Business24 eNewspaper (February 12, 2020)

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WEDNESDAY FEBRUARY 12, 2020

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US$120m GCNet judgement debt looms over UNIPASS

By Patrick Paintsil

Should the Ghana Revenue Authority (GRA) go ahead to implement the new UNIPASS trade facilitation system at the ports, the Ghana Community Network (GCNet) will shut down its systems and head straight to court to demand an estimated US$120million in judgment debt, the Business24 has picked up.

The figure includes, among other things, the cost of demobilizing the

company’s technological systems and physical infrastructure across the country.

The stance of the company, this paper has gathered, was in response to a letter from a senior government official seeking to buy out GCNet out of their current contract with government, which is due to expire in 2023, in order for GCNet to hand over its tried and tested system to UNIPASS. “We are currently at the crossroads for doing the unthinkable in the country’s ports; we have invested

into so much into technology, created so much employment opportunities and consistently helped to shore up revenue from 2002 till date.

“It does not augur well for a country that is looking for investments, if it cannot respect the sanctity of contracts,” a source said.

The source disclosed that, the moves by UNIPASS is a clear indication that they have no ‘superior system’ but is only seeking to profit from what the two main Single Window service providers, GCNet and WestBlue, have done over the years.

The decision of the ministries of Trade and Industry and Finance to award a 10-year contract to Ghana Link and its oversea partner, CUPIA Korea Customs, to operate the UNIPASS trade facilitation has stoked a lot of controversy.

Although some key port stakeholders including the Ghana Institute of Freight Forwarders (GIFF) and Importers and Exporters Association of Ghana have expressed as baseless the need to replace the existing systems at the port, the GRA appears ready to implement UNIPASS. Per the plan, the UNIPASS system was supposed to be piloted at the Takoradi Port as at yesterday [Tuesday] but checks by the Business24 showed that the exercise could not take off.

The Business24 has gathered that although the cost of operating UNIPASS is more expensive compared to that of the two current operators, GCNet and WestBlue, the state will not be making any money from the new system, except in the area of transit trade.

Also, aside the costs to the taxpayer, the shutdown of GCNet’s systems will have dire implications on the operations of some critical state agencies, such as the DVLA and Fire Service, whose back-end activities ride on the technological infrastructure of GCNet.

Cashew export rakes in US$378m

The country raked in US$378 million from the export of 110 tonnes of raw cashew nuts in 2018.

The amount represents 43 percent of the total revenue obtained from non-traditional exports in 2018.

Cashew production in Ghana has averaged between 200kg to 400kg per hectare as compared to the potential yield of between 1,500kg to 2,000kg per hectare harvested in Asia and other continents.

Speaking at the opening of a oneweek technical upscaling development training programme on cashew value chain promotion in Sunyani over the weekend, The Director of Crop Services of the Ministry of Food and Agriculture (MoFA), Mr. Seth Osei-Akoto, acknowledged that there were challenges bedeviling the cashew sub-sector in most producing countries, including Ghana, where production levels were still low.

Mr. Osei-Akoto explained that under the flagship Planting for Food and Jobs programme, the government MORE ON PAGE 2

Africa must choose renewables over coal

By Carlos Lopes

African heads of state and government are convening at the annual African Union (AU) summit, and issues related to the continent’s economic growth and development are front and center. But leaders also must ensure that their growth agenda is linked to the global challenge of urgent action on climate change.

This is particularly critical for Africa, which is disproportionately

vulnerable to the effects of global warming: more frequent and severe tropical storms, droughts, and floods, all of which have devastated African communities and economies in recent years.

Given the climate risks Africa faces, it is perhaps not surprising to see the continent take the lead in shaping a sustainable future. Of the 108 countries that have thus far indicated that they will step up their climate commitments in 2020, as required by the Paris agreement, 47 are in Africa.

They recognize the opportunities to leapfrog to a new, cleaner, more efficient growth model – and the risks of not doing so.

Moreover, in November 2019, the African Development Bank (AfDB) announced that it will not finance new coal plants in the future. This shift reflects renewable technologies’ increased competitiveness and the emergence of new business models. Combined with investments in energy-efficient appliances, equipment, housing, and commer-

FEATURE

FEATURE

EUROPE MUST RECOGNIZE CHINA FOR WHAT IT IS

INVESTING IN RESILIENCE AND FOOD SECURITY LEADS TO PEACE

Neither the European public nor European political and business leaders fully understand the threat presented by Xi Jinping’s China. PAGE 5

In a region beset with conflict, the uptick of numbers paint a grim foreboding. Hunger is on the rise again in Africa. PAGE 10

cial buildings, these developments can eliminate the need for new coal-generated power in Africa.

The AfDB is adding to the growing momentum across the development-finance community to support the transition to a low-carbon economy, and to move away from coal. More than 100 global financial institutions, increasingly concerned about climate-related risks, have now divested from thermal coal, MORE ON PAGE 2

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News/Editorial US$378m realized from raw cashew exports continued from page 1 had supported the development and distribution of about five million improved cashew seedlings to farmers this year.

Mr. Osei-Akoto commended ComCashew and its partners for the investment in the capacity building of actors within the cashew sub-sector and gave assurance that the ministry would continue to collaborate and support such initiatives.

He said it was gratifying that the government had passed the Tree Crop Development Authority Act (Act 1010) that seeks to develop and regulate the cashew sub-sector to enable it to contribute to the economic transformation of the country. In a speech read on her behalf, the Bono Regional Minister, Mrs. Evelyn Ama Kumi-Richardson, observed that as a region with the highest production in cashew, the government’s Planting for Export and Rural Development programme has been very beneficial to its farmers.

She stated that cashew processing companies in the region had invested in adding value not only to the cashew kennels but also the apple and called on partners in the cashew sub-sector to support and encourage more processing of the commodity in the region.

On her part, the Finance and Administration Manager of ComCashew, Mrs. Juliana Ofori-Karikari, explained that the main objective of her organisation was to increase the production and processing competitiveness of cashew in Africa.

Mrs. Ofori-Karikari observed that Ghana had become a place of expertise in cashew throughout West Africa and noted that has been made possible through the efforts of MoFA, supported by stakeholders such as GIZ/ComCashew.

Touching on the objective of the training, Mr. Leonard Dogbey, of the Ghana Skills Development Initiative, stated that there was the need to equip facilitators such as tutors of agriculture educational institutions with the standard skills to enable them impart their knowledge to young trainees to create more jobs.

Seventy-two (72) participants, made up of tutors from agriculture training institutions in Ghana are taking part in the training programme to ensure that they acquire the right knowledge in order to pass it on to potential trainees who enroll in their institutions.

The training was organised by Competitive Cashew Initiative (GIZ/ ComCashew), a non-governmental organisation, in collaboration with the Ghana Skills Development Initiative (GSDI), with support from the MoFA.

Editorial: Let’s put national interest first Concerns initially raised by persons with knowledge about Ghana’s Single Window system have proven true, following the revelation that UNIPASS has no ‘superior” system but is rather seeking to benefit from years of hard work by the Ghana Community Network Services Limited ( GCNet) and WestBlue, the two main vendors.

A clause in the 10- year sole-sourced contract championed by the Min-

istry of Trade and brought Ghana Link and it’s overseas partners in the picture, reveal that the handing over of GCNet and any other third parties’ system to UNIPASS to operate.

This begs the question, why would you take a job from a company in which the state has an interest and which pays so much dividends to government annually, and give it to a foreign company with no tested systema.?

Policy think-tank, IMANI has consistently maintained that there is no need to tinker with the existing Customs system at the port given the key role in helping rake in more revenue and drastically reducing the number of days it took to clear goods.

The paperless initiative championed by the Vice President, Dr. Mahamudu Bawumia, with GCNet and WestBlue as ven-

dors, has been largely successful.

It’s the position of this paper that, UNIPASS, having failed over the past months to demonstrate its superior technology, should be shelved and the existing operators made to continue their work.

If the contracts of the existing vendors expire, then we may consider alternatives or simply renew their contact.

Africa must choose renewables over coal Continued from page 1

including 16 of the top 40 international banks, and even more are restricting their investments in new coal.

Shifting away from coal is good not only for the climate, but also for Africa’s economy and people. In many regions, renewable energy is now cheaper than coal, even without subsidies. The economics are even more favorable when we consider the hidden costs of coal-related health problems, the risk of stranded assets, and the high upfront investment needed for so-called clean coal. It simply makes no economic sense to invest in new coal.

Indeed, 42% of coal-fired power plants worldwide are losing money, and Africa is not immune to this trend. Primary energy costs for South Africa’s public electricity utility Eskom

have soared 300% in real terms over the last 20 years, leading to dire financial problems and higher rates for consumers. An analysis of the draft 2016 Integrated Resource Plan (IRP) for South Africa’s power system found that the least-cost option was not coal, but rather a mix of solar photovoltaic, wind, and flexible power generators like hydropower, biogas, or gas. In response, the 2018 IRP confirmed a move away from coal to renewable energy. Other African countries trying to follow South Africa’s path would likely find themselves in a similar situation.

