscal performance which has already deteriorated as result of the pandemic

BoG says fiscal policy is an area to watch By Nii Annerquaye Abbey abbeykwei@gmail.com

overnor of the Bank of Ghana Dr. Ernest Addison says the bank’s desire to

reduce its key lending rate is hampered by the uncertainty surrounding government’s fiscal policy, especially as the effects of the COVID-19 pandemic still linger.

After its monetary policy committee meeting last week, which was followed by a press briefing on Monday, the central bank decided to hold its policy rate at 14.5 percent and warned of fiscal policy risks to monetary policy implementation.

Cont’d on page 3

NITA to compile database of IT professionals from 2021 Q1 By Eugene Davis ugendavis@gmail.com

Cont’d on page 2

Ghana is open for business-Kofi Adda tells Qatar Airways By Dominick Andoh (Kofi.pra@gmail.com)

viation Minister, Joseph Kofi Adda, has welcomed the entry of Qatar Airways into Ghana’s aviation sector, urging the gulf carrier to take advantage of investment opportunities within the sector.

he Board Chairman of Ghana Cocoa Board (Cocobod), Hackman Owusu-Agyemang, has urged the cocoa regulator to work hard to raise funds from the domestic capital market to finance its programmes and activities in the ensuing years.

he National Information Technology Agency says it will begin the compilation of a database of all information technology professionals from the first quarter of 2021. Cont’d on page 3 ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

USD$1 =GHC 5.6734*

*POLICY RATE

Cont’d on page 2

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

11.4% OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHC 5.13*

INTERNATIONAL MARKET

Cont’d on page 3

BRENT CRUDE $/BARREL NATURAL GAS $/MILLION BTUS GOLD $/TROY OUNCE

Did you know 65% of the world’s products and services are exchanged following a referral or recommendation?

Call Us 0594 016 432 | www.bforb.com

@bforbghana

1.79 1,842.40

CORN $/BUSHEL

329.50

COCOA $/METRIC TON

$2,620

COFFEE $/POUND:

Want to know more? Send us an email at info@bforbgh.com

$39.80

$109.65

NEWS/EDITORIAL Editorial / News

MONDAY SEPTEMBER 142020 2020 WEDNESDAY SEPTEMBER 30,

EDITORIAL Editorial

Pay before boarding order needs a rethink

Call for Cocobod to raise funds locally in the right direction The new directive for all passengers to pay for their COVID-19 test online before their arrival at Kotoka International Airport has been meet with resentment by call airlines and he clarion for Ghana passengers. Cocoa Board to look

condition for boarding of flights country� s COVID-19 testing to KIA.” regime.

T h e n e w d i re c t ive , h a s however, been described by airlines as detrimental to the But the efforts board chairman of renewed to stimulate Cocobod, Owusudemand for Hackman air travel, given that cash payments remains the At awithin time when are Agyemang thepassengers domestic wants Cocobod predominant mode of payment still coming to terms with the markets to raise capital to to do more by raising at least for most travelers.from US$150 � its GHC 900� mandatory support programmes and the bulkGhanaian of its financing payment for COVID-19 test upon An airline operator who activities could not directive come domestic sources. arrival at KIA, the new wishes to remain have at a better time. At the virtualanonymous, signing has generated more debate. told Business24 that “The cost is

T Wash your hands 2

Cover your cough 3

It’s even more plausible Passengers travelling to Ghana given that it fitsSeptember into the15 will from Tuesday, President’s of ‘Ghana be requiredvision to make online paymentsAid’ forwhich the mandatory Beyond is aimed CO V I D - 1 9 that t e sthe t acountry t K o t o is ka at ensuring International Airport prior self-reliant and not dependentto boarding of their flight, a on foreign donors. directive by Frontier This mantra top abe HealthC a r e � t h ehasc o m ny adopted contractedbyto the carrycountry’s out the antigenregulator test at KIA--to airlines cocoa as it all seeks to on Friday has revealed. access capital externally to finance B y tthe h e purchase n e w d iof r ecocoa ctive, “Passengers are required to show beans locally. proof of payment to airlines as a Arrangers and bookrunners of the loan comprise 28 banks with 4 being local banks including Societe Generale, Stanbic, Absa and Ecobank. CONTINUED FROM COVER

ceremony of the US$1.3bn already too high and now this pre-export finance new policy is trade also going to be facility i m p l e m efor n t e d2020/2021 . T h e r e ain re hundreds of Ghanaian traders Accra yesterday, the Cocobod who travel said: to buy“Igoods to retail chairman believe the in the country. time has come to be able them don�US$1.3 t carry any to “Most put oftogether to electronic for payment cards to be US$1.5bn an industry that able to pay online. They should has shown that it can always have the flexibility to pay cash deliver, we should avoid the when they arrive.” cost of doing this syndication. The Consumer Protection You have of Agency � CPA� all has manner also raised things come upabout to addthe to criticalthat questions the interest rates that is given relatively high cost of the to you” The syndicated loan amount of $1.3bn is meant to finance the purchase of cocoa

The CPA� s Chief Executive Officer, Kofi Kapito, said in as much as the government want to for theimported 2020/2021cases crop season curb of the by the Ghana Cocoa respiratory disease, it Board. must not burden theproduction passenger but Cocoa hadcharge been what is enough to cover their forecasted to be 900,000 cost and not to profit from the metric tonnes for the for the passenger.

2020/2021 crop season. “Look you Even around though Africa it is and a good see that what is paid in Ghana for point, there is the need to the test is the highest. Why support should thatlocal be� ” banks to be adequately capitalised in He also raised questions about orderthe to rise to the Memorial occasion why Noguchi when the comes. Institute fortime Medical Research of Government’s the University of Ghana,clean-up was not made to handle the sector testing for of the banking lasta reasonable fee but rather a year represents an example contract given to a foreign of empowering local banks, company to do what Noguchi sanitising the handle. system and could adequately ensuring good governance Business24 would like to urge hold sway allthat theallows time. ashould flexible approach This paper hopespay that the passengers to either online call by the Board Chair will or cash on arrival. inform a strategic direction of Cocobod which will be pursued diligently.

