Business24 Newspaper 1st March, 2021 by Business24 Online

MONDAY MARCH 1, 2021

BUSINESS24.COM.GH

NO. B24 / 165 | NEWS FOR BUSINESS LEADERS

Ghana has 2bn barrels of oil left to drill

MONDAY MARCH 1, 2021

Ken Ofori-Atta , Finance Minister Designate

High liquidity, hunt for safety dampen Treasury yields By Joshua Worlasi Amlanu macjosh1922@gmail.com

xcess liquidity, coupled with investors’ search for safety, continues to drag down the short end of the treasury yield curve, despite the pandemic-induced weak macroeconomic fundamentals, investment analysts have said. Cont’d on page 3

Prez announces Covid-19 vaccine roll-out By Eugene Davis ugendavis@gmail.com

By Benson Afful affulbenson@gmail.com

hana has a total of 2bn barrels of oil left to drill before the country’s hydrocarbons get depleted, the Public Interest and Accountability Committee (PIAC) has revealed.

In 2010, the country lifted its first oil cargo of 1.1m barrels, and 10 years down the line, 420m barrels have been produced, the committee said. Ghana’s first oil field, Jubilee, was followed by the TEN and Sankofa Gye Nyame fields. PIAC said the government

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

POLICY RATE

14.5% 14.77%

OVERALL FISCAL DEFICIT

11.4% OF GDP

AVERAGE PETROL & DIESEL PRICE:

4.2% GHC 5.13

he first Covid-19 vaccinations in Ghana will take place from March 2 to 15 in 43 districts across three regions, as the country gears up for its largest ever immunisation campaign. Cont’d on page 3

Cont’d on page 2 INTERNATIONAL MARKET

US$1 = GHC 5.7606

GHANA REFERENCE RATE PROJECTED GDP GROWTH RATE

has earned US$6.2bn since production began to the first half of 2020. Nine percent of the total revenue has been saved for the next generation, in line with the Petroleum Revenue Management Act (PRMA).

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

CORN $/BUSHEL

$543.75

COCOA $/METRIC TON

$123.55

COFFEE $/POUND:

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Editorial / News

MONDAY MARCH 1, 2021

Editorial

End in sight at last T his month marks exactly a year since the discovery of the first cases of the novel coronavirus in the country. The devastation caused to the economy as well as the loss of some critical human resources to this virus has made the past 12 months a rather painful one. The search for a vaccine that would at least prevent some of these needless deaths has been successful and the country last week received its share due to donors’ generosity. After the Food and Drugs Authority has satisfied itself about the safety of the vaccine, a mass vaccination exercise is expected to commence tomorrow with the President and his Vice set to be inoculated

on live TV. The move by the Presidency has become necessary following the spread of vile propaganda as well as conspiracy theories about the entire vaccination exercise as well as on the disease itself. With nearly 20m Ghanaians expected to receive the vaccine by the close of the year, the President is seeking to use himself to demonstrate that not only are the vaccines safe but they are equally essential to the full reopening of the economy. There is no denying that there is a significant number of Ghanaians who are skeptical of the vaccine and its so-called side effects if any. Whereas the basis for this skepticism may be

unfounded, it could still have a telling impact on how the vaccination plan turns out. The more people get vaccinated, the less room for the virus to move and mutate. Beyond the President’s approach expected to create awareness, citizens equally have to take it upon themselves to convince their relatives and friends to get vaccinated. This paper would like to once again thank the World Bank for coming to the aid of Ghana by providing funds for this exercise. It is now left to the government to ensure that, just like they handled the initial outbreak of the pandemic, the vaccination plan would be handled well.

Ghana has 2bn barrels of oil left to drill Continued from cover

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In the first half of 2020, the government received US$322m from petroleum revenue. Out of the amount, US$80m was given to the Ghana National Petroleum Corporation (GNPC) and US$169m went to the Annual Budget Funding Amount (ABFA), PIAC said in its 2020 semi-annual report. According to the report, the total petroleum receipt of US$322m was paid into the Petroleum Holding Fund (PHF) compared with US$363m in the same period of 2019, representing an 11.32 percent decline. However, PIAC, which has a mandate to monitor how the country’s oil money is spent, said in the report that for the fourth time, the Ministry of Finance failed to provide them with ABFA utilisation data for the compilation of the report. According to PIAC, this makes it difficult to reconcile disbursements and expenditure, and undermines the spirit of accountability as envisaged in the PRMA PIAC therefore reiterated its earlier call on Parliament to

bring its oversight mandate to bear on the ministry. This, PIAC said, is because the ministry’s persistent failure to provide half-year data on ABFA utilisation is not only adversely affecting the work

of the committee, but also eroding gains in the fight for transparency and accountability in the management and use of Ghana’s petroleum revenues for the benefit of citizens.

MONDAY MARCH 1, 2021

High liquidity, hunt for safety dampen Treasury yields Continued from cover This year, treasury yields across the short end of the yield curve have remained depressed. For instance, the 91-day treasury bill rate, which shows the government’s three-month borrowing cost, has declined year-to-date by 0.82 percentage points, from 14.09 percent to 13.27 percent. Equally, the 182-day and 364-day treasury bill rates have declined by 0.23 and 0.19 percentage points to 13.89 percent and 16.8 percent, respectively. Speaking at the Pension Strategy Conference 2021 last week, Chief Investment Officer at Stanbic Investment Management Services, Kwabena Boamah, said that given the current macroeconomic indicators, interest rates should be increasing. However, he added, this seems not to be happening. “This is because beyond the macroeconomic indicators are

the factors of demand and supply dynamics,” he said. “If you look at the current situation, you don’t only have foreign investor interest, you also have local participating interest as well, which has been going up over the short-term period. So, the government is looking to raise funds, but a lot more people are willing to provide the funds. Hence, what is pushing the yield curve downwards has to do more with the demand and supply dynamics, as we’re seeing more liquidity supply.” Mr. Boamah also indicated that the current heightened credit risk due to the slow economic recovery has made institutional investors risk-averse. “Therefore, the safe haven which we are all looking towards are the government securities,” he added. According to the Bank of Ghana, credit extended to the private sector eased throughout 2020. On an annual basis, the

growth of net credit to the private sector slowed to 5.8 percent in December 2020 compared with 23.8 percent in the corresponding period of 2019. At the same time, government’s domestic debt stock increased by GH¢44.33bn to GH¢147.3bn as at November 2020, from GH¢102.9bn in 2019. A senior analyst with Databank Research, Courage Kingsley Martey, said the high liquidity

on the market is due to the swift move by the central bank to unleash a substantial amount of liquidity during the early stages of the pandemic. As a result, domestic borrowing by government cannot crowd out the private sector, he said, adding that the private sector is not receiving enough credit due to commercial banks being riskaverse.