Furthermore, shifting to renewables can improve energy access quickly and affordably while avoiding air pollution. Between 1990 and 2013, annual deaths from outdoor air pollution in Africa increased by 36%, to about 250,000. Decentralized or off-grid renewable energy can reduce harmful emissions, and help rural African communities to meet basic household and public power needs. Broader access to electricity can also boost gender

equality by bolstering women-led entrepreneurial activity, implying up to an elevenfold increase in women’s incomes.

The benefits of a transition away from coal are clear. But as Africa embarks on a low-carbon path, it also must invest more in energy efficiency and avoid becoming over-dependent on natural gas, oil, or even larger-scale hydropower, all of which are highly exposed to climate-related financial risks.

Mixed policy signals could result in trillions of dollars of stranded fossil-fuel assets by 2035, or a loss of up to 15% of GDP if valued in today’s terms. And climate change is already putting some large-scale African hydropower facilities at risk, calling into question their longer-term reliability and financial viability.

But, despite the economic and social case for renewables, new coalfired plants are still being planned across Africa. With projects expected to come online in Zimbabwe, Senegal, Nigeria, and Mozambique,

the continent’s coal-fired power capacity could increase from three gigawatts today to as much as 17 GW by 2040.

African countries are now at a turning point in terms of how they choose to develop. Governments should strengthen strategies and policies aimed at encouraging the transition to a new climate economy and increasing investment in clean energy.

Making this shift to a resilient, low-carbon economy is critical to achieving the AU’s ambitious Agenda 2063 for inclusive and sustainable development. And by phasing out fossil fuels, Africa can lead by example in the global effort to combat climate change.

(Carlos Lopes, a professor at the Nelson Mandela School of Public Governance at the University of Cape Town, is High Representative of the African Union for partnerships with Europe and a member of the Global Commission on the Economy and Climate. Copyright: Project Syndicate, 2020. www. project-syndicate.org)

Rhinos in Kenya face a new threat: bacteria - study The mighty rhinos living in a national park in Kenya face a new threat: microscopic bacteria.

Scientists behind a study in a recent issue of New York-based academic journal EcoHealth found that the endangered animals in Ruma National Park, a protected area on shores of Lake Victoria, had developed alarming levels of antibiotic resistance.

They appear to have become unexpected casualties of the global overuse of the drugs.

Resistance to them is growing because people take the drugs for non-bacterial diseases; don’t finish drug courses, allowing bacteria to recover and adapt; and because many farmers overuse the medicines on livestock.

Antibiotic use and abuse in Kenya has been rampant for decades, elevating levels of drug resistance among people, livestock and now wildlife.

The team of scientists, which included Maseno University PhD student Collins Kipkorir Kebenei, used fecal samples to study resistance levels in 16 black rhi-

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nos. They isolated E. coli genes in both rhino and human waste and studied how resistant they were to eight of the most commonly used antibiotics: ampicillin, gentamicin, tetracycline, cotrimoxazole, chloramphenicol, ceftriaxone, amoxicillin/clavulanic acid, and erythromycin. Resistance levels between rhinos and humans were comparable for four of the antibiotics. Rhinos were more resistant than

humans for two of them.

That’s a problem because rhinos - already under major threat from poaching - are susceptible to the bacterial disease bovine tuberculosis, researchers in South Africa’s Kruger National Park have found.

Antibiotic resistance could make treatment harder.

“If they (rhinos) are sick, they need to be treated – and so what kind of medication can be used on these

Editorial: Dominic Andoh: E ditor Eugene Kwabena Davis: Head of Parliamentary Business & Commodities Benson Afful : Head of Energy & Education Patrick Paintsil : Head of Maritime & Banking Eliezer Mensah: Head of Production Marketing: Alexander Lartey Agyemang: Business Development Manager

animals?” Kebenei said in the university lab, as his adviser and co-author, zoology professor Patrick Onyango, looked on.

Rhinos are already critically endangered. There are only about 29,000 alive, according to the International Rhino Foundation.

Around 5% of them are in Kenya.

It’s unclear how the rhinos are being exposed to the stronger bacteria. It could be through drinking at the Lambwe River, which runs through Ruma National Park and carries waste containing antibiotic-resistant bacteria. Or it could be through contact with the rangers protecting them from poachers.

Onyango said that although attention was focused on poaching, antibiotic resistance was a new and insidious threat.

“There are people who are hawking antibiotics in bus stations,” added David M. Onyango, a lecturer in Maseno University’s zoology department who also co-authored the study. “There is no proper policy and regulation on their use.”

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News

Develop policies to deal with critical maritime issues, AAMA told Mr. Kweku Ofori Asiamah, the Minister for Transport has called on the Association of African Maritime Administrations (AAMA) to be at the forefront in developing policies to deal with the critical issues confronting Africa’s development.

He said some of the critical issues confronting the African continent are the lack of investment in shipping and the low participation of African tonnage in the carriage of seaborne trade.

Mr. Ofori Asiamah made the call at the 4th AAMA Executive Council Meeting in Accra.

The aim of the Association is to promote the development of the maritime industry in Africa and encourage coordination and policy integration for greater competitiveness on a global front.

It also sought to promote the sharing of best practices among Africa’s maritime administrations in order to enhance its growth.

The Minister said the maritime industry is the backbone of most economies across the world and especially for African economies that mostly depend on the importation of goods and services for the development of their countries.

Mr. Kweku Ofori Asiamah,

It is known that about 90 per cent of Africa’s imports and exports are conducted by sea and that 38 out of the 54 States in Africa are Coastal yet, the statistics of Africa’s share of the international seaborne trade are not encouraging.

At the last International Maritime Organisation (IMO) Assembly session, only three African countries namely Egypt, Kenya and South Africa were elected to serve on the Council.

He said to put across issues that affect the African maritime industry at the international level, Africa must be well represented at the Council of International Maritime

Banks now taking corporate governance seriously—Addison

A total of 184 bank directors undertook the mandatory annual directors’ corporate governance certification training programme as banks embrace strong corporate governance values as the core of a resilient and sustainable financial sector.

Governor of the Bank of Ghana (BoG), Ernest Addison, who disclosed this at the rebranding of Absa Bank Ghana Limited in Accra, indicated that results of a recent survey show full compliance of the banks to the regulator’s corporate governance requirements.

“Results of a recent survey indicate full compliance with requirements of the corporate governance directive on the size, structure, composition and qualification of bank boards; due diligence in the appointment of key management personnel; and separation of the positions of CEOs and board chairs,” he said.

A chained cleanup of the banking fraternity over the last two years saw a number of top-class banks and other financial institutions closed down due largely to inappropriate corporate practices that put their balance sheets beyond salvaging.

Nine banks could not escape the axe even after several attempts by the central bank to resuscitate them.

Soon after the cleansing exercise,

and in accordance with Section 56 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), the Bank of Ghana issued the Corporative Governance Directive to industry in March 2018 for implementation.

Among the directives was for the banks to ensure full compliance with the provisions such as having in place a solid business strategy; board qualification and composition; board size and structure; and directors’ independence.

Also, the tenure of office for the board chair and CEO of the banks were pegged at three and four years respectively but subject to renewal.

Dr. Addison argued that the banking sector’s performance after the reforms, which commenced in 2017, has been encouraging and as regulators, the central bank will continue to hold banks accountable by applying the laws applicable to the sector.

Speaking on the Absa Bank Ghana brand, he said: “The central bank expects the changeover to Absa to carry along the level of excellence, leadership, and professionalism that has become synonymous with the 100-year Barclays heritage in Ghana. This is what has endeared the general public to Barclays, and that is what will be expected from Absa.”

Organisation (IMO).

The Minister said clearly that African States were under represented and “We need to do more to increase our presence and participation on the Council.”

He said the Association must also take steps to coordinate and strengthen the work of Africa’s Permanent representatives at the IMO and encourage them to take common positions on the maritime issues affecting Africa and articulate these position at the IMO. Mr. Asiamah said the African Union through its development agenda has initiated the African Integrated Maritime Strategy to regulate and manage maritime issues and resources within the African maritime domain.

“Regrettably, the African Union does not have a maritime wing to see to the harmonization and development of this very important agenda,” he added.

He, therefore, called on the leadership of the AAMA per their unique position to engage the African Union with a view to ensuring that maritime issues were placed high on the Union’s agenda.

He said the role of the AAMA has

become more relevant in the era of the blue economy when Africa was aiming at a structural transformation through sustainable economic progress and social development to be achieved by tapping into the many benefits the sea and inland waters have to offer.

Mr. Thomas Alonsi, the Director-General of the Ghana Maritime Authority said the vast majority of the population depend on the oceans and inland water for their livelihood and for transportation.

