Business24 Newspaper (April 8, 2020) by Business24 Online

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Covid-19: Cashew sees sharp fall in price as farmers count losses

Tullow Oil revival gets boost from lenders

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INTERNATIONAL MARKET

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NEWS/EDITORIAL

Editorial: Salvage the dying cashew industry 1

Wash your hands 2

The pain of the coronavirus pandemic is being felt across all sectors of the economy and the cashew business has not been left off the hook, considering the drastic fall in the price of the commodity within the first quarter of the year. The commodity has been performing well as a cash crop on the exports market following intense efforts from the government and other actors along the value

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not a good sign for the trade. They admitted that although the business had its own challenges, the pandemic has exacerbated matters and we implore the government to consider the sector in its rescue plans for the agriculture sector. We share in the call of stakehomders on the government to turns its attention to the processing and preservation of cashew by way of investing in the building modern processing machinery with structured credit arrangements in this

tough times. We also throw our weight behind the proposed Tree Crops Development Law which would regulate and ensure the production, pricing and marketing of tree crops, including cashew. We believe that these measures will go to secure the investments and livelihoods of cashew stakeholders as well as sustain a cash crop that has shown strong potential in terms of forex earnings to the state.

Covid-19: Cashew sees sharp fall in price as farmers count losses BY REUBEN QUAINOO

Cover your cough

chain but all of that appears to be waning considering latest statistics on the crop. From an international market value of US$1,500 per tonne as at January the pandemic has driven down the price of the commodity to about US$950, a situation that has led farmers and processors alike to count their loss. Some investors of the sector have disclosed to Business24 that they are now struggling to breakeven after contracting huge loans for their business and that is

From a global market price of around US$1,500 per tonne at the start of the year, the price of cashew has sharply declined to US$950 per tonne currently, a situation that stakeholders attribute to the harsh impact of the coronavirus pandemic on the commodity. The shutdown of cashew exports, especially to Vietnam and India, has had a devastating impact on the livelihoods of thousands of cashew farmers, players in the value chain told Business24 in an exclusive interview. Both cashew farmers and processors indicated that they were struggling to break even after contracting loans to invest in production. The situation, according to the General Secretary of Cashew Buyers and Exporters Association

of Ghana, Alhaji Justice Mahama Ansomah, “was heartbreaking.” A member of the Cashew Council of Ghana and President of the Association of Cashew Processors Ghana, Mr. Ed-Malvin Nii Ayibonte Smith, said it was time government turned its attention to cashew processing and preservation. He said: “Government must invest in the building of modern processing machinery while financial institutions help with credit. This is our way out from this kind of crisis we have found ourselves in today.” Secretary of the Ghana National Cashew Farmers Association, Clement Anane, clarified that the cashew sector had its challenges but the coronavirus pandemic has exacerbated matters. “100kg bag of raw cashew nuts has reduced from GH¢700 to about GH¢350; we are forced to sell the fruit at a profitless price,” he said.

A farmer and Member of Parliament for the Kintampo North Constituency, Mr. Kwasi Etu-Bonde, called for coordinated policies along the cashew value chain to bolster the fortunes of the industry and its stakeholders. “Ghana has comparative advantage to process more raw cashew nuts to the global market, yet the nonexistence of key agricultural infrastructure and high utility bills makes it impossible for local processors and exporters,” he added.

Meanwhile, the Chief Executive Officer of the Ghana Chamber of Agribusiness, Mr. Anthony S.K. Morrison, has made a call on private sector players in the country to invest more in the commodity at this critical moment. “The chamber as soon as possible will start having conversations with other international players about what we can do to aid our cashew farmers; under one umbrella we can fight for reforms.”

Ghana aims to set up regional financial services hub 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)

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This is not the first time the country has attempted to establish an IFSC. A previous effort in 2007, when the erstwhile Barclays Bank Ghana was granted a licence to run an offshore financial services centre in Accra, did not succeed as there was low interest and worries that the country could become a conduit for monetary laundering and other financial crimes. The government, however, sees Ghana as well placed to drive financial services growth in the sub-region. A 2018 report by PwC, the audit firm, said “there is a high demand for various financial services in Ghana.

The relatively underdeveloped financial services sector in neighbouring countries is an opportunity for financial services firms in Ghana to supply such services in those countries.” Other components of the project For the second component, the main objective will be to reinvigorate debt and treasury management functions through the upgrading of the current debt management system, introduction of electronic filing of public debt records, and development of operating guidelines to support the recently established Debt Community Platform. Improving system efficiency for non-tax revenue is

captured under the third component, which is expected to increase collection of nontax revenue through the acquisition of IT solutionbased tools (e-monitoring platform) for non-tax revenues and development of a nontax revenue medium-term strategic document. There is also an aid coordination component, which entails system upgrade of the aid management platform, while the fourth component focuses on technical assistance, monitoring and audit, and general project management and coordination. The Finance Committee’s report said the project is intended at building upon a previous institutional support project that ended in 2019. In

particular, it aims at improving institutional, managerial and technical competencies to effectively prepare, implement, monitor and report on the planned priority interventions outlined in the Ministry of Finance’s Strategic Plan (2019-2023). The scope covers new and emerging practices which aim at enhancing public financial regulation, effective treasury and credit risk management, as well as enhancing revenue mobilisation and fostering economic relations for increased foreign direct investment. Through this capacity building project, it is expected that the Ministry of Finance will build its capacity in best practices and improve upon its work generally.