Prez announces Covid-19 vaccine roll-out Continued from cover Addressing the nation in his 24th Covid update, the President, Nana Akufo-Addo, indicated that key government officials and mostat-risk persons will start receiving the AstraZeneca coronavirus vaccine from Tuesday, after it was authorised for use by the Food and Drugs Authority. The President himself, his wife, and the Vice President and his spouse will take the vaccine on Monday. The 43 districts—25 in Greater Accra, 16 in Ashanti and 2 in the Central Region—selected for the vaccination programme are the epicentres of the pandemic in the country. Ghana last week took delivery of 600,000 doses of the AstraZeneca vaccine, the first consignment of many more to come, making it the first country in the world to be recipients of vaccines from the COVAX Facility. The President also announced that certification processes are currently ongoing for other vaccines, stating that the range of vaccines available to the country will increase. “This will facilitate our ability to reach our target of vaccinating 20m Ghanaians by the end of this

year,” he said. In accordance with the National Vaccine Deployment Plan, the population has been segmented into four groups to determine which section of the population gets vaccinated at a particular time. Group 1 is categorised as “persons most at risk and frontline state officials”. It includes healthcare workers, frontline security personnel, persons with underlying medical conditions, persons 60 years and above, and frontline members of the executive, legislature and judiciary. Group 2 is made up of other

essential service providers and the rest of the security agencies. It includes water and electricity supply services, teachers and students, supply and distribution of fuels, farmers and food value chain, telecommunications services, air traffic and civil aviation control services, meteorological services, air transport services, waste management services, media, public and private commercial transport services, the Police Service, Armed Forces, Prisons Service, Immigration Service, National Fire Service, CEPS Division of the Ghana Revenue Authority, and other members

of the executive, judiciary, and legislature. The March 2–15 vaccinations will be for persons in Groups 1 and 2. Group 3 consists of the rest of the general public, that is, all persons over 18 years except for pregnant women. The final group, Group 4, will include pregnant mothers and persons under the age of 18, who will be vaccinated when an appropriate vaccine is found, or when enough safety data on the present vaccines is available. Special arrangements will be made for persons with disabilities who fall within these groups. President Akufo-Addo also disclosed that government is planning on developing and manufacturing locally-made vaccines, and that already, a committee has been established under the chairmanship of the former Minister for Environment, Science, Technology and Innovation, Prof. Kwabena Frimpong-Boateng, which is formulating a concrete plan of action towards vaccine development and manufacturing. He also stated that the vaccine is safe and has no complications as is being peddled around.

MONDAY MARCH 1, 2021

News

MONDAY MARCH 1, 2021

BoG commits US$200m to FX forward market in 2 mths By Joshua Worlasi Amlanu macjosh1922@gmail.com

he Bank of Ghana has in the first two months of the year committed a total of US$200m to the forex market through its forex forward auctions. Bids submitted during the auctions in the two months amounted to US$419.4m, out of which US$267.25m and US$150.15m were for January and February, respectively. The bids submitted were for the 7-day, 15-day, 30-day and 45day tenors, as well as the 60-day and 75-day tenors. The activities of the central bank on the forex market have largely driven the stability of

the cedi this year amid the coronavirus pandemic. According to the Governor of the Bank of Ghana, Dr. Ernest Addison, the bank

remains confident that the reserves it has amassed so far, coupled with other measures to be implemented by the government, should see the local currency remain stable throughout the year.

The cedi, which depreciated by 3.8 percent against the dollar in 2020, outperformed most of its peers on the African continent. So far this year, it has appreciated by 0.4 percent against the dollar.

Dr. Ernest Addison, Governor, Bank of Ghana

Stock market closes week bullish

he Ghana Stock Market (GSE) Composite Index, which measures the weighted average price change of all the equities listed on the market, advanced by 23.49 points, or 1.08 percent, to close the week at 2,200.92, with a yearto-date return of 13.36 percent. MTN Ghana dominated trades by volume and value, accounting for 54.58 percent and 50.7 percent of the total volume and value traded, respectively. This led to an increase in the market capitalisation by 0.43 percent to settle at GH¢57.15bn. The GSE Financial Index, which tracks the weighted average

price change of financial services equities, stayed unaffected, closing at 1,873.31, with a yearto-date return of 5.08 percent, while the SAS Manufacturing Index remained unchanged at 1,619.23, with a year-to-date return of -4.83 percent. NewGold (4.64 percent) was the sole decliner last week at GH¢100.60. Trading activity rebounded as 7.34m shares valued at GH¢6.33m were transacted, up from 1.85m shares valued at GH¢1.73m the previous week. Market analysts expect trading activity to surge this week.