He said increasingly, and more recently, the oceans have also served as the major source of energy and mineral needs through the exploration of hydrocarbons He said the oceans, therefore plays very significant role in continent’s existence, hence the need to have a coherent policy for its sustainable use.

He said the critical issues for discussion includes the role of AAMA in the implementation of Africa’s integrated maritime strategy 2050, the African maritime regulations, country performance review and development of the African Near Coastal Trading Certification and Competency Code.

Others are Maritime Celebrations such as Day of the Seafarer, African Day of the Seas and Oceans and World Maritime Day and African Maritime Administrations Awards.

He said international trade was critical to almost all African economies and maritime trade and sustainability of the continent’s marine resource would develop further only if the marine environment was safe and secured.

The Director-General said it was evident by reports from the international maritime bureau showing that even though there was a decline in overall worldwide incidents of piracy last year, there was an alarming increase in crew kidnapping across the Gulf of Guinea.

“This essentially, calls for greater collaboration necessary to put in place the institutions and capabilities to ensure security and the rule of law in order to address these illicit maritime activities and transnational organized crimes in waters,” he added.

He, therefore called on the maritime administrations to increase their collaborative and coordination efforts with the Navies to install sanity in the maritime domain.

Free SHS has improved access but substantial challenges remain- PIAC

by Benson Afful

The Public Interest and Accountability Committee has shared its findings and observations from the report of a monitoring exercise undertaken in 2018 and 2019 on the implementation of the Free Senior High School programme.

The exercise was in line with the Committee’s mandate of monitoring and evaluating compliance with the Petroleum Revenue Management Act, 2015 (Act 815) as amended in the management of petroleum revenues, and conducting independent assessments of the management and use of these revenues.

In line with its mandate to undertake independent assessment of the management and use of petroleum revenues, the Committee in 2018 and 2019 undertook the monitoring of Senior High Schools under the Free SHS Programme. The exercise covered 51 schools across eight (8) regions, comprising, Ashanti, Brong Ahafo, Central, Greater Accra, Northern, Upper East, Upper West and Western regions.

The Committee’s decision was informed by the fact that the Programme benefited substantially from the Annual Budget Funding Amount (ABFA) through the selection of Physical Infrastructure and Service Delivery in Education as a priority area for petroleum revenue spending. In 2017, 59 percent (Approx. GH¢196 million) of utilised ABFA was spent on the Programme, with 50 percent (Approx. GH¢415 million) of utilised ABFA going to support the programme in 2018. For 2019, approximately GH¢680 million representing about 32 percent of the projected ABFA, was allocated for the programme.

The exercise was aimed at obtaining first-hand information on the progress of implementation of the policy, the challenges and opportunities, and identifying areas for improvement.

General Observations 1. Early reporting at schools: The programme has resulted in a more timely reporting of students to school at the beginning of each term, compared to the period preceding the Free SHS. Students no longer have to wait for school fees to be provided them before reporting to school.

2. Supply of Core Textbooks: Core textbooks had been adequately provided in all schools visited, albeit late in some instances. Generally, the books were supplied in sufficient quantities. 3. Supply of Uniforms and Jerseys: Most schools received uniforms and jerseys on time, however, there were few reported cases of schools not receiving theirs consistent with the school colours.

4. Impact on Enrolment: The Programme has led to an increase in enrolment in 41 percent of the schools visited. Girls’ enrolment in particular has increased across most of the schools visited. 5. Improved Feeding Menu: According to school authorities and some of the students interviewed, food variety and quality have generally improved under the Programme.

Concerns: 1. Quality and Timeliness of Supplies Poor quality and un-wholesomeness of some supplies, delays in supply of food and other items, and under or over supply of some food items and provisions were pretty wide spread.

2. Corruption Risks Associated with Food Supply: The lack of advice to recipient schools on the value of goods supplied portends a corruption risk as the lack of transparency provides cover for cost manipulation. The lack of cost information also makes it difficult to complete the school accounts. The schools indicated that their request for advice has so far been ignored.

There is no transparency in the selection of suppliers.

3. Performance The abolition of cut-off grades in the admission of students has led to a situation of dumping of poorgrade students in schools, particu-

larly deprived schools.

4. Elective Text Books and Equipment Elective textbooks are not covered under the policy. However, this has not been clearly communicated to parents by government, leading to a situation where some parents are refusing to take responsibility for the purchase of these textbooks for their wards. This situation is negatively impacting on the quality of teaching and learning in the schools. The absence of a textbook replacement scheme is also adding to the challenge to effective teaching and learning.

Furthermore, equipment and materials for the study of Technical and Vocational courses are not provided.

5. Funding / Budgetary Allocations Some schools experience delays in receipt of funds, sometimes transferred in tranches within or across terms. About 85 percent of the schools visited had to rely the funds of the non-free SHS students to cater for all streams of students unti funds are disbursed from the Free SHS Secretariat. If this is not addressed, it will impact negatively on the running of the schools when the programme runs full stream.

6. Infrastructure and Equipment Majority of the schools visited had insufficient classrooms, beds, labs and equipment, poor or inadequate staff quarters, prevalence of bed bugs, lack of infirmaries and where they exist, there are no qualified nurses to man these facilities. A case in point was when the PIAC team arrived just in time, to save a student who had just had an asthma attack in one of the schools, with no infirmary and no vehicle to convey the student to a health facility.

7. Operations of PTAs While the Ghana Education Service’s (GES) moratorium on the operations of Parent Teacher Associations (PTAs) may have been well-intended, this has deprived schools of the additional infrastructure that the PTAs traditionally provide. Most of the developmental projects that the PTAs initiated have been abandoned.

8. Staffing

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Feature

Europe must recognize china for what it is

By George Soros

Neither the European public nor European political and business leaders fully understand the threat presented by Xi Jinping’s China.

Although Xi is a dictator who is using cutting-edge technology in an effort to impose total control on Chinese society, Europeans regard China primarily as an important business partner. They fail to appreciate that since Xi became president and General Secretary of the Communist Party of China (CPC), he has established a regime whose guiding principles are diametrically opposed to the values on which the European Union was founded.

The rush to embrace Xi is greater in Britain, which is in the process of separating itself from the EU, than in the EU itself. Prime Minister Boris Johnson wants to distance the United Kingdom from the EU as much as possible and to build a free-market economy that is unconstrained by EU regulations. He is unlikely to succeed, because the EU is prepared to take countermeasures against the type of deregulation that Johnson’s government seems to have in mind. But in the meantime, Britain is eyeing China as a potential partner, in the hope of reestablishing the partnership that former Chancellor of the Exche-

quer George Osborne was building between 2010 and 2016.

The Trump administration, as distinct from US President Donald Trump personally, has done much better in managing its ties with China. It developed a bipartisan policy that declared China to be a strategic rival and put tech giant Huawei and several other Chinese companies on the so-called Entity List, which forbids US companies to trade with them without government permission.

Only one person can violate this rule with impunity: Trump himself.

Unfortunately, he appears to be doing just that by putting Huawei on the bargaining table with Xi. Since May 2019, when the United States placed it on the Entity List, the Department of Commerce has granted Huawei several three-month exemptions in order to prevent undue hardship for the company’s US components suppliers.

Huawei is a very unusual – and in some ways unique – company. Its founder, Ren Zhengfei, received his technical education in part as a member of the People’s Liberation Army engineering corps, and the PLA became one of his first major customers. At the time of Huawei’s founding in 1987, all of China’s technology was imported from abroad, and Ren’s goal was to reverse engineer foreign technologies with local researchers. He has succeeded be-

yond his wildest dreams.

By 1993, Huawei launched the most powerful telephone switch available in China. Subsequently, it received a key contract from the PLA to build the first national telecommunications network. It then benefited from the government’s policy, adopted in 1996, for nurturing domestic telecommunications manufacturers, which also meant keeping foreign competitors out.

By 2005 Huawei’s exports exceeded its domestic sales. In 2010, Huawei was included in Fortune magazine’s global list of the 500 largest companies.

After Xi came to power, Huawei lost whatever autonomy it may have enjoyed. Like every other Chinese company, it must follow the CPC’s orders. Until 2017, this remained an implicit understanding; with the adoption of the National Intelligence Law that year, it became a formal obligation.

Soon after that, a Huawei employee was involved in a spying scandal in Poland, and the company has also been accused of other cases of espionage. But spying is not the greatest danger for Europe. Making Europe’s most critical infrastructure dependent on Chinese technology means opening the door to blackmail and sabotage.

It is clear to me that under Xi, China poses a threat to the values on which the EU was founded. Appar-

George Soros

ently, this is not clear to the leaders of EU member states, nor to the leaders of industry, particularly in Germany.