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Tullow Oil revival gets boost from lenders BY NII ANNERQUAYE ABBEY

Troubled oil company Tullow Oil plc’s path to revival got a boost as its lenders agreed that the company’s debt capacity remains in a healthy position. A release issued by the company on Friday said its recent Reserves-Based Lending (RBL) redetermination confirms a debt capacity of US$1.9 billion as well as a US$700 million liquidity headroom of undrawn facilities and free cash at the start of the second quarter of the year. The Anglo-Saxon company and operator of Ghana’s Jubilee and TEN oil fields said it will now pursue further savings in addition to initial measures that, among other things, included layoffs expected to affect about a third of its global workforce. “Securing the ongoing support of our RBL lending banks and confirming our debt capacity has been important given the current challenging environment,” Chief Financial Officer Les Wood said. Per the agreement with lenders, Tullow voluntarily reduced facility commitments

from US$2.4 billion to US$2.2 billion, effectively accelerating its first scheduled commitment amortisation from October 2020. It is expected that the reduction in debt capacity and commitments will translate into a reduction in finance costs. According to Mr. Wood, the agreement with the lenders verifies the strength of the company’s producing assets and robust hedging strategy. Combined with the further

cost savings it has identified, this confirms the strength of Tullow’s liquidity in the medium term, he added. Cost savings Last year, the company’s operational challenges culminated in a US$1.6 billion loss. This triggered a raft of actions in a bid to trim costs and return to profitability. After previously slashing its planned capital expenditure for 2020 by 30 percent, the

company is further reducing the amount to US$300 million from US$350 million, while expenditure earmarked for decommissioning has been revised to US$65 million from US$100 million. Tullow said it expects additional savings through the deferral of activities across the portfolio and through savings that can be realised by ongoing farm-down activities. “In Ghana, for example, savings will be made through

the early termination of the Maersk Venturer rig and the deferral of some well activity, combined with the removal of any non-critical work that does not focus on safety and asset reliability.” Hedge cushion Tullow said the impact of reduced crude oil prices is mitigated by its robust hedging strategy, whereby 60 percent of its 2020 sales revenue is hedged at a floor price of US$57 per barrel (/bbl) and 40 percent of 2021 sales revenue is hedged at a minimum price of US$53/bbl. For January and February 2020, the company’s realised oil price was US$62/bbl, and following the recent price drop, hedging receipts of US$30 million are forecast for March 2020. According to the company, underlying operating costs remain less than US$12/bbl, with operating costs in Ghana at US$9/bbl. It said its hedging policy together with expected output of 70,000-80,000 barrels per day results in a free cash flow breakeven oil price of US$35/bbl for the rest of the year.

Unions warn over Pre-tertiary Education Bill BY BENSON AFFUL

Pre-tertiary education unions have accused the Ministry of Education of taking advantage of thelockdown period to smuggle the Pre-Tertiary Education Bill into parliament for passage – a bill they have initially raised objections to. They have therefore cautioned the ministry and parliament to desist from the passage of the bill, which was included in the Order Paper last Friday to be laid before lawmakers for discussion and subsequent enactment. The unions comprise Ghana National Association of Teachers (GNAT), National Association of Graduate Teachers (NAGRAT), Tertiary Education Workers Union (TEWU), and Coalition of Concerned Teachers Ghana (CCT-Gh). Thomas T. Musah, General Secretary of GNAT, who spoke on behalf of the unions, said at their last meeting with the ministry, which was represented by Deputy Minster Dr. Yaw Osei Adutwum, the unions were asked to put their inputs together and submit them to the next meeting for discussion. “We were in the process of doing this when the COVID-19 pandemic broke out and the country went on lockdown,” he said. The inclusion of the bill in the parliamentary Or-

der Paper “for discussion and subsequent passage therefore comes to the unions as a rude shock and an exercise of bad faith,” he added. The reforms envisaged by the bill will place Senior High Schools under the management of Regional Education Directorates, which in turn will be under the Regional Coordinating Councils. Basic schools will be managed by Metropolitan, Municipal and District Assemblies, while technical and vocational schools will be managed and run by their own director-general, independent of the Ghana Education Service (GES). The unions argued that if the bill is passed, the GES would be shorn of its power and become a feeble coordinator. “The teaching profession would be destabilized and the unified service currently in place would be broken or dismembered,” Mr. Musah said. He added that the unified conditions of service under which teachers operate would be broken, with teachers at risk of being manipulated and subjected to the whims and caprices of the assemblies. “In the spirit of unity, harmony and organic solidarity, the pre-tertiary education unions express their abhorrence for the arrangement and reject it in no uncertain terms,” Mr. Musah said.

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Mastercard, NBSSI raise GH¢90m to support small businesses BY EUGENE DAVIS

Mastercard Foundation and the National Board for Small Scale Industries (NBSSI), an agency under the Ministry of Trade and Industry (MOTI), have partnered to assist micro, small, and mediumsized enterprises (MSMEs) and start-ups survive the economic downturn caused by the COVID-19 pandemic. The Programme christened NBSSI Mastercard Foundation Recovery and Resilience Program for MSMEs, has an initial funding amount of GHC90 million with additional funds expected from donors. The NBSSI Mastercard Foundation Recovery and Resilience Program for MSMEs will provide financial assistance, in the form of grants and soft loans, via participating institutions – banks, microfinance, mobile lenders, NGOs and Business Development Services – to eligible, qualified micro-, small-, and medium-sized enterprises, both formal and informal. The amount and type of financial support provided will vary depending on the size of enterprise, their need and repayment capacity.

Nathalie Akon Gabala- Regional Head for Western, Central and Northern Africa/ Country Head in Ghana for Mastercard Foundation

Businesses in growth sectors where the employment of young people, especially young women, businesses providing services that will be in demand during the pandemic and that have the potential to grow and positively impact communities affected by COVID-19 and businesses that will focus on digitization to support MSMEs are expected to be supported by the programme.

The creation of the NBSSI Mastercard Foundation Recovery and Resilience Program for MSMEs follows the Foundation’s recent announcement of its West, Central and Northern Regional office opening in Accra to drive its Young Africa Works strategy in the region. Young Africa Works, developed in consultation with young people, policymakers, educators, and entrepreneurs,

Executive Director of NBSSI- Kosi A. Yankey-Ayeh

is Mastercard Foundation’s strategy that aims to extend dignified work to 30 million young people in Africa, with 3 million in Ghana, 70 percent of which will be young women, over the next 10 years. “The effects of COVID-19 are multifaceted and unfolding rapidly. We expect that the prospects of young people in Ghana, and the rest of Africa,

will be deeply impacted,” says Mastercard Foundation President and CEO Reeta Roy. He added: “We will continue working with young people to better understand their needs, amplify their voices, and cocreate solutions that will enable them to reach their full potential. We are also keenly considering what lessons we can glean during this time to better equip young people for a future in which work will be increasingly digital.”