COVID-19: Banks deferred GH¢3bn in loan repayments

BoG says fiscal policy is an area to watch Wear a mask Brought to you by

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that the desired outcomes are outbreak had transformed their team structures to the new way of achieved and the economy operations, the bank chiefs working in order to maximise brought back on track.” responded that the immediate efficiencies of digital banking, Mr. Awuah� s remarks were response was to enforce remote and ensure less-paper operations double (11.4 percent year, given the Continued cover of the top reach working whiledigits realigning workers� of andtherequirements for easing social reinforcedfrom by majority of GDP) this year. of coronavirus restrictions, roles. distancing. In the long run, these bank executives who responded “There is this small area that The central bank’s initial including the reopening of the measures may result in possible While the majority, 69 percent, to the survey. The respondents we have to watch carefully—that response layoffs for some whose jobs of respondents indicated that to the pandemic in Kotoka International Airport for advised the Bank of Ghana to is the fiscal situation. become automated,” report remotewas working will its become to reduce policya commercial passenger the flights at increase stakeholder consultation March Were it not for the fiscal rate said. permanent option going forward, by 150 basis points together the beginning of September. in order to propose more situation, one could easily have with Commenting onthe thepolicy findings there other was general consensus that measures to allow The outlook for rateof beneficial policies. asked this question [whether there banks the survey, which was on the the newgive norm will ultimately lead cheaper credit to is that no reduction is likely to be This, for they said, reduction will help to the shedding of workers whose theme “The new normal� banks� is room a further mitigate the devastating effects of seen in the rest of the year, said estimate the timelines and extent in the policy rate in 2020.] But the response to COVID-19”, jobsvirus. have become automated. the Economist Intelligence PwC� Unit s to which of the the Country Senior Partner, Vish “ M o s t b a n k s i n t e n d t o now we arethe all policies monitoring Despite the 3.2 percent GDP (EIU) in its September Ghana regulator will remain available. permanently Ashiagbor, cautioned that for incorporate remote situation and we cannot predict contraction in the second quarter Country Report. S o m e r e s p o n d e n t s s i m p l y working as an option available to workers that survive the digital whether we will go down or up of the year, the BoG governor said “Although inflation is currently thought that there was the need staff based on their roles. 12.5� of p ro g rethe s s i o6-10 n , tpercent hey h ave depending on how things will go there were visible signs of the above targetto for detailed guidelines from the banks confirmed that they have upgrade their skills to remain over the next six months,” Dr. economy rebounding, with the band, we believe that the BoG government and Bank of Ghana already begun and will continue relevant. Addison projection of 0.9 will maintain rates at the current on thesaid. implement ation of government’s to realign the job roles and work Government’s key fiscal percent growth for 2020 likely to level (rather than hiking rates in a measures put in place to curb the indicators have all been thrown be exceeded. bid to stem inflation) as economic impact of the pandemic. off balance by the pandemic, with Many analysts have also activity declines and the BoG In their view, clear guidance the 2020 general elections still yet predicted that economic growth seeks to boost access to credit to was missing, and though this to come. In July the government will improve in the second half support businesses,” the EIU said. could be shared during formally suspended the statutory stakeholder consultation, they fiscal deficit rule, which sets a could not fully embed the new ceiling annual strategy budget policies on in the operational deficit at 5 percent of GDP, in without a detailed documented order to increase spending to directive. address the repercussions of the ADVERTISE WITH US coronavirus pandemic. Post-pandemic banking TEL: +233 024 212 2742 The election presents further risks to a budget that has already When asked by the audit firm www.thebusiness24online.net suffered severely from the about how the pandemic� s Ken Ofori-Attah pandemic, with the deficit set to

WEDNESDAY SEPTEMBER 30, 2020

Ghana is open for business--Kofi Adda tells Qatar Airways Continued from cover “We are happy to welcome Qatar Airways to Ghana and urge them to make Ghana a hub outside their home-base. We are delighted to receive Qatar after such a long time. It is a manifestation of the confidence in what is going on the aviation sector and the prudent management of the economy; confidence in the way things are being done in Ghana. This is an icing on the cake. “I invite them, formally, to create a hub in Ghana. A hub for the West Africa sub-region where they can come into Ghana and fly into other parts of Africa. Any form of investment option they see in the ancillary areas--aviation training, Maintenance, Repair,

Overhaul (MRO), and private jet terminals among others. These are opportunities available to them. Once they set up a hub here, all these are there for the taking,” Mr. Adda said. Qatar’s maiden flight was operated by a Boeing 787-8 Dreamliner and was flown by two Ghanaian pilots—Khaldi Talal and Sunkwa Mills Edwin Lantei. The cabin crew was also made up of five Ghanaians. There were 60 passengers and 14 crew on-board the maiden flight. Chief Executive Officer of the Ghana Investment Promotion Centre (GIPC), Yofi Grant, said: “Qatar Airways coming to Ghana, opens the door for us, as two partner countries, to

‘Cocobod must seek capital locally to support programmes’ Disbursement

Continued from cover According to Mr. OwusuAgyemang, as the Board Chair, their objective is to wean Cocobod from its appetite of borrowing from the external market and rather raise its funds from domestic capital market. Speaking at Cocobod’s signing ceremony of the US$1.3bn syndicated loan for the purchase of cocoa beans for the upcoming crop season, in Accra, he said: “as we move forward, we should be able to see how best we do it on our own. Ghanaian banks can do syndication.” The syndicated loan amount of US$1.3bn is meant to finance the purchase of cocoa for the 2020/2021 crop season by Cocobod. The amount represents a Trade Finance Facility between the Cocobod and a consortium of banks and financial institutions. Four Ghanaian banks are part of the consortium – they are Absa, Ecobank, Societe Generale and Stanbic Bank, which have all been challenged by the board chair of Cocobod to join forces to ensure they support the regulator to borrow locally.

Chief Executive Officer of Cocobod Joseph Boahen Aidoo indicated that the first tranche of an amount of US$650m is expected to be released by the first week of October. He also hinted at the possibility of Cocobod raising extra funds to meet the 900,000 metric tonnes (mt) for the for the 2020/2021 crop season. “The US$1.3bn can move us up to some stage because we are aiming at 900,000mt. If you look at the price of cocoa including the LID [living income differential], it means when we produce around 500,000mt that alone will consume all the US$1.3bn and if that happens, it means we have to go for extra money. But the banks have assured us that the whole thing has been oversubscribed by some US$250m so we still have room to go for more money to top up.” The terms of the financing include the facility amount of US$1.3 bn, interest rate of onemonth LIBOR+ 1.75 per cent per annum, commitment fee of 0.62 per cent per annum and upfront fees of 1.25 per cent flat. Cocoa production had been forecasted to be 900,000 metric tonnes for the 2020/2021 crop season.

exploit the opportunities that we have for mutual benefit. It is particularly joyous when Ghana is spearheading the operationalisation of the Africa Continental Free Trade Area (AfCFTA). “I believe that more opportunities are going to come and there are interesting opportunities on both sides that I believe this will initiate. I believe that Ghana is open and open for good.” The Foreign Affairs Ministry, also assured Qatar Airways of their continuous support going forward. “Ghana is open for business and we will give Qatar Airways all the needed support so that they can play their key role here. Welcome and we are ready

to do business with you,” Charles Wiredu, Deputy Foreign Affairs Minister said. For starters, Qatar Airways will operate four weekly flights between Accra, Ghana and Doha, Qatar via Lagos, Nigeria. It has announced a promotional fare starting at US$895. Passengers must, however, book by October 5, 2020 for travel until March 31, 2021. “We are proud to be the leading global airline connecting passengers with the world, operating one of the youngest and most efficient and sustainable fleets to take people safely where they need to be,” Qatar said in a statement.

NITA to compile database of IT professionals from 2021 Q1 Continued from cover Speaking at the ICT Stakeholders Conference 2020, the Head of Legal and Regulation at NITA, Kwame Baah-Acheamfour indicated that the move is meant to enhance credibility and ensure that people deal with qualified IT professionals. “One other thing we want to do is to register IT professionals, in this market everybody or almost everyone has a mobile phone or a smartphone and tends to be an ICT or IT professional. But who are the persons to work on government systems – they should have certain competencies and credibility. If they are lacking these, this is where we get into a situation where a government body or agency will find money, invest into an ICT project and buy all the systems but may never work and sometimes it may work for few months. Because the solution they went for is not scalable to the fast-evolving ICT ecosystem,” he said. Under the new move, IT professionals seeking contracts with the various Ministries Department Agencies (MDAs) who are captured on the database will therefore be required to submit details to be registered under NITA’s database. This will provide a one-stop shop for qualified IT professionals that government agencies and the public can do business with.

Currently there is no recognised database of qualified IT professionals and this move will provide professional excellence, knowledge and competence for the public and government agencies. According to Mr.BaahAcheamfour, it is imperative to set standards in data management. The ICT Stakeholder conference 2020 was under the theme: “Deepening regulatory compliance for a successful digitisation agenda.” Request for comments NITA has published the draft Information Communication Technology Standards for stakeholder comments. The Agency intends to enforce the application of these Standards in the adoption, deployment, configuration and implementation of Information Communication Technology in government to enhance usage, access and security. The purpose of the standards is to ensure the provision of quality information communications technology, promote standards of efficiency and ensure high quality of service. In addition, these standards will facilitate the coherence in the MDAs ICT investments and activities, the implementation and monitoring of the national information communications technology policy.

