Business24 Newspaper - July 31 2020 by Business24 Online

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FRIDAY JULY 31, 2020

Banks must adopt humanised approach to digital banking—Alkan CEO

COVID-19 induces drop in household income of 22million people -GSS At least 22 million Ghanaians could potentially have suffered a drop in their income since March this year when the COVID-19 pandemic struck, a new study conducted by the Ghana Statistical Service has shown. BY ABDUL SANI-RAHMAN

>> PG 3

Mrs. Alberta Quarcoopome sees a mix of human and tech-based customer service delivery to be crucial in an era of digital banking BY PATRICK PAINTSIL

UBA introduces Flexi Loan for government workers MORE ON PG 5

COVID-19: Farmers decry input shortage

MORE ON PG 3

ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

USD$1 =GHC 5.6734*

*POLICY RATE

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

11.4 % OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHc 5.13*

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

43.22 1.79 1,842.40 329.50

COCOA $/METRIC TON

1,562.00

COFFEE $/POUND:

$109.65

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

17.07

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EDITORIAL

Wash your hands 2

Cover your cough 3

Getting ready for over 300,000 SHS graduates This year’s universities admission is expected to be very competitive with the huge number of candidates preparing to secure admission into the country’s universities, Business24 analysis has revealed. With less than a month to complete the West Africa Secondary School Certificate Examination (WASSCE), over 313,837 candidates are expected to apply to various universities for admission, the highest ever to be recorded. The coronavirus crisis and the closure of land, sea and air borders also mean that many Ghanaians students will have to continue their tertiary education in Ghana, which will put more pressure on admissions in the country. These students will add up to the existing backlog of about 200,000 students. Business24 analysis from the National Accreditation Board’s 2019

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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)

Studies, Accra reduced intake by 18 percent in previous admissions as a result of lack of accommodation. The University of Ghana was able to admit a little over 50 percent of all applicants last year. In order for the tertiary institutions to prepare for the massive applicants for this year’s admissions, analysts have called on government to support a rigorous infrastructural development of these institutions. Though government said it has set aside an amount of US$1.5 billion GETFUND financing for educational infrastructure in the various institutions, we believe that the intervention is very urgent if a lot more students are to be admitted into tertiary institutions this year.

Banks must adopt humanised approach to digital banking—Alkan CEO CONTINUED FROM COVER

Wear a mask

Tertiary Education Sector report shows that the country’s tertiary education institutions altogether can admits about 150,000 students in a particular year. This means that with the 313,837 candidates who are set to apply for admission into these institutions, it is expected that only 150,000 will be admitted into tertiary education institutions this year, creating an additional backlog of 163,837. Currently, there are 399,956 tertiary student populations, which is almost equal to the number of students who are expected to complete SHS this year alone. Ironically, the country’s foremost universities, which admit high number of students every year, have over the years been reducing admission intake as a result of lack of capacity to accommodate the applicants. The University of Professional

era where customers seek more technologically-oriented banking solutions that will put them in control. In response to this, banks that had already invested heavily in technology but for which there was limited uptake, have seen a surge in the use of such technology. Others have also committed significant funds, within the past four month, to enhance their digital offerings. It has been predicted that postpandemic, banks will digitise more transactions and services as consumers become more digital-savvy, and will also enhance the simplicity and convenience of those service. For instance, First National Bank, a subsidiary of South Africa’s FirstRand Group, recorded transaction growth through digital channels of more than 90 percent in both March and April, whilst Cal Bank, one of the fastestgrowing indigenous banks in the last decade, has seen a 25 percent rise in users of its mobile banking platform since the year began. The two-day virtual training programme was on the theme: “Banking operations in a digitised environment” with participants

comprising bank tellers, customer and frontline staff, call and back office staff and relationship officers. Mr. Patrick Baah Abankwa, Head of Training and Business Development Manager for the Institute, said the course was designed to, among others, equip participants with an integrated understanding of digital banking to help them offer cutting-edge performance in a digitised banking

environment. “This course was to enhance participants’ knowledge of new skills required in using digitisation to better manage customer complaints, service recovery and maintain loyalty. “It was also to guide them to make practical resolutions that will impact positively on their banking roles to enhance the reputation and profitability of their respective banks,” he indicated.