ECOWAS Commission reaffirms support for member states in COVID-19 fight In light of the spread of the pandemic, ECOWAS Commission has reaffirmed its solidarity with Member States and welcomes all the measures already taken to contain the spread of the pandemic and care for the sick. A communique issued and signed by Jean-Claude Kassi Brou, President, ECOWAS Commission said the Commission remains committed to supporting member states in the fight against this pandemic. It said in this regard, the West African Health Organisation (WAHO), its specialised health Institution responsible for coordinating the response at the regional level, has drawn up a Regional Strategic Plan with all member states. To address the emergency at hand, ECOWAS has immediately made available financial support from its own resources, in addition to assistance from international partners, for the purchase of medical supplies and equipment es-

sential for the fight against the pandemic. The communique said WAHO has already purchased and dispatched to the 15 Member States supplies including 30, 500 diagnostic test kits; 10, 000 Personal Protective Equipment (Coveralls, Aprons, gowns, gloves, goggles, boots); 740, 000 prescription tablets (Chloroquine and Azithromycin); It said orders have been placed to acquire for Member States, the following items: 240,000 diagnostic kits; 240,000 extraction kits; 250,000 viral sample transport equipment; 285,100 Personal Protective Equipment (PPE); 268,1000 masks for medical personnel (face masks, surgical masks, full face masks); 120 ventilators and Several thousand litres of alcohol gel and disinfectants. It said WAHO was also working, in close collaboration with the specialised services in Member States, to deploy personnel and epidemiologi-

cal surveillance and data collection tools, strengthen the capacity of reference laboratories and train technical personnel. The communique said ECOWAS and its Institution,

WAHO, continue both internal and external resource mobilisation, with a view to increasing the availability of medical materials and equipment necessary to prevent, monitor and

combat the pandemic. “This will expand its scope of support to supplement Member States’ own efforts,” it said. It said in addition, ECOWAS was working to complement its intervention as part of a Short and Medium Term State Assistance Plan (humanitarian assistance and support for economic recovery). It commended its partners for their financial and technical support to the Community in these difficult times. The ECOWAS Commission urged people to continue to implement the measures recommended by the Health Authorities, and to comply with the prescribed hygiene guidelines. “Together, we will win the fight against COVID-19,” the statement assured. As of April 5, 2020, the 15-member states are affected by the pandemic with 1, 739 confirmed cases of contamination, 55 deaths and 328 persons who have fully recovered and approximately 95 per cent of deaths are patients with comorbid conditions.

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Covid-19 accelerates Ghana’s e-health revolution As of April 6, Ghana had recorded 214 confirmed cases of Covid-19 and five deaths, out of a global count of 1.34m infections and 74,600 fatalities. The government has responded comparatively quickly to the global pandemic: on March 17 it barred entry for all travellers – excluding Ghanaian nationals – who had visited a country with more than 200 confirmed Covid-19 infections. A mandatory 14-day quarantine for all travellers was instituted at the same time, with 1030 people isolated and tested regularly, 10% of whom tested positive during this period. On March 22 the country closed its land borders, while on March 30, when the number of confirmed cases stood at fewer than 200, Ghana imposed a two-week partial lockdown in the two major metropolitan areas of Accra and Kumasi. These lockdowns allow residents of the affected areas to go to food markets, petrol stations and banks, but notably provide no exemption for religious services and include a ban on mass gatherings for funerals. The country has been exposed to epidemics in the recent past, including several cholera outbreaks and a successful effort to prevent the spread of Ebola between 201316. This is widely thought to have contributed to Ghana’s ability to conduct enhanced testing and screening at points of entry, and has likely sensitised the population to the severity of the current outbreak. Economic impact and response Keenly aware of the economic risk the crisis poses to the country, the administration of President Nana Akufo-Addo and the Bank of Ghana have quickly responded with a host of monetary and fiscal measures. On March 18 the central bank was the first in sub-Saharan Africa to cut the monetary policy rate, which it reduced from 16% to 14.5%. This was accompanied by other measures to boost liquidity, including a lowering of the reserve requirement and the reduction of capital adequacy rates. The country has also requested support from the IMF and the World Bank, as officials attempt to close a looming financing gap in the 2020 budget. Given that Ghana’s economy is exposed to current demand fluctuations in the oil and tourism sectors, and that exports such as gold and cocoa have also been negatively affected by the pandemic, the government is likely to authorise withdrawals from the

state’s oil-funded Ghana Stabilisation Fund. Healthtech tackles Covid-19 As the fight against the virus continues, a number of domestic and Pan-African health care start-ups have built on recent innovations to help tackle new challenges posed by Covid-19. In the pharmaceutical retail space, Ghanaian start-up mPharma, which last year acquired Kenya’s second- largest pharmaceutical chain, Haltons, has been using technology to address inefficiencies in supply chains, with the aim of lowering drug prices. As Covid-19 began to cause global disruptions in drug supply chains, subsequently threatening the supply of important medicine in Ghana, in mid-March mPharma launched a price control programme called ‘Mutti Keep My Price’. The initiative allows patients in need of chronic disease medication to continue paying the same price for their prescriptions for up to six months, regardless of market prices. Elsewhere, the nascent telemedicine space – which allows for the distribution of health-related services via electronic and telecommunication methods – is also expected to see increased de-