WEDNESDAY SEPTEMBER 30, 2020

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WEDNESDAY SEPTEMBER 30, 2020

Humado wants Parliament to be briefed on status of the ECO

hana’s Member of Parliament for Anlo and a member of the country’s delegation to the Economic Community of West African States (ECOWAS) Parliament, Clement Kofi Humado is advocating for the legislature to be briefed on the status of the implementation of the sub-regional single currency, the ECO. According to him, the ECOWAS Commissioner for Economic Affairs and Regional Integration should come before the Community Parliament, to give a report on preparation reached on the implementation of the single currency at its next session. In an interview as to what lawmakers are doing on their part to ensure the implementation of the ECO, he said, “we can influence the Secretary General, John Azumah and the Speaker Sidie Mohammed Tunis to invite

him to give us status report on the situation and we can pick it up from there”. His call comes in the wake of the uncertainty and delay that seems to be affecting the implementation of the single currency that the sub-region has

been looking forward to. Mr. Humado is pushing for a gradualist approach where countries within the sub-region who meet the convergence criteria can start with the implementation of the single currency, and allow other countries to join later as the

year go by. The second rapporteur of the Community’s Parliament Committee on Infrastructure, expressed worry over the delay in kick starting the single currency which has a 2020 deadline. He fears the effects of the coronavirus pandemic on the economies of all fifteen member countries may even worsen the quest for implementing the single currency and explained further that, the Community lawmakers were informed by the ECOWAS Commissioner for Economic Affairs that the single currency would come into force this year. And pointed out that this was later revised to ending of either September or October 2020. However, at the 57th Session of Authority of Heads of State and Governments in Niger, it emerged that there is lack of consensus among the Heads of States on what to do with the ECO.

Cyber Security Awareness Month to be observed from October 1

he Ministry of Communications, through the National Cyber Security Centre, will hold its annual National Cyber Security Awareness Month (NCSAM) from October 1 to 31, 2020. The month-long event will be conducted through physical engagements (under strict COVID-19 protocols) and the use of virtual platforms, including live streaming on NCSAMTV, Facebook, YouTube and updated across various social media pages such as Instagram and Twitter. This year’s theme is: “Cybersecurity in the Era of CoVID-19,” aimed at reflecting on the current cybersecurity trends as a result of the increasing use of digital platforms by individuals, businesses and governments for socio-economic activities in view of the global COVID-19 pandemic. A statement signed by Naa Korkoi Essah, the Head of Public Relations, Ministry of Communications, and copied to the Ghana News Agency on Monday, explained that the event would involve leadership sessions, panel discussions, workshops and media engagements to intensify capacity building and awareness

creation on cybercrime and cybersecurity issues among Ghanaians. Recognised as the leading event within the cybersecurity space, NCSAM would educate children, the public, businesses and Government stakeholders on cyber hygiene best practices, consistent with the Safer Digital Ghana campaign. The statement said there would be weekly high-level events including a “Forum on Impact of COVID-19 on Ghana’s Digitalization Agenda.” It would also see to the launch of the Month and protection of children online. The speakers would include Mrs. Ursula Owusu Ekuful, the Minister of Communications, Madam Stephanie S. Sullivan, United States Ambassador to Ghana, Mrs. Anne-Claire Dufay, Country Representative of UNICEF Ghana, and Mr. George Nenyi Andah, Deputy Communications Minister. The statement said the event would attract collaboration from Ghana’s cybersecurity partners such as the Council of Europe, UNICEF, Security Governance Initiative of the US Government

and the Freedom Online Coalition. “COVID-19 pandemic has changed our way of life and this event will focus on how our children, the public, businesses as well as government institutions can ensure utmost protection

of their online activities whilst utilising digital platforms,” Mrs. Owusu-Ekuful was quoted as saying. The official hashtag for the event is #NCSAM2020 and #SaferDigitalGhana.

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WEDNESDAY SEPTEMBER 30, 2020

Shareholders’ financial entitlements The distinction between assets, revenue (sales), profit and dividend Richard Nunekpeku Introduction The decision by persons to contribute their resources for the incorporation and promotion of a common business interest or idea is underpinned by expectations, particularly financial. However, such financial expectations are not without limitations in the case of companies. The distinction between the financial concepts of assets, revenue (sales), profit (loss) and dividend is critical to ensure “shareholders” mostly of Start-ups and Small &amp; Medium Scale Enterprises (SMEs) do not make or anticipate any illegal appropriation of the resources of their companies. In this article, I shall distinguish between these imperative financial concepts and demonstrate how they limit shareholders’ financial entitlements under the Companies Act, 2019 (Act 992). The distinction is important for the promotion of long-term sustainability and the prevention of financial misappropriation in companies as going concerns. Shares and Shareholder(s) The Companies Act, 2019 (Act 992) defines “shares” as “the interests of members of a body corporate who are entitled to share in the capital or income of the body corporate”. By this definition, owners of shares in a company implies an entitlement only “to share in the capital or income of the body corporate” and not the assumption of “private ownership” of the company and its assets/ properties. Shareholders by

implication are thus not even in the collective sense “owners” of a company; a company owns itself. This position holds valid even in circumstances where shareholders are permitted by law or the registered constitution of the company to transfer their shares (interest) to another by way of sale or otherwise (exercising personal dealings with the shares). The number of shares and the rights and liabilities attaching to the same are to be determined by the terms of the issue by the company. By this, different classes of shares could be created. Generally, shares could be created either as equity (referred to as “ordinary” in the now repealed Act 179) or preference shares. Issued preference share will entitle the holder to a right to participate not beyond a specified amount of money in a distribution whether by way of dividend, on redemption, in a winding up or otherwise. Also, Act 992 permits subject to the registered constitution of a company for the attachment to shares either as preferred, deferred or any other special rights or restrictions, whether as regards dividend, voting, repayment or otherwise. This provision allows for the creation of preference shares either as cumulative or noncumulative,redeemable or nonredeemable, convertible or nonconvertible etc. In essence, shares represent the unit of the contribution of long-term capital (working) of each holder without expression of unit values and further constitutes the basis for the attachment of rights and liabilities to each class of shares

issued. Shareholders are therefore the holders of any class of shares duly created, issued and registered by a company or by the operation of law. Assets Act 992 defines assets as “any kind of property or any legal or equitable right”. A Company&#39;s right to asset ownership is one to be exercised independently of its shareholders. Where companies acquire assets, it is done in their names and shareholders have no proprietary interest in those assets – the assets of a company are not the property of its shareholders. The long-established “separate legal entity” principle (with statutory backing) which promotes the distinct and separate feature of companies supports this separate asset ownership regime. On incorporation under Act 992, companies become artificial persons and, in their names, have the power to procure, use, maintain and dispose of assets relative to the law. Companies leverage assets for the generation of economic benefits (revenue &amp; profit). These assets may be in the form of plants &amp; machinery, land, building, vehicles, stock of goods, cash at hand or bank, debtors’ stock etc. The acquisition of these assets may be financed with capital contributed by the shareholders – even where it is the case, it does not permit shareholders’ claim to such assets as theirs personally. In some circumstances, credit financing arrangements are also used to procure assets thereby creating

liabilities for the companies. Shareholders are not entitled to any interest or returns in the assets of the company. Shareholders’ entitlement is limited to the return of capital on winding up or reduction of capital after creditors and other liabilities have been discharged. Where a shareholder works as an employee or a director of a company and company assets such as a vehicle is provided as a work tool, that may also not give rise to claims of personal ownership by the shareholder – they however remain the assets of the company. Proper records must be kept of all assets (current or non-current) of companies and should reflect in the financial statements of the company. Employees and Customers are said to be great assets of companies. These nonfinancial assets can also not become personal employees or customers of shareholder(s) and be subjected to their personal uses, rules or terms. Therefore, it is illegal for shareholders to deal with assets/ properties of a company based on share ownership as personal assets/properties. Any such exercise of entitlement is illegal and where on-going should be stopped forthwith. Separate asset/property ownership is a critical feature of a registered company and must be protected against shareholders’ abuse. Revenue (Sales) The production, sale and distribution of goods and the provision of services are the primary means of revenue generation for companies – either on cash or credit basis. The nature of a company’s operation also influences the frequency either on daily, weekly, monthly etc of such revenue generation. Monies received or ascertained as debts are not for the personal benefit of any shareholder either as the sole shareholder or otherwise. In the fulfilment of obligations on production cost and other liabilities resulting from the running of the company, revenues play a critical role in a company’s sustained operations. There is an obligation on managers through accurate financial reporting to capture all revenues as they as they come in and not subject their utilisation to any shareholder’s personal wishes. A prudent way to ensure strict adherence is to maintain separate accounts for companies from the shareholders (even in the instance of a sole shareholder).