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COVID-19 induces drop in household income of 22million people -GSS BY ABDUL SANI-RAHMAN

At least 22 million Ghanaians could potentially have suffered a drop in their income since March this year when the COVID-19 pandemic struck, a new study conducted by the Ghana Statistical Service has shown. The survey, titled “A Brief on Covid-19 Households and Jobs Tracker,” which analysed the impact of the pandemic on households and sources of income spanning March 16, 2020 and June ending revealed that at least 77 percent of households experienced a decline in income. Households relying on income from non-farm family businesses were the hardest hit due to the restrictions on movement to curb the spread of the virus. While household income were dropping, public anxiety over the lockdown caused hikes in food prices. The study showed that 77.4 person of households reported

to be severely affected by the increase in food prices. To cope with the effects of the pandemic on their livelihoods, more than half, 52.1 percent, of households reduced food consumption. Only 9 percent of the 3,000 households engaged in the survey reported to have recorded some form of support, specifically free food. The survey, however, found out that of the 29.9 percent of children (6-14 years) on the school feeding programme, more than half still received food in the last four weeks although schools remain closed. “We expect the impact to weather when we collect data for the second wave, as a result of the numerous business support schemes rolled out by the government and as well as the general ease in restrictions,” Coordinator of the project Omar Seidu told Business24 in an interview in Accra. Impact on education

The closure of schools is a major challenge for households without access to digital learning tools. According to the survey, some 35 percent of basic school students, and 28 percent of senior high school students were not engaged in any form of learning during the closure of schools. Access to these tools is affecting

a quarter (25.6 percent) of basic school children and one-third (32.7 percent) of SHS students. Despite the COVID-19 sparked anxiety among households, 96.6 percent of students at the basic and secondary levels responded they are likely to return to school once schools reopen.

COVID-19: Farmers decry input shortage BY REUBEN QUAINOO

Chief Osman Fukuyama, a farmer at Bereku in the Central Region, said farmers in his district and others are “struggling to get access to quality inputs like seeds as the majority of them are imported.” The 2019 National Best Agroforestry Farmer, Mr. Robben Asare, confirmed the shortage of improved imported seedlings and farm machinery. “All the above [shortage of improved seeds and unavailable farm machinery] are negatively impacting productivity and making farming less productive” he said. According to the FAO, the significant slowdown of all economies of the world and specially of the most vulnerable ones, as unemployment rates have risen, and COVID-19’s

economic impacts will be felt more and will make countries, especially food import-dependent countries, struggle to have the needed resources to buy food. In turn, as demand for food will decrease over the next months, prices should go down in 2020, and this will have a negative impact on farmers and the agricultural sector. “Shortage of fertilizers, veterinary medicines and other input could affect agricultural production,” the UN agency said. To support farmers and their organisations in the coming months, the FAO said it is important to “identify collection centres closer to producers, for example develop storage facilities like warehouse receipt system platforms where farmers can deliver their produce without the need to go to markets. If possible, allow local markets to remain open, while putting in place strict

physical distancing measures within and outside markets. If feasible, relocate markets to larger premises, while ensuring the appropriate infrastructure is in place to maintain quality and food safety.” Help in sight To help address the challenge of improved seedlings, various agricultural research institutes are working hard at developing improved and high-yielding seeds locally. Dr. Mumuni Abdulai, Principal Investigator (Bt Cowpea) at the Savannah Agriculture Research Institute, SARI of the Council for Scientific and Industrial Research (SARI-CSIR) in Tamale, said the Institute has developed a new cowpea variety, known as BT cowpea, which is pest-resistant and requires less spraying than the varieties currently available to farmers.

He indicated that Ghana has completed its scientific work on Bacillus Thuringiensis (BT) Cowpea, after almost a decade of research. He said that the new cowpea variety, could potentially increase yield by 20 times more and the acceptance of the product, will pave way for the environmental release of the BT Cowpea. Field trials in Ghana show productivity in Bt (1925.0 kg/ha) compared with the non-Bt (94.1 kg/ha). The final work document contains details of the research work including the gene inserted in the beans to control the Maruca pest, its safety and its non-target effect. “The dossier of the work will be submitted to the National Biosafety Authority of Ghana” he added.