mand as a result of Covid- 19. In 2016 the Ministry of Health and Ghana Health Service, in conjunction with the Swiss Novartis Foundation, began setting up a series of tele-consultation centres as part of its e-health strategy. Since then, other private players have entered the space. Talamus Health, active in Ghana, Nigeria and South Africa since 2018, provides a platform for patients to connect with health care providers. The company is currently offering video appointment services for free as the major cities remain in lockdown, and has experienced a spike in activity as a result of the Covid-19 outbreak. “We have had a lot of new facilities sign up with us to leverage our telemedicine feature and deliver healthcare to the general public. This includes those under the government-imposed partial lockdown, as well as those in self isolation – all of whom need access to health care,” Joshua Owusu-Ansah, country lead of Talamus Health Ghana, told OBG. Another e-health player, Redbird, a start-up with a focus on rapid testing, has also been able to use its technology to help minimise patient interactions. In late March it launched the ‘COVID-19 Daily Check-in App and Symptom Tracker’, which

allows patients to self-report potential virus symptoms to health care professionals. The app is expected to alleviate pressure on hospitals and provide remote triage. Meanwhile, medical drone delivery company Zipline has also been able to adjust its model to suit the immediate needs of communities and health care specialists during the pandemic. The drone delivery service was initially tailored to emergency blood and anti-venom deliveries in remote areas, but the company has been able to work with local authorities to provide supportive treatments including antibiotics, hydration, and fever and pain relief to reduce Covid-19 related mortality, with plans to deliver vaccines and test kits as they become available. As a result, the service has helped to prevent overcrowding at hospitals and has bolstered attempts to enforce effective social distancing. Post-pandemic prospects Established industry players in Ghana have also become aware of the potential for disruption caused by technology, and have already adjusted their plans accordingly by investing more in digital infrastructure. In January a merger of three of the country’s pharmaceuti-

cal companies – Dannex, Ayrton Drug Manufacturing and Starwin Products – resulted in the establishment of DAS Pharma, now the largest drug company in Ghana. Talking to local media at the time of the merger, CEO Daniel Apeagyei Kissi emphasised the importance of taking advantage of new technological trends in the industry. “Consumer and customer needs are changing, industry players are integrating vertically, dealer-owned brands are appearing on the market and technology is manifesting in online pharmacies, electronic payment, online health care systems [and] online doctors,” he said. Agreeing with the sentiment, Owusu-Ansah believes that e-health solutions should experience significant growth moving forward. “Covid-19 highlights the inefficiencies in the health care sector, largely run by the government, and for a long time seen by technology enthusiasts as an unattractive sector to venture into,” he told OBG. “Given the scale of this pandemic – and its direct and indirect impact on the global economy and daily life – I expect it will encourage more to venture into healthtech.” (Source: Oxford Business Group)

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COVID -19: An opportunity to reboot our minds and our country BY SAMUEL OBENG APPAH While the world continues to battle the novel COVID-19 (Coronavirus) outbreak, ideas are emanating from every corner as to how the world should run after the pandemic. Health care delivery systems have been overwhelmed; both caregivers and institutions are being stretched to their elastic limits. For countries like Ghana, the situation is calamitous as inadequate provision of facilities and personnel expose a system which has been under resourced over the years. However like every cloud, there is a silver lining in the Coronavirus pandemic which can be leveraged to enhance the quality of life of citizens if only the government is willing to step up to the plate, commit resources and see that it is done. Take China and India for example, which have suffered bad climate for years as result of excessive pollution of its atmosphere. Reports following the Covid-19 outbreak indicate that those counties are now experiencing improved climatic conditions as human activities that led to the pollution have been curtailed. Taking advantage of COVID-19 to correct flawed systems Ghana needs to take advantage of the COVID-19 pandemic to correct problematic systems and tackle other challenges the country has been battling with for years. It is a well- known fact that so many human activities and movements hamper the execution of major projects especially within our cities. Case in point is the dredging of big drains which causes so much inconvenience. In the wake of COVID-19, it is prudent for government to have tasked the Sanitation Minister to ensure that gutters are desilted. While these gutters are being unclogged, government must also pay attention to the larger drains, some of which run through the heart of our cities and communities. The Odaw River drain near Achimota has been a contributory factor to Accra’s perennial flooding due to city authorities’ inability to completely dredge it. This lockdown season presents an opportunity for the responsible ministry and other stakeholders to ensure that it is completely desilted and dreged. Another source of inconvenience is ongoing major constructions such as interchanges and flyovers which end up affecting mobility. With less movement these days, such projects can be expedited before the lock-

down ends. Post Covid-19 will require that the country’s workforce increase productivity to hasten the process of recovery for the economy. Heavy traffic jams as a result of non-functioning or poorly configured traffic lights slow down productivity. Now that parts of heavy-traffic areas in the country are under lockdown, authorities must do well to fix them. Also, buildings that are found on waterways that create discomfort and continue to pose a challenge in the prevention of flooding can now be demolished. Again, COVID-19 has exposed the need for the establishment of robust ICT systems and infrastructure. We need to increase internet penetration rate to allow for online learning especially amongst rural folks in this period where physical meetings are restricted. Although correcting systemic challenges is very necessary in the wake of COVID-19, perhaps what is more important in all of this is the need for citizens to renew their minds, and be more patriotic and responsible. We need to strip our minds of that sense of entitlement without any recourse to responsibility. Meeting tax obligations does not give any citizen the free will to be nonchalant and irresponsible. Every citizen has a crucial role to play in making Ghana better. Corruption This pandemic has unraveled how some Ghanaians are so quick to advantage of unfortunate events to swindle their compatriots. The cassava seller, drug dispenser, those selling sanitizers among others see COVID-19 as an opportu-