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CONTINUED FROM PAGE 7 Other institutional arrangements such as the engagement of account staff, establishment of account systems linked to sales etc will help promote good accounting practices as well as enhance good corporate governance. Revenues should never be considered as profits and be subjected to any disbursement in such regards. Shareholders are also not entitled to any share of revenue generated by a company except where payments are made based on an employment contract (constituting general expenses of salaries &amp; wages for the company). Profit (Loss) The basic accounting principle for the determination of profit is revenue less expenses. However, profit could be gross profit – determined as sales less cost of sale (directly related sale cost). Net profit determined as gross profit less administrative and other expense represents a more accurate position of profitability for companies from its operations. Companies are expected to keep and maintain books of account constituting financial statements. These statements showing the financial position of the company are required to be prepared at intervals and as final on a 12-month calendar basis. A strong profit position of

WEDNESDAY SEPTEMBER 30, 2020

a company offers hope for shareholders’ entitlements. Although it is in itself not available as shareholders’ entitlement, it determines how much should be made available and at what value per share as benefits for shareholders’ capital investment. It is also not automatic that once profit (income) is declared, shareholders become entitled to its distribution. The performance of the company over the years and its financial forecast regards revenue generation, liabilities, investment plans etc could determine whether shareholders could become entitled in part or whole to any available income from a company’s operations relative to a financial year. Shareholders’ expectation must be restrained in years where profits are declared as the financial outlook of a company could demand the retention of such profits to support projected financial outflows – profits could be made and retained without distribution to shareholders. Dividend The declaration and payment of dividends are strictly regulated by Act 992 with liabilities for directors and shareholders for breaches. Dividend represents the sum of money paid regularly by a company to its shareholders out of its profit (reserves) in fulfilment of shareholders’ entitlement to a share in the income of the company. Subject to Act 992 and the

registered constitution of a company (a private company), a company may declare dividends in respect of a year or any other specified period but shall not exceed the amount recommended by its directors. Directors are mandated to comply with a distribution test which Act 992 defines to include the assessment of the company’s ability to pay its debts as they fall due and the amount or value of any distribution made by the company does not exceed its retained earnings immediately before the making of the distribution, in any recommendation for the payment of dividends exercise. In order to prevent the overriding powers of the shareholders in dividend payment, the law strictly provides against approving payments beyond amounts recommended by directors (the managers of the company). However, pay-outs could be influenced by class of shares issued – as some classes take precedence in dividend payments over the others. Once dividends are declared and become due, shareholders are entitled in the ratio of their shareholding and subject to the class of share to the full benefits without limitation on how such payments are to be utilised. Dividends declared and due do not constitute part of the properties of a company. Where they remain unclaimed, the law makes provisions for the same to be kept separately from the finances of the company

as they have now become shareholders&#39; personal values. Dividends are often the only financial entitlements of shareholders (as the return of capital entitlement is less likely the case in Ghana). Conclusion Ordinarily, person(s) who contribute to the formation of a thing should have ownership of the same. However, this is not the case in the formation of companies. Persons who subscribe to the shares of companies or become shareholders by the operation of law are not “owners” of the companies. However, the Companies Act, 2019 (Act 992) rewards them (shareholders) with some benefits including financial entitlements in the share of returned capital or income of the company. A clear distinction and the understanding of the legal effect of some financial concepts such as assets, revenue, profit and dividend will aid shareholders in the management of their expectations and prevent financial misappropriation of company resources. Further, shareholders must understand that any breach in respect of these financial concepts could result into personal liabilities. The Author is Richard Nunekpeku, a lawyer at E.L Agbemava Law Office. He is reachable at Richard. nunekpeku@outlook.com

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Decoding China’s “dual circulation” strategy By Yu Yongding

n May, China’s central leadership proclaimed that it would “fully develop the advantages of [the country’s] super-large market and the potential for domestic demand to establish a new development pattern featuring domestic and international dual circulations that complement each other.” “Dual circulation” has been the subject of intense discussion within and outside China ever since. Does the announcement signal a fundamental shift in China’s growth paradigm or development strategy? Why was this new concept introduced, and what policy changes will it entail? To answer these questions, one should briefly revisit the process of China’s “reform and opening up” since it began in the late 1970s. Around the end of that decade, the key hurdle preventing China from taking off economically was a shortage of foreign-exchange reserves. Policymakers faced what seemed to be a Catch-22: without foreign reserves, China could not jumpstart its exports, and without decent export growth, it could not earn and accumulate the minimum necessary amount of reserves. In the event, China was lucky. The rise of the originalequipment-manufacturer (manufacturing inputs) sector in 1970s gave China a window of opportunity to break through the deadlock. OEM manufacturing began to flourish in China’s southeast coastal regions during the late 1970s and early 1980s. Despite little or no foreignexchange reserves, Chinese OEM firms were able to import and process parts and components that were being outsourced by foreign corporations. These final products, with the value added contributed by Chinese firms, were then sold in international markets. The processing trade allowed China to leverage its comparative advantage in abundant, lowcost skilled labor. Gradually, a feedback loop – from importing intermediate products to processing to exports – was

established. With each round, Chinese firms were able to accumulate more reserves. And this increase in foreign exchange in turn enabled the importation of more intermediate products for processing and export. Through this virtuous import-export cycle, China amassed foreign reserves at an accelerating pace. Large capital inflows – the result of China’s preferential policy on foreign direct investment – further strengthened this trend. In 1988, the Chinese researcher Wang Jian coined the term “great international circulation” to describe China’s export-led development strategy. The strategy turned out to be a stunning success. In 1981, Chinese exports and imports totaled just $22.5 billion and $21.7 billion, respectively. By 2013, China’s total trade reached nearly $4.2 trillion, making it the world’s trade leader. In those three decades, China’s GDP rose from 17th in the world, just behind the Netherlands, to second, surpassing Japan in 2010. But export-promotion strategies can become selfnegating when an economy grows past a certain point. After 40 years of expansion under the great international circulation model, China is no longer a small economy, and the global impact of its export drive is no longer negligible. In fact, since the turn of the century, the price of whatever products China purchases has tended to rise, whereas whatever it sells has fallen in price. Worse, China’s relentless export drive has provoked