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Volta fishers take delivery of 200 subsidised outboard motors Mrs. Elizabeth Afoley Quaye, Minister for Fisheries and Aquaculture Development has distributed 200 outboard motors to fishers in the Volta Region. It forms part of the first batch of the about 5,000 outboard motors to be distributed across coastal communities in Ghana under the President’s Fishing Input Support Scheme for fishers. The scheme aims to provide outboard motors at affordable prices to improve productivity. Speaking at separate ceremonies at Adina and Keta to hand over the items to the beneficiaries in the Ketu South and Keta/Anloga Municipalities respectively, Mrs. Afoley Quaye said the outboard motors, with a market price of about GH¢20,000 each, were subsidized and given to beneficiaries at GH¢10,000, representing a 50 percent subsidy. She said government through MOFAD had been providing fishers with inputs and gears such

as tricycles, assorted fishing gear, wire mesh, aluminum basins and ovens to support their livelihoods. The Minister, also the Member of Parliament for Krowor Constituency, said government had carried out infrastructural development projects across fishing communities in Ghana including Axim, Lower Dixcove and Anloga, continuing with new ones to develop the Sector. She urged fishers to “perform best practices at sea, to justify government’s expenditure in the industry,” she said. Mrs. Afoley Quaye hinted of collaborative fishing management, which would involve all stakeholders including traditional leaders as the way forward to ending ‘saiko’ (illegal fish transshipments) and other Illegal, Unreported and Unregulated (IUU) fishing practices to save the country’s fisheries sector from collapse. Madam Ruby Adukpo,

representing National Fish Processors and Traders Association (NAFPTA), Volta Region, decorated the Minister as Mama Dunenyo I of Dzelukope with ‘kente’ as a demonstration of the Association’s love for her works in the Region and the country.

Torgbui Seth Abotsi, Volta Regional Chief fisherman, was grateful for the intervention and called on other colleague fishers not to use the opportunity to engage in unpatriotic ventures to rob the state. GNA

UBA introduces Flexi Loan for government workers United Bank for Africa (UBA) Ghana Limited has introduced a flexible loan product designed to give easy access to credit to all government workers. UBA Ghana’s Chief Executive Officer and Managing Director, Olalekan Balogun, acknowledged the challenging economic situation due to COVID-19 and noted there is the need to stimulate the economy by through the provision of easy credit facilities which can lead to the revamp of economic activities. “One of the ways to do that is to support workers with flexible loan to enable them live their dreams and at the same time support economic activities” Balogun noted. The UBA Flexi Loan has flexible repayment terms and can be accessed within 48hours. The facility is available to all UBA account holders and non-account holders so long as the person draw their salary through the Controller and Accountant General’s Department. The Managing Director noted “as a bank, we shall continue to augment efforts of government at stimulating economic growth by making credit available to our customers to promote the financial wellbeing of the citizens of the country”. Speaking on the features of the Flexi Loan Product, Head of Retail at UBA Mrs. Victoria Attipoe explained the product

has an individual limit of up to GHS140,000 for customers without provident fund and up to GHS275,000 where the applicant has provident fund. The repayment period for Flexi Loan is between 36 months for customers who do not have provident fud and 60 months for customers with provident fund and requires no collateral. Mrs. Attipoe noted “the good news is customers with existing loan facilities with UBA or other financial institutions can access a

takeover, top up or restructure for increased loan amounts, longer repayment period and low interest rates”. Since inception in 2005, UBA Ghana has established its presence in Ghana as a full financial service institution providing retail, corporate and investment banking services. The bank offers a wide range of unique banking solutions and products to its customers. The Bank pioneered the entry of a new generation of foreign banks into Ghana in January 2005. UBA

Ghana’s presence in the banking industry in Ghana over the last decade has revolutionized banking in the industry, where competitive innovation in responding to the needs of the customers has become the driving force of the industry. UBA’s world class customer driven innovations have earned it the confidence of the Ghanaian public; as it continues to provide banking services to a wide variety of customers.