nity to be usurious by pegging their wares at very ridiculous rates. If you believe you ought to overprice your wares just to cash-in on a public health crisis, to the detriment of the average Ghanaian who can’t afford it, you are corrupt; if not worse. Your lack of empathy and kindness should be a conversation for another day. COVID-19 also reminds us of the need to create new healthy habits and strengthen relationships. I have heard people talking about acquiring a new skill and starting a “side hustle” among others. These are all necessary. I personally believe folks should also focus on reading books, exercising, developing connections with family and loved ones and honing skills and capabilities. We should purposefully add value to our life in any meaningful way while time allows us. The Bible talks about seasons and times in Ecclesiastes 3 and I feel this is a unique time to reconfigure and reinvent ourselves into much more responsible, empathy-filled and law abiding citizens. Yes, some might be stupidly defiant, they cannot bring themselves to kowtow to any restrictions in this difficult time, but don’t add on to the statistics – you need to be different! A change of attitude As we figure out the best ways of dealing with COVID-19, our attitudes toward waste creation and its management must change. We should find effective and efficient ways of disposing off waste and recycle where necessary to not just keep our surroundings clean, but enhance environmental

sustainability. We must arouse our consciousness to stick to time, approach national issues with a sense of urgency and avoid procrastination. While we are in lockdown, we must deeply reflect on what we can do to better our lot and improve the quality of life of those around us, especially the vulnerable and needy. Local consumption and economic recovery The speedy recovery of our economy from this downturn largely depends not just on government policies, but local consumption patterns. Already, it’s been projected that the country’s economy might shrink by some GH¢9.5 billion according to the Finance Minister in his address to Parliament late March. For a country like Ghana, this could be quite dire for livelihoods. Mitigating this will require citizens to realign their taste buds to conform to local products and services. This will ultimately spur our industries on to churn out more goods which could positively affect the fortunes of the local economy. As someone who writes and reports on tourism and travel, I cannot overlook the significant role domestic tourism will play in this regard. After COVID-19, we should be eager to visit the many tourist sites across the country. Most of these sites present a better opportunity to get in tune with nature for a healing and therapeutic effect as opposed to the superficial and flashy things elsewhere. President Akufo-Addo in his latest address to the nation on measures being taken by gov-

ernment to deal with the pandemic outlined five key objectives around which this is being done. One of them very much aligns with the rationale behind this article; “inspire the expansion of our domestic capability and deepen our self-reliance.” I am of the firm belief that this pandemic presents us with a unique opportunity to lay the foundations towards the “Ghana Beyond Aid” agenda. The onus is therefore on us citizens to harness our creativity, be innovative and do all we can to see to the realization of this objective. In the end we can look back and reminisce in glee with the words of this evocative poem written by Kitty O’Meara: And the people stayed home. And read books, and listened, and rested, and exercised, and made art, and played games, and learned new ways of being, and were still. And listened more deeply. Some meditated, some prayed, some danced. Some met their shadows. And the people began to think differently. And the people healed. And, in the absence of people living in ignorant, dangerous, mindless, and heartless ways, the earth began to heal. And when the danger passed, and the people joined together again, they grieved their losses, and made new choices, and dreamed new images, and created new ways to live and heal the earth fully, as they had been healed. The Writer, Samuel Obeng Appah is the Content Editor for VoyagesAfriq Travel Magazine.

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The private sector steps up BY DAMBISA MOYO If the 2008 global financial crisis laid bare the worst of capitalism, the private sector’s response to the COVID-19 pandemic is already showcasing the very best. COVID-19 cases have now surpassed one million worldwide, with the death toll above 70,000 and rising. The full extent of the global economic impact remains unknown. What we do know is that the world urgently requires a herculean response from both governments and the private sector to avert a devastating recession. Since the 2008 crisis, corporations have faced harsh criticism and even accusations of maximizing profits without due consideration of society’s broader needs. Today, however, we see corporations stepping up in response to the global health crisis. While some companies will need government assistance to survive, given the severity of the crisis, others can ease the overall burden on government by becoming part of the solution. For starters, leading pharmaceutical companies have redirected resources toward the development of COVID-19 diagnostics, therapeutics, and, one hopes, a vaccine. The Swiss health-care giant Roche, for example, created the first commercially approved COVID-19 test. The US Food and Drug Administration’s decision to give the company emergency permission to sell its test to labs in the United States will enable a significant improvement in the country’s lagging capacity for testing. Google’s health subsidiary Verily, for its part, reportedly redirected 1,700 engineers to develop a web-based COVID-19 screening test. Meanwhile, some health insurers – particularly in the US, where private companies account for the majority of health coverage – have adjusted their terms to enable people to get the medical care they need. Blue Cross and Blue Shield’s Federal Employee Program, which covers millions of government workers and their families, is waiving co-payments for treatment and testing, which can run into the thousands of dollars. Many more industries, such as automobile producers, are also contributing. They have redeployed their resources from revenue-generating activities to the production of vital equipment, such as protective gear for frontline health workers (including surgical masks, face shields, and gowns) and ventilators.

Similarly, the US retailer Walmart has agreed to convert some of its stores’ parking lots into COVID-19 testing sites. And hotels in Germany, the United Kingdom, and the US have repurposed themselves into makeshift hospitals to help cope with the surge in patients. Private companies have also facilitated adherence to social-distancing and quarantine

“Already, some central banks – including the US Federal Reserve, the European Central Bank, and the Bank of England – have implemented aggressive interest-rate cuts, and pledged financial support to enable banks to offer low-cost loans and repayment holidays to businesses and individuals affected by COVID-19.”