The EU faces a tremendous challenge: the silent pro-European majority has spoken, saying that their primary concern is climate change, but the member states are fighting with one another over the budget and are more focused on appeasing Xi than with maintaining the transatlantic relationship.

Instead of fighting a losing battle against Huawei’s dominance in the 5G market, the US and the EU, or the EU alone, ought to cooperate in building up Ericsson and Nokia as viable competitors. Xi will meet the heads of state and government of the 27 EU member states at the EU-China summit in Leipzig in

September. Europeans need to understand that this will hand him a much-needed political victory unless he is held accountable for, and questioned about, his failure to uphold human rights, particularly in Tibet, Xinjiang, and Hong Kong.

Only the Chinese political leadership can decide Xi’s future. The harm caused by his mishandling of the coronavirus outbreak has become so visible that the Chinese public, and even the Politburo, must recognize it. The EU should not knowingly facilitate his political survival.

George Soros, Founder and Chair of the Open Society Foundations, is the author, most recently, of In Defense of Open Society (Public Affairs, 2019).

Copyright: Project Syndicate, 2020. www.project-syndicate.org

Is global climate solidarity impossible?

By Willem H. Buiter

NEW YORK – Despite the buzz around climate action at this year’s World Economic Forum meeting in Davos, Switzerland, the world’s current environmental prospects look grim. There are three obstacles: climate-change denial; the economics of reducing greenhouse-gas (GHGs) emissions; and the politics of mitigation policies, which tend to be highly regressive.

According to the Intergovernmental Panel on Climate Change, global carbon-dioxide emissions must be cut by 45% from 2010 levels by 2030, and then eliminated entirely by 2050, to have even a reasonable chance of preventing global warming of 1.5°C above pre-industrial levels. “We need quick wins,” warns the United Nations Environment Program in its latest Emissions Gap Report, “or the 1.5°C goal of the Paris Agreement will slip out of reach.”

That is an understatement. Even if the current Nationally Determined Contributions (NDCs) under the 2015 Paris accord are met, emissions in 2030 will be 38% above where they need to be. Global average temperatures will be on track to rise by a disastrous 2.9-3.4°C by 2100, with continuing increases thereafter. The NDC targets would need to be roughly tripled just to limit warming to 2°C, and would have to increase fivefold to achieve the 1.5°C goal.

That is not going to happen. The only time in recent history when CO2 emissions have looked as though they might plateau was in 2014-2016, owing to weak global growth. According to the Global Carbon Project, emissions have since increased again, by 2.7% in 2018 and 0.6% in 2019. Making matters worse, the December 2019 UN Climate Change Conference (COP25) was a dismal failure, resulting in no new climate pledges

By Willem H. Buiter

or clear messages of intent for this year’s COP26 summit in Glasgow.

Why is humanity so reluctant to save itself? First, many people simply do not accept the predictions issued by climate scientists. But denialism is the least serious of the three main obstacles. There will always be a minority for whom facts and logic are unwelcome distractions. Yet even US President Donald Trump must realize by now that climate change will undermine the future viability and profitability of Mar-aLago.

As the real-world costs of climate-driven disasters mount over time, denialism will become less of an issue. Indeed, a November 2019 Yale University survey finds that 62% of registered voters in the United States already would support a president “declaring global warming a national emergency if Congress does not act.”

The second major challenge is

that GHG emissions are the quintessential global economic externality. Climate change doesn’t respect borders; GHGs emitted anywhere will affect everyone eventually. That means there is a massive free-rider problem. Under current circumstances, it will always be individually rational to let others cut back on their emissions rather than doing so yourself. The only way to correct this problem is through collective rationality or enlightened self-interest. But given the current state of multilateralism, expecting a truly global effort in pursuit of the common good is a tall order.

The third obstacle is that effective policies to reduce GHG emissions disproportionately hurt the poor (both globally and within countries). The International Monetary Fund recently calculated that the current effective global price of CO2 emissions is a mere $2 per ton.

To limit global warming to less than 2°C, however, would require an average effective price of $75 per ton by 2030.

I agree with Harvard University

economist Kenneth Rogoff that a uniform global carbon-emissions tax is likely to be the best solution to the climate challenge, at least from an environmental perspective. But with such a tax in place, average household electricity prices over the next decade would increase cumulatively by 45%, and gasoline prices by 15%. Hence, even within rich countries, the distributional consequences would be difficult to handle, as France’s government found out after it tried to introduce a modest fuel tax in 2018. Worse, since the 1980s, effective redistributive fiscal mechanisms in most advanced economies have been emasculated.

Moreover, the larger distributional burden of a global carbon tax would fall disproportionately on poor countries that are hoping to pursue rapid development in the coming decades. Around 570 million people in Sub-Saharan Africa alone lack access to basic electricity; globally, the number is closer to 1.2 billion.

Needless to say, long-overdue growth in developing and emerging

economies will bring massive increases in energy consumption and GHG emissions. In India, China, and many other countries, coal-fired power plants will likely continue to be built for years to come. Clean and renewable energy from solar and wind will complement, but not displace, fossil fuels in these countries. Despite the strides made in battery storage technology, the intermittency problems associated with wind and solar imply a continuing role for fossil fuels and nuclear power. Consider India, which accounts for 7% of annual global GHG emissions, making it the world’s fourth-largest emitter, after China (27%), the US (15%), and the European Union (10%). That is despite the fact that India’s per capita energy consumption is around onetenth of America’s. And even if that figure doubles by 2030, it will still be only half of what China’s was in 2015.

Countries like India and those in Sub-Saharan Africa are not going to sacrifice their economic development for the sake of emissions reductions. The only way to square the circle is to extend financial aid to developing and emerging economies undergoing unavoidably energy-intensive development, so that they can afford to internalize the GHG externality through an appropriately steep tax on emissions.

Unfortunately, sustained largescale international aid programs are deeply unpopular. And given that domestic fiscal solidarity is already wanting, cross-border fiscal solidarity seems like a non-starter.

Unless and until that changes, an existential crisis of our own making will only worsen.

Willem H. Buiter, a former chief economist at Citigroup, is a visiting professor at Columbia University.

Copyright: Project Syndicate, 2020. www.project-syndicate.org

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Energy

Kenya power: 4GW target in sight but challenges persist Kenya is often seen as a relatively attractive market for investors, with a functioning democratic polity, a stable economy and a strong track record of private sector investment. However, challenges persist in Kenyan domestic politics and governance, and in the investment environment for the electricity supply industry (ESI) and other investable sectors. The African Energy consultancy team’s latest in-depth country survey, Kenya Power Report 2019/20, outlines the market’s attractions and downsides for power developers, financiers and other stakeholders.

Calm before the storm There is an air of relative calm before a looming storm in the often-dramatic soap opera that is Kenyan politics. At several years of separation from the 2022 presidential contest, the familiar winds of a Kenyan leadership race are already buffeting the political landscape – even though a surprise détente between President Uhuru Kenyatta and his perennial rival Raila Odinga has helped plug the greatest source of political volatility. While the ‘handshake agreement’ removed an unwelcome distraction to the Jubilee Party-led government’s ambitious ‘Big Four’ development policy agenda, it has also created swells of disturbance across the political divide. To complicate matters, the fractured Jubilee Party is facing existential threats from within, reflected in the increasingly palpable discontent of Vice President William Ruto and his supporters,

whose eyes are firmly fixed on the top job. Concerns over corruption, indebtedness and other issues feed into a relatively low African Energy Political Risk Rating of ‘D’ (on a scale where ‘A’ is the lowest risk and F the highest).

Positive macro indicators despite concerns In contrast, upbeat macroeconomic indicators suggest clear sailing for Kenya’s macroeconomy – a forecast that is expected to continue, despite a few worrying clouds on the horizon. Kenya has earned rightful praise for a generally positive investment environment and a resurgence in economic activity.

However, a mounting debt profile – which has been aggravated by the loosening of government purse strings on a number of flashy (often Chinese-financed) infrastructure projects – is making markets increasingly anxious, despite resolute assurances from policymakers.

IPP ‘frenzy’ in the power sector Favourable economic conditions have been felt in the ESI, helping spur a frenzy of independent power

project (IPP) activity in recent years.

This has been facilitated by several phases of power sector reform spanning multiple decades; and the reforms continue as detailed in Kenya Power Report 2019/20.

In theory, generation capacity now outstrips demand with a healthy surplus. However, a number of technical and non-technical factors have severely limited delivery, meaning there remains a power supply deficit. African Energy’s research points to a very promising medium-term outlook, however, as the pipeline of generation projects is expected to continue flowing. Kenyan generation capacity is forecast to reach 4GW by 2022, according to African Energy Live Data, whose figures are based on an analysis of each existing and planned (with a realistic chance of coming on line) power plant.

A proactive approach to policy-making The government’s appetite for generation is matched by a proactive approach to policy-making, as expressed in the wide-ranging 2019 Energy Act, which introduced new

regulatory bodies and redefined existing mandates.