APOLOGY

n 2015, the Institute of Statistical, Social and Economic Research (ISSER) launched its 2014 Social Development Outlook Report. The Report contained 14 chapters, including an “Overview Chapter” and “Chapter 14 on Energy”. Both Chapters 1 and 14 of the Report quoted research findings made by Power Systems Energy Consulting (PSEC) on the cost of power failures in Ghana. The Overview Chapter stated that: “It has been estimated that power failures are costing the Ghanaian economy a whopping amount of between USD $320 million and USD$ 924 million (excluding indirect costs) or between two per cent and six per cent of gross domestic product (GDP) every year”. Regrettably, PSEC (the source) was not cited in the Overview Chapter which was the only document that was put out in the public domain by ISSER. As a result, the research findings on the economic cost of power failures in Ghana sourced from PSEC were attributed to ISSER in international academic and opinion papers, and was published by a number of local media outlets, including the Daily Graphic, Ghanaian Times, Business and Financial Times and the Daily Post without any

reference made to PSEC as the original source of those research findings. At subsequent press briefings, ISSER inadvertently did not correct the record that the findings were sourced from PSEC, including after multiple major newspapers credited ISSER with the research finding. As an institution of higher learning, the University of Ghana has a robust plagiarism policy, which was launched in April, 2015, paragraph 2.4(4) of which defines plagiarism to include “lack of credit given (passing of another’s work without the appropriate attribution to the original source)”. The lack of attribution to PSEC as the original source of those research findings breached paragraph 2.4(4) the University of Ghana Plagiarism Policy, 2015. For the above reasons, ISSER unequivocally and without any reservation whatsoever apologizes to PSEC for the lack of attribution to PSEC as the original source of the research findings on the cost of power failures in Ghana. INSTITUTE OF STATISTICAL, SOCIAL AND ECONOMIC RESEARCH, UNIVERSITY OF GHANA

MONDAY MARCH 1, 2021

Feature

MONDAY MARCH 1, 2021

How to stay motivated should there be another lockdown ~You are not alone. We are in this together

he current pandemic is causing a panic situation everywhere. It has also caused a lot of anxiety and stress for people. Most people from all around the world are working from home. In this situation, people are feeling trapped inside their homes. At times like this it is very important to take care of your mental health during this time. This is testing time for all of us. To survive in this situation, you must stay motivated. Set a daily routine Even when being at home, try and stay as close to your normal routine as possible. Ensure you get up each morning as the same time as you normally would when be having to travel to your place of work. If you are working from home, use this extra time to enjoy your breakfast and prepare yourself for the day ahead. Keeping to your usual meal times is also very important. Get fresh air People have been told to stay inside as much as possible but this does not mean you should be kept like a prisoner in your home. Sunshine and fresh air are essential for maintaining good health. This does not mean go to a place where there could be

lots of other people. Spend some time sitting in your garden, or on your balcony or terrace. This is help manage stress levels and give you positivity as well. If you do not have a garden make sure you open your windows and doors so that fresh air can get into your home.

not work on your laptop lying or sitting on your bed or sitting on your sofa all day. Find yourself an area with a suitable chair and table to use. It is also very important to take breaks, so you can get up and move around. This stops you feeling tired.

Positive thoughts

Stay connected

It is impossible to know what the future will bring for us. You should try not to obsess over the things:

Communication is very important in our lives. We all need to stay connected. It is even more important if you are living alone during lockdown. Keep in touch with your friends, family and loved ones on the telephone, WhatsApp, Skype, FaceTime etc. There is a wide range of tools that can be used to communicate. If you are working from home, use video conferencing tools like Zoom, Skype etc for communication instead of just emailing your colleagues. By doing this, you feel connected with others which helps you to manage the stress.

• What will happen in the future? • What will happen after this lockdown period? • When will my office reopen? Do not waste your time or energy in thinking all this. No one can predict the future. The time until we all get vaccinated of COVID 19, we cannot predict when the things will back to the normal routine. So nothing will happen by bringing negativity in your mind. Positivity can save you from stress, depression and negative thoughts. Keep yourself as well as your loved ones positive. Find the ideal workplace Make sure you have a suitable workspace in your home. Do

Authored by: BforB Ghana | Networking Clubs Business for Breakfast (BforB) is internationally recognised for creating successful networking meetings, events and training for referral marketing. Our global offices are in Australia, Germany, Czech Republic, Spain, Slovakia, Ghana and headquartered in UK. We create an environment where you can build quality relationships within your group, backed up by an ongoing member support programme. BforB is committed to helping small to medium scale businesses expand. In our professional network, members meet regularly in business networks to develop relationships, support each other and to share and record referral business. We are here to help you get new business from quality business introductions and referrals made through our meetings. Kindly join our next meeting using this link: https://rb.gy/qrf4pl Contact us: 059 4 016 432 | info@bforbgh.com | Facebook & LinkedIn: @bforbghana | www. bforb.co.uk

MONDAY MARCH 1, 2021

News

MONDAY MARCH 1, 2021

World Bank denies providing guarantees to IPPs By Joshua Worlasi Amlanu macjosh1922@gmail.com

he World Bank has refuted claims that it provided any financing or guarantees to the Independent Power Producers (IPPs) that signed Power Purchase Agreements with the Government of Ghana. In a release, the Bank said, “Following recent media reports, the World Bank wishes to clarify that it has not provided any financing or guarantees to the Independent Power Producers (IPPs) that signed Power Purchase Agreements with the Government of Ghana or the Electricity Company of Ghana during the (Dumsor) energy crisis in 20142016.” However, the Bank said to secure Ghana’s energy future, it supports the Energy Sector Recovery Plan (ESRP) of the Government of Ghana for affordable and reliable electricity supply and enhance the accountability in the energy sector. The ESRP mandates the rationalisation of gas and power purchase costs in line with the demand and approves the

Mr. Pierre Laporte, Country Director, Ghana, Liberia, and Sierra Leone

procurement of energy supply and service contracts in a competitive manner. “The implementation of this policy will be essential to ensure that new power generation capacity is procured competitively and transparently based on the most cost-effective basis. This

will prevent a recurrence of oversupply of generation capacity in future,” the Bank said. The World Bank noted that it provided financing and a guarantee to the Sankofa Gas Project, which since 2019 has increased the availability of natural gas for power generation

by leveraging private capital investment and promoting a cleaner energy mix. “The World Bank is committed to support Ghana in its efforts to sustain economic growth, accelerate poverty reduction, and enhance shared prosperity in a sustainable manner,” it said.