( justifiably or not) severe protectionist responses from importing countries. China’s persistent trade and capitalaccount surpluses have translated into a persistent accumulation of foreign-exchange reserves, which reached $3 trillion in 2014 – an amount far above what is needed to ensure liquidity. Equally worrying, despite the fact that China’s net foreign assets stand at more than $2 trillion, it has run investmentincome deficits for more than a decade. This suggests that there is something seriously wrong with China’s intertemporal and cross-border allocation of resources. For its part, the Chinese government has long known that the success of the great international circulation strategy has created new problems. In China’s 11th Five-Year Plan, published in early 2006, the authorities declared that: “China’s growth should be based on domestic demand, especially consumption demand. The drives for economic growth should be shifted from growth of investment and exports to balanced growth of consumption and investment, as well as balanced growth of domestic demand and external demand.” But China’s economic shift had already started by this point, as demonstrated by the fact that its trade-to-GDP and exportto-GDP ratios peaked in 2006, at 65% and 36%, respectively. Between 2008 and 2018, net exports as a share of Chinese GDP fell from 10% to 1%. And in almost every year since 2009, the contribution of net exports to China’s GDP growth has been

negative. In light of these trends, it is clear that the introduction of a new concept – dual circulation – does not imply any fundamental change in China’s growth paradigm. No matter what happens, China will never turn its back on the rest of the world. Still, the Trump administration’s policy of “decoupling” and sanctions has left China with no choice but to double down on linking economic growth to domestic demand and support for domestic innovation, in order to secure a solid position in global value chains. This imperative may explain why Chinese leaders have begun to emphasize dual circulation. With its huge domestic market of 1.4 billion people and well-developed manufacturing capacity, China will survive under any label. Yu Yongding, a former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006. Copyright: Project Syndicate, 2020. www.projectsyndicate.org

WEDNESDAY SEPTEMBER 30, 2020

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Ghana: Balancing economic growth and depletion of resources By Sanjay Srivastava & Agata Ewa Pawlowska

hana has an impressive story of economic growth. But this comes with a warning: the natural resources that underpin this success must be protected and sustainably managed. Over the past 30 years, an increase in the price and production of cocoa, gold, and oil helped transform Ghana: real GDP growth quadrupled, extreme poverty dropped by half, and in 2011, Ghana moved to a Lower Middle-Income Country status. The fundamental question is: How can this impressive development, anchored firmly on natural capital, continue to deliver gains in macroeconomic growth and poverty reduction? The recent World Bank Ghana Country Environmental Analysis (CEA) responds by providing the scale, scope, and economic effects of environmental degradation on society. Air, plastics, and water pollution affect health and hygiene; gold mines, unmanaged solid waste, and contaminated sites release hazardous chemicals; land degradation, deforestation, and overfishing heavily impact livelihoods and limit drivers of growth.

According to the CEA, environmental degradation costs $6.3 billion annually or nearly 11% of Ghana’s 2017 GDP . Non-renewable resources such as gold and oil cannot sustain growth as resources deplete while renewable resources like cocoa, timber, and other tree and food crops, depend on good environmental stewardship. There are clear signs and scientific evidence that the erosion of the natural capital may put at risk growth, livelihoods, and human health. Air pollution, the number one environmental risk to public health, costs roughly $2 billion per year and causes the premature death of nearly 16,000 people each year. Elderly account for most of the deaths, while more than half of the deaths from pneumonia in children under five is associated with air pollution. Water Pollution causes significant damage equivalent to 3% of the GDP. This is due to the health effects of inadequate water supply, poor sanitation, and discharge of solid industrial and toxic waste into water systems. Plastics pollution is rising to crisis proportions. Each day, over 3,000 metric tons of plastic waste is produced with much of

it dumped as litter or placed into improvised landfills. This waste clogs open drainage systems and pollutes the ocean. E-waste, associated with the Agbogbloshie dumpsite, is Accra’s main source of air pollution. Here, burning electronic parts cast carcinogenic compounds into the air while deposited toxic metals enter waterways and oceans. Each year, exposure to lead and mercury-causing diseases and the lost IQ points in children cost $440 million. Poor land management leads to land degradation, costing over US$500 million a year and to deforestation costing US$400 million a year: five million hectares of forest was lost between 2001 and 2015. Over the past decade, artisanal gold mining aggravated the degradation as streams and rivers were dug up to find gold. Miners’ exposure to the toxic mercury also costs $240 million in health costs. Ghana loses about 2.7 million m2 of its shore every year, with 80% of the shoreline actively eroding. Coastal erosion and flooding are particularly serious in Greater Accra where sea level rise increases erosion intensity and raises the chance of flooding by 20%. This puts at risk communities and UNESCO World Heritage sites such as Cape Coast and Elmina. Overfishing cost $233 million and could lead to the collapse of small pelagic fisheries and the loss of half a

million jobs. Climate change heavily affects climate- sensitive sectors on which Ghana’s growth is based agriculture, forestry, and energy. It also triggers environmental disasters: in the last 40 years, floods affected four million people and a 2015 flash flood in Accra caused $55 million in damages. Ghana is responding to the urgent need to protect the natural capital through evidencebased actions and concrete steps to share the impact of growth, especially in terms of food security and human development. Informed by this analysis, Ghana is prioritizing environmental issues in development planning. But it’s crucial to act now to prevent the impacts of environmental degradation and climate change on vulnerable people in Ghana . It is also key to understand the importance of well-informed communities and strong institutions in seeking accountability and transparency. Finally, Ghana would benefit from advancing critical policy reforms to allocate resources and benefits to communities.

Sanjay Srivastava, World Bank Manager of the Environment, Natural Resources and Blue Economy Global Practice in Africa. Agata Ewa Pawlowska, Operations Manager for Ghana, Liberia, and Sierra Leone.

WEDNESDAY SEPTEMBER 30, 2020

Markets

WEDNESDAY SEPTEMBER 30, 2020

WEEKLY INVESTMENT UPDATE September 25, 2020

     

Producer Price Inflation dropped further to 9.0 percent. Interest rates on 91-Day and 182-Day T-Bills upped last Friday. GSE drove further southwards. The Cedi sustained a year-to-date appreciation against the British pound. Brent crude oil dropped as rising infection cases dimmed demand outlook. Global equity market closed bearish as Covid-19 infection rises.

Macroeconomic Update

Producer Price Inflation dropped further to 9.0 percent Producer Price Inflation sustained a downtrend in the month of August as it settled at 9.0 percent from a previous rate of 9.30 percent. The moderation recorded in the month of August is attributed to the easing of inflation pressures at Manufacturing and Mining & Quarrying sub-sectors and resumption in industrial activities after the easing of the COVID-19 restrictions. The PPI for the Manufacturing sector trimmed by 40 basis points to 4 percent in August whereas that of the Mining & Quarry subsector dropped by 30 basis points to end the month at 37.9 percent. The Utility sub-sector was, however, unchanged in the month of August at 5.8 percent.

Ghana Economic Data

Indicator Inflation CPI (y-o-y %) Inflation PPI (y-o-y %) Monetary Policy Rate (%)

GDP Growth (y-o-y %) Budget Deficit (% of GDP Public Debt (% of GDP)

Fx. Reserves (M. Cover)

Source: BOG; MOFEP; GSS.

Aug-20

Jul-20

Jun-20

May-20

Apr-20

Mar-20

Feb-20

Jan-20

Dec-19

Nov-19

Oct-19

Sep-19

Aug-19

14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

Trend Analysis of PPI

ǯ ǯ Ǥ Results of Auction held on 25th September, 2020 Bids Bids Accepted Bill Tendered GHS (Million) GHS (Million) 91-Day T-Bill 730.70 730.70 182-Day T-Bill 95.32 95.32

2018

2019

11.8 8.9 20.0 8.5 5.9 69.8 4.3

9.40 4.40 17.0 6.3 3.8 57.6 3.7

7.90 13.00 16.00 6.5 4.5Sep 63.00 4.1

* represents provisional estimate

Government of Ghana Treasury Securities Treasury Bills, Notes & Bonds (%) Date 91182Day day Sep 28 Ȃ Oct 2 14.04 14.15 Sep 21 Ȃ 25 14.01 14.12 Sep 14 Ȃ 18 14.02 14.09 2020 Yr. Open 14.70 15.15