The mood in Nairobi has shifted towards least-cost expansion, with renewable energy at the forefront.

The share of energy from renewable sources as a percentage of total capacity is expected to reach 80% by 2021. Geothermal energy will make the most substantial contribution with a weighty 656MW of geothermal generation capacity expected online by 2024. Wind and solar are also set rise within the energy mix; this contrasts with a noticeable decline in the use of liquid fuel.

The project pipeline is busy Following the commissioning of the multi-donor-financed Lake Turkana Wind power project in 2018-19, a significant number of renewable IPPs are expected to come online in the foreseeable future. The list includes the Suswa Geothermal project and a number of geothermal stations in Olkaria; these are expected to add 150MW and a collective 500MW, respectively, between 2019 and 2021. The 102MW Kipeto wind project is due in 2020 and the

80MW Meru plant is expected in the same year. According to African Energy Live Data, the long-term project pipeline also contains some expected big developments. These include an additional 500MW of hydroelectric power (HEP), which is due around 2031 in the form of the High Grand Falls HEP on the Tana River.

Controversial coal and nuclear More controversially, Kenya’s national nuclear programme is expected to begin within 20 years with the installation of 1GW of power. More immediately, the massive 1,050MW Lamu Coal power plant, backed by China, has hit a stumbling block. The highly controversial coal-fired project’s future is now in question pending serious environmental concerns. This development represents a surprise departure from the recent trend of Chinese investment projects in Kenya, which have been heavily scrutinised for a perceived lack of sober and long-term consideration.

Nevertheless, Chinese financing for power projects – including the 54.7MW Garissa Solar scheme – shows little sign of slowing.

Off-grid is in vogue As Kenya strives for universal electricity access by 2020, the country is growing into a role of global leader and continental hub for off-grid solutions, particularly within the blossoming solar home systems market. Policy-makers are trying to capitalise and have set an ambitious target of installing 8,000 minigrids by 2023 to serve 3.5m people.

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News

Richard AkuokoAdiyia is new CEO of PBC

The Board of Directors of PBC limited has appointed Mr. Richard Akuoko Adiyia as the Chief Executive Officer of the company effective January 21, 2020. Mr. Adiyia brings to the position decades of corporate experience in finance and international development,having worked extensively with the United Nations (UN) in the United States of America, Switzerland and Abkhazia Georgia (Former Soviet Rep.) He is a former Member of Parliament for the Ahafo-Ano North Constituency and until his appointment as CEO of PBC Ltd. the Financial Controller of GIHOC Distilleries Ltd.

Collapsed FMCs: SEC announces two-phased payment plan

By Patrick Paintsil

The Securities and Exchange Commission (SEC) has that payment to customers of the 53 fund management companies (FMCs) whose licenses have been revoked will be made in two phases following the completion of claims submissions which started from November last year to January 15, 2020.

According to the securities sector regulator, further communication on when payments will commence will be made in due course.

“Two phases of the payment of claims are yet to commence. In the first phase, the amount promised and allocated by Government would be paid to investors after the validation of claims submitted.

The second phase will be after a court-appointed official liquidator realizes net proceeds upon successful winding- up proceedings in Court in relation to the affected

fund managers’ assets,” the SEC stated in a public notice on its website.

In November 2019, the SEC revoked the operating licenses of 53 fund management firms pursuant to Section 122 (2) (b) of the Securities Industry Act, 2016 (Act 929 or “the Act”).

The affected companies were deemed by the regulator not to be performing in conformity with the industry’s best practices and standards, among others.

By the public notice, SEC has indicated its readiness to pay the affected investors with the payment dates expected to be made soon.

The commission has also assured investors who are yet to receive acknowledgment of claims from the SEC should note that acknowledgments are ongoing.

“SEC would like to thank Investors and all stakeholders for the successful completion of the submissions,” the statement added.

Pay all locked-up deposits, investments to depositors – GPCC to govt The Ghana Pentecostal and Charismatic Council (GPCC) has called on the Finance Ministry, the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC), to, “without delay, take steps as promised earlier by the President, in his New Year message, to pay, in full, monies owed thousands of individual Ghanaians and institutions as a result of the financial sector cleanup“.

In a communiqué issued by the GPCC after deliberations at the 2020 Conference of Heads of Churches and Organisations held at the Pentecost Convention Centre, Gomoa Fetteh from 4 to 7 February 2020, the Council said: “The cleanup has brought untold hardships to many Ghanaian individuals, families, businesses as well as non-profit institutions, thus, threatening the very survival of many families, especially the very vulnerable popu-

lations at the micro level”.

“As a Council, we are willing and committed to mobilising and joining the masses on the streets to demand full payments of all locked-up funds of ordinary Ghanaians should government fail to address the issue in the shortest possible time”.

President Nana Addo Dankwa Akufo-Addo, in his Christmas message to Ghanaians last year, said customers of all the collapsed financial institutions – banks, microfinance firms, savings and loans companies, finance houses and fund managers – will have a full refund of their locked-up deposits and investments.

“Thus far, the Ministry of Finance and the Bank of Ghana have worked together to guarantee payments of 100% of deposits of customers of the failed banks – which is being done”, the President announced, adding: “I have directed the Minis-

try of Finance to work with the Bank of Ghana to ensure that same applies to customers of microfinance and savings and loans companies whose licences have been revoked”.

The financial sector cleanup exercise saw the collapse of nine local banks, 347 microfinance companies, 23 savings and loans and finance houses, as well as 53 fund management companies.

“We have had to take painful but necessary measures to sanitise and save the banking system – a process which I know has brought discomfort to many a household”.

“It is worthy to note, however, that the jobs of some 6,500 workers were saved as a result, instead of the 10,000 that could have been lost, in addition to the protection of funds of 4.6 million depositors”, the President added on the need for that bold exercise.

PHARMACEUTICALS

New Bill to set up Trust Fund to cater for drug addicts

By Eugene Davis

A new bill, the Narcotics Control Commission Bill, 2019 which is currently being considered by Parliament is expected to provide for the establishment of a Trust Fund for the rehabilitation of persons suffering from substance abuse disorder once it is passed into law.

A memorandum accompanying the bill has revealed.

Under the Narcotics Control Commission Bill, there shall be a trust fund to support people who would undergo rehabilitation from substance drug abuse.

It is also proposed in the Bill that, monies for the Fund shall be paid into a bank account opened by the Board for that purpose with ap-

proval of the Controller and Accountant-General. The object of the Fund is to provide for both capital and current expenditure relating to the treatment and rehabilitation of a person with substance abuse disorder.

Among the source of money for Fund includes: moneys approved by Parliament, funds raised from the general public, grants, gifts and donations and fifty percent of the proceeds realized from the sale of confiscated property, the memorandum noted. It shall also be used for research in the area of addiction disease, treatment of persons with substance abuse disorders, setting up of rehabilitation centres and training and capacity

building for professionals in addiction treatment.

The Commission when established is also expected to submit in each financial year a report on the management and use of the Fund to the Minister and Parliament at the end of the financial year. The purpose of the Bill is to establish the Narcotics Control Commission and to provide for offecnces related to narcotic drugs. Furthermore, the Commission is to take measures to curb the drug trade, collect and disseminate information and provide advice to public agencies on policy initiatives.

Africa World Airlines (AWA) starts Accra-Abidjan Service Friday Africa World Airlines (AWA) is all set to start operating 6 weekly flights between Accra, Ghana and Abidjan, Ivory Coast starting on Friday, February 14, 2020.

The maiden flight is expected to depart Accra for Abidjan at 14:50hrs on Friday.

The new service will bring the airlines’ regional routes serviced from Accra to five — Lagos, Abuja, Freetown, Monrovia and Abidjan. The latest move forms part of the airline’s strategy to grow its presence in West Africa and ultimately become a dominant players on the continent.

Backed by a strong team of aviation professionals, the airline, which was stablished in 2012, has become the reliable airline of choice in the sub-region. Its high sense of safety has seen it operate for 8years without any major incidents.

AWA has over the past few years, attracted a lot of interest from major international carrier.

Africa World Airlines (AWA), has an interline agreement with Ethiopian, Emirates, Brussels and recently signed one with Qatar.

The partnership with Doha-based Qatar Airways that will open up new destinations is the West Africa sub-region for Qatar Airways passengers.

With Qatar Airways set to start daily service to Accra starting April 15, 2020, the one-way in-

terline agreement will allow Qatar customers to connect onto regional and domestic routes serviced by AWA such as Lagos, Abuja, Abidjan, Freetown, Monrovia, Kumasi, Takoradi and Tamale. A multiple award-winning airline, Qatar Airways was named ‘World’s Best Airline’ by the 2019 World Airline Awards, managed

by Skytrax. It was also named ‘Best Airline in the Middle East’, ‘World’s Best Business Class’, and ‘Best Business Class Seat’, in recognition of its ground-breaking Business Class experience, Qsuite. It is the only airline to have been awarded the coveted ‘Skytrax Airline of the Year’ title, which is recognised as the pinnacle of excellence in the airline industry, five times.