UNIDO-WACOMP Ghana and Global Shea Alliance train of Ghanaian Cosmetic sheabutter companies with EU support capacities SMEs.

he West African Competitiveness Programme (WACOMP) Ghana funded by the European Union and implemented by the United Nations Industrial Development Organization (UNIDO) and the Global Shea

Alliance (GSA) on Wednesday trained over 40 Shea-based entrepreneurs in cosmetics packaging in Accra. Mr. Charles Kwame Sackey, the WACOMP - Ghana Chief Technical Advisor in a keynote address said the training which

is a sequence to the branding and marketing training in Accra, the Standards and Compliance training in Tamale as part of activities implemented under the project’s Sub-Contracting Matching scheme is to boost the technical and marketing

“UNIDO and the European Union through this collaboration with the GSA for shea small and medium based companies is to prepare Ghanaian businesses in the cosmetic industry to be competitive in the global market space,” he said. Mr. Aaron Adu, Managing Director of Global Shea Alliance said the training aims at providing cosmetic manufacturers in Ghana the ability to understand the various topics connected to packaging designs. Participants were taken through packaging functions for shea-based producers and distinction between labelling requirements and rules packaging with a special focus on legal packaging requirements for the European Union (EU), United States of America (USA) and West Africa. A business to business (B2B) session was also held for the entrepreneurs specialising in producing shea-based cosmetic products including soaps, creams, hair products, and shea butter to engage packaging companies as part of the training.

MONDAY MARCH 1, 2021

News

MONDAY MARCH 1, 2021

Qatar Petroleum to deal with Vitol for the supply of LNG to Bangladesh

nergy is a commodity that cuts across all walks of life. Private sector or public sector, homes or industries, transportation or entertainment, this commodity tends to be vital in our everyday life. The huge cost to build pipelines to make energy accessible to people who are located far from gas fields makes it prudent for a means to store and transport energy closer to demand. Gas can be cooled into liquid state, hence shrinking its volume for easier storage and transportation. Qatar Petroleum (QP), a state owned petroleum company of Qatar held a long-term sale and purchase agreement (SPA) with Vitol to supply 1.25 million tons per year (mmt/y) of liquefied natural gas (LNG) to Bangladesh. The Minister of State for Energy Affairs, and President and CEO of Qatar Petroleum, Saad Sherida Al-Kaabi, stated “We are pleased to sign this SPA with Vitol, and we look forward to commencing deliveries under the SPA to further contribute to meeting Bangladesh’s energy requirements.”

He further stated, “This SPA also highlights our strong ability to meet the requirements of our partners and customers. We are proud to continue to be the supplier of choice for our customers and partners around the globe.” Excelerate energy supplies the two floating storage and regasification units (FSRUs), that are currently serving Bangladesh with the chilled fuel. The FSRU Excellence is serving Petrobangla’s Moheshkhali Floating LNG project with up to 500 million standard cubic

feet of gas per day (MMscf/d) of regasification capacity. Excelerate Energy’s FSRU Summit LNG began operations at the Summit LNG Terminal in April 2019. Located offshore Moheshkhali Island in the Bay of Bengal, the terminal is owned by Summit LNG Terminal Co Ltd. It has a send-out capacity of 500 million standard cubic feet per day (MMscf/d) of natural gas, according to Excelerate Energy. Under the agreement, supply will start later this year hence making Bangladesh a major

importer of LNG along with Pakistan and India as domestic supply fall. The country currently has two floating storage and regasification units (FSRUs) with a total regasification capacity of 28 million cubic metres (1 billion cubic feet) per day – equal to about 7.5 million tonnes a year. Bangladesh imported 3.89 million tonnes of LNG in 2019 – through two long-term contracts with Oman Trading International and Qatargas. Will this trigger more of such agreements within Africa and other parts of the world? Will a nation like Ghana hold the mantle and continue to be the Gateway to Africa by holding in high esteem high safety standards and a good maintenance culture in her Tema LNG Terminal plant? The decision lies on the citizenry NOT the leaders. The leaders are citizens first therefore hold the nation at heart. Writer: Donald Marshall Company: Mframadan Energy Management & Research Institute (M.E.M.R.I). Contact: 00233-24-4550854 Email: donaldamus@yahoo.com

COVID-19 continues to be disruptive, but we need to be optimistic – FBN Bank MD

y all indications, businesses may have to live with the Covid-19 pandemic for longer than expected as Ghana, like many other countries, experiences the second wave of infections, the FBN Bank MD, Victor Asante, has said. “Due to the current situation, hopes of a better 2021 are fading rapidly following a tough start of the year where statistics on COVID-19 infections have been grim,” he said. Mr. Asante, however, believes that businesses may be better

Victor Yaw Asante

prepared to live with COVID-19 in 2021 than they did in 2020. According to him, even though 2021 is likely to record an increase in the number of daily infections across the country, people are in a better position to manage the effect on their businesses now that there is better knowledge around how to manage the effects. He explained that: “companies have invested in platforms and technology enablers that will aid remote working. Also, in terms of their welfare, staff have become more aware of how to manage

their health and how to adhere to the protocols in order to avoid the disease.” These, the Managing Director of FBNBank believes will “make it easier to work from home and therefore afford a better management of the disruptions.” Ghana’s case count increased from 54,771 at the end of 2020 to 67,010 as at 31st of January 2021; with the active number of cases increasing from 842 to 5,358 within the period. Also, deaths increased by 24% in the month of January, that is from 335 on 31st December 2020 to 416 on 31st January 2021. As a result, the President of the Republic, Nana Addo Dankwa AkufoAddo on Sunday 31st of January 2021 reintroduced restrictions on funerals, weddings and the operations of some categories of hospitality and entertainment providers. He also opines that, there is the need to proceed with caution as new and deadlier strains emerge since that could easily unravel

all gains leading to disruption of business plans and strategies for 2021. He remains optimistic that “by adhering strictly to the COVID–19 protocols, we will overcome the challenge. We must remain committed to a future where today’s investments especially in technology, will create long term value and sustainability for all of us. We must maintain and even heighten our vigilance because the second wave has proven to be deadlier.” On FBNBank’s measures to ensure safety at the workplace, Mr. Asante mentioned that, the Bank had activated its business continuity plan before the latest update by the President. According to him, the FBNBank is implementing a shift system for staff, and ensures that they feel comfortable and safe coming to work, both at the branches and the head office. He added that, for those customers who need to come to the branches to conduct business, the protocols are in place for their safety, even as they are encouraged to use the Bank’s digital platforms.

