1
FRIDAY NOVEMBER 26, 2021
BUSINESS24.COM.GH
Friday November 26, 2021
Young entrepreneurs seek better execution of gov’ts financial support initiatives
NO. B24 / 279 | News for Business Leaders
Ghanaian SMEs demand harmonized standards for effective intra-Africa trade following IATF 2021
See page 12
See page 13
Gov’t targets 1m jobs with YouStart initiative By Benson Afful
affulbenson@gmail.com
G
o v e r n m e n t ’ s entrepreneurial-driven initiative YouStart is expected to create about one million jobs with a seed capital of GH¢1 billion, Deputy Minister of Finance John Ampontuah Kumah has said. Speaking to the Institute of Financial and Economic Journalists (IFEJ) and the Parliamentary Press Corps during a webinar on the 2022 Budget Statement and Economic Policy, Cont’d on page 2
he said the initiative would be driven by existing government structures like the Ghana Enterprise Agency, National Entrepreneurship and Innovation Plan (NEIP) and participating banks, as well as the various universities where government would create an endowment fund to make it possible for students to apply for working capital while they are still on campus. He explained that the project would assist the youth in becoming more creative and innovative, allowing them to start their own enterprises. “Existing SMEs and other enterprises could also apply for
The YouStart initiative would assist the youth in becoming more creative and innovative, allowing them to start their own enterprises.
TUC to dissect 1.75% e-levy, urges integration of jobs policies
‘2022 budget contains hopes for a better future’
By Patrick Paintsil p_paintsil@hotmail.com
By Eugene Davis ugendavis@gmail.com
T
T
he Trades Union Congress (TUC) says it will analyse the proposed 1.75 percent electronic levy on mobile money and bank transfers that exceed GH¢100 using the principles of fairness, adequacy, transparency Cont’d on page 3
he Minister of Education, Dr. Yaw Osei Adutwum, has endorsed the proposed 2022 budget as a policy document for the 21st century aimed at laying a foundation for the Cont’d on page 3
TUC Secretary-General Dr. Anthony Yaw Baah
Cont’d on page 2 Cont’d on page 2
2
Editorial / News
FRIDAY NOVEMBER 26, 2021
Editorial
Streamlining job creating initiatives will yield better results
G
overnment is keen on the private sector as the engine of wealth and job creation in the country and has continually provided the enabling environment for the entrepreneurship and innovation to advance this course. From its end, there have been a number of interventions and policies that seek to promote and open opportunities for the youth of the nation, with programmes such as Nation Builders Corps, Youth in Afforestation and the revamping of the Youth Enterprises Agency attest to the vision of government to provide avenues for wealth and socioeconomic growth. These are all notable and welcoming aimed at reduce the unemployment situation either
temporarily or permanently through entrepreneurship. The 2022 budget provides yet another jobmaking machinery which is the YouStart initiative. The initiative is looking to create 1 million jobs with a seed capital of GHS1 billion and would take effect from March 2022. The details of the initiative include interested persons registering online while the NEIP engages Faith-Based Organisations as partners for the delivery of essential artisanal skills, business competitions, and support systems. Young people under the program will benefit from District Level Loans under 10,000 GHC after 2-3 months of training and Soft loans of up to GH¢50,000 to help start-ups (in particular by young graduates
from and school-leavers) and small businesses to expand. Feasibility studies and introduction to financing institutions with a commitment of up to 10% of GOG contribution to the program. Undoubtedly, these ideas and interventions are plausible and timely given the unemployment situation in the country at the moment. But the TUC has raised concerns about what it terms as an unintegrated or segregated nature of the various policies or programmes. We share in this view that these programmes must be streamlined and must be implemented in an integrated manner so as to reap the collective benefits as we seek to build a job nation.
Gov’t targets 1m jobs with YouStart initiative Continued from cover
Your subscription -- along with the support of businesses that advertise in Business24 -- makes an investment in journalism that is essential to keep the business community in Ghana well-informed. We value your support and loyalty. Contact Email: editor@business24.com.gh Newsroom: 030 296 5315 Advertising / Sales: +233 24 212 2742
this funding arrangement to help them grow their operations,” he added. Mr. Kumah therefore charged IFEJ and the Parliamentary Press Corps to use their media to sensitise the public to the budget, whose theme was: “Sustaining an entrepreneurial nation through fiscal consolidation and job creation.” “The 2022 Budget is important, especially the communication of measures contained in it, so your role is very critical in explaining the numerous policies and measures that are in the budget,” Mr. Kumah noted. Each year, as part of its broader goal to sensitise key stakeholders and to galvanise public support, the Ministry of Finance engages the media on key aspects of the budget statement and economic policy. The deputy minister clarified some of the government's financial initiatives, such as the E-levy and the reduction and elimination of some taxes and policies. According to Mr. Kumah, who is also the Member of Parliament
Deputy Minister of Finance John Ampontuah Kumah
for Ejisu Constituency, before the introduction of the E-levy, about 10,000 Ghanaians were surveyed and the results showed that about 40 percent of mobile money users did not transfer more than GH¢100 a day. This, he explained, meant that not all mobile money transactions would be subjected to the E-levy. Individuals who receive or withdraw money from their "Momo" wallet and those who transfer money from their "Momo" wallet to their bank accounts under the interoperability system
will be exempted from the levy. “No matter the amount you send, the first GH¢100 will not be affected by the E-levy, which is 1.75%,” Mr. Kumah stressed. On what the nation stood to gain from the E-levy, he stated that, unlike the road toll that generated about GH¢78 million a year, the E-levy was expected to generate GH¢6.9 billion in 2022, which would give government enough fiscal space to pay road contractors anytime they submitted their certificates.
3
News
FRIDAY NOVEMBER 26, 2021
TUC to dissect 1.75% e-levy, urges integration of jobs policies Continued from cover and efficiency to inform its position on the controversial tax. “If a tax is so inefficient, then you don’t introduce it. We’ve asked our policy and research institute to assess the taxes in the budget, especially the e-levy, on its fairness and efficiency or otherwise and based on that we’ll take a decision,” SecretaryGeneral Dr. Anthony Yaw Baah told journalists at a post-budget forum in Accra. Finance Minister Ken Ofori-Atta, announcing the electronic transactions tax in his 2022 budget presentation last week, indicated that the implementation of the e-levy will boost the state coffers by some GH¢6bn annually; but the TUC boss argued that taxation goes beyond adequacy—which is substantial value—to include its fairness and administrative efficiency. “If the GH¢6bn is going to be generated from the poor, and it’s not fair to people who are already suffering, then don’t introduce it. If it’s going to be carried out progressively for the rich to pay more, then go ahead,” he said. The proposed e-levy replaces road tolls, which have been abolished in the country.
Government said the abolition will reduce the wastage of productive hours, as it will grossly reduce traffic gridlocks which are usually much heavier along the tolling routes. Dr. Baah said the viability of such an action will also be analysed: “We are told that total revenue from tolls for last year was GH¢78m. So, we have to measure the benefit of this in terms of productivity and
delays in traffic. So, the costbenefit analysis of this action is something we’ll be considering.” The TUC also proposed the integration of the various job and employment creation initiatives of government to streamline implementation and to enable them achieve the intended objectives. “We have the NABCO, which has been extended now, the YEA, et al. We were expecting
that these schemes would be integrated with the YouStart. What we are seeing is a new initiative, and we don’t know [if ] they’re going to manage it institutionally. We [TUC] believe that the private sector has a major role to play in employment creation, so we must put in place sustainable measures that will enable the private sector to expand and create more jobs,” Dr. Baah said.
‘2022 budget contains hopes for a better future’ Continued from cover Ghanaian economy. The 2022 budget, which is currently being debated in Parliament, has earmarked under the education ministry funds to construct five new university campuses in support of government’s agenda in
prioritising STEM education, as well as funds to construct 21st century Junior High Schools in selected urban communities. Dr. Adutwum’s comments followed criticisms from the Ranking Member on Parliament’s Education Committee, Peter Kwasi Nortsu-Kotoe, who described the budget as lacking
sensitivity and not outlining comprehensive plans for the education sector. However, addressing the press in Parliament, the Education Minister said: “What we are saying to the people of Ghana is that this budget contains their hopes and aspirations for a better future for this country. The better
Education Minister Dr. Yaw Adutwum (in ash suit) is flanked by his two deputies and other colleague MPs
days of our nation are ahead and not behind us; our nation is going to make massive investments in science, technology, engineering and mathematics education— talking about building 35 STEM high schools. The President has a vision second to none: this is laying a foundation for the Ghanaian economy to be competitive.” Government in the 2022 budget plans to expend GH¢21.bn on the Ministry of Education and its agencies. The budget has also proposed to supply and install educational equipment and training in basic science, technology, engineering, and mathematics; undertake the construction of the African Institute for Mathematical Sciences Ghana Campus Project; and construct physical infrastructure for the University of Health and Allied Sciences, Hohoe Campus.
4
FRIDAY NOVEMBER 26, 2021
5
News
FRIDAY NOVEMBER 26, 2021
Improve domestic revenue mobilization - President to NDPC
P
resident Nana Addo Dankwa Akufo-Addo has charged the newly inaugurated members of the National Development Planning Commission (NDPC) to layout modalities to improve Ghana’s domestic revenue mobilization. This, he said, would enable the Government to finance critical development needs, create jobs and improve livelihoods. The President made the charge when he swore into office the 49-medmber governing body of the reconstituted NDPC at the Jubilee House, Accra on Tuesday. Chaired by Chairman of the National Development Planning Commission, Professor George Gyan-Baffour, the body includes the Ministers of Finance, Health, Education, Food and Agriculture, Local Government and Rural Development, Energy, Trade and Industry, Employment and Labour Relations, Environment, Science Technology and Innovation, and Gender, Children and Social Protection. Others include the DirectorGeneral of the NDPC, the Government Statistician, the Governor of the Bank of Ghana, representatives from all the sixteen regions, as well as Governance, economic and development experts. President Akufo-Addo told
them that the NDPC must as a matter of priority, develop a strategy that would help Ghana widen its domestic revenue mobilization above its current 14 per cent tax to Gross Domestic Product (GDP) ratio. "You have to identify the ways and means to help enhance significantly the country’s capacity for domestic revenue mobilization to realize her development potential and thereby create opportunities for the vibrant and dynamic youth and to improve the livelihoods of all Ghanaians. “Ghana’s tax-to-GDP ratio of 14.3% compares unfavourably with our peers in ECOWAS and the world over. Ghana as the second largest economy in ECOWAS should not have one of the lowest tax-to-GDP ratios in the community," he said. The average tax-to-GDP ratio in West Africa stands at 18% and the minimum recommended ratio for ECOWAS member states is pegged at 20%. With OECD countries posting an average of 34 percent tax to GDP ratio, the President noted that It was no surprise that the developed nations of the OECD readily found the means to fund their own development, particularly, their infrastructure development, “whereas we are
constantly struggling to do the same.” “The NDPC should have this issue as a special focus,” he stressed. President Akufo-Addo tasked the Commission to among others, harmonise the multiple frameworks such as Ghana at 100, Ghana Beyond Aid, and the CARES Obaatampa Programme into the National Medium Term Development Policy Framework, 2022-2025. “I want to see results, therefore development planning must drive the following, agenda for building back better, agenda for youth development, agenda for entrepreneurial development, and ultimately, agenda for jobs,” he noted. The President emphasised that beyond its core mandate of policy proposals, the NDPC must focus on facilitating the coordination
of the country’s development processes to ensure the prudent use of the Ghana’s scares resources. It should develop pointers and tools to eliminate the duplication and implementation of policies and plans across all sectors, and must focus primarily on promoting sustainable and stable development of the country to improve the quality of life of the citizenry. The President charged the members of the Commission to leverage the rich experience at its disposal to advance the development of the country. “You must rise to the occasion at this opportune moment to help promote the progress of our country. Relying on your collective skills, knowledge and experience, we should be able to create a more predictable, attractive and smart economy,” he said. Prof. Gyan-Baffour thanked the President for the confidence reposed in them and promised that the Commission would deliver on its mandate. “Together with my members, we will work acidulously to put together a framework that captures the aspirations of our people taking into consideration the technical, political imperatives of development,” he said.
Resilient infrastructure needed to accelerate socio-economic development – Housing Minister
M
r Francis Asenso-Boakye, Minister, Works and Housing, says quality and resilient infrastructure through effective planning is needed to support the Government's accelerated socio-economic development. If planned efficiently, he said infrastructure would foster economic growth, and will help in poverty alleviation, reduction in income distribution inequality in the country and facilitate expansion of trade within and abroad. That, he noted, required collaboration and engagement with policy makers and other professionals in the infrastructure provision space as well as the development of effective infrastructure planning skills among the country's Planners. The Works and Housing Minister was speaking at the 50th Annual General Meeting and Conference of the Ghana Institute of Planners (GIP) on the theme, "Accelerating