Qatar Airways currently operates a modern fleet of more than 250 aircraft via its hub, Hamad International Airport (HIA), to more than 160 destinations worldwide. The world’s fastest-growing airline added several exciting new destinations to its growing network last year, including Rabat, Morocco; Izmir, Turkey; Malta; Davao, Philippines; Lisbon, Portugal; Mogadishu, Somalia; Langkawi, Malaysia; and Gaborone, Botswana.

AWA has won domestic, regional and international recognition for its business growth and operational excellence.

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Free SHS has improved access but substantial challenges remain- PIAC Continued from page 3 The critical teaching staff running the double-track system have no holidays or breaks, as they need to be present during each track to teach. Supporting staff such as kitchen staff, security, and cleaners are inadequate, exerting additional stress on these staff.

Key Recommendations 1. The Committee encourages vigilance on the part of school authorities in monitoring the quality

of supplies, such as inspecting the expiry dates among others. This will prevent the suppliers from using the schools as dumping grounds.

2. In order to avoid the recurrence of over and under supply of food items, supply of food items by the Buffer Stock Company should be based on orders from the schools.

3. Supply contracts for uniforms and house vests should be given out early enough to forestall delays. The Committee strongly recommends full transparency in the delivery of supplies to the schools and in par-

ticular the Buffer Stock Company must ensure that all goods supplied are accompanied by advice on the value and quantity of the goods.

5. Cut-off grades (thresholds) for admitting students should be restored, as students with poor grades struggle with subjects during the course of the term. The Ghana Education Service should pay more attention to the basic schools to improve the quality of students for the second cycle schools.

6. Government must ensure that disbursements to the schools are

done expeditiously as the non-free SHS students phase out, to avoid closure of the schools and disruptions to the academic calendar.

7. Technical and Vocational Schools should be adequately resourced with the necessary equipment and teaching materials.

8. Government must expedite action on the provision of infrastructure facilities to end the double track system, extend contact hours, and relieve staff of the attendant extra pressures.

9. The Committee welcomes the

streamlining of the guidelines on the operations of the PTAs where Parents Associations are now allowed to operate as voluntary associations outside the control of the school authorities.

The Committee is grateful to the Ministry of Education, the Ghana Education Service, the Free SHS Secretariat and, Metropolitan, Municipal and District Assemblies (MMDAs) in the regions and districts visited for their support and co-operation during the monitoring exercise.

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Features

Investing in resilience and food security leads to peace

By Abebe Haile-Gabriel

In a region beset with conflict, the uptick of numbers paint a grim foreboding. Hunger is on the rise again in Africa, reversing the gains and derailing the efforts made in the last few years.

Recent years brought recurrent conflicts in the region. In 2018 alone, there were over 90 conflicts in Africa, a quarter of such occurrences globally. Conflicts in ten African countries left millions of people in need of urgent food assistance and hundreds of thousands to quickly flee their homes and involuntarily abandon their livelihoods.

Most of these livelihoods are dependent on agriculture and the emergence of conflict has life-changing and serious implications. For people who rely on agriculture, conflicts destroy food systems, decimate crops and livestock resources, and cause loss of assets and incomes. These trigger food insecurity, and malnutrition and hunger.

People living in countries affected by conflict are more likely to be food insecure and malnourished.

For some African countries, the prevalence of undernourishment is about two and a half times higher in countries affected by a protracted crisis than in other development contexts. Nutrition outcomes are also worse in conflict situations,

where almost 122 million, or 75 percent of stunted children are under the age of five.

Additionally, conflicts harm national economies. Agriculture in Africa contributes a sizeable proportion of the Gross Domestic Product (GDP), employs more than half of the total labor force, and provides livelihood incomes for smallholder farmers, who usually constitute approximately 80 percent of the total population. When conflicts occur, agricultural activities are disrupted, resulting in massive youth unemployment, displacement, strife and discord.

Conflicts trigger a domino effect.

They lead to food insecurity and malnutrition, which are also conflict multipliers, especially in fragile states. The relentless cycle goes unchecked if collective action is not in place.

The 2030 Agenda for Sustainable Development calls for a transformative approach pointing to an improved collaboration on conflict prevention and resolution. The African Union Agenda 2063 likewise prioritizes peace and security to reposition Africa on a sustainable route of transformation and development. The commitment of the African leadership to change course has been confirmed in the 2014 Malabo Declaration on “Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods” in the framework of the Comprehensive Africa Agriculture Development

Abebe Haile-Gabriel

Programme (CAADP) agenda. The goal to ending hunger in Africa by 2025 stands out among the prominent commitments of the Malabo Declaration, stressing the notion that peace and stability are the prime preconditions to achieve this goal. It is in this context that the African Union has selected the theme of the year 2020 to be “Silencing the Guns: Creating Conducive Conditions for Africa’s Development”.

As a flagship project of the Agenda 2063, this initiative would have a greater impact in promoting peace and stability in Africa, with the goal of ending all wars and civil conflicts, thereby achieving concrete development goals, including the eradication of hunger.

FAO and its partners have a key role to play in supporting the Silencing the Guns Initiative. FAO is

poised to tap into the potential of agriculture to lift large numbers of the rural poor out of poverty, contributing to peace and security.

Under FAO’s flagship Hand-in-Hand initiative, FAO aims to actively collaborate with member countries and development partners taking a bold step towards achieving the SDG goals of eradicating poverty, hunger and malnutrition, through accelerating agricultural transformation and sustainable development. The initiative offers opportunities to use the most advanced tools available, including advanced geospatial modelling and analytics, to improve targeting and tailoring policy interventions, innovation, finance and investment and institutional reform in a comprehensive approach. On the margins of the AU Summit this year, FAO, in col-

laboration with the Government of the Federal Democratic Republic of Ethiopia and the African Union Commission, is organizing a High Level side event, “Hand-in-Hand in Partnerships towards Maintaining Peace through Improved Food Security and Nutrition in Africa.”

The engagement will delve into the critical role of enhancing inclusive investments and innovative solutions to support resilient food and agriculture systems that would make sustainable peace possible, which in turn would be key to reverse the worsening trends of food insecurity and malnutrition in Africa. At the side event, FAO, ECA, and AU will also launch the regional flagship publication ‘Africa Regional Overview of Food Security and Nutrition,’ which reports on the food security situation in the continent as driven by conflicts and other factors such as climate shocks and economic slowdowns and downturns.

FAO extends its gratitude to the government of the host country, the Federal Democratic Republic of Ethiopia, whose Prime Minister is the 2019 World Peace Prize recipient, and to the African Union Commission, for collaborating with FAO to organize the event.

The writer is the Assistant Director-General and Regional Representative for Africa Food and Agriculture Organization of the United Nations (FAO)

The coronavirus will not cripple china’s economy

By Zhang Jun

Just five days before the Chinese New Year, the authorities in Beijing finally declared the coronavirus epidemic that originated in Wuhan to be a major public health emergency. Because Wuhan’s municipal government had initially withheld information and failed to control the virus effectively, about five million residents and temporary workers left the city for the Lunar New Year holidays before the city was officially closed off on January 23. As a result, the virus spread rapidly throughout China and beyond, leading to the current high-profile international health emergency.

Unsurprisingly, China’s economy is slowing down. The services sector, which includes retail, tourism, hotels, and transportation, and accounts for more than half of the country’s GDP, is suffering severely. Disruption in this sector will in turn affect manufacturing. And growing international concern at the continued spread of the virus might further strain trade and limit the movement of people. But the key question is whether we believe it will last longer.

My answer is no. The coronavirus epidemic is very unlikely to last long. Despite all its problems, China undoubtedly still has an unparalleled ability to mobilize resources in response to a large-scale emergency. During the last two weeks, for example, official efforts aimed at controlling panic have been firstrate. In addition to ordering a nationwide mobilization of medical personnel and resources (including from the military), the authorities have been assessing major hospitals’ capabilities to diagnose and treat coronavirus patients. More important, as part of a national disease-control campaign announced

on January 20, officials are identifying and observing any citizens who had traveled to and from Wuhan since the outbreak began.

Meanwhile, urban communities and rural villages alike have tightened access restrictions in order to reduce unnecessary movements and aggregations of people, even establishing temporary rationing systems to distribute face masks to families and individuals. In addition, holidays have been extended and schools remain closed. By helping to minimize the public’s exposure to the peak of the epidemic, these steps are playing an effective role in curbing the spread of infection. There is a higher probability that the increase in the number of infections will slow in the coming weeks.

It is still too early to assess the full economic impact of the coronavirus

outbreak. However, the key factor will not be the epidemic’s range or severity, but rather its duration.