MONDAY MARCH 1, 2021

Feature

MONDAY MARCH 1, 2021

The future of payments without cheques

n July 2019, a major policy change in the payments environment was announced by the Namibian Central bank. The bank announced after a period of preparation that it had abolished cheques as acceptable payment instruments in Namibia. In doing so, the bank listed the weaknesses and risks that cheques posed in the Namibian environment and the need to promote more non paper-based instruments such as payment cards and Electronic Funds Transfer (EFT) (also called Automated Clearing House (ACH) payments. In December 2020, the South Africa Reserve Bank (SARB), together with the Financial Sector Conduct Authority, the Payments Association of South Africa (PASA) and Banking Association of South Africa followed the Namibian policy and abolished cheques as an acceptable payment instrument in South Africa effective January 1st, 2021. In a consultation paper issued in October 2020, the National Payment System Department of the South African Reserve Bank listed a number of problems with cheque payments as the rationale for the policy which included the following: 1) Prevalence of scams and fraudulent activities such as counterfeiting, forgeries, cheque washing, cheque alterations and closed-account issued cheques 2) Increasing cost of cheque processing as paying by cheque was not only lengthy but also risky due to the multiple stages involved from presentment to clearing 3) Lack of innovation in the cheque environment 4) Increasing restrictions on the acceptance of cheques within South Africa 5) Aging interbank cheque infrastructure 6) The effects of Covid 19 in reducing the usage of cheques Namibia & South Africa have followed a growing number of countries where the usage of cheques as payment instruments have come under scrutiny and/ or been abolished altogether. The United Kingdom for example, considered the phasing out of cheques in 2018 after a nineyear preparatory period without success. However, cheques have generally seen gradual death in EU countries such as Germany, Poland, Belgium, the Netherlands, Denmark and the Scandinavian countries. In these countries, the decline and eventual death in cheque usage was facilitated by the availability and promotion of other digital alternatives such as Payment Cards and EFTs. These were considered more

efficient, convenient, less risky and faster means of transferring value for both retail and commercial payments. With most businesses publishing their account details on invoices in some of those countries, it became even easier to pay directly into bank accounts electronically rather than by cheque instruments. This is certainly a major step in the continuous evolution of payments that should engage the thoughts and actions of other countries especially where the risks and difficulties that informed the Namibian and South African policies are prevalent. In Ghana, cheques as payment instruments, governed by the Bills of Exchange Act, 1961 (Act 55), have been around for many years. It has certainly played a major role in the movement towards cashless payments and continues to be the preferred means of noncash payment for the commercial sector. Like many systems, cheque processing at the banks and the Ghana Clearing House has evolved in sophistication from the introduction of the Magnetic Ink Character Recognition (MICR) characters in 1997 and the imagebased processing in 2009. Whilst it is not relatively popular with individual payments, businesses and corporate entities as well as Governmental Institutions have been the major users of cheques for commercial payments. The acceptance of cheques was greatly boosted after the introduction of the Cheque Codeline Clearing (CCC) system in 2009. This system which facilitates the clearing of cheques without the movement of the physical paper between the presenting and drawer banks ensured faster clearing of cheques. The clearing periods essentially reduced to 2 days (t+ 1) and in some cases within the same day (express sessions). Comparatively, this was a great departure from the pre-CCC days where cheques were cleared through the exchange of the paper instruments and consequently took longer days (between 3 to 9 days depending on the region or clearing zone where the cheque was presented)

for value to be given. However, the risks that necessitated the abolishing of cheque as acceptable payment instruments in Namibia and South Africa are as applicable to Ghana as they were to the two countries and indeed all jurisdictions where cheques are still accepted. In ‘THE 2019 BANKING INDUSTRY FRAUD REPORT’, the Bank of Ghana listed Cheque fraud together with ‘Suppression of Cash/Deposit’ and ‘Forgery and Manipulation of Documentation’ as the only types out of the seven (7) fraud types monitored to have seen increases in volume between 2018 and 2019. The other fraud types namely, Cyber/Email, ATM/ POS, Other and Remittance Fraud decreased in volume over the same period. As captured in section 3.2 of the report: ‘The number of cheque fraud cases increased marginally by 2.56 per cent from 39 cases in 2018 to 40 cases in 2019. This includes fraud incurred as a result of cloned cheques, stolen cheque leaflets and cheque alteration. Notable however, is the increase in the number of cases reported as cheque cloning, which originates from the operation of syndicates involving staff of financial institutions, telecommunications companies and cheque-printing houses’ The case of cheque cloning fraud in particular has been aided by improvements in retail technology that enables fraudsters to reproduce cloned leaflets and forged signatures to near perfection. In order to mitigate such fraudulent practices, some banks have had to implement callback measures for account holders to authenticate cheque payments thereby incurring additional costs. Even then, this call-back measure has not been fool-proof due to SIM swapping. SIM swapping happens when fraudsters are able to divert calls from the bank to a swapped SIM card of the phone number linked to an account in order to respond to the bank and impersonate the real account holder during call-back. Thankfully, Ghana has enough

alternative payment instruments that are well established and able to provide real benefits to the users in terms of speed and convenience without most of the risks identified with cheques. The Ghana Interbank Payment and Settlement Systems Ltd, which runs the CCC clearing house also manages the Ghana Automated Clearing House (ACH) for electronic funds transaction (EFT) payments. Like the cheque system, all commercial banks in Ghana are also connected to this platform for the exchange of electronic payments amongst member banks. In addition, the Ghana Interbank Payment and Settlement Systems Ltd (GhIPSS) has also introduced the GhIPSS Instant Pay (GIP) platform which also provides users with the means for real time transfer of funds instantly to recipients of other member institutions every day of the year. It’s important to note that the membership of GIP extends beyond banks to FinTechs, Mobile Money Operators and other nonbank Financial institutions. These two platforms are not only good substitutes for cheques but also offer a more efficient and risk-controlled payment options to businesses and other members of the banking public. Most financial institutions have incorporated these payments types into their various digital channels such as Online Banking, ATMs, Mobile Apps and USSD channels. Some have also enhanced the security of payments by multiple factor authentication mechanisms (MFA) such as one-time PINs/Passwords and biometrics to generate better assurances of payments. Additionally, the activities of service providers in the digital payments space have been given a boost through the passing of the Payment Systems and Services Act in 2019 (Act 987). The Act has provided the legal and regulatory framework to guide and manage their operations. As a result, additional cashless and dematerialised payment options have been added to the available instruments which further removes any challenges with the phasing out of cheques. With the current Covid 19 pandemic, these EFT payment options have been very useful as they have enabled and supported remote payments to support business transactions without the physical presence of the parties. These are very much unlike cheque payments where the physical instrument is required to be presented at the bank branch with all the attendant infection transmission risks.

