Business24 Newspaper - August 12,2020 by Business24 Online

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WED. AUGUST 12, 2020

Airports Company engages lenders over debt 91% of legacy arrears cleared, teacher promotion improved— Education Minister The Minister of Education, Dr. Matthew Opoku Prempeh, has stated that the government has cleared 91 percent of legacy arrears inherited from the past administration since 2017. BY EUGENE DAVIS

>>PAGE 3

BY DOMINICK ANDOH

he Ghana Airports Company Limited (GACL) is currently engaged in discussion with lenders about meeting its obligations, despite the adverse impact of the COVID-19 pandemic on their operations. The airports operator, in statement issued on Monday, August 10, 2020 and copied to Business24, said it triggered “the force majeure provision under the loan agreement and has been in discussion with its lenders to meet its obligations.” Given the year-on-year growth in passenger throughput between 2012 and 2019, the state-

owned limited liability company, which is one of the exemplary SOEs, secured loans on the back of its own balance sheet to develop on-ground infrastructure at Kotoka International Airport in Accra, Tamale Airport and the Ho Airport. About US$350million was spent on the construction of Terminal 3 and other ancillary works at the Kotoka International Airport, US$130million expended on the construction of a new runway at the Tamale Airport, and a further US$25million used for the construction of a new airport at Ho in the Volta Region. The GACL, whose revenues are neither capped nor realigned in accordance with Capping and Realignment Act, was able to service its debts >> MORE ON PAGE 2

First National Bank renews commitment to help address housing needs in Ghana >> MORE ON PAGE 19

T’di roads to see facelift as Parliament approves €72m facility Parliament has approved a €72m facility aimed at financing the construction of the Paa Grant Interchange and other roads in the Sekondi-Takoradi township. BY EUGENE DAVIS

Impact of COVID-19 to widen Ghana’s fiscal deficit – Standard Bank

>> PAGE 3

ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

US $ 1 = 5.6797

*POLICY RATE

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

11.4 % OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

GHc 5.13*

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

>> MORE ON PAGE 5

0.9%

CORN $/BUSHEL

43.22 1.79 1,842.40 329.50

COCOA $/METRIC TON

1,562.00

COFFEE $/POUND:

$109.65

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

17.07

NEWS/EDITORIAL

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WED. AUGUST 12, 2020

EDITORIAL

Wash your hands 2

Cover your cough 3

Airports Company needs stability to operate Persistent claims and explanations offered by the Aviation Ministry and the GACL about the purported sale of the KIA only serve to derail the focus of staff of GACL. Indeed, management of the company said: “Kotoka International Airport is not for sale or being privatized as stated by GACL in an earlier press release. Rather, an unsolicited proposal has been received from a Turkish Consortium which is yet to be considered. It is rather unfortunate that certain figures from the proposal are being used to peddle untruths.” The facts are that a Memorandum of Understanding (MoU) with a consortium, TAV-Summa, to assess a proposal for private capital injection and a partnership with GACL has been signed. Possible areas for collaboration with TAV-Summa, which were outlined by the Aviation Minister

in a concept note he submitted to the GACL and other stakeholders, include: a soft loan with longer tenor for GACL, reconstruction of the Kotoka International Airport (KIA) runway at an estimated cost of US$40m, a multistorey car park at Terminal 3, and construction of a light rail system for the KIA enclave to connect the three main terminals and facilitate movement within and into the area. Others include the construction of an airport green park—an ecofriendly recreation area with various facilities—to generate revenue while maintaining about 60 per cent of the greens on the stretch between the KIA airport roundabout and the Hajj Village. Additional airside developments, investment in systems and technology, a budget transit hotel, and other ideas were captured in the Minister’s concept note sent to the GACL for discussions.

These proposals, according to the statement signed by the Management of GACL, does not in any way constitute a sale of the KIA or privatization of GACL. “Management of GACL would like to assure the general public that Kotoka International Airport is not for sale. The vision of making Ghana the preferred aviation hub and leader in airport business in West Africa remains a priority,” the statement said. Over the years, the GACL has proved to be effective as an SOE if it is allowed to operate free of interference. Business24, therefore, calls on all to support the organisation in this COVID-19 era and beyond.

Airports Company engages lenders over debt CONTINUED FROM COVER

Wear a mask Brought to you by

LIMITED Copyright @ 2019 Business24 Limited. All Rights Reserved. Editorial Team Dominic Andoh: Editor Eugene Kwabena Davis (Head of Parliamentary Business & Commodities) Benson Afful (Head of Energy & Education) Patrick Paintsil (Head of Maritime & Banking) Nii Annerquaye Abbey (Online Editor) Marketing Alexander Lartey Agyemang (Business Development Manager) Ruth Fosua Tetteh (Dept. Business Development Manager) Gifty Mensah (Marketing Manager) Irene Mottey (Sales Manager) Edna Eyram Swatson (Special Projects Manager ) Events Evelyn Kanyoke (Snr. Events Consultant) Finance/Administration Joseph Ackon Bissue (Accountant)

until the current pandemic led to the drying up of scheduled international passengers and with it the Airport Passenger Service Charge (APSC)—the major revenue source for servicing outstanding loans. The country’s borders—land, sea and air—were closed in March, as part of a raft of measure to help contain the spread of the COVID-19 pandemic. It is still unclear when the airspace would be opened. Business24 sources say central government, as part of the COVID Relief Programme, has extended relief support to the GACL. “Government is helping pay GACL staff salaries till the end of the year as part of the support,” the source said. Management fights off Kotoka Airport sale claim GACL says recent comments by senior statesmen that the country’s main international airport is to be sold to foreign investors or being privatized for a token is untrue. Following the Aviation Ministry’s confirmation of the signing of a

Memorandum of Understanding (MoU) with a consortium, TAVSumma, to assess a proposal for private capital injection and a partnership with GACL, various stakeholders have raised issues. “Kotoka International Airport is not for sale or being privatized as stated by GACL in an earlier press release. Rather, an unsolicited proposal has been received from a Turkish Consortium which is yet to be considered. It is rather unfortunate that certain figures from the proposal are being used to peddle untruths,” management of the company said. Possible areas for collaboration with TAV-Summa, which were outlined by the Aviation Minister in a concept note he submitted to the GACL and other stakeholders, include: a soft loan with longer tenor for GACL, reconstruction of the Kotoka International Airport (KIA) runway at an estimated cost of US$40m, a multistorey car park at Terminal 3, and construction of a light rail system for the KIA enclave to connect the three main terminals

and facilitate movement within and into the area. Others include the construction of an airport green park—an ecofriendly recreation area with various facilities—to generate revenue while maintaining about 60 per cent of the greens on the stretch between the KIA airport roundabout and the Hajj Village. Additional airside developments, investment in systems and technology, a budget transit hotel, and other ideas were captured in the Minister’s concept note sent to the GACL for discussions. These proposals, according to the statement signed by the Management of GACL, does not in any way constitute a sale of the KIA or privatization of GACL. “Management of GACL would like to assure the general public that Kotoka International Airport is not for sale. The vision of making Ghana the preferred aviation hub and leader in airport business in West Africa remains a priority,” the statement said.

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T’di roads to see facelift as Parliament approves €72m facility BY EUGENE DAVIS

The project is expected to enhance economic activities and improve public transport and the standard of living of the residents. The Paa Grant roundabout is one of the three roundabouts that link the peripheral roads which form a triangular ring road and adjoining roads within the central business district of the Sekondi-Takoradi metropolis. It attracts significant traffic into the area but has limited traffic capacity, resulting in poor network performance, which impacts commercial activities negatively. The roundabout is located to the

east of the triangular network and is a key access point for intercity traffic between Sekondi and Takoradi as well as port traffic to the port gates 1 and 2. The proposed intervention includes road widening, pavement strengthening, interchange and junction improvement, footbridge and railway overpasses, street lighting facilities, and pedestrian facilities. Moving for the adoption of the Finance Committee’s report on the financing facility, chairman Dr. Mark Assibey-Yeboah said the Ministry of Finance has requested Belfius Bank SA/NV to structure an Export Credit Facility with support

Kwabena Okyere Darko-Mensah reckons the construction of the roads will boost economic activities in Takoradi and its environs

from Credendo, Belgium, to finance the project at an estimated contract sum of €65m. On his part, the Western Regional Minister, Kwabena Okyere DarkoMensah, said the project is aimed at improving traffic circulation by enhancing the capacity of the road network, removing bottlenecks, and improving the movement of peopIe, goods and services to support socio-economic development of the inhabitants of Sekondi and Takoradi. The successful implementation of the project is expected to result in lower vehicle operating costs, savings in travel time leading to savings in fuel consumption, and reduction in accident rates.

91% of legacy arrears cleared, teacher promotion improved— Education Minister BY EUGENE DAVIS

The Minister, who is also the MP for Manhyia South in the Ashanti Region, said this when he presented a statement to Parliament on Tuesday on education and teacher reforms since the current government assumed office. Dr. Prempeh revealed that previously, under the three-month pay policy, teachers were paid only three months’ salary, no matter how long they had worked since being engaged. “This bare-faced injustice formed part of what became known as the legacy arrears that this government inherited. Today, all newly engaged teachers have had all their arrears paid a few months after commencing employment. Again, so far, this government has cleared over 91 percent of the legacy arrears we inherited. That is competence!”, he declared to loud cheers from the Majority benches in the House. On teacher promotion, he stated, “hitherto, the teacher promotion was a laborious, lengthy and expensive face-to-face interview process riddled with perceptions of corruption and victimisation that was stuck in 20th century practices and procedures. We engaged the teacher unions and other stakeholders and eventually settled on an aptitude test for particular ranks of applicants. I am pleased to report to this House that the maiden aptitude test for promotion has been a resounding success and

Kwabena Okyere Darko-Mensah reckons the construction of the roads will boost economic activities in Takoradi and its environs

teachers appreciate the relatively simple process now in place.” Touching on salary adjustments for newly promoted staff, the Minister revealed that contrary to the previous situation where it took months for promoted teachers to have their salary adjustments paid, teachers who received their promotion letters in April 2020 saw the reflection of the adjustments in their May 2020 salaries. The Minister further said that teachers’ conditions of service are being worked on in conjunction with the National Teaching Council and the Fair Wages and Salaries Commission, and government will soon be able to resolve any outstanding challenges. “We will continue to engage with the teacher unions, student unions and other stakeholders on how to improve the image of the teaching

profession, improve teacher education and training as well as improving learning outcomes. Our vision of a 21st century teacher is a competent, skilled and professionally trained person equipped with the right set of skills and competencies to play a key role in delivering improved learning outcomes for learners to meet our development needs,” Dr. Prempeh declared. According to him, the government inherited outstanding bills on key supplies for education service delivery. There were outstanding bills of approximately GH¢9m on capitation grant, GH¢4m on feeding grant for special schools, GH¢14m on exercise books to basic schools, and GH¢4m on the supply of school uniforms. “Moreover, there were delays in the disbursement of capitation and

feeding grants for special schools, affecting the effective operation of the schools. Within the period, government has cleared all the arrears and ensured timely release of capitation and feeding grants for special schools,” he added. New JHS and SHS curriculum set for roll-out The Education Minister also announced that Cabinet has approved the Common Core Programme (CCP) Curriculum for Junior and Senior High Schools, which will be rolled out at the beginning of the next academic year. He explained that the CCP is a carefully designed curriculum for learners in JHS 1 (Basic 7) to SHS 1 (Basic 10) as part of the learning experiences necessary to prepare them for higher education and the world of work. With significant emphasis on a set of high internationally-benchmarked career- and tertiary-ready standards, the CCP is designed around building character and nurturing values, in addition to ensuring a seamless progression for all targeted learners from JHS to SHS, he said. “At the end of the CCP, learners have the options of branching into either the academic pathway or the career pathway for two years (SHS 2 to SHS 3), leading to either a high school or career-ready diploma. Our transformational efforts on the curriculum is focused on ensuring that we have the dream Ghanaian child who is competent and able to match up to any of their counterparts anywhere in the world,” he stated.

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ADB encourages customers to update their records The Agricultural Development Bank Limited (ADB) is encouraging customers to update their customer information details to ensure that all their details are accurately captured by the Bank. To ensure this , the Bank encouraging customers to visit the Bank’s website www.agricbank. com or any of the 83 branches nationwide to effect the update of their personal and entity records. Per Bank of Ghana regulations customers of Banks are supposed to furnish the Bank with certain details and an identification document for ease of banking transaction. This is to ensure that information provided by customers during their account opening are still relevant for identification and validation purposes. The information being updated includes the customer’s name, date of birth, gender, residential or occupational address (physical address), telephone numbers, valid ID number and details of a valid national identification document of the customer. To complete the process, a Ghanaian customer will have

to provide a valid National ID (e.g. Voter ID, Passport, Driver’s License) whilst a foreign national will be required to update details with their National passport. Commenting on the need for the update, the ADB Managing Director, Dr. John Kofi Mensah said: “This important exercise will enable our customers enjoy many of the new E-business products and services we are currently rolling out.” According to Dr. Kofi Mensah, currently with the roll out of the *767# self-registration most customers are unable to enjoy the service because of the changed of mobile numbers used in opening the account by customers. “We want our customers to enjoy our unique services and updating their information with their current mobile numbers and other relevant documents will help them to enjoy more from the Bank”, he said. Dr. Kofi Mensah assured customers of their privacy and protection of all their information with the Bank.

Impact of COVID-19 to widen Ghana’s fiscal deficit – Standard Bank Ghana’s fiscal deficit is expected to widen this year as a result of the economic and social impact of the COVID-19 pandemic. In its July 2020 Flash Note of the African Markets Revealed (AMR) report, economists at Standard Bank are predicting Ghana’s 2020 fiscal deficit to rise to GHS44 billion from the initial budgeted deficit of GHS18.9 billion. “The combination of revenue shortfalls and increased government spending, particularly to mitigate the fallout of the Covid-19 pandemic in the country, is set to force a significantly wider fiscal deficit in Ghana in 2020. The government had strived to maintain a fiscal deficit responsibility rule below the 5% ceiling in the past three years, recording 4.8% of GDP in 2019, which excluded arrears and the financial sector bailout. Inevitably, the government is now expecting the fiscal deficit to rise to GHS44bn (11.4% of GDP) in 2020 from GHS18.9bn (4.7%) in the initial 2020 budget”, the report said. The report further noted that the government is not expected to meet the 5% budget deficit

threshold until 2024, indicating that fiscal consolidation might take longer than expected post the COVID-19 pandemic. According to the report “Interestingly, the government does not expect to return within the 5% budget deficit threshold, until 2024. This suggests that the fiscal consolidation path, post the pandemic, could take

much longer than expected.” “The revenue shortfall for 2020 is projected at GHS13.4bn (3.5% of GDP). Whilst the government had initially anticipated total revenues and grants of GHS67bn in 2020, it now expects revenues and grants to come in lower by 20% at GHS53.7bn (13.9% of GDP). This

is largely as a result of expected shortfalls in petroleum receipts and non-oil tax revenues as well. The government is assuming an average oil price of USD39.1/bbl in the revised budget from USD62.6/ bbl previously”, the report further said. The July 2020 Flash Note also mentioned that Ghana’s total expenditure is now estimated at GHS97.7bn (25.4% of GDP) which is 13% higher than initially budgeted. Capital expenditures, however, remained flat at GHS9.3bn (2.4% of GDP) when compared to the initial budget, while interest payments have been revised higher by 21% to GHS26.3bn (6.8% of GDP) reflecting the significant increase in debt. The African Markets Revealed Report is a monthly report issued by the Standard Bank Group, parent company of Stanbic Bank Ghana and focuses on the economic and financial outlook of African countries. The report also reviews current economic situations and makes short to medium-term predictions about the economies of African countries.

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BUSINESS OUTLOOK SERIES PART VI

The Business Model Improvement and Innovation (Part 2) BY CDC CONSULT

n the last edition of the Business Outlook Series, we introduced the Business Model and discussed nine (9) building blocks for developing a business model. In this edition, we will focus on how you can improve your business model and discuss the stages for building a good business model. This edition will focus on the first two (2) stages. The outbreak of the novel coronavirus has resulted in many business owners and executives questioning their existing business models. Indeed, many business owners and executives have different ideas on how to steer their businesses out of this uncertain times in the business environment. They may have plans on how to convert these ideas into a good working and consistent business. However, they may not know whether their plans will work out as expected. Hence, the natural discussing points are on how to keep evaluating the business model and what should be done to improve the business model. The business model improvement and innovation process can be categorized into five (5) broad stages namely: preliminary (making the case and team formation); evaluation of the existing business model; generation of improvement and innovative ideas and measures to reposition the business; estimating the resource requirement to implement the revised business model; and developing implementation (action) plan. Stage 1: Preliminary Activities (making the case and team formation) The business model review starts with business owners and executives admitting that, the business is going through operational and financial challenges and requires a review. These challenges may be caused by factors that may be internal or external to the business as they could emanate from product, customers, employees, economy among others. Business owners and executives have to establish the case for and need to review the existing business model in view of the current challenges. This should be followed by the formation of a core team to lead the process and deliver the improvement and innovation required to steer the business out of its challenges. It is important to select people with experience and critical thinking skills. It is also important that the team is well balanced with a combination of visionary and conscientious personalities to ensure that ideas are enough yet well contested and

analyzed in an emotionally mature manner. The tendency for this exercise to spark wide fear and job insecurity among staff is high so the process should be well managed lest the business could lose critical staff before the innovations could be launched. Effective communication to the wider team (employees) that re-assures yet presents realities and a call for innovative ideas is important to ensure each person understands the times and has wellmanaged expectations. Stage 2: Evaluating the Existing Business Model The second stage of the process involves a clear description of the existing business model (please refer to the previous article for the nine building blocks of a business model). This will be followed by evaluating the existing business model. The evaluation of the model seeks to identify the shortcomings and the key drivers of the successes achieved so far. During this stage, the core team members should be tasked to review and develop independently, a SWOT analysis of the current business model. The SWOT analysis measures the internal and external positive and negative sides of the existing business model. This should be done by assessing each of the business model´s nine building blocks in detail, describing the strengths, weaknesses, opportunities and threats that are associated with each model as applied by the business. Presented below are sample key questions that could be used to evaluate each of the nine dimensions of the business model. 1. Building Block 1: Customer Segments - Is our customer base segmented? How have they been segmented and is the current segmentation right? Is our current customer retention rate for each segment high? Are we continuously acquiring new customers in various customer segments? Do we think our current market would be saturated soon? Are our competitors threatening our market share? How likely are our customers to defect and why would they choose our competitors over us? How quickly will competition in the market we serve intensify? Could we serve new customer segments and which are they etc. 2. Building Block 2: Value Proposition – What customer needs have we sought to meet? What products and services are we offering each of the customer segments? Are the products meeting the needs of our customers? What has been the feedback from customers? Do we think our clients are satisfied with the value proposition? Are substitutes to our products and services

available in the market? Do these substitutes provide better value to our customers? Are competitors threatening or actually offering better price or value? How could we better integrate our products or services to better address customer need? Which additional customer segment needs could we satisfy? What other services could we offer existing customers and new customer segments etc. Building Block 3: Key Channels What channels do we currently use in reaching each customer segment? Do we think the existing channels are very effective in the current circumstances? Can our customers easily see the selected channels? How expensive or cost efficient is each of our channels? What other channels exist and are being used by our competitors? Are the existing channels well matched to our customer segments? Could we better align channels with customer segments? Could we find new complementary partner channels? How could the existing channels be improved? etc. Building Block 4: Customer Relationships - Do we have strong customer relationships? Have we developed and maintained different types of client relationships? Do our relationship quality correctly match the customer segments? Do we think our brand is strong for the competition? Is there potential to improve our customer followup? Do we need to automate some relationships given the need to observe social distancing protocols? How can we enhance relationships with customers? Could we improve personalization? Are we in danger of losing any customer or segment due to poor relationships etc. Building Block 5: Revenue Streams - What are our revenue streams? What are the revenue streams from each customer segment? How much is each revenue stream’s contribution to overall revenue in terms of percentages? Do we depend excessively on one or more revenue streams? Which revenue streams are likely to decrease or disappear in the near future? Are our margins threatened by competition and technology? What other elements would customers be willing to pay for? What other revenue streams could we add or create? Can we increase prices? Are most of the revenue streams recurring etc? Building Block 6: Key Resources - What key resources do we rely on in running the business? How does each of these resources relate to value propositions and their corresponding customer segments channels and relationships? Could we face a disruption in supply of certain resources? Is the quality of our resources threatened in

any way? Could we use less costly resources to achieve the same result? Which key resources could be better sourced from partners? Which key resources are underutilized etc? Building Block 7: Key Activities - What are our key activities in relation to each product offering and service provision? Which key resources do these activities rely on? What key activities might/ have been disrupted? Is the quality of our activities threatened in any way? Could we standardize some key activities? Would IT support boost efficiency? How could we improve efficiency in general etc. Building Block 8: Key Partnerships Who are the key partners, suppliers, service providers, regulatory bodies etc. we work with? How well do we currently work with these partners? Are we in danger of losing any partners and why? Are our key partners collaborating with our competitors at our disadvantage? Are we too dependent on certain partners etc. Building Block 9: Cost Structure - What are our major cost drivers? Is our cost structure appropriate (low cost or high cost model)? Are we clear which part of the business model has the highest costs? Where can we reduce costs? Which cost elements are threatening to become unpredictable and/ or uncontrollable? Which cost categories are threatening to grow more quickly than the revenues they support? Can the cost be fairly estimated for each customer segment we currently serve etc? The core team members could conduct internal interviews for a better understanding of the issues. For example, speaking to marketing officers could give better insight on building blocks 1 to 4. The overall purpose is to understand how the internal environment views the business model and its products or services. Indeed, the business could also undertake a rapid assessment with its external stakeholders such as its key customers, suppliers, service providers among others. Mystery shopping could be used as a technique to understand what competitors are offering. Following the core team’s independent evaluation and development of the SWOT analysis of the current business model, a meeting should be schedule to discuss and agree on the final SWOT analysis of the business model.

For more information and targeted services in financial management and investment advisory services, training and recruitment, market solutions and organizational development, and research, kindly contact CDC Consult Limited through info@cdcconsult. org, babilo@cdcconsult.org. You can also call 055332030/0244683042

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Felix Eshun writes: Tips on Partnerships & Financing options for startups BY FELIX EKOW ESHUN

ccording to Wikipedia, “Partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations. Organizations may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract”. This article seeks to bring to light the many partnership options available to startups. It is also attempts to educate the startup owner on how to quickly kick off with their concept or business, leveraging on the strength of other like-minded individuals as well as addresses the many funding options available to startups. Now let’s ask ourselves this question. How do I determine who a good partner is? One of the building blocks of the Business Model Canvas developed by Alex Osterwalder is Key Partners. The rest are Key Activities, Key Resources, Value Preposition, Customer Relationships, Channels, Customer Segments, Cost Structure and Revenue Streams. The focus will be on the Key Partners as I attempt to address the concern of how to determine who a good customer is. However, Key Partners as explained in the Nine Business Model Canvas detailed the general partnership arrangements in terms of Suppliers, Manufacturers, sub-contractors and Similar Strategic Partner. My focus will be on the Similar Strategic Partner; and here, I am talking about collaborating with like-minded individuals to basically come out with your business idea or concept. One single mistake some startup owners commit is spending a lot of time at the conception of their business looking for potential partners (I have been guilty of this myself ). My potential partner insisted that we launch the business even though there was no contractual agreement between us. I insisted that we do that to get a firm foundation of the business and that was the end of the partnership. Obviously, it is best to test your idea and make sure you first have a handful of customers on your roster, and make quick tweaks and changes to the product. Now, when you deal with a Strategic Partner you can frame the conversation in a way that maps your asks i.e. what your partner is bringing on board e.g. help increase the customer base. This is important because some partners can seem very cooperative from outside, but without any proven story with numbers. They may not take you seriously or just take advantage of you. Brandstette, R. et al, (2006). Successful Partnerships. Vienna:

OECD LEED Publishers. [Accessed 1 August 2020] established in their publication that, a partnership is likely to be ineffective if; • Partners do not share the same values and interests. This can make agreements on partnership goals difficult. • There is no sharing of risk, responsibility, accountability or benefits. • The inequalities in partners’ resources and expertise determine their relative influence in the partnership’ decision making. • One person or partner has all the power and/or drives the process. • There is a hidden motivation which is not declared to all partners. • The partnership was established just to “keep up appearances”. • Partnership members do not have the training to identify issues or resolve internal conflicts. • Partners are not chosen carefully, particularly if it is difficult to “departner”. • In my own estimation, some of the underlying reasons why startups seek for partnerships at their formative stages include: • Sharing complimentary skill sets. • Startup owners can share complimentary skill sets by determining amongst themselves the unique strengths of each team member such as in the area of strategy, leadership or operations; while coming together on the team’s shared purpose. • Lack of funding support systems etc. Research shows that lack of funding turns to be one of the common reasons why most new businesses fail; especially during the first year of operation. Before the business idea generates revenue, the business may need some level funding or capital. Since money is the bloodline of most business; Harshal Katre, a Director at Profit Books (profitbooks.net) gave illustrative list of the funding options on his article titled-10 Ways to Raise Money for Business, out of which 7 is under listed: Bootstrapping Self-funding, also known as bootstrapping, is an effective way of startup financing, especially when you are just starting your business. Firsttime entrepreneurs often have trouble getting funding without first showing some traction and a plan for potential success. You can invest from your own savings or can get your family and friends to contribute. This will be easy to raise due to less formalities/compliances, plus less cost in raising it. In most situations, family and friends are flexible with the interest rate. Self-funding or bootstrapping should be considered as a first funding option because usually when you have your own money, you are tied to the business. But this is suitable only if the initial requirement is small. Some businesses need money right

from day-1 and for such businesses, bootstrapping may not be a good option. Angel Investment Angel investors are individuals with surplus cash and a keen interest to invest in upcoming startups. They also work in groups of networks to collectively screen the proposals before investing. They can also offer mentoring or advice alongside capital. Angel investors have helped to start up many prominent companies, including Google, Yahoo and Alibaba. This alternative form of investing generally occurs in a company’s early stages of growth, with investors expecting up to 30% equity. They prefer to take up more risks in investment for higher returns. Angel Investment as a funding option has its shortcomings too. Angel investors invest lesser amounts than venture capitalists. Venture Capital This is where you make the big bets. Venture capitals are professionally managed funds who invest in companies that have huge potential. They usually invest in a business against equity and exit when there is an IPO or an acquisition. VCs provide expertise, mentorship and acts as litmus test of where the organization is going, evaluating the business from the sustainability and scalability point of view. A venture capital investment may be appropriate for small businesses that are beyond the startup phase and already generating revenues. Fastgrowth companies like Flipkart, Uber, etc. with an exit strategy already in place can gain up to tens of millions of dollars that can be used to invest, network and grow their companies quickly. However, there are a few downsides to Venture Capitalists as a funding option. VCs have a short leash when it comes to company loyalty and often look to recover their investment within a three- to five-year time window. If you have a product that is taking longer than that to get to market, then venture-capital investors may not be very interested in you. They typically look for larger opportunities that are a little bit more stable, companies having a strong team of people and a good traction. You also have to be flexible with your business and sometimes give up a little bit more control, so if you’re not interested in too much mentorship or compromise, this might not be your best option. Business Incubators & Accelerators Early stage businesses can consider Incubator and Accelerator programs as a funding option. Found in almost every major city, these programs assist hundreds of startup businesses every year. Though used interchangeably, there are few fundamental differences between the two terms. Incubators are like a parent to a child, who nurture the business providing shelter tools and training and network to a business. Accelerators are more or less the same thing; but an incubator helps/

assists/nurtures a business to walk, while accelerator helps to run/take a giant leap. These programs normally run for 4-8 months and require time commitment from the business owners. You will also be able to make good connections with mentors, investors and other fellow startups using this platform. Raise Funds By Winning Contests An increase in the number of contests has tremendously helped to maximize the opportunities for fund raising. It encourages entrepreneurs with business ideas to set up their own businesses. In such competitions, you either have to build a product or prepare a business plan. Winning these competitions can also get you some media coverage. E.g. is the McDan Entrepreneurship Challenge. You need to make your project stand out in order to improve your success in these contests. You can either present your idea in person or pitch it through a business plan. It should be comprehensive enough to convince anyone that your idea is worth investing in. Bank Loans Ordinarily, banks should be one of the options when it comes to funding for Startup Business. However, since all businesses go through several cycles especially at its inception, it is advisable if the bootstrapping option is explored first. When finally, the business succeeds after a few years in operation; then they can opt for a bank loan if there is the need to go for such assistance. Government Programs The current Government has launched a program called the Presidential Pitch to generally in my view improve the startup ecosystem in Ghana. This is another funding option Startup businesses can partake in to turnaround the face of their businesses. Conclusion Besides these funding options, the Revenue Agencies should give some special dispensations to startups to free them from the many challenges they face at the inception of their businesses. The prospects are really high; and thus, if this is done properly, it will help whip up interest in entrepreneurship and create more startups which will help to reduce unemployment in the country. The government should provide interest free loans to startups as well as partner angel investors in the country to unearth more startup businesses. Startup owners must however prepare their businesses for fund raising or to attract potential investors. It is also better to start on a good note by steadily investing the little proceeds back into the business and practicing good corporate governance. This can be best done by investing in robust accounting softwares to keep your finances in order.

Felix Ekow Eshun, is a Banker and Supply Chain Professional. He is also member of the Young African Leaders Initiative (YALI) and an entrepreneur. Email: felixekoweshun@gmail.com

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Penplusbytes validates citizens’ reports on government’s assurances for fishing landing sites, railway sector Access to information is a key necessity for citizens to demand transparency and responsiveness from government and at the same time hold government to account on promises and assurances made to the public. Penplusbytes working with the Committee on Government Assurances (CGA) in Parliament has adopted a rights-based approach to development, by engaging citizens on various government assurances using new digital tools. This working relationship has enabled citizens become aware of government assurances in their communities, report on the progress of work on various projects promised by government and play an effective oversight role on assurances given by government using new digital tools. All these have been made possible under the project “Connecting Citizens to Parliament II” with technical support from OSIWA. The project’s digital platform (www.assurances. gov.gh), has made it possible for evidence-based advocacy

where information about various government assurances have been simplified and made relevant to citizens to provide feedback on the state of development for those assurances. Based on the aggregated feedback from the online platforms, the project team is embarking on verification visits to selected projects in the Greater Accra, Central and Eastern Regions. These visits are to assess at first hand, the veracity of claims and reports sent on the digital platform by citizens. The trip, which is taking place in the week of 10th - 14th August 2020, will take the team to project sites of assurances on development of fishing landing sites at Jamestown, Winneba and Mumford. The assurance on these landing sites when fulfilled is expected to provide jobs, reduce post-harvest losses and increase the export volume of fish from the current 12 percent. The project team will also visit the construction of railway lines between Tema and Akosombo which has been earmarked to be completed by the end of August 2020.

According to Jerry Sam, Programmes Director at Penplusbytes, “this project is contributing to entrenching citizen participation in governance using new digital tools that is providing an easy and impactful way for citizens’ participation and expanding the democratic space” The outcome of these visits will form part of a policy brief that will be generated and passed on to the CGA ahead of their own monitoring visits at a later date after which a final report will serve as evidence; based on which

appropriate sector Ministers will be held to account during the CGA’s public hearings. The project, which aims at complimenting the efforts of Parliament through the CGA to effectively play its oversight role on the Executive to ensure improved public service delivery, has meant that citizens through the online digital platforms, are now better informed and updated on pertinent assurances that affect their lives via SMS, web-forms and mobile apps as well as social media.

Heirs Holdings Appoints Dan Okeke as Group Executive Director Pan-African investment company, Heirs Holdings this week announced the appointment of Dan Okeke as Group Executive Director. The appointment took effect from August 01, 2020. Mr Okeke joins following a distinguished three-decade career at the United Bank for Africa Plc (UBA), where he most recently served as an Executive Director, responsible for leading consumer, commercial and public-sector businesses. At HH, he will be responsible for business coordination and growth across Heirs Holdings’ portfolio of panAfrican investments in the power, financial services, oil and gas, hospitality, real estate, healthcare, and financial technology sectors. Heirs Holdings is a family-owned investment company committed to improving lives and transforming Africa. Our portfolio spans the power, oil and gas, financial services, hospitality, real estate, and healthcare sectors, operating in twenty-three countries worldwide. Driven by the Africapitalism philosophy of the Group’s founder, Tony Elumelu, which positions the private sector as the catalyst of African

growth and seeks both social and economic returns on investment, Heirs Holdings invests for the long-term, bringing strategic capital, sector expertise, a track record of business turnaround accomplishment and operational excellence to companies within its investment portfolio. Celebrating its tenth anniversary this year, Heirs Holdings has recorded consistent business success across its portfolio of investments. Commenting on the appointment, Chairman, Heirs Holdings, Tony Elumelu, stated: “As we continue to grow in scale and complexity, Dan’s appointment demonstrates our ongoing commitment to institutionalisation. We have always recognised the need to invest in human capital. This announcement is a clear demonstration of our intent and determination to create sustainable value in all our business operations.” “I am delighted to take on this new challenge and look forward to contributing towards the fulfillment of Heirs Holdings’ objective of improving lives and transforming the Continent,” Mr Okeke stated on his appointment.

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Capitalizing on women’s ventures BY LILYANA PAVLOVA

f you are a venture capitalist, you are almost certainly a man. But you would do well to know that your best chance to outperform the market is to invest your money in a company led by a woman. That rule of thumb – cherchez la femme – would radically simplify complicated VC investment decisions. Yet, because men make up 91% of the VC industry’s executive ranks, the bottomline performance of women-led companies has been chronically overlooked. Securing funding to enable women-led businesses to reach their potential is needed to drive European innovation. The annual productivity loss to the European Union as a result of women leaving their jobs in information and communications technology (ICT) is around €16.2 billion ($19.1 billion). Though women represent roughly 52% of Europe’s overall population, they constitute only 34% of the EU’s self-employed workers, and 30% of its startup entrepreneurs. Worse, in 2017, women-led ICT companies accounted for less than 10% of VC invested across the continent. Research suggests that womenled companies, displaying some degree of risk aversion, are less inclined to pursue external financing options. Even when women starting new enterprises in the EU are aware of their opportunities to secure external funding, many still prefer to provide a significant level of startup capital by themselves. As such, female founders are less likely than male founders to pursue VC investment. The relative lack of female entrepreneurs, combined with women’s self-reported preference for “bootstrapping” their businesses, appears to have contributed to a reduced overall demand for external financing in Europe. The situation in the United States is even worse. There, roughly four out of five VC firms have never employed a woman in a senior investment role. Just one of every ten new hires is a woman. All told, a combination of risk aversion on the part of women, gender bias on the part of men, and the lack of female representation among investors and founders creates a vicious cycle that has been difficult to break. That’s the bad news. The good news is that the cycle can be broken, especially when one

considers women entrepreneurs’ far-reaching potential as innovators and job creators. Women-led businesses tend to attract more investment at later stages than their maleled counterparts. They also outperform the market in terms of median revenues, and are more likely to provide employment for other female entrepreneurs. These are just a few of the findings of a European Investment Bank Advisory Report that was released in early July. In fact, the EIB also finds that women-led VC-backed companies in the EU enjoy higher exit rates in terms of deal value and volume. Mature VC-funded companies tend to hire more women in general, and this has contributed to a recent increase in funding for businesses founded by women or with women in executive roles. Equally promising, the European venture community has begun investing in women-led companies at an annual rate above that of overall investment growth in the region. Global challenges like the COVID-19 pandemic underscore the need for more finance for

female entrepreneurs, who have a critical role to play in responding to market shocks and contributing to economic recoveries. Amid the turmoil of the current crisis, there is an opportunity to encourage more gender-balanced innovation. But, to make progress toward gender parity and reap the full benefits of diversity, there will need to be fundamental changes in attitudes, business cultures, and institutions. The EIB itself has been making a concerted effort to improve gender diversity within its ranks. But with just three female members (including me) on the nine-member Management Committee, it still has a way to go. Beyond establishing a better gender balance among the leadership ranks, the EIB Group also must ensure that its financing decisions benefit all members of the community equally. To that end, the Bank has adopted a Strategy on Gender Equality and Women’s Economic Empowerment based on three pillars: protection, impact, and investment. The goal is to help identify innovative, high-growth female-led companies, and

then provide advice, financing options, and assistance making connections with other market players. So far, these include lenders such as Spain’s CaixaBank, Romania’s Garanti Bank, the Netherlands’ Karmijn Kapitaal, and Italy’s UniCredit. Other investment and development banks around the world should consider adopting a similar model. With a strong partnership between public banks and private investors, we can encourage VCs and other sources of finance to adopt a more gender-balanced approach. Ensuring access to finance for women-led enterprises ultimately creates jobs and contributes to our shared prosperity. Not only does empowering women make ethical and social sense, but it also happens to be good for business.

LILYANA PAVLOVA IS A VICE PRESIDENT AT THE EUROPEAN INVESTMENT BANK. COPYRIGHT: PROJECT SYNDICATE, 2020. WWW.PROJECT-SYNDICATE.ORG

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Democratizing Innovation BY DANI RODRIK

nnovation is the engine that drives contemporary economies. Living standards are determined by productivity growth, which in turn depends on the introduction and dissemination of new technologies that allow an ever-wider variety of goods and services to be produced with fewer and fewer of our planet’s resources. Policymakers and the public at large understand the importance of innovation. What is less well appreciated is the degree to which the innovation agenda has been captured by narrow groups of investors and firms whose values and interests don’t necessarily reflect society’s needs. In today’s advanced economies, private firms undertake the bulk of research and development. The business sector’s share of total R&D spending ranges from 60% in Singapore to 78% in South Korea, with the United States closer to the higher end, at 72%. But it is the public sector that provides the essential social, legal, and educational infrastructure that sustains private R&D. Innovation in the private sector depends crucially on government funding of basic science and research labs. It relies on scientific talent trained in universities supported by public funds. The state provides innovators with monopoly rights through the patent system, and ensures the private appropriation of returns to R&D through labor and contract law. Not least, private R&D is heavily subsidized by the state through tax credits and other policies. As a society, we should care not just about how much innovation takes place, but also about the types of new technologies that are developed. We ought to ensure we are investing in technologies that are safe, environmentally sound, empower rather than simply replace human labor, and are consistent with democratic values and human rights. The direction of technological change is not fixed or determined from outside the social and economic system. Instead, it is shaped by incentives, values, and the distribution of power. Despite the state’s heavy involvement in supporting innovation, governments typically pay remarkably little attention to the direction technological change takes in private hands. But private firms’ priorities often lead them to under-invest in technologies that have significant long-run returns, such as those that reduce climate change, or to pay inadequate attention to the human-rights or

privacy implications of digital innovations. Pharmaceutical companies, for example, seek returns in high-priced medicines for rare diseases affecting advanced economies, instead of vaccines for tropical diseases affecting millions in poor countries. Moreover, firms tend to over-invest in automation in order to increase the return to capital and managers, at the expense of employees. As the economists Daron Acemoglu and Pascual Restrepo have noted, this may result in “so-so technologies” which produce few overall productivity benefits, while leaving workers worse off. The common fixation with automation can lead the smartest investors astray. In 2016, Elon Musk announced that Tesla’s Model 3 would be built in a new, fully automated car factory, which would operate at speeds exceeding what is feasible for humans. Two years later, the plans had floundered, and severe bottlenecks at the new factory made clear actual production would fall far short of the company’s targets. Musk was forced to set up a new assembly line – full of human workers – on the factory grounds. “Humans are underrated,” he conceded on Twitter. Innovators’ priorities are naturally shaped by their own cultural and social milieu. In a recent paper, Harvard Business School professor Josh Lerner and Ramana Nanda have quantified how distant their values and priorities may be from

those of ordinary people. In the US, venture capital (VC) plays a disproportionate role in financing innovation by startups. The VC industry is highly concentrated, with the top 5% of investors accounting for 50% of the capital raised. Three regions – the San Francisco Bay Area, Greater New York, and Greater Boston – account for about two-thirds of the industry and over 90% of top firms’ corporate board membership. The top VC firms’ influence goes even further, because they often act as gatekeepers for other investors. The social and educational background of those who make the investment decisions is equally homogeneous. Lerner and Nanda report that three-quarters of partners with at least one board seat in top VC firms attended an Ivy League university, Caltech, MIT, or Stanford. Nearly a third are graduates of just two business schools (Harvard and Stanford). It would be surprising if the funding decisions taken were not influenced by the social composition of the group. Lerner and Nanda suggest that the geographic concentration of VC firms may have contributed to the “hollowing out” of innovative activities in other parts of the country. “Venture firms based in other cities,” they argue, “might have chosen very different firms to invest in given their perspectives on their local economies.”

Biased priorities prevail in public innovation programs as well. The largest single program supporting high-tech innovation in the US is the Defense Advanced Research Projects Agency (DARPA), which as the name indicates, is oriented toward military applications. While many DARPA projects have yielded civilian benefits as well (not least the Internet and GPS), agency priorities are clearly shaped by defense considerations. DARPA’s clean-energy technologies counterpart, the Advanced Research Projects Agency-Energy (ARPA-E), has barely a tenth the budget. Perhaps the biggest omission is that no government currently has programs devoted specifically to funding the development of laborfriendly technologies. If technological innovation is to serve society, the direction it takes must reflect social priorities. Governments have evaded their responsibility here, because of the pervasive belief that it is difficult to alter the course of technology. But we have not tried nearly enough to steer technology in the right directions. Innovation is too important to leave to innovators alone. Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy. Copyright: Project Syndicate, 2020. www.project-syndicate.org

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Revisiting Ghana’s financing requirement: The case of diaspora bonds BY DANIEL TAYLOR, MAVIS BOSSMAN

Introduction

he perennial budget deficit is a common financing challenge that Ghana faces as a result of the annual shortfalls in domestic revenue mobilization. Based on the recent mid-year budget review, the overall fiscal deficit stood at 6.3% of GDP and projected at 11.4% of GDP at the year end. Confronted with such dilemma, the government has limited options of financing the deficit gap through borrowing on the domestic market, printing of currencies, using foreign reserves, external borrowing on the international capital market among others. However, each of the above means of financing is wrought with challenges. Domestic borrowing is usually inadequate to bridge the budget deficit partly due to the under-developed nature of our bond market as well as low domestic investor base. Printing of currencies also has the tendency to increase money supply with associated repercussion of fueling inflationary tendencies in the economy. Foreign reserves are adequately unavailable. Thus, external borrowing on the international capital market becomes an inevitable option despite the huge debt service burden and dire implications on exchange rate stability. Research has shown that, external financing is not feasible during periods of economic and financial crisis. Recently, the World Bank Group reported the Covid-19 crisis is likely to have an enduring effect on investor confidence, impeding the abilities of developing economies like Ghana to access the international capital market. In a recent publication by “Financial Times”, Ghana’s Finance Minister, Mr. Ken OforiAtta succinctly echoed the financing plight and dilemma of African Finance Ministers amid the Covid-19 Pandemic in his article titled ‘what does an African finance minister do now?’ Seeking viable alternative means of financing is surely the way to go. In early January, it was intriguing when the finance Minister hinted of a planned $3 billion diaspora bonds issuance before the year ends. In this article, we shed light on the concept of diaspora bond issuance, the associated benefits and likely challenges.

Concept and Rationale for Diaspora bonds Diaspora bonds are debt instruments issued by a country targeted exclusively at their citizens living in the overseas diaspora. Diaspora citizens despite their absence from the home country continue to maintain strong financial ties with them as a result of regular remittances. However, several studies did not find positive effects of remittance on development and economic growth especially when these remittances are spent on consumption which increase financial outflows (Abdih et al 2008). This development coupled with the high borrowing cost on the international capital market propelled nations to structure alternative financing instrument which gave rise to the concept of diaspora bonds. Diaspora bonds allow citizens of the issuing countries living in the diaspora to invest part of their accumulated wealth in their homeland. From the issuing nation’s perspective, diaspora bonds have proven to be more stable source of funding and are likely to be demanded in both good and bad times as they thrive on the patriotism and commitment of the diaspora citizens to promote the economic development of their home country. Historically, Israel and India are reputed as some of the most successful diaspora bonds issuers. Dating back to 1951, Israel has been issuing diaspora bonds annually to meet development related issues. Unlike Israel, India has issued diaspora bonds occasionally in 1991, 1998, 2000, and beyond mostly to support its balance of payments. Nigeria also successfully tapped into the diaspora bond market when its maiden diaspora bonds issued in 2017 was oversubscribed by 130%. Ghana’s Golden Jubilee Savings Bond in 2007 targeted at both Ghanaians living in Ghana and those living abroad to attract infrastructure finance proved unsuccessful with 60% undersubscription. The huge remittance inflow from the diaspora is considered a useful proxy for diaspora bond issuance. Based on research studies, remittance flows to developing countries proved to be resilient during the global financial crisis, falling by 5.5% in 2009 and rebounding sharply in 2010. Data from the World Bank on Sub Saharan Africa indicates that Nigeria, with substantial diaspora across the world was the largest

recipient of remittance flows of $23.8 billion in 2019 followed by Ghana ($3.5 billion) and Kenya ($2.8 billion). The graph below shows remittance flows to selected Sub-Saharan Africa countries in 2019. Reasons for investors interest in Diaspora bonds Although investment decision is based on the comparison of expected financial earnings, for diaspora investments, the expected social and emotional returns are crucial. From a survey undertaken by the Commonwealth Secretariat between October 2017 and March 2018, which focused mainly on diaspora communities in the UK from six Commonwealth countries namely Bangladesh, Fiji, Ghana, Jamaica, Kenya, and Nigeria, there was empirical evidence which suggested that financial connections between diaspora members and their countries are extremely common and both quantitative and qualitative findings suggested that diaspora members feel a strong connection to their countries, and hence, are interested not only in personal profit but in contributing to the social and economic development of their country – a sense of patriotic duty and fulfillment. The patriotic offering made by these diasporas are fueled by the underlying future benefits to be derived from a welldeveloped economy when they relocate from the diaspora to their home countries for retirement and subsequent resettlement. Investors are also interested in diaspora bonds because the wealth they contribute will be used in the execution of government projects; support infrastructural development; provide affordable healthcare and education and also create jobs which can be reckoned as a discharge of duty towards the less privileged in society. Lastly, the knowledge that these bonds are channeled towards sustaining economic growth which in turn creates a stable and viable economic environment in which businesses can thrive is always a win-win situation for investors who mostly would already have established businesses in their home countries. Benefits of diaspora bonds Diaspora Bonds are issued when conventional external debt cannot be issued on the international debt market or only at very high interest rates. The basic source of sovereign revenue is taxation. If a country can generate sufficient tax revenue through widening

the tax base and efficient tax administration, it will prefer this kind of funding, as with this source there is no need to repay the funds. As have been already established in the introduction, a pandemic such as the world is currently facing, distorts market, lowers investors’ confidence and tends to bring meaning to the adage “each one for himself, God for us all”. And this is generally seen in the activities of some credit rating companies such as S&P Global which has consistently without fail revised the ratings for most developing economies in the emerging markets painfully in line with the bleak economic outlook. In such times when an issuing country does not have the reception on the international capital market or is unable to pay interests appropriate to its credit rating (if existent anyway) due to deteriorating market sentiment, it relies on the patriotic discount offered by the buying diasporas who are only moved by pure altruism. There is no pure financial consideration and as such sovereign nations issuing these bonds can have reduced interest rates which makes this cheaper as compared to the other deficit financing options. In addition, unlike the conventional external debt, in times of severe economic hardship, the government can enter into memorandum of understanding with the diaspora investors to settle them in Ghana cedi as most of them operate bank accounts and have businesses in Ghana. It is therefore likely that most of them will need local currency for their working capital and others for transfers to their families and loved ones. This can reduce the exchange rate volatility during maturity repayments. The benefits of diaspora bonds are not only synonymous to the issuer but to investors too. Diaspora bonds are sovereign bonds and as such members of the diaspora can assess the government’s willingness to repay and its ability to repay the amount lent via diaspora bonds at maturity. For most developing economies, the government cares about its reputation in order to take out loans in the future (Eaton & Gersowitz, 1981). This would imply that a country that has closer links to the world will repay its debts with higher probability, as it relies on perpetual lending and as such reduces the risk of default for such bond holders. Also, despite the CONTINUED ON PAGE 19

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reduced interest rate on diaspora bonds compared to the interest rate on similar external bonds, they serve as attractive investment instruments that offer high return to the diaspora investors due to the perpetual low interest rates in the developed overseas diaspora and recently, amidst this pandemics, negative yields. Challenges of issuing Diaspora bonds The way, in which the diaspora - as a possible source of external finance - is perceived by its home country government, crucially, depends on the impact it is expected to have. Most developing economies only hold the diaspora in high esteem when it is time for an election and exclude them during policy formulation and implementation. However, the home country’s government policies or governance are also assessed by diaspora citizens when making their investment decisions. There is lack of access to viable data and during the period of designing the bonds, the book runners, in particular those in developing countries do hardly have access to accurate data of all possible investors. This partly

explains Ghana’s failure in her maiden partial diaspora bond issuance. Also, the associated entry costs into the diaspora bond market; different charges and fees might be required; for example to the commercial seller of the bonds (book runners) or for registration by Securities and Exchange Commission (SEC). Therefore, a threshold number of potential investors are required for a successful launch of a diaspora bond which might take a while to gather and this implies that at the time the diaspora investors also make their investment decision, the data for the home country’s supply decision is also in the past. Conclusion The perpetual budget deficit coupled with the challenges of assessing financing on the international capital market especially during periods of crisis and economic uncertainties calls for the structuring of alternative financing instrument. It seems that the investment decision for the diaspora strongly depends on its closeness to the home country, on the good governance of the home country, on the alternative external financing (remittances) and on the rating of the home country, which indicates the latter’s willingness and ability

to repay the debt which in all can be greatly influenced by the issuing economy. Diaspora bonds, if properly structured through dialogue with the investors and well aligned to development goals, offer huge potential to raise the much-needed finance for development. References Abdih, Y., Chami, R., Dagher, J., & Montiel, P. (2008). Remittances and institutions: Are remittances a curse?, IMF Working Paper, No.08/29. Eaton, J., & Gersowitz, M. (1981). Debt with potential repudiation: Theoretical and empirical analysis, Review of Economic Studies, 48(2), 289-309.

Bachelor of Commerce Degree from University of Cape Coast. He is currently a final year Master student in International Audit, Economics and Finance at UCA in France Email: taylorkojodaniel@gmail.com LinkedIn: https://www.linkedin.com/ in/danytaylor/

Mavis BOSSMAN; She is a keen enthusiast of the developments and growth of the Emerging Markets Economies and an astute banker whose area of expertise is in the global financial markets. She is a member of The Financial Markets Association (ACI) and holds a Bachelor of Commerce Degree from the University of Cape Coast. She is currently pursuing a postgraduate degree in International Audit, Economics and Finance at UCA in France. Daniel TAYLOR is a Chartered Accountant and financial market enthusiast with years of treasury experience in the banking sector. He holds certification from The Financial Markets Association (ACI) and

Disclaimer: The views expressed in this article are exclusive to the authors and do not represent those of their respective institutions.

First National Bank renews commitment to help address housing needs in Ghana First National Bank has reassured Ghanaians of its determination to help address the housing needs in the country, even in the climate of uncertainty generated by the COVID-19 pandemic. Executive Head of Home Loans at First National Bank Kojo AddoKufuor, gave the assurance during the maiden virtual Property Developers Forum with real estate developers from all over the country. He said the bank has introduced an enhanced home loans portfolio with a dedicated team and a robust platform to serve the increasing number of Ghanaians discovering the benefits of mortgages. “Housing is a universal need,” he told the developers. “People need shelter regardless of the situation they find themselves in. So, whether Covid-19 or not, the demands haven’t changed. That is why keeping the relationship with developers and agents is a very important activity on our calendar every year.” Mr. Addo-Kufuor also revealed that First National Bank has proactively re-engineered its team and systems to drive efficiency

and speed in the processing of mortgage applications. “With the support from other business units like the Retail, Commercial Banking, Corporate and Institutional Banking, coupled with the positive relationship with real estate developers and agents, we are better placed to help meet the growing demands for home ownership,” he said.

The Secretary of the Ghana Real Estate Developers Association (GREDA), Mr. Samuel Amegayibor, congratulated First National Bank on the successful acquisition and subsequent merger with GHL Bank and expressed the association’s readiness to support the renewed entity. “On behalf of the Executive Council of GREDA, we wish

to congratulate First National Bank Ghana for the merger and for hosting the first virtual Property Developers Forum,” Mr. Amegayibor said. “We were not sure of what to expect but this has been a great meeting overall. GREDA is behind you and the entire membership of GREDA will maintain ties with First National Bank Ghana.”

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