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Vodafone employees raise GH¢100, 000 to support domestic abuse survivors Vodafone Ghana employees and the Vodafone Group Foundation have raised GHȼ100,000 towards the establishment of the Vodafone Ark Foundation Transit Shelter for survivors of domestic violence. The amount was donated to the Ark Foundation, a Non-Profit Organization (NGO) that provides support for survivors of domestic violence. The donation is part of Vodafone’s efforts to support the fight against the COVID-19 pandemic and its numerous challenges. These include domestic abuse, which has significantly increased globally, as survivors are compelled to stay at home with their abusers due to measures in place to contain the spread. Speaking at the donation ceremony via a video call, Dr. Joyce Aryee, Board Chair of Vodafone Ghana Foundation, said: “One of the core mandates of the Vodafone Foundation is to meet the needs of vulnerable women in society and the COVID-19 outbreak makes our support for Ark Foundation even more relevant. During the lockdown period, it was realized that many women experienced physical and sexual abuse. In view of this, we decided to support the Ark Foundation to take care of vulnerable women and

children by means of this gesture. The donation is a true reflection of Vodafone’s continuous support for Ghanaians in spite of the pandemic.” Ashiokai Akrong, Human Resource Director at Vodafone Ghana, during her remarks, said: “At Vodafone, we take pride in undertaking activities that solve societal problems and change the lives of many individuals for the better. Our employees live these values and are always excited to give back to the community.

It is gratifying that Vodafone employees generously raised half of the amount and the other half came from Vodafone Foundation’s COVID-19 Hardship Fund that was launched to support a local charity to provide relief for Ghanaians. This clearly goes to reiterate Vodafone’s position as a humane and people-centred organization” According to Amaris Nana Perbi, Foundation & Sustainability Lead at Vodafone, when completed, the new Vodafone Ark Foundation Transit shelter will have a fully

furnished mini digital library for study and research, a recreational area for comfort, new washrooms, CCTV cameras for security and Vodafone’s fibre broadband connectivity. He said, the Vodafone Foundation will also make available Personal Protective Equipment (PPE) and other essentials needed to protect staff and survivors of abuse from COVID-19. Receiving the cheque on behalf of the Ark Foundation, Dr. Angela Dwamena-Aboagye, Executive Director, said: “The new facility when completed will enhance our humanitarian work of providing counselling and shelter for survivors of sexual abuse and domestic violence. We had come under financial stress in recent times because of the dwindling donor support. We are extremely delighted that Vodafone Ghana Foundation has come to our aid”. Vodafone Ghana has provided massive support for Ghanaians since the inception of the COVID-19 pandemic with many interventions. Notable among them is the Vodafone Healthline Call Centre, which seeks to provide guidance to Ghanaians on COVID-19 in a wide range of local and international languages.

More Ghanaians stranded in U S return home Thursday A total of 210 more stranded Ghanaians in the USA were flown back home on Thursday, July 30, 2020. The Ethiopian Airlines flight (ET 8509 ) transporting the Ghanaian citizens departed Newark, New Jersey at 5: 25pm on July 29 and safely touched down at the Kotoka International Airport, Accra at 08: 45am local time on Thursday. This is the third in-bound repatriation flight arranged by Ghana’s Ministry of Foreign Affairs and Regional Integration with support from US authorities and handled by Ethiopian Airlines. The returning citizens are expected to complete a 14-day mandatory quarantine at any of the five designated hotels–Alisa Hotel, Korkdam Hotel, Maxlot Hotel, Alma Hotel and Bellair Crest. Ethiopian was chosen to operate this flight given the airlines capabilities, fleet and key role it has played in the fight against COVID-19 in Ghana. Ghana’s land, sea, and air borders have been closed since March, as

part of a raft of measures to help contain the spread of the COVID-19 pandemic. Any repatriation flight, in-bound or outbound, requires special permission from government.