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CONTINUED FROM PAGE 13 Apart from these EFT payment options, there are also other types such as card and walletbased payments from banks and electronic money issuers which have been accepted and seen growth in usage over the last few years. Together with the EFT payments, there are therefore enough digital payment options that provide better alternatives to cheques for payments in Ghana. Overall, the usage of cheques has seen a decline in recent times as against the other cashless payment alternatives. The graphs below show the trend in the last four years with regards to the comparative volumes of cheque payments against EFT/ACH and Realtime payments that were processed through the Ghana Clearing House operated by the Ghana Interbank Payment and Settlement Systems Ltd (GhIPSS). The graph above shows the decline of cheque payments as compared to the significant rise in Realtime payments and the relatively smaller rise in EFT/ACH payments. Real time payments are the Instant Payments on whose rails mobile money interoperability (MMI) and the GhIPSS instant pay (GIP) transactions are processed. The graph below shows the trend for cheques alone over the same period out of the graph above for emphasis It has to be noted that the payment statistics shown above exclude those of other closed-loop digital payments that do not go through the clearing house and are completed on the same networks of their issuers. Most of these have also seen even more significant increases in both volume and value of transactions (eg, Mobile Money and other wallet-based payments at agent and merchant points) Road Map The recommendation is therefore to migrate Ghana away from cheque payments and towards the other non-paperbased digital instruments. This will ensure that we avoid the increasing risks associated with cheques in the march towards greater cashless payments. However, a move to sunset cheques as acceptable payment instruments will have to be done in a controlled manner over a period of time in order not to create chaos especially in the business environment. As was done in the cases of Namibia and South Africa, there should be a clear roadmap with adequate time between the promulgation of the policy and its implementation date, to allow all major stakeholders prepare and take the necessary steps towards compliance. The following measures are some suggested means as part of

any road map to implement the policy smoothly. 1) Clear timelines There must be clear timelines set for the policy to take effect. An implementation date (whenever agreed) must be communicated to all stakeholders including the general public well in advance. For the purposes of proper implementation, a period of two to five years is recommended. 2) Discriminatory measures It is recommended that systematic measures be implemented over the proposed implementation period to graduate the sunsetting of cheques and thereby move the country along the process. Such measures are to introduce various discriminatory costs/benefits measures as a means to guide users towards the non-cheque options by systematically making cheque payments unattractive. Some of these may include: a) Placement of limits on the value of cheque deposit especially for commercial payments. This will make it inconvenient to receive or demand cheque for payments and drive recipients and payers towards the digital alternatives. There is currently no regulatory limit on cheque values processed through the clearing system except for Bankers Drafts. b) Prohibition of cheque deposits into non-business accounts in the period leading to total abolishment. c) Extension of cheque clearing period. This also implies abolishing the current intra-day clearing of cheques (Express Sessions) . As with point (a) above, the aim of this measure is to discourage parties from receiving cheques as it will result in delayed settlement of the funds into their bank accounts d) Imposition of incremental fees in addition to existing cheque clearing fees over the implementation period. The charge can be set to zero and increased over time until the sunset date. e) Reduction in the validity period of cheques which is currently at 6 months down to a few weeks over the implementation period. f ) Reduction in EFT and non-cheque-based transactions and clearing fees to introduce payment some arbitrage in favour of the digital alternatives and encourage their use. It is further recommended that the reduced charge should be passed on to the customers as benefits so as the encourage them continue to utilise the non-cheque digital options. g) Mandated reduction in digital payment fees across all issuing and processing institutions for the benefit of users. 3) Continuous publicity and engagement with the banking public and stakeholders in the cheque processing industry to

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support and address any pertinent concerns they may have. This will help gain the buy-in of these stakeholders and avoid any resistance which could derail the entire policy as happened in the United Kingdom when they tried to sunset cheques in 2018. Change Management and Support Like any established system, the phasing-out of cheques as acceptable payment instruments will not come without challenges and or push-back. As stated earlier, cheques have been one of the big and oldest non-cash payment instruments that has become very popular with the business community and for high value commercial payments. There is therefore a strong culture of cheque payments which will need to be manged in any effort to abolish cheque payments. There are also a number of businesses in the cheque processing industry that will be impacted if cheques are phased out. These include security printing companies that print cheque books for the financial institutions and vendors of hardware as well as software developers and vendors whose applications are used in cheque processing. It will therefore be useful to engage with these stakeholders who are most likely to lose out in any policy to sunset cheques in order to enable them to prepare for any negative effects of the policy. Eye on Cyber Security In migrating cheque payments to digital, attention must be placed on cyber security concerns to ensure no lapses in security. Even though cheque volumes are much lower compared to the other digital alternatives, they account for very signification values. In 2020, for example, the average value per cheque processed through the Ghana Clearing House approximated GHS30,000.00 compared to about GHS6,000.00 for EFT/ACH and GHS300.00 for the Realtime payments. This underscores the commercial usage of cheques. Member institutions (banks, FinTechs) will therefore have to take adequate measures to meet all regulatory requirements from the Bank of Ghana regarding cyber security including but not limited to other industry standards such as the Information Security Management Systems (ISMS) and Payment Card Industry Data Security Systems (PCI DSS) for the protection of their payment systems infrastructure and data repositories. Additionally, member institutions will need to enhance their Identity and Access Management Systems to protect