rules, by expanding deliveries of food, household items, and other incidentals. Thanks to fast decision-making and operational flexibility by suppliers and producers, the flow of needed goods has continued largely uninterrupted in many places. To keep up with surging demand, many such companies have even started hiring. Amazon, for example, has

pledged to create 100,000 new jobs that pay more than minimum wage. Such efforts are particularly valuable at a time when forced shutdowns are contributing to spiking unemployment. In the US, a record 6.6 million workers filed for unemployment benefits in one week in March. The week before, 3.3 million filed claims – nearly ten times the previous record of 695,000, set in 1982. Private-sector interventions free up public resources for activities that are firmly within the state’s purview, such as ensuring the continued provision of education, health care, infrastructure, and other basic public goods. Moreover, governments must pursue aggressive fiscal measures, including bailouts for the most affected sectors (such as airlines and the cruise-ship industry) and direct support for workers and small businesses. In the US, $2 trillion will now be channeled toward such measures – the single largest fiscal package in the country’s history. Government also will be instrumental in injecting liquidity into the economy to avoid a credit crunch. Already, some central banks – including the US Federal Reserve, the European Central Bank, and the Bank of England – have implemented aggressive interest-rate cuts, and pledged financial support to enable banks to offer low-cost loans and repayment holidays to businesses and individuals affected by COVID-19. All of this is essential to buttress the economy, and it would be much harder to achieve if the private sector was not contributing to the fight against the pandemic. Likewise, recovering from what is almost certain to be a deep recession, and rebuilding the global economy, will also require private-sector commitment, as will addressing other global imperatives, including poverty reduction, broadening access to quality education, and combating climate change. Meeting all of these challenges demands the kind of innovation at which the private sector excels. If private firms maintain the foresight, adaptability, and compassion that many have shown in recent weeks, they will emerge from this crisis having established their true value to the economies and communities they serve.

Dambisa Moyo, an international economist, is the author of four New York Times bestselling books, including Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth – and How to Fix It.Copyright: Project Syndicate, 2020. www.project-syndicate.org.

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Counting the cost: Impact of COVID-19 on the energy sector BY SAMSON ADDO The world is still counting the massive cost that COVID-19 has unleashed on its soil. The level of anxiety and uncertainty prevailing globally has characterised the pandemic as a key milestone in human history. In 2019 both the World Bank and the International Monetary Fund (IMF) gave a positive forecast for a marginal expansion of the global economy. IMF predicted that the global growth forecast will increase from 2.9% in 2019 to 3.3% in 2020. Little did they know what was ahead. In its January 2020 Global Economic Prospect, the World Bank forecasted that the world will see a growth rate of 2.5% in 2020. OECD in the same fashion lowered its estimation of the 2020 global GDP growth to 2.4%, indicating a prediction of contraction in general output. In its African Economic Outlook for 2020, African Development Bank puts Africa’s 2020 growth rate at 3.4%. In the light of the COVID-19 I guess this outlook will be revised downwards to reflect the emerging risks. Impact on Energy Whilst we analyse and count the cost of COVID-19, we must not lose sight of the adverse impact on the key driver of world economy: ENERGY. Within a quarter the price of oil fell from $62.00 per barrel at the end of December 2019 to $25.00 per barrel in March 2020. The steep fall was driven largely by a twin-effect namely the glut in oil production due the disagreements between Russia and Saudi Arabia, the supposed class prefect of OPEC+ and a reduction in global demand due the COVID-19 pandemic which is threatening the economic foundations of major world Economies like China and USA. The fall in the price of oil has resulted in the weakening of revenues and output mainly in economies that depend heavily on oil and gas Exports for the growth of their economies. With the fall in the oil prices, African countries including Nigeria, Ghana, Libya, Angola, Algeria, and Equitorial Guinea, will obviously have to prop themselves up to face an onslaught of difficult fiscal conditions that can linger into the medium term. Preliminary Effects Ghana is no exception to the wave of COVID-19’s economic de-stabilization. Ghana is one of the newest oil producing countries in Africa. Even though relatively small the

volumes of oil being produced mainly in the Tano-Cape Three Point Basin in the Western Region of Ghana is making a significant impact on the development agenda of the nation. For example between 2011 and 2018 Ghana bagged a little above $7.5billion, according to Public Interest and Accountability Committee (PIAC) a body established by law to monitor petroleum revenues in Ghana. This revenue is significant in relation to Ghana’s level of GDP. With the emergence of COVID -19 the revenue generated from the petroleum sector for 2020 is expected to assume a tailspin. This is mainly due to fall in the world price of oil. Ghana’s 2020 projected petroleum revenue is pegged at $1.2milion. Underlying this projection is the assumption that the dollar price of oil will be $58.66/b. The reality as presented to us by the weakening global demand curtesy COVID-19 and the price war between Russia and Saudi Arabia, is that as at 5th April 2020 the WTI and Brent crude sold at $28.34/b and 34.11/b respectively. The obvious effect is that if the price remains below $58.66/b, which analysts expect, Ghana will suffer a shortfall in petroleum revenue and this will have a negative ripple effect on the Government’s ability to execute the needed agricultural, infrastructural, educational and health projects it intends to carry out this year. The attendant negative effect on the GDP for 2020 including significant job losses cannot be escaped unless bold and out-of-the-box policies are urgently executed. Measures Proposed It is heartwarming that

the Government of Ghana, through the Ministry of Finance decided to embark on a number of measures to reduce the impact on the nation. On 30th March 2020 the minister of Finance made some proposals before Parliament of Ghana to address the effect of COVID-19 on Ghana’s economy and some of the measures outlined bothers, of course, on energy. Specifically the minister indicated that the total fiscal impact is projected to be $9.5million which is 2.5% of the revised budget. The minister requested approval to use $219m from the Ghana Stabilization Fund (GSF) towards Ccovid-19 projects, reduce the statutory cap on GSF of $300million to $100million to allow the Government to access extra Ghs1,250million more funds from the petroleum revenue to support Corona Virus Alleviation Programe (CAP), reduce portion of the Net Carried and Participation interest due GNPC from 30% to 15% and a daring suggestion to amend the Petroleum Revenue Management Act (PRMA) to enable Government to withdraw money from the protected $591million Ghana Heritage Fund. Position of the law and Recommendations Ghana’s petroleum sector is highly regulated. We have laws that regulate the upstream, midstream and downstream subsectors. One key law that is relevant and which has already undergone amendment is the Petroleum Revenue Management Act (Act 815). The law stipulates that Ghana shall have Petroleum Holding Fund which hosts all petroleum revenues. From this fund disbursements can