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Keeping poverty reduction front and center

BY JUAN MANUEL SANTOS AND SABINA ALKIRE

oday’s pandemic-induced humanitarian and economic crisis represents an unprecedented opportunity to go beyond emergency responses and address our economies’ structural flaws. Many governments’ stimulus and recovery packages are already shaping the future. But leaders across all sectors of society should recognize this moment as a rare chance to build a more inclusive and sustainable world, which will be possible only if we end poverty in all its forms. Ending poverty might seem like an impossible dream, but so did abolishing slavery and ending apartheid. The launch of the global Multidimensional Poverty Index 2020 can serve as a catalyst. Recently released by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative, the MPI shows that 65 of the 75 countries studied reduced their poverty levels significantly within the last decade. Moreover, the country that reduced poverty the fastest, Sierra Leone, did so despite the Ebola epidemic that began in 2014. The risk now is that these gains could be reversed. The COVID-19 crisis requires the commitment of global and national leaders not only to preserve hard-won progress, but also to turn a corner in the global effort to end poverty. This will not be easy, given that the pandemic is exacerbating pre-

existing inequalities. It is a “myth that we are all in the same boat,” observed United Nations Secretary General António Guterres this month. “While we are all floating on the same sea, it’s clear that some are in superyachts while others are clinging to the drifting debris.” It is thus all the more essential that we extend a hand to the poor, who are suffering multiple deprivations, with COVID-19 adding to what was already a crushing burden. Using data dating back to 2010, the MPI provides a comprehensive picture of how people experience disadvantages in their daily lives, because it simultaneously measures deprivations in health care, education, and living standards across ten indicators. These data can help us mitigate the pandemic’s burden on the 1.3 billion people living in multidimensional poverty, while preventing many others from becoming impoverished. At the national level, governments should consider creating their own country-specific MPIs to guide effective strategies for tackling poverty. Dozens of countries around the world already have. Of the 47 countries to submit Voluntary National Reviews at the UN’s HighLevel Political Forum this month, 21 mention multidimensional poverty. We hope they can wield this powerful tool during the pandemic itself. By emphasizing support for the most vulnerable today, all countries will be in a stronger position to “build back better” after the pandemic. Tackling multidimensional poverty is good for society, and

good for peace. But to turn a corner on poverty, commitments at the highest levels are essential. During my (Santos’s) tenure as president of Colombia, we complemented the peace process with the Revolutionary Armed Forces of Colombia (FARC) with a national MPI that focused not just on income but also on the additional social deprivations that were affecting Colombians’ lives. Our MPI, supported by robust data, served as the basis for developing concrete programs and policies that succeeded in reducing multidimensional poverty from 30.4% to 19.6% within eight years. Countries that do not yet have an official permanent multidimensional poverty indicator could explore the global MPI to see if it could strengthen their own efforts. Either way, all governments must place human dignity and capabilities at the center of their recovery strategies. National governments can’t do this alone, of course. The magnitude of the challenge demands collective action on the part of businesses, nongovernmental and civil-society organizations, and philanthropists. Now is the time to back words with action. Leaders must demonstrate grit, determination, and endurance, and combine boldness with pragmatism. Mobilizing all sectors of society around the common cause of ending poverty will benefit not just the poor but also the broader economy. In the wake of World War II, Eleanor Roosevelt noted that, “We cannot tell from day to day what may come. This is no ordinary time. No time for weighing

anything, except what we can best do for the country as a whole.” In these challenging times, humanity has an opportunity to come together in solidarity on behalf of those left behind, and to act with vision and determination to end poverty in all its dimensions everywhere. At the start of this pandemic, our friend Amartya Sen, a Nobel laureate economist, reminded us of good and bad examples of leadership during times of crisis. He pointed out that during WWII, a rationing system in Britain led to more equal food distribution, which in turn underpinned a sharp increase in life expectancy – of 6.5 years for men and seven years for women (up from an increase of only 1.2 and 1.5 years, respectively, in the previous decade). The lesson from that experience, and from Sierra Leone’s over the past decade, is that forwardlooking, practical, equitable policies enacted during times of duress do work. Let us hope that today’s leaders recognize the opportunity in front of them, and adopt the multidimensional metrics needed to seize it. Copyright: Project Syndicate, 2020. www.project-syndicate.org.

Juan Manuel Santos, a Nobel Peace Prize laureate, is a former president of Colombia (2010-18) and a visiting professor at the Department of International Development, University of Oxford. Sabina Alkire is director of the Oxford Poverty and Human Development Initiative, University of Oxford.