their own issuing and acquiring systems, communication networks as well as customer’s online access mechanisms. As stated earlier, it is good to note that many of these institutions have already implemented some of these risk mitigation measures to protect and ensure proper authentication of their customers for in-person and online transactions. However, continuous action will be required to maintain the robustness and resilience of cyber security measures against cyber criminals and developers of malicious code. Eye on Cash In advocating for the phasing out of cheques in Ghana, it must be stated that the efforts to continue the march towards greater cashless payments must be maintained if not intensified. Cash must not be allowed to become the alternative when cheques are phased-out. For this reason, some incremental limits can be placed on cash deposits into third party bank accounts over a prescribed period. As stated earlier, the Ghanaian payments landscape has available to it, enough electronic payment alternatives to replace cheques and even reduce cash payments. However, whilst it is easy to totally phase out cheques, cash will always be around as a payment instrument due to the nature of the Ghanaian economy and the significant number of informal actors involved in it. The key however is for the financial regulator and government to put in measures to discourage cash payments in favour of available digital instruments such as EFTs, walletbased and card payment types. Cheque payments, on the other hand, can conveniently be phased-out as has been done by other countries some of whom are here with us in Africa. Payments have evolved significantly across the world and so has their related instruments. In the era of cryptocurrencies in the mix of digital payment instruments, cheques are fast becoming archaic. The time has therefore come for Ghana to shed this payment instrument off, in favour of the other available digital options. By Mark Nyame Boateng Head, Payments and Credit Fulfilment, First National Bank Ghana

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Africa must stop being a museum ofpoverty. Its people are determined to reverse this trend. The future ofyoung Africans is not in Europe, their destiny is not to end their lives in the Mediterranean Sea,” Africa Development Bank President, Akinwunmi Adesina Every year since 2014 Ishmael Yamson & Associates has hosted a Business Roundtable and it is our greatest honour to invite you to be present at the 2021 edition themed “Youth-Driven and Youth-Centred Development - Africa’s Future” on Wednesday, May 26. 2021 Business Roundtable will provide a platform for executives, policy makers, millennials, and other key stakeholders to; (i) discuss and create an understanding ofthe current and emerging issues facing the economy of Africa and businesses operating on the continent and how they impact their individual countries, (ii) identify the potential and opportunities available to drive national and enterprise level growth and overall prosperity across Africa, and (iii) explore how Africa can better invest in and empower young African minds and talent to take advantage of the emerging 4th Industrial Revolution for rapid development. Africa is in a crisis and the nature of the challenges it faces require a new kind of response. Though there is momentum across the entire region for the

inclusion of young people in a fairer socio-economic framework that supports and promotes (a) the rights of young people to access economic opportunities, (b) their role in economic decision-making and (c) structures that create room for the innovations and business ideas of young people to thrive in a growing economy, the continent still suffers from a leadership deficit compounded over some sixty years of its postcolonial history. In that time, the continent also accumulated a massive build-up of deficiencies in infrastructure, in technology, public sector systems, market access, productivity in both the public and private sectors, and opportunities for the growth and development of African enterprise and African Without a doubt, African enterprises in financial services, power and tourism have done very well in pockets such as Nigeria, Egypt, Southern and Eastern Africa and in a majority of African countries also, the telecom sector has proven to be a catalyst in economic development that benefits the youth. But this is not enough. Africa is exporting its future in droves. Sadly, Africa has been and is losing its young people - both unskilled and professionals, who year after year, are willing to undertake the perilous journey to greener pastures in their thousands in the developed economies of Asia, Europe and North America in search ofthe ‘better life’. The global community is as much frustrated

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with the lack of resolutions to the problems of Africa, as it is indignant about the migration of young Africans. What drives this exodus is the uncertainty of their future if they stay in Africa and the guarantee of poverty if they do not move. The future of the continent’s economy and Africa’s place in the emerging Fourth Industrial Revolution are both at stake. The need for new thinking, new ideas and innovation has seldom been greater. The youth are the current and future workforce of the Region, yet accounts for 60 percent of all the unemployed Africans. About 1 1 million young people are expected to enter a formal labour market starved of employment opportunities, join family-run firms or start running their own informal enterprises each year for the next decade. While there has been growth in formal sector jobs in some countries, most young people are likely to find secure employment. To transform their economies in todays borderless global economy and talent market, African countries will require knowledge-driven institutions and the untapped advantage of well-educated and trained youth who represent Africa’s vast potential to become the originator of innovation and disruptive change. The African Union, through its African Youth Charter, signed in 2006 in Banjul, the Gambia, enshrined the rights, duties, and freedoms of African youth to ensure the constructive involvement of youth in the

development agenda of Africa and their effective participation in decision-making processes towards the development of the continent. Young people must take centrestage. Africa’s youth will be the implementers of the agenda for economic transformation. Therefore they must set the direction and define what investments are required to drive African development over the next decade in new sustainable industrial development, improved economic productivity and the accelerated creation and equitable distribution of wealth. The current leaders of African states and major enterprises must extend credible invitations to the youth of Africa to participate actively in defining, reimagining solutions and implementing policy to resolve Africa’s most pressing challenges that will evenly deliver ground-breaking development and wealth across the continent. We trust that your participation at BRT2021 will help stimulate the conversation on how to implement this agenda and look fonnard to your participation. We will be grateful if you share your perspective on what the theme means to you as an organisation in a maximum one-page write-up that we will use in the pre-event marketing campaign and the event brochure. 0 0247665283 info@ieyamson. com, ieyamson.associates@ gmail.com Ishmael Yamson & Associates

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MONDAY MARCH 1, 2021

A realist reset for US-Saudi relations

By Richard Haass

he report issued Friday by the US intelligence community on the murder of Saudi journalist and permanent US resident Jamal Khashoggi in October 2018 at the Saudi consulate in Istanbul, Turkey mostly confirms what we already knew. The operation to capture or kill Khashoggi was approved by Mohammed bin Salman, Saudi Arabia’s Crown Prince and in many ways already the Kingdom’s most powerful person. MBS, as he is widely known, wanted Khashoggi dead, both to rid himself of a nettlesome critic and to intimidate other would-be critics of his rule. We are unlikely to find a smoking gun, but MBS’s fingerprints are all over Khashoggi’s killing. There is not only abundant photographic and communications evidence that it was carried out by people close to the Crown Prince. There is also the simple reality that nothing of significant political magnitude happens in Saudi Arabia without MBS’s authorization. Former President Donald Trump’s administration looked the other way at the time, as it often did in the face of flagrant human rights violations. Moreover, Trump wanted to avoid a rupture with MBS, whose antiIranian policies were appreciated and who was seen as central to his government’s willingness to purchase armaments from US

manufacturers. President Joe Biden’s administration feels differently. It has already distanced the United States from involvement in Saudi military operations in Yemen. And human rights are occupying a central role in its approach to the world. The fact that Biden has not communicated directly with MBS, and instead called the ailing King Salman, underscores Biden’s desire to separate the US relationship with the Kingdom from the relationship with the Crown Prince. But this separation will likely prove impossible to sustain. The US is not in a position to prevent his ascension to the throne when his father dies. Any attempt to do so would almost certainly fail, in the process triggering a nationalist backlash, causing domestic instability, or both. And the fact is that the US has many reasons to maintain a working relationship with an individual who will likely lead for decades a country that is critical to setting world energy prices, containing Iran, frustrating terrorism, and, if it elects to do so, promoting Middle East peace. Saudi Arabia is hardly the only country in the world where the US has to deal with a flawed leader. The Biden administration just signed an important nuclear arms control agreement with Russia, even though President Vladimir Putin tried to kill – and has now imprisoned – his main political rival. The principal difference between him and

the Saudi Crown Prince in this instance is their competence at eliminating opponents. Or consider China. Biden administration officials have accused the Chinese government of carrying out genocide against the Uighur minority. If so, they are accusing Chinese President Xi Jinping of genocide, as there is no way what is taking place in Xinjiang province could happen without his approval. Yet Biden recently spoke with Xi and is sure to meet with him regularly to discuss North Korea, trade, climate change, and much else. Don’t get me wrong. Biden is not wrong to strike deals with Putin and Xi. US strategic and economic interests demand it, and America’s ability to influence Russian and Chinese behavior at home is limited. The US can and should criticize and sanction, but it would be feckless and self-defeating to hold the entire bilateral relationship with Russia or China hostage to their domestic policies. Foreign policy is not about virtue signaling; it is about advancing interests. Prioritizing and compartmentalizing are essential. In the case of MBS, such realism might lead to opportunity. The promise of meetings with Biden administration officials should be traded for a firm commitment that he will never again target a political opponent in this way and that he will release imprisoned human rights advocates. Bringing the Saudis into diplomacy might preserve the

possibility of a two-state solution to the Israeli-Palestinian conflict. The United Arab Emirates agreed to normalize relations with Israel only when Israel agreed not to annex occupied Palestinian territory for at least three years. MBS reportedly is ready to build bridges to Israel, but his father is not, and much of the Saudi population might resist. Even an Israeli government committed to expanding Jewish settlements in the Occupied Territories might find it difficult to resist curbing them in exchange for peace and diplomatic ties with the Kingdom. It should be a long time before the now publicly-exposed MBS is invited to the US, much less to visit the Oval Office. But refusing to deal with him is not the answer. Pragmatic, conditional relations with him could bring protection and freedom to many Saudis, make possible collaboration to impede Iran’s nuclear ambitions, wind down the war in Yemen, and advance prospects for Israeli-Palestinian peace. None of this would bring Khashoggi back to life, but it would give added meaning to his death. About author Richard Haass, President of the Council on Foreign Relations, previously served as Director of Policy Planning for the US State Department (2001-2003), and was President George W. Bush’s special envoy to Northern Ireland and Coordinator for the Future of Afghanistan. He is the author of The World: A Brief Introduction (Penguin Press, 2020).

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MONDAY MARCH 1, 2021

Rotary Clubs of Accra undertake community empowerment project in collaboration with Opportunity Industrialiation Centre

n response to a need expressed by community leaders in Bortianor, a suburb in the Ga South Municipal District the Rotary Club of Accra Ring Road Central, together with the Rotary Club of Accra industrial in collaboration with Opportunities Industrialisation Centre (OICG), undertook a Community Empowerment Project aimed at providing training to 40 selected women of various ages. The training covered a variety of skills such as Interior Decoration, Hair Braiding, Bead and Soap Making as well as Bakery.

The project was to enable the beneficiaries acquire skills for self-employment, earn an income with the skills acquired, aid in building women capacity and empowerment and reduce unemployment rate in the Bortianor enclave. The project not only met the approval of the community leaders but got them involved in whipping up interest among the young female population via broadcast on the community radio and regular engagement with opinion leaders within the community.

The OICG team lent their support by visiting the project location, identifying Master Crafts Persons and also conducting orientation sessions them. They followed a strict selection process based on a set of criteria. Fortyone applicants made the cut and began their training. The necessary tools and consumables were made available to ensure smooth training sessions. The project was strictly monitored to track progress. Every week, visits were organized to the various training sites to ensure the judicious use of consumables and

check on trainees’ attendance to the workshops. A counsellor was on site to ensure trainees’ welfare and provide interventions to shore up their self-confidence. The trainees were also taken through entrepreneurship lessons that enabled them to understand what it takes to start a business, as well as basic reading and some basic accounting principles. At the end of their training, the participants were registered with the National Vocational Training Institute (NVTI) where they took proficiency exams and will receive their certificates when results are released. The advent of Covid-19 and its attendant restrictions delayed the processes by at least six weeks. After being provided with the sanitary materials such as hand sanitizers, veronica buckets, liquid soap and nose masks, training could safely resume. Finally, on 30th June 2020, the graduation ceremony was held, in compliance with Covid-19 social distancing protocols. It was attended by the Executive Director and the Programs Manager of OICG, the Club Presidents of the Rotary Club of Accra - Ring Road Central, Accra - Industrial as well as selected group of Rotarians from both clubs. The project beneficiaries were given certificates of participation as well as startup packages in their selected fields; for which they were immensely grateful to the organizers for giving them an opportunity to enhance their livelihoods.