2020 Target 8.00 n/a n/a 6.8 4.7 n/a ζ͵Ǥͷ

2020 Actual 10.50 9.00 14.50 4.9 Q1 6.3 67 4.3

14.0357 14.1478

Government of Ghana accepted all the GHS826.02 million bids tendered by investors at the auction. The amount raised was surpassed the GHS735.00 ǯ Ǥ ͻͳ-Day T-Bill was the most accepted bid by the government as it constituted 88.46 percent of the overall bids raised. At the upcoming auction, an amount of GHS712.00million is targeted to be raised at the upcoming auction from the sale of the 91-Day, 182-Day, and 364-Day T-Bills. 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%

Yield Curve

91 Days 182 Days 364 Days 2 Year Duration

3 Year

5-Year

The term structure of the Government of Ghana treasury securities ǯ auction was marginal. The continued risk aversion of investors coupled with rising demand for Funds by Government also contributed to the sustenance of the yield curve. Ghana Stock Exchange

Ghana Stock Exchange (GSE) Indices (YTD %) GSE-CI

Year 2017

Interest Rate (%)

Rate (%)

Weekly Highlights

GSE-FSI

2016

2017

2018

2019

2020

-15.33

52.73

-0.29

-12.25

-18.73

-19.93

49.51

-6.79

-6.23

-17.97

The Ghana Stocks Exchange drove further southwards on account of the persisting selling pressures in some blue-chip stocks on the bourse. The GSE-Composite Index tumbled by 37 basis points to settle at 1,834.47 points, representing a year-to-date loss of 18.73 percent. The GSE Financial Stocks Index also recorded a week-on-week decline of 75 percent as it settles at 1,656.71 points last Friday. The year-to-date loss of the index thus widen to 17.97 percent. GSE Indices Performance (YTD %)

0.00% -5.00%

364day 16.99 16.99 16.91 17.90

2-Yr

3-Yr

5-Yr

-10.00%

18.25 18.25 18.25 20.95

19.00 19.00 18.85 19.70

19.25 19.25 19.25 19.50

-15.00%

NB: The above are the annual yields on Government of Ghana Treasury Securities.

The yield on the Government of Ghana treasury securities were marginally adjusted in the week-under-review. Yield on the 91-Day T-Bill upped by 3 basis points to settle at 14.04 percent. The 182-Day T-Bill also increased by 3 basis points to close at 14.15 percent but that on the 364-Day T-Bill remained unchanged at 16.99 percent. That on the other treasury

-20.00%

GSE CI

GSE FSI

GSE Market Indicators

Wk. Open

Wk. End

Total Volume Traded (M) Total Value Traded (GHS M) Market Cap (GHS M)

1.71 2.97 53,165.81

6.51 3.97 52,927.83

For further information please contact us on: +233 302 260 367| 050 1338009 Email: research@igsghana.com or clientservice@igsghana.com

Change (%) 281.93 33.81 -0.45

Website: www.igsghana.com

Disclaimer: Every effort has been made to ensure that the information provided in this report is accurate. The update is provided to you for information purposes only. IGS Financial Services Limited and its employees cannot be held responsible for any errors and no liability is accepted for any losses, which may arise from the use of this information.

CONTINUED ON PAGE 17

WEDNESDAY SEPTEMBER 30, 2020

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Markets

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WEEKLY INVESTMENT UPDATE September 25, 2020 Market outturn improved significantly in the week under review. A total of 6.51 million shares valued at GHS3.97 million exchanged hands as compared with the 1.71 million shares worth GHS2.97 million, which traded in the week ended 18th September 2020. MTN Ghana Ltd topped the activity chart in terms of traded volume, contributing 81.63 percent of the total shares traded in the week and dominated in terms of value with an amount of GHS3.19 million. The GSE market capitalization, however, fell on account of the selloffs by 0.45 percent to settle at GHS52,927.83 million.

Most traded stocks in terms of volume ETI Others FML 7.38%1.99% 9.00%

MTN 81.63%

infection. Furthermore, government ditched its current furlough scheme that supported employees in favour of a less generous wage-support scheme that focuses on tackling the broader macro-economic instability. The Pound succumbed to these developments as it recorded a week-onweek depreciation of 1.95 percent on the interbank currency market to exchange at GHS7.25. The Ghana cedi thus posted a year-to-date appreciation of 1.04 percent.

The Euro sank lower following the release of a string of downbeat economic data, ǯ k on the bloc. Economic recovery in the region hit a snag as the ǯ IHS services Purchasing ǯ dipped from 51.9 points in August to 47.6 points in September, driven by lockdown measures in some member states.

ǯ IFO business-climate index also settled at 93.4 points in September, slightly lower than the projected upturn of 93.5 points. The Euro thus depreciated by 1.99 percent on the interbank forex market to sell at GHS6.63. The year-to-date depreciation of the cedi thus narrowed to 6.26 percent. YTD (%)

YTD Performance of the Cedi

Stock Price Movements A total of two ǯ one advancer and a laggard. Standard Chartered Bank Ltd gained 2 pesewas to trade at GHS13.55 per share. Equity SCB

Stock Price Advancers in terms of WK closing prices Yr. Wk. Wk. Wk. Change YTD Open Open End (GHS) (%) 18.40 13.53 13.55 0.02 0.15%

Ecobank Transnational Incorporated on the other hand, shed a pesewa to ǯ ͸ Ǥ Equity ETI

Stock Price Losers in terms of WK closing prices Yr. Wk. Wk. Wk. Change Open Open End (GHS) 0.08 0.07 0.06 -0.01

Currency Market Currency Buying USD 5.6991 GBP 7.2373 EUR 6.6222

Selling 5.7049 7.2452 6.6281

3.9979

4.0030

66.7310

67.1694

AUD

NGN

Currency CAD CFA JPY

YTD (%) -14.29%

Buying 4.2508 98.9661 0.0540

Selling 4.2549 99.0542 0.0540

ZAR

0.3323

0.3326

CNY

0.8346

0.8354

Source: Bank of Ghana 25.09.2020

On the interbank currency market, the Ghana cedi appreciated against the British Pound and the Euro but lost against the US dollar. The US Dollar jumped to a five-month high as economic uncertainties in the US amid ǯ Ǥ The IHS Markit Composite PMI Index in US slumped from 54.6 in August to 54.4 in September. Unemployment benefits for the week ended September 19 surged by 4,000 to close at a seasonally adjusted 870,000 from the 866,000 Ǥ ǯ outturn, it posted a week-on-week gain of 0.03 percent to trade at GHS5.70 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 2.95 percent. The British Pound eased to a two-month low on account of the imposition of a new lockdown restriction and a scale-down in covid-19 relief packages. British Prime Minister-Boris Johnson announced a new lockdown measures that included closure of pubs, restaurants, and restrictions on retailer shops to help subdue a second wave of covid-19

10.00% 8.00% 6.00% 4.00% 2.00% 0.00% -2.00% -4.00% -6.00% -8.00% -10.00%

Jan-20

Feb-20

Mar-20

Apr-20 May-20

Jun-20

Jul-20

Aug-20

Sep-20

USD/GHC

Jan-20 -1.00%

Feb-20 -4.51%

Mar-20 -1.68%

Apr-20 1.20%

May-20 1.54%

Jun-20 2.36%

Jul-20 2.54%

Aug-20 2.66%

Sep-20 2.95%

GBP/GHC

-1.66%

-7.77%

-8.25%

-3.65%

-5.74%

-4.45%

1.21%

3.73%

-1.04%

EUR/GHC

-2.62%

-6.99%

-3.94%

-1.36%

0.48%

2.38%

7.23%

8.57%

6.63%

International Markets Stock Indices S&P 500 Index DJIA FTSE 100 NIKKEI 225 FTSE/JSE All Share NSE All Share Nairobi All Share

Wk. Open 3,319.47 27,657.42 6,007.05 23,360.30 54,673.65 25,572.57 140.24

Wk. Close 3,298.46 27,173.96 5,842.67 23,204.62 53,587.11 26,319.47 140.37

Change (%) -0.63 -1.75 -2.74 -0.67 -1.99 2.92 0.09

YTD (%) 2.09 -4.78 -22.54 -1.91 -6.13 -1.95 -15.65

Wallstreet ended bearish, recording its fourth straight decline last Friday due to continued resurgence of the US dollar as investors flew for safety, amidst the rising cases of COVID-19 in the US and European countries. Financial, technological and energy sector stocks were the most affected stocks on the bourse. The S&P 500 thus went down by 0.63 percent to settle at 3,298.46 points. The Dow Jones Industrial Average also went down by 1.75 percent to settle at 27,173.96 points. The London Stocks Exchange closed in the red following uncertainties about the prospects of the UK economy, amidst the rise in COVID-19 cases and Brexit uncertainties. The down drive of the index was further spurred by the decision of management of the bourse to trim jobs by 250 to save £30m. The FTSE 100 thus dipped by 2.74 percent to settle at 5,842.67 points with the mining and commodities stocks recording the worst declines.