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Transparency makes central banks more effective and trusted BY TOBIAS ADRIAN, GHIATH SHABSIGH, AND ASHRAF KHAN

he role and mandates of central banks have become broader and more complex since the 2008 global financial crisis. The unconventional nature and growing scale of interventions (as seen again during the COVID-19 pandemic) have brought on much higher scrutiny. More transparency and accountability are required to maintain public support, safeguard independence, and enhance policy effectiveness. The IMF has developed a Central Bank Transparency Code to help member countries answer these demands and increase trust and support. It aims to facilitate more effective communication between central banks and their various stakeholders, reducing uncertainty and contributing to better policy choices. Accountability and effectiveness Central banks have been engaging in a growing list of activities. More of them have taken over supervision and other financial stability functions, for example. Transparency is an instrument to facilitate accountability, allowing the public to better understand how these actions serve their best interest and are consistent with existing mandates, with the ultimate goal of increasing effectiveness. The increasing responsibilities and significant expansion of balance sheets have led to a stronger demand for central banks to better explain what they do, how, and why. This is especially important as their independence has come under scrutiny in many countries. In central bank parlance, transparency and accountability become the collateral guarantee of independence. The new code is part of the IMF’s broader focus on issues of accountability and governance. A voluntary code, it allows central banks to measure transparency in five key areas or “pillars:” governance, policies, operations, outcomes, and official relations. Under each pillar, the code provides a list of best practices from “core” to “expanded” to “comprehensive” for key functions such as monetary or macroprudential policy. This range of practices takes into account the immense diversity of the IMF’s 189 members central banks in terms of legal frameworks, governance arrangements, and

levels of economic and financial development. Each central bank and its stakeholders can determine if transparency is balanced in practice and within each country’s specific circumstances. Importantly, it is designed not to be a ranking tool and steers clear of expressing preferences or making recommendations about mandate, institutional setups, or governance procedures. The code acknowledges that transparency is not an absolute goal or an end in itself. Central banks have legitimate reasons for delaying or withholding publication of market sensitive data, financial stability considerations, and personal data. Confidentiality is particularly relevant for foreign exchange interventions, reserve management, supervisory decisions on individual institutions, and emergency liquidity assistance. The code contains appropriate qualifications and outlines the general principle that central banks should develop clear policies explaining and

justifying what is kept confidential. Dialogue with stakeholders The preparation of the transparency code involved extensive consultations with central banks, monetary unions, and international financial institutions and standardsetting bodies. In particular, it received extensive input from 73 central banks representing diverse regional and economic development backgrounds. An advisory panel formed by eminent academics and former governors provided additional perspective and practical experience. One concern was for the code to be applicable for all countries and different central banks, regardless of their income level, exchange rate regime, or geographical location. The code was conceived so that assessments can be done in full or with a subset of principles and practices best applicable to specific circumstances. IMF staff can assist with the evaluations, which can also be used as a diagnostic tool for designing targeted capacity

development programs. To help with implementation, several pilot assessments will be conducted over the coming years. Flexibility and attention to individual circumstances were commended by member countries’ representatives in the IMF Executive Board. On approving the code in mid-July, they said in a statement that it is a “timely and useful tool for central banks to guide their transparency practices and strengthen accountability, ensuring more effective policy outcomes and better-informed dialogue with stakeholders.” Developed with and for central banks, the IMF transparency code will help them to continue playing their crucial roles in a manner that maintains and strengthens support from their stakeholders and society at large. As central banks are once again called to step up their actions, it is critical to continue building trust and credibility with the citizens they ultimately serve. (IMF.org)

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Impact of conflict and political instability on banking crises in developing economies BY MONTFORT MLACHILA AND RASMANE OUEDRAOGO

hile the economic effects of conflict and political instability have been analyzed extensively, much less attention has been paid to how banks are affected. Our IMF staff paper addresses this gap by investigating whether rising conflict and political instability globally over the past several decades has led to more banking crises in developing countries. Our study focuses on the potential impact of conflict and political instability on systemic banking crisis in 92 developing countries over the period 1970-2016 We find that the odds of a banking crisis are 2.5 times greater when a country is affected by a conflict. Conflicts and political instability in neighboring countries increase the likelihood of banking crises in a given country. And the probability of experiencing a banking crisis is 25 percent when the conflict lasts 10 years, against 16.4 percent when it lasts two years. Our chart displays the relationship