The sooner the epidemic is over, the quicker China’s economy will recover, given its trend growth. Although severe control measures will weaken current economic performance, they might help to end the outbreak earlier.

In any case, as both a theoretical and empirical matter, epidemics can cause only short-term economic slowdowns. Having said that, external shocks will not significantly alter the Chinese economy’s medium- and long-term growth trend.

Once the coronavirus storm passes, therefore, the economy will bounce back and return to its previous course.

Back in 2003, for example, most economists and researchers estimated that the SARS outbreak would lower China’s second-quar-

ter GDP growth by about one-fifth, but shave less than 0.5 percentage points off the full-year figure. These forecasts reflected the limited number of regions and sectors affected

by SARS, as well as the expectation that the outbreak would last no more than three months.

In the event, second-quarter GDP growth fell by two percentage points, much as expected. At the time, China’s economy was expanding by about 10% annually, and the SARS-induced slowdown was quickly offset by subsequent strong growth. So, on a graph of Chinese growth from 2002 to 2007, the impact of the SARS outbreak is not even visible.

Although the scope of the coronavirus outbreak now exceeds that of SARS, its duration is still the key factor for assessing the size of the impact on the economy. Current data suggest that the epidemic will

likely reach a turning point in the next two weeks. That would mean China might conquer the virus in the first quarter, which is essential to mitigating the epidemic’s impact on overall growth in 2020.

True, China’s annual GDP growth of just over 6% in the last several years is much slower than at the time of the SARS outbreak. But the Chinese authorities can still ensure a robust recovery through targeted fiscal- and monetary-policy adjustments that support small and medium-size enterprises and service-sector businesses affected by the coronavirus epidemic.

According to my preliminary estimates, the worst-case scenario is that the epidemic lowers GDP growth in the first quarter by a third or half, leaving the figure 2-3 percentage points lower than in the first quarter of 2019 But if things start to look up in the second quarter, the ensuing rebound will partly offset that drop. And with the necessary macroeconomic policy adjustments in place, economic growth will accelerate again during the second half of the year.

Provided there are no further external shocks, continued policy loosening should limit the full-year decline in GDP growth to 0.5-1 percentage point. That would imply a 5-5.5% full-year economic expansion in 2020, which is still largely in line with China’s current growth trend. But it is not yet clear whether the Chinese government, currently preoccupied with tackling the epidemic, will cut its GDP growth target for this year accordingly.

Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based think tank. Copyright: Project Syndicate, 2020.

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Commodities

UN targets small farm businesses to help poorest producers As harvests fall and hunger rises on a warming planet, the United Nations plans to use new financial tools and work with banks and other partners to help fill a gaping hole in agricultural investment over the next decade.

The revamp is part of efforts by the International Fund for Agricultural Development (IFAD), a Romebased U.N. agency, to boost support for small-scale food producers in rural areas.

Despite producing half of the world’s food calories, most cannot access loans, while hunger and poverty are increasingly concentrated where they live and work, the agency said.

For the first time, IFAD plans to fund small agricultural businesses in some of the world’s poorest countries, either directly or by teaming up with other financial institutions.

Until now, it has funded governments, but last year its mandate was changed to enable it to finance the private sector.

Paul Winters, IFAD associate vice-president, told the Thomson Reuters Foundation most development funding does not get to the local business networks used by farmers on the ground.

But IFAD is well-positioned to reach providers of seeds, fertilisers, transport and other goods and services, he added.

“The finance that is out there is often either too small or too big,” he said, adding it rarely targets the type of enterprises that work with small-scale producers. “This is new for IFAD but it is also new in general.”

The U.N. agency could, for example, work with local banks or the International Finance Corporation, the World Bank’s private-sector arm, to back a business setting up cold storage units in places where IFAD is assisting fishermen, dairy farmers or vegetable growers.

Refrigeration could boost their income by allowing them to keep their catch, milk or produce for longer to avoid a glut in supply and fetch a higher market price.

Winters said IFAD was now looking for financial partners to make joint investments of $1 million-$5 million.

“That’s the missing market,” he told journalists.

Another IFAD project in the works involves partnering with food industry giants like Danone and Mars to prepare small farmers in Ghana

to meet growing demand for shea butter.

The new financial approach, unveiled on Tuesday at a two-day meeting of IFAD’s governing council, could include tapping a growing global pot of climate finance and providing loans in line with project results.

IFAD President Gilbert F. Houngbo told the Thomson Reuters Foundation the aim was to “tackle inter-related challenges of climate change, poverty and hunger in rural areas, where three-quarters of the poor

Kenya upbeat on direct cargo flights deal with US Over 600 women in the Northern region are expected to benefit from a shea butter facility and warehouse for the Tiyumtaba Women’s Cooperative at Sorogu in the Sagnarigu Municipality of the Northern Region.

The facility will increase incomes of these women in the collection and processing of shea nuts.

Inaugurating the facility, the United States Ambassador to Ghana, Stephanie Sullivan, commended the efforts of the project partners.

The facility will provide the space needed to safely store and process nuts while creating a one-stop market space for direct sales, she noted.

“USAID is working with the Global Shea Alliance, Communities, other Non Profit Organizations and has provided 250 warehouses generating increased incomes for more than 137,000 wen across West Africa,” she said.

Ambassador Sullivan called on members of the community to protect the shea trees and parklands to secure sustainability of the shea industry. The Managing Director of the Global Shea Alliance Aaron Adu assured the women of ready market for the processed Shea butter. “The GSA as part of efforts to preserve the parklands, will mobilize over one million women to plant about 10 million shea trees,” Mr. Adu said. The leader of Tiyumtaba women’s cooperation, Mary Naab Alhassan, said the facility will help them rake in more revenue.

“This new facility is a blessing to us and our families because more people will be engaged and more revenue will be generated,” she noted. The facility is part of efforts by the United States government to expand economic opportunities for women. Shea, is a primary source of livelihood for women living in Northern Ghana. It is one of the few agricultural cash crops where women control their revenue. The facility is made up of a kneading shed, machine room, packaging room among others.

It is expected to increase incomes for over 600 Ghanaian women in

the collection and processing of shea nuts. The West African Regional Mission of the United States Agency for International Development seeks to promote social and economic wellbeing advanced by West Africans.

The United States Agency for International Development and its partners since 2016 have provided 250 warehouses that has generally increased incomes for over 137,000women across West Africa.

Ambassador Sullivan called on members of the community to protect the shea trees and parklands to secure sustainability of the shea industry.

and food-insecure people live”.

“Many others are working on climate finance. However, IFAD is the only one that specifically targets small-scale producers,” he added.

The number of hungry people worldwide has increased for three years in a row after a decade of progress.

Scientists say climate change is likely to worsen the situation, with recent studies warning of simultaneous falls in food production from both farming and marine fisheries, as water shortages jeopardise crop yields. Eliminating hunger by 2030, a goal agreed by world leaders in 2015, requires annual investment of more than $115 billion, the United Nations has said.

But wealthy governments only provide about $10.5 billion a year in development aid for agriculture, according to the Donor Tracker website.

The odds of government assistance rising are slim, Winters added, stressing the need to be “clever” in finding extra resources.

Much more could be achieved by focusing efforts on remote farming communities where IFAD has been working for decades, he said.

“If you want to end hunger, if you want to end poverty ... the road goes straight through rural areas,” he added. Reuters

Namibia, FAO launch farmers’ support project

The program which will run for six months between January and July is meant to avert challenges faced by farmers across the country’s regions who are losing crops and animals because of drought.

According to Namibian government the current drought is by far the worst phenomenon to hit the country in the past 60 years.

Executive director in the Ministry of Agriculture, Water and Forestry Percy Misika, said the initiative will create alternative for farmers including hydroponics fodder production as well as irrigation.

Misika said Namibia is one of the hardest hit by the effects of climate change in the Southern African region.

“Farmers in Namibia are hard pressed with the ongoing drought and urgent remedies are needed to avert the problems inflicted on the farmers by the calamity,” he said.

The support scheme, Misika also added, will include provision of veterinary services to farmers who are into animal husbandry.

Misika said investment in better forms of agriculture will go a long way in protecting farmers from losing their yields to drought.

FAO also revealed that their organization looks forward to working with the Namibian farmers. The project will also include Namibian National Farmers Union, (Source: XINHUA)

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LAND FOR SALE Four (4) plots (1 ACRE) of registered land for sale at North Akporman in the Ga East District close to Abokobi. Interested parties should call 0244742577 or 0274510800.

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Banking

More resources to be committed to strengthening banking sector The Central Bank is to commit more resources in ensuring improvement in the internal controls and risk management systems of banks operating in the country. The Central Bank Governor, Dr. Ernest Addison, outlined various measures to consolidate the gains made in sanitizing the industry in his address at the transitioning of Barclay to Absa Bank Ghana Limited in Accra on Feb 10, 2020. His speech is reproduced below: Let me reiterate that as regulators, we will continue to commit our resources towards ensuring that financial institutions improve their internal controls and risk management systems since the safety and soundness of institutions pivots on these principles Today marks a significant change in the history of the banking sector as Barclays Bank Ghana Limited, which opened its doors to banking in Ghana some 100 years ago transitions to Absa Bank Ghana Limited. Before going any further, let me extend a special welcome to Mr. Aaron Daniel Mminele, CEO of Absa Group to Ghana, and for gracing this occasion. At this stage, permit me to take you down memory lane as we follow the tracks of this over a century journey which has led us to this important launch. You will realize that the journey of Barclays and now Absa is intertwined with the history of Ghana—making it a cornerstone of the banking industry.

In 1917, the Colonial Bank, which was founded by a Royal Charter in 1836 to trade in the West Indies, was acquired by Barclays as the nucleus for its colonial network – Barclays (Dominion, Colonial and Overseas), and started operations in Lagos, Nigeria. Subsequently, the then new Barclays DCO acquired branches of the National Bank of South Africa and one other bank (the Anglo Egyptian Bank in Lagos) to widen its international operations. By the end of 1926, Barclays had established nine branches in West Africa, including Barclays Bank of Ghana.

Your Excellency, after several decades of operating in Africa, it is interesting to note, but comes as no surprise, that after Barclays Bank acquired the National Bank of South Africa to establish itself in Africa, Barclays plc is passing the baton back to Absa, a South African bank.

What we are witnessing today is a culmination of three years of arduous planning and execution of a detailed transition plan that was presented to the Bank of Ghana by Executives of Barclays. As regulators, we have worked closely with Barclays Bank and its officials to ensure that every aspect of the transition plan are aligned with the central bank’s overarching goal of financial stability. On this note, let me congratulate all those who played diverse roles in this historic changeover from Barclays to Absa Bank, for the professionalism shown in carefully engaging stakeholders, customers, and the general public during the transition process.

Your Excellency, the history of banking in Ghana would be incomplete if special mention is not made of the contribution of Barclays to Ghana’s banking system and economic development more broadly.

Although the brand Barclays has now been phased out of Ghana’s banking system, it has over the decades left a significant footprint that includes a strong corporate culture, strong corporate governance, the provision of quality financial services, skilled manpower, and investments in technology driving cutting-edge solutions to the ever-growing complex needs of the industry.

Barclays has also influenced the

industry with many innovations, including being: the first bank to be nationally networked and thereby giving real time banking in all the branches across Ghana in 1998; The first to introduce cash accepting (Deposit) ATMs in Ghana in 2013; and Today, February 10, 2020 is another landmark as now Absa, becomes the first bank to introduce Vertical Debit & Credit Cards to enhance the functionality of scheme cards in Ghana.

These achievements are remarkable and the Bank of Ghana, and the general public, expect the changeover to Absa to carry along the level of excellence, leadership, and professionalism that has become synonymous with the 100-year Barclays heritage in Ghana. This is what has endeared the general public to Barclays and that is what will be expected from Absa. I believe that Absa Bank Ghana will carry the same principles into the next 100 years, and the new footprints will become even more exciting if the Ghanaian public have an opportunity to become shareholders in Absa Bank Ghana in the near future.

Your Excellency, Absa’s leadership in the African financial markets landscape is not disputed at all. For example, Absa has single-handedly supported the creation of an Africa-wide Absa Africa Financial Markets Index.

This index studies key developments in financial markets of several countries in Africa and recommends alternative solutions, which is helping to deepen the financial markets in Africa including Ghana.

Although we had indicated our concerns on some of the matrices, the Absa Africa Financial Markets Index remains an important tool and I will encourage you to share your knowledge and insight, as well as best practices across the banking sector.

As Absa Ghana aspires to become a forward-looking digitally-led bank, the Bank of Ghana is counting on you to contribute to the development of digital solutions that make

banking more convenient, while providing more avenues to make financial services more accessible to the unbanked.

Your Excellency, we are launching Absa at a time when Ghana’s banking sector is stronger than ever.

Banks are well-capitalized to perform their financial intermediary roles in support of the economy. I am also delighted to let you know that Absa Bank Ghana exhibited strong performance even during the critical time of transition. Indeed, Absa Bank Ghana, was one of the first banks to meet the new minimal capital requirement through internally-generated funds. Total Assets more than doubled from GH¢5.3 billion at end-December 2016 to GH¢11.7 billion at end-December 2019, and the bank’s Capital Adequacy Ratio of 10.6 percent improved significantly to 16.5 percent.

Also, the bank’s Non-Performing Loans ratio of 19.2 percent improved to 6.6 percent over the review period, an indication of sound credit administration practices.

Your Excellency, the performance indicators just enumerated, is a broader reflection of the current state of the entire banking sector and an attestation that the reforms undertaken by the Bank of Ghana within the intervening period are beginning to yield the desired results. The banking industry has built up a much stronger balance sheet and recorded strong asset growth, improved quality of loans and profitability during the year.

All the financial soundness indicators, measured in terms of earnings, liquidity, and capital adequacy remained strong.

The banking sector’s performance has been encouraging and as regulators, we will continue to hold banks accountable. We will ensure the continuous sanity of the sector, and consistently apply the laws applicable to the sector. Your Excellency, one of the key aspects of the reform agenda was the issuance of the Corporate Governance

and the Fit and Proper Persons Directives for banks which banks are now complying with. In particular, enforcement of the Corporate Governance Directive has led to several board chairs and CEOs of banks ending their tenure, while Board members who had served for prolonged periods have been replaced.

In addition, results of a recent survey indicate full compliance with requirements of the Corporate Governance Directive on the size, structure, composition and qualification of bank Boards; due diligence in the appointment of key management personnel; and separation of the positions of CEOs and Board Chairs.

A total of 184 bank directors undertook the mandatory annual Directors’ corporate governance Certification training programme. Of this number, over 50 percent have fully completed the programme, while the rest who are at various certification stages will be certified by the deadline of end-March 2020.

Let me reiterate that as regulators, we will continue to commit our resources towards ensuring that financial institutions improve their internal controls and risk management systems since the safety and soundness of institutions pivots on these principles. Also, we will continue to create an enabling regulatory environment that encourages innovation in the industry, while ensuring that we continually strengthen our supervisory and enforcement capabilities to ensure sanity in the industry. That way, we can ensure that Ghana’s banking business is conducted in a safe and sound manner and with integrity, thereby retaining the trust and confidence depositors, and indeed the general public, reposed in the industry.

Ladies and Gentlemen, let me once again congratulate Absa Bank Ghana and the Absa Group for the successful transition. I trust that we can count on your support as we move the banking sector to new heights in support of Ghana’s growth and development agenda. Thank you.

TEF, AfDB catalyzing entrepreneurship across Africa … First tranche of US$5m partnership disbursed Tony O. Elumelu, CON, has congratulated the African Development Bank (AfDB), and AfDB President Akinwumi Adesina, on their commitment to African entrepreneurship, with the disbursement of US$2.5million seed capital to the AfDB-sponsored beneficiaries of the 2019 TEF Entrepreneurship Programme.

US$2.5m was released today, with the remainder expected to be disbursed to the entrepreneurs in Q12020.

The AfDB commitment follows the recent $8.5 million disbursement from the United Nations Development Programme (UNDP) to 2,648entrepreneurs in the Sahel region and Africa more broadly and further accelerates the economic empowerment generated by the Tony Elumelu Foundation.

In 2019, the Foundation significantly increased the scale and reach of it impact, with the number of beneficiaries of its flagship Entrepreneurship Programme rising from its annual

From Right to Left: Tony O. Elumelu, CON, Founder, Tony Elumelu Foundation and Akinwunmi Adesina, President, African Development Bank (AfDB) at the 2019 Tony Elumelu Foundation Entrepreneurship Forum - Africa’s largest entrepreneurship conference.

commitment of 1,000, to 5,150, in collaboration with global and African partners.

With its commitment to strengthen small and medium-sized enterprises and develop young entrepreneurs, AfDB joined the growing listof global development institutions benefiting from the Tony Elumelu Foundation’s unique model of identifying, training, mentoring and funding entrepreneurs and start-ups across Africa.

The partnership demonstrates the implementation of the AfDB’s ten-year “Jobs for Youth in Africa” strategy, launched in 2016, to support the creation of 25 million meaningful jobs across the continent.

The partnership illustrates TEF’s willingness to share its infrastructure and know-how, with others who share the missionto empower young African entrepreneurs and TEF’s goal of creating millions of jobs, as well as generating billions in revenue, to catalyse economic growth across the continent.

The Foundation is currently accepting applications to the2020 cohort of its flagship Entrepreneurship Programme on TEFConnect.com, Africa’s digital hub for entrepreneurs.

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