be to GNPC, Annual Budget Funding Amount, Ghana Petroleum Funds and Exceptional Purpose Transfers. Ghana Petroleum Funds are made up of Ghana Heritage Fund and Ghana Stabilization Fund. According to the PRMA (ACT 815) Section 9(2) ‘The object of the Ghana Stabilization Fund is to cushion the impact on or sustain public expenditure capacity during periods of unanticipated petroleum revenue shortfalls’. Section 10 of the Act 815 states that “the object the Ghana Heritage Fund is to (a) provide an endowment to support development for future generations when petroleum reserves have been depleted; and (b) receive excess petroleum revenue”. Considering the analysis above, it is clear that that since petroleum revenues are projected to reduce the use of the proceeds this year should be highly maximized. Oil and Gas are finite resources and hence the use of the proceeds must have adequate sustainability measures in place. I think the use of funds from petroleum funds especially the Ghana Stabilization Fund to support CAP is in order considering the fact that COVID-19 needs to be contained quickly to curtail further economic destruction. It is suggested that part of the fund should be used to assist educational institutions in Ghana (both private and public) that are providing Energy Programes through the traditional means, to deliver seamless technologically driven studies to students so that the future manpower needs of Energy Experts are not compromised. In this case the use of the funds will address current needs and also future

aspirations of the nation. As regards the proposal to amend the PRMA to enable funds to be withdrawn from the Heritage funds, it is suggested that the position of the law on the Ghana Heritage Funds should be maintained as it is. We have a future after COVID-19. We will reach a peak in our oil and gas production cycle and that is where the true value of the GHF will be felt. The history of exploitation of natural resources in Ghana is dented with disheartening scenes of degradation without far reaching benefits and this is what the law wants to prevent in future. The spirit of the writers of Act 815 should be maintained and guarded and I think there is no need to amend this part of the law now. I think that Government should use part of the funds to support local companies that engage in mainly manufacturing activities for both domestic consumption and export. This is so because these companies employ a teaming number of Ghanaians and at the same time serve as a source of foreign currency. Cushioning them during this time is crucial to the resilience of our economy. Government must also support the Agricultural sector by ensuring that farming areas are properly targeted and farmers are adequately educated on ways of preventing COVID-19. Efforts should be made by Government to establish health facilities in food basket zones in Ghana. Adequate funds should be directed towards safeguarding the Agricultural value chain to prevent food inflation which can create further hardship in the economy. Finally it is recommended that all funds that are being pulled to support CAP to ensure the effect of COVID-19 is alleviated are efficiently spent and accounted for. PIAC must not lose sight of this even in this emergency situation.

SAMSON ADDO, MSc Energy Economics Student at GIMPA. Contact: 2010risk@gmail.com

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Internationalizing the Crisis

BY: PROF. JOSEPH E. STIGLITZ As it spread from one country to another, the novel coronavirus paid no attention to national frontiers or “big, beautiful” border walls. Nor were the ensuing economic effects contained. As has been obvious since the outset, the COVID-19 pandemic is a global problem that demands a global solution. In the world’s advanced economies, compassion should be sufficient motivation to support a multilateral response. But global action is also a matter of self-interest. As long as the pandemic is still raging anywhere, it will pose a threat – both epidemiological and economic – everywhere. The impact of COVID-19 on developing and emerging economies has only begun to reveal itself. There are good reasons to believe that these countries will ravaged far more by the pandemic than the advanced economies have been. After all, people in lower-income countries tend to live in closer proximity to one another. A higher share of the population suffers from pre-existing health problems that render them more vulnerable to the disease. And these countries’ health systems are even less prepared to manage an epidemic than those of the advanced economies (which have hardly functioned smoothly). A March 30 report from the United Nations Conference on

Trade and Development offers an early glimpse of what lies in store for emerging and developing economies. The most successful of them rely on export-led growth, which will now collapse as the global economy contracts. Not surprisingly, global investment flows are also plummeting, as are commodity prices, indicating a tough road ahead for natural-resource exporters. These developments are already being reflected in the yield spreads on developing countries’ sovereign debt. Many governments will find it exceedingly difficult to roll over the debts coming due this year on reasonable terms, if at all. Moreover, developing countries have fewer and harder choices about how to confront the pandemic. When people are living hand to mouth in the absence of adequate social protections, a loss of income could mean starvation. Yet these countries cannot replicate the US response, which features (so far) a $2 trillion economic package that will blow up the fiscal deficit by some 10% of GDP (on top of a pre-pandemic deficit of 5%). Following a virtual emergency summit on March 26, G20 leaders issued a communiqué committing “to do whatever it takes and to use all available policy tools to minimize the economic and social damage from the pandemic, restore global growth, maintain market stability, and strengthen resilience.” To that end, at least two things can be done

about the dire state of affairs in emerging and developing economies. First, full use must be made of the International Monetary Fund’s Special Drawing Rights, a form of “global money” that the institution was authorized to create at its founding. The SDR is an essential ingredient in the international monetary order that John Maynard Keynes advocated during the Bretton Woods Conference of 1944. The idea is that, because all countries will obviously want to protect their own citizens and economies during crises, the international community should have a tool for assisting the neediest countries without requiring national budgets to take a hit. A standard SDR issuance – with some 40% of the SDRs going to developing and emerging economies – would make an enormous difference. But it would be even better if advanced economies like the United States donated or lent (on concessionary terms) their SDRs to a trust fund dedicated to helping poorer countries. One might expect that the countries providing this assistance will attach conditions, in particular, that the money not go to bailing out creditors. It’s also crucial that creditor countries help by announcing a stay on developing and emerging economies’ debt service. To understand why this is so important, consider the US economy. Last month, the US Department of Housing and Urban Development announced that there would