between the number of countries in banking crises and in conflict. It shows that major waves of conflict tend to be associated with a higher rate of occurrence of banking crises. For instance, during the Sierra Leone civil war (1991-2002), more than 40 percent of banking system loans were nonperforming and the license of one bank was suspended in 1994. In Central African Republic, bank nonperforming loans increased to more than one-third of total loans and some banks became undercapitalized following the outbreak of the conflict in 2013. The primary channel of transmission is the occurrence of fiscal crises following a conflict or political instability. Conflicts and political instability can have a negative impact on the productive capacity of a country and this in turn can reduce government revenue and increase unproductive spending, including military expenditures, leading to fiscal crises. This can also lead to government dysfunctionality and weakening of institutions. Governments facing conflict and/ or political instability need to

address their root causes and try to mitigate their negative effects with the appropriate design and implementation of economic policies. Creating adequate fiscal space in normal times can reduce the likelihood of fiscal crises and in turn lower the probability of systemic banking crises.

Our findings also suggest that policymakers should pay attention to conflicts in neighboring countries even if they themselves are not conflict-afflicted as their banking systems may suffer negative spillovers from their neighbors given that banks operate across borders. (IMF.org)

Youth creativity and ingenuity crucial towards tackling COVID-19 pandemic-NYA Boss

outh creativity and ingenuity crucial towards tackling COVID-19 pandemic-

NYA Boss The National Youth Authority (NYA) has launched the 2020 International Youth Day (IYD) celebration, with the aim of tapping into the creativity and ingenuity of the Ghanaian youth towards finding solutions to the country’s socio-economic challenges and the COVID-19 pandemic. At a news conference to officially launch the IYD celebration in Accra, Mr Sylvester Tetteh, the Chief Executive Officer (CEO) of the NYA, said the youth played significant roles in enriching institutions with their innovative ideas. Therefore, the Authority will organise pre-event activities and series of dialogues to engage students, young entrepreneurs and Persons with Disability (PWDs), to tap into their intellectual property and ingenuity towards finding

lasting solutions to the country’s socio-economic, cultural and political challenges. The global theme for this year’s celebration is: “Youth Engagement for Global Action” with a local sub theme, “Promoting Youth Engagement in Mitigating the Impact of COVID-19: The Need for Youth Innovation and Creativity”. The International Youth Day is held annually on August 12 worldwide to recognise the contributions of the youth in national development efforts and to create awareness about their challenges, with the ultimate objective of finding solutions to them. It is being organised by the National Youth Authority under the auspices of the Ministry of Youth and Sports. The NYA has lined up various pre-event activities and series of dialogues across the 16 regions to solicit the concerns of youth groups. The NYA Boss stated that the Authority had categorised the

dialogues into four thematic areas including Innovation and Creativity in Delivering Quality Education to the Youth, Business and Entrepreneurship, Hospitality and Entertainment and Governance and Elections, which intended to provide holistic development to young people in the country. He said, over the years, the NYA had collaborated with the United Nations Development Programme (UNDP) to build the capacity of the youth in the country. Mr Tetteh therefore encouraged the youth to participate fully in all the activities to enhance youth representation and engagement in national development. Mr Ahmed Osumanu Halid, a Communication Consultant of the Youth and Sports Ministry, who represented the Sector Minister, said the National Youth Policy was being reviewed to meet the needs of the youth in the contemporary times. He said the youth were the hardest hit by the COVID-19

pandemic, therefore the Ministry’s ultimate goal was to find solutions to their challenges including unemployment, access to quality education and economic opportunities. “These issues featured prominently in the policies and programmes being pursued by the Ministry in order to find solutions to them,” he stated. Mr Osumanu Halid indicated that the government, through the Ministry, was constructing 10 multipurpose resources centres in 10 administrative regions to unearth talents and make them more profitable to the society. The media launch attracted the two Deputy Chief Executive Officers of the NYA-Mr Nelson Owusu Ansah, who is in charge of Programmes and Operations and Mrs Akosua Asaa Manu in charge of Finance and Administration, as well as the Directors, a representative from the Board of Directors, members of staff and the media.GNA

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