The Japanese Stocks Exchange posted a week-on-week decline as investors reacted to the impact of the rising infection cases in the US and European countries on their economy. The Nikkei 225 thus went down by 0.67 percent to settle at 23,204.62 points. On the African equity market, the Nigerian All Share Index recorded a weekly gain of 2.92 percent as it closed at 26,319.47 points. The Nairobi All Share Index also upticked by 0.09 percent to settle at 140.37 points. The Johannesburg All Share Index, on the other, hand registered a weekly decline of 1.99 percent to settle at 53,587.11 points.

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CONTINUED ON PAGE 17

WEDNESDAY SEPTEMBER 30, 2020

Markets / News

WEDNESDAY SEPTEMBER 30, 2020

President commissions Kasapreko juice and water factory in Kwadaso

resident Nana Addo Dankwa Akufo-Addo Monday commissioned the Kasapreko Water, Juice and Soft Drinks Factory at Kwadaso in the Ashanti Region. The company, operating under Government’s One -District- One-Factory (1D-1F) initiative, has the capacity to produce 35,000 bottles of juices and non-alcoholic soft drinks per hour, and 15,000 bottles of water per hour. The factory, which will employ 300 people directly, and generate 3,000 indirect jobs through the supply chain, will cater for the Ashanti, Bono, Ahafo, Northern, Savannah, North East, Upper East and Upper West Regions, as well as export to neighbouring countries including Burkina Faso and Côte d’Ivoire. Speaking at the ceremony, the President said the factory was evidence that government’s

President Nana Addo Dankwa Akufo-Addo

insistence on a value-added industrial development as a panacea for economic growth was making a head way. He indicated that commissioning of the factory was a fulfilment of the promise by Government to partner the private sector to set up at least one medium to large scale enterprise in every district of the country. President Akufo-Addo noted that the Kasapreko Company

CPC marks World Heart Day, opens sales outlet in Kasoa By Patrick Paintsil

ocoa Processing Company Limited (CPC) has marked this year’s World Heart Day with a public forum in Kasoa to encourage the consumption of cocoa-based products to help reduce the risks of cardiovascular diseases among Ghanaians. In furtherance of this cause, CPC also commissioned Jelemik Enterprise, an authorised sales outlet to market and distribute the company’s products for consumers in Kasoa, Winneba, Swedru and its environs. The depot will facilitate access to the company’s esteemed GoldenTree products and also ensure that traders and consumers to easily get their supplies without having to travel to Tema or Accra. Managing Director of CPC Nana Agyenim Boateng I indicated in his remarks that the event was part of the company’s awareness campaign to drum home the significance of the occasion and to encourage healthy habits including the consumption of cocoa. “World Heart Day provides an opportunity for individuals, families, communities and

Ltd, with government’s support, took advantage of the 1D-1F initiative, which focused on the promotion of commercially viable business ventures, to build the new factory at Tanoso, in the Kwadaso district of the region. He disclosed that as an incentive to attract private sector investments in rural economic activities, government had granted a waiver of duties and taxes on machinery and raw

materials, as well as a 5-year tax holiday to Kasapreko Company to nurture the new factory. He further applauded the company for sourcing 90 per cent of its packaging materials domestically. The President emphasized that government remained committed to supporting private sector operators, like Kasapreko, to become globally competitive, and to take advantage of market integration frameworks such as the African Continental Free Trade Area (AfCFTA). “I am particularly pleased that a successful and innovative company like Kasapreko is finding new opportunities under the 1D1F policy and would like to assure them of Government’s unwavering support. “I commend the shareholders and management of Kasapreko for their diligence and commitment towards boosting the capacity of our nation towards self-reliance,” he said. GNA

WEEKLY WEEKLY INVESTMENTINVESTMENT UPDATE SeptemberUPDATE 25, 2020 Septemb CONTINUED FROM PAGE 17

Commodities Commodities Wk. Wk. Change YTD governments around the world Wk. Wk. Change YTD Open Close (%) (%) to unite in the fight against Open Close (%) (%) 43.15 41.92 -2.85 -36.48 cardiovascular diseases which isCrude Oil $/barrel -2.85 -36.48 Gold $/ounceCrude Oil $/barrel 1,962.10 1,866.30 43.15 -4.88 22.5341.92 everybody’s business. Gold $/ounce 1,866.30 -4.88 22.53 2,641.00 2,568.00 1,962.10 -2.76 1.10 As producers of the world’sCocoa$/metric tonne Cocoa$/metric 2,568.00 -2.76 1.10 1.136 tonne 1.1365 2,641.00 0.04 -12.37 premium and high qualityCoffee $/pound Source:www.bloomberg.com, & www.investing.com Coffee $/pound 1.136 1.1365 0.04 -12.37 GoldenTree cocoa and chocolate Source:www.bloomberg.com, & www.investing.com confectionery products, we Brent crude oil posted a weekly decline on the international commodities on growing worries over rising Covid-19 cases, renewed carry a great responsibility market of crude oil posted weekly decline on the international commodities lockdowns inBrent some advanced economies anda slowing economic recovery. getting involved in the prevention on growing worries rising Covid-19 cases, renewed High numbersmarket of new infection cases in the US, the UK andover some advanced and control of cardiovascular lockdowns in some advanced economies and economies sparked worry about its potential impact on global demand of slowing economic recovery. diseases,” he said. the energy commodity. In the US, four-week average demand of the High numbers ofthe new infection cases in the US, the UK and some advanced The CPC boss also announced energy commodity was about 9 percent below about a year ago similar impact on global demand of economies sparked worry its with potential happenings inthe China Ȃ the worldǯ largest consumer. These and indications the company’s plan to adopt and energy commodity. In the US, the four-week average demand of the to resume export in the coming days caused Brent crude localise the annual celebration that to Libya plans energy commodity was about 9 percent below a year ago with similar oil to trim $1.23 of its opening price to end the week at $41.92 per barrel. be known as “Royale Heart Day” happenings in China Ȃ the worldǯ largest consumer. These and indications and urged health professionals that Libya resume in the of coming days caused Brent crude Gold was knocked down byplans fadingto hopes for theexport implementation US and communities’ workers oil topackage trim $1.23 its opening price endthe the week at $41.92 per barrel. Covid-19 stimulus despiteofresurgence in new casesto across developed economies. The price decline of the yellow metal also stemmed within the area to join the effort the dollardown which by negatively Gold wasofknocked fading affected hopes its for the implementation of US to promote better heart health.from the resurgence attractiveness. Gold thus shed $95.80 to trade at $1,866.30 per ounce. Covid-19 stimulus package despite resurgence in new cases across the “This should include the developed economies. The price decline of the yellow metal also stemmed sharing of information on the Cocoa tumbled on the international commodities market on improved fromresulting the resurgence thegrower dollar which negatively affected its health benefits of cocoa with the climatic conditions in bumper harvestofin top Ivory Coast. attractiveness. Gold thus shed $95.80 to trade Cocoa which went down by $73.00 to trade at $2,568.00 per metric tonne at $1,866.30 per ounce. view to ensuring the widespread is anticipated to recover in the near term following the newly-adopted consumption of cocoa among policy initiative by thetumbled Ivorian Government improved processing by 14 Cocoa on thetointernational commodities market on improved both the young and old,” he percent as it outline plans in setting up two addition processing plants that climatic conditions resulting in bumper harvest in top grower Ivory Coast. noted. has the capacity to mob up 100,000 of the Cocoa which wenttonnes down bybeans. $73.00 to trade at $2,568.00 per metric tonne A chief pharmacist from Cocoa is anticipated to recover in the near term following the newly-adopted Coffee recorded little change on the international commodities market Clinic, Dr. Edward Amporful, policy initiative by the Ivorian Government to improved processing by 14 despite report of improved production in Brazil and Vietnam. Data from who was the guest speaker for percent as it outline plans in setting up two addition processing plants that Brazil indicated that export of the beans grew by 38 percent to 47.4 million the occasion, in his presentation has the capacity to mob up 100,000 tonnes of the beans. bags for 2020, up from a previous estimate of 46 million bags. Coffee thus on “Cocoa Consumption and was unchanged to trade at $1.13 per pound. Healthy Heart” implored the Coffee recorded little change on the international commodities market public to make cocoa products, despite report of improved production in Brazil and Vietnam. Data from in this publication is Friday on Friday (w/w) especially dark chocolate Note: a The data Brazil indicated that export of the beans grew by 38 percent to 47.4 million bags for 2020, up from a previous estimate of 46 million bags. Coffee thus daily intake to reduce the risk of was unchanged to trade at $1.13 per pound. heart-related diseases.

Note: The data in this publication is Friday on Friday (w/w)

WEDNESDAY SEPTEMBER 30, 2020

GHANA NATIONAL CHAMBER OF COMMERCE AND INDUSTRY

NOTICE OF THE 44TH ANNUAL GENERAL MEETING OF THE GHANA NATIONAL CHAMBER OF COMMERCE AND INDUSTRY

In accordance with Clause 26 (1)(a) of the Chamber's Rules (1988), NOTICE is hereby given that the 44th Annual General Meeting (AGM) of the Ghana National Chamber of Commerce and Industry (GNCCI) shall be st held on Wednesday 21 October, 2020 at 10:00am at the Ghana Shippers' House Conference Room, Near Fidelity Bank, Ridge - Accra. PART 1

A. PLENARY SESSION: I. Address by the President of the Ghana National Chamber of Commerce and Industry ii. Solidarity messages iii. Address by the Special Guest of Honour iv. Vote of Thanks PART 2

B. BUSINESS SESSION: TO RECIEVE AND DISCUSS THE FOLLOWING: i. The Report of the Council for the year 2019 ii. The National Treasurer’s Report for 2019 iii. The Account for the year duly audited and the Auditor's Report thereon for 2019 iv. Appointment of Auditors C. ELECTIONS: a. To elect the following National Oﬃcers for 2020-2022 I. The President ii. The 1st Vice President iii. The 2nd Vice President iv. The National Treasurer b. To consider and discuss motions of which due notice have been given You are cordially invited to attend the above meeting. By Order of the Council SIGNED Mark Badu-Aboagye Chief Executive Oﬃcer

WEDNESDAY SEPTEMBER 30, 2020

Digital or ‘phygital’ bankingthe best of both worlds In recognition of the challenges experienced by most businesses and the rapid reforms in the Ghanaian banking sector specifically, Dominic Adu, the CEO of First National Bank Ghana has shared some insights on how to positively adapt to the new changes to banking service delivery, relevant to the needs of customers.

y now the impact of COVID-19 on the entire world is no more news. This pandemic has over the period of its prevalence forced in a new, digital-oriented way of life for many people. One key business sector greatly impacted is the banking industry. It is important that even before the standoff, many banks were warming up to the idea of driving digitisation alongside the almost inherent physical service presence with branches. It is predicted that the digitization has come to stay and more evidently, customers are adapting quite rapidly. Hypothetically, it is safe to advise that banks should not be in a hurry to ‘wipe’ their physical presence altogether with the change in the world order and flow due to COVID-19. Indeed, a combination of both offline and online engagement is the best way forward. Entering a new phase of what has been described as the isolation economy, the daily lives of people are being conformed to superseding the previous social and sharing phenomenon. Following all the restrictions that came with the lockdown, digital became the primary channel for retailers, doctors, governments, property, auto sales and banks, indeed every aspect of human interaction. Now, as lockdowns are relaxed,

the consensus is that many consumers will take a long time to return to regular physical engagements – and some may not come back. So, is there a future for ‘brickand-mortar’ banks? Can one marry the online and offline worlds to create a truly cohesive physical/digital hybrid – a phygital experience? The pandemic has accelerated most banks’ digitalization initiatives. If the 2008 recession caused a boost in financial technology innovation, appetite for experimentation, and a wave of fintech start-ups, then this time round it is more about delivering real change. Here banks can learn from the digitalization of other industries such as manufacturing, retail and consumer packaged goods, and utilities. Across these, we see an increasing focus on technological innovations related to voice as a channel, AI-powered chatbots, augmented reality, social virtual reality, hyper-personalisation, gamification, secure video interactions, digital ecosystem plays and others. Yet the physical branch network remains particularly challenging to shift online. Not only does a bank branch hold cultural, historical and prestige value for communities it also is the final bastion for key segments of the population that cling to cash. Typically, these are small businesses, the mainstay of local economies. And finally provides trust and credibility to customers. In order to retain this prestige and their important link with communities, the model of branch banking will have to be turned completely on its head in the post-COVID-19 era. At First National Bank, we believe that banks must break out of the traditional branch model and focus on how to deliver specific, high value, physical interactions and experiences that can complement a digital banking core. In true complementary fashion, digital technologies should also be used to augment physical experiences and make services faster, more secure, and more convenient. This is the essence of a true phygital strategy. In the new norm, consumers will carefully pick and choose how to spend their time interacting. Bank branches, already a low-

Dominic Adu

priority destination for most, will likely struggle to grab a share of this time. This means a smaller network of branches providing a wider variety of services and experiences, potentially even beyond finance. This will include banking kiosks that are colocated within other businesses or physical destinations. These embedded experiences will be orchestrated in a way in which technology also matters and makes a difference. There are many banks that have begun experimenting with new style branches – modelling experience through smaller retail businesses and grocery shops like that of First National Bank’s Agency Plus Partners. With this Agency Plus concept, our bank partners with existing businesses in various communities to operate as outlets which offer a range of banking services to customers on behalf of the bank. First National Bank Ghana has adopted the initiative as part of its strategic plan to take its innovative offerings to the doorsteps of as many Ghanaians as possible without the need to open brick and mortar branches. More of these activations should be encouraged. Bank branches need to offer real value to customers by showcasing the best of what a bank has to offer in terms of education, trust, advice and networking.

Indeed, this also enables closer links with corporate clients. As many countries face an unprecedented recessionary environment, consumer spending is going to be tight. Many businesses would welcome their own miniature bank advisor in their store, helping customers understand and responsibly access their finance options through the myriad of solutions First National Bank has. If the agency banking experience is integrated correctly with the consumer’s online interactions – both with the bank and the business – there could be many opportunities in analysing and sharing data on buyer behaviour and finance capability. It will be much more important to get ever-more limited physical interactions right. Customers have fully demonstrated that they are comfortable dealing with us via digital platforms outside of the branches. We should therefore consider ways of providing a one-stop shop and remote banking services to our clients. Whether going with a digital or phygital strategy, or a combination of that with agency banking, banks can leverage the edge in this new normal. To the customer, the related cost of the extensive branches saved, will be extended to them.

WEDNESDAY SEPTEMBER 30, 2020