be no foreclosures on federally insured mortgages for 60 days. In essence, this policy is part of a broader “stay” on the entire US economy as a response to the COVID-19 crisis. Workers are staying home, restaurants are staying closed, and airlines are all but shut down. Why should creditors be allowed to continue racking up returns, especially when the interest rates they charge should have already created a sufficient risk cushion? Unless creditors grant such a stay, many debtors will emerge from the crisis owing more than they can possibly repay. Such stays are just as important internationally as they are domestically. Under current conditions, many countries simply cannot service their debts, which, in the absence of a global stay on repayment, could lead to massive, rolling defaults. In many developing and emerging economies, the government’s only choice is either to funnel more income to foreign creditors or allow more of its citizens to die. Obviously, the latter will be unacceptable to most countries, so the real choice for the international community, then, is between an orderly or a disorderly stay, with the latter scenario inevitably resulting in severe turbulence and far-reaching costs to the global economy. Of course, it would be even better if we had an institutionalized mechanism for restructuring sovereign debt. The international community tried to achieve that in 2015,

when the United Nations General Assembly adopted a set of shared principles with overwhelming support. Unfortunately, that framework lacked the necessary buy-in from key creditor countries. It is probably too late to establish such a system now for use in the current crisis. But there will inevitably be more crises down the line, which means that sovereign-debt restructuring should be high on the agenda for the post-pandemic reckoning. In John Donne’s immortal words, “No man is an island …” Nor is any country – as the COVID-19 crisis has made abundantly clear. If only the international community would get its head out of the sand.

Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia University and Chief Economist at the Roosevelt Institute. A paperback version of his most recent book, People, Power, and Profits: Progressive Capitalism for an Age of Discontent, will be published by W.W. Norton in the US and by Penguin/Allen Lane in the UK. Copyright: Project Syndicate, 2020. www. project-syndicate.org

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Will COVID-19 Remake the World?

BY PROF. DANI RODRIK

Crises come in two variants: those for which we could not have prepared, because no one had anticipated them, and those for which we should have been prepared, because they were in fact expected. COVID-19 is in the latter category, no matter what US President Donald Trump says to avoid responsibility for the unfolding catastrophe. Even though the coronavirus itself is new and the timing of the current outbreak could not have been predicted, it was well recognized by experts that a pandemic of this type was likely. SARS, MERS, H1N1, Ebola, and other outbreaks had provided ample warning. Fifteen years ago, the World Health Organization revised and upgraded the global framework for responding to outbreaks, trying to fix perceived shortcomings in the global response experienced during the SARS outbreak in 2003. In 2016, the World Bank launched a Pandemic Emergency Financing Facility to provide assistance to low-income countries in the face of cross-border health crises. Most glaringly, just a few months before COVID-19 emerged in Wuhan, China, a US government report cautioned the Trump administration about the likelihood of a flu pandemic on the scale of the influenza epidemic a hun-

dred years ago, which killed an estimated 50 million people worldwide. Just like climate change, COVID-19 was a crisis waiting to happen. The response in the United States has been particularly disastrous. Trump downplayed the severity of the crisis for weeks. By the time infections and hospitalizations began to soar, the country found itself severely short of test kits, masks, ventilators, and other medical supplies. The US did not request test kits made available by the WHO, and failed to produce reliable tests early on. Trump declined to use his authority to requisition medical supplies from private producers, forcing hospitals and state authorities to scramble and compete against one another to secure supplies. Delays in testing and lockdowns have been costly in Europe as well, with Italy, Spain, France, and the United Kingdom paying a high price. Some countries in East Asia have responded a lot better. South Korea, Singapore, and Hong Kong appear to have controlled the spread of the disease through a combination of testing, tracing, and strict quarantine policies. Interesting contrasts have emerged within countries as well. In northern Italy, Veneto has done much better than nearby Lombardy, largely owing to more comprehensive testing and earlier imposition of travel restrictions. In the US, the neighboring states of Ken-

tucky and Tennessee reported their first cases of COVID-19 within a day of each other. By the end of March, Kentucky had only a quarter of the number of cases as Tennessee, because the state acted much more quickly to declare a state of emergency and close down public accommodations. For the most part, though, the crisis has played out in ways that could have been anticipated from the prevailing nature of governance in different countries. Trump’s incompetent, bumbling, self-aggrandizing approach to managing the crisis could not have been a surprise, as lethal as it has been. Likewise, Brazil’s equally vain and mercurial president, Jair Bolsonaro, has, true to form, continued to downplay the risks. On the other hand, it should come as no surprise that governments have responded faster and more effectively where they still command significant public trust, such as in South Korea, Singapore, and Taiwan. China’s response was typically Chinese: suppression of information about the prevalence of the virus, a high degree of social control, and a massive mobilization of resources once the threat became clear. Turkmenistan has banned the word “coronavirus,” as well as the use of masks in public. Hungary’s Viktor Orbán has capitalized on the crisis by tightening his grip on power, by disbanding parliament after giving himself

emergency powers without time limit. The crisis seems to have thrown the dominant characteristics of each country’s politics into sharper relief. Countries have in effect become exaggerated versions of themselves. This suggests that the crisis may turn out to be less of a watershed in global politics and economics than many have argued. Rather than putting the world on a significantly different trajectory, it is likely to intensify and entrench already-existing trends. Momentous events such as the current crisis engender their own “confirmation bias”: we are likely to see in the COVID-19 debacle an affirmation of our own worldview. And we may perceive incipient signs of a future economic and political order we have long wished for. So, those who want more government and public goods will have plenty of reason to think the crisis justifies their belief. And those who are skeptical of government and decry its incompetence will also find their prior views confirmed. Those who want more global governance will make the case that a stronger international public-regime health could have reduced the costs of the pandemic. And those who seek stronger nation-states will point to the many ways in which the WHO seem to have mismanaged its response (for example, by taking China’s official claims at face value, opposing travel bans, and ar-

guing against masks). In short, COVID-19 may well not alter – much less reverse – tendencies evident before the crisis. Neoliberalism will continue its slow death. Populist autocrats will become even more authoritarian. Hyper-globalization will remain on the defensive as nation-states reclaim policy space. China and the US will continue on their collision course. And the battle within nation-states among oligarchs, authoritarian populists, and liberal internationalists will intensify, while the left struggles to devise a program that appeals to a majority of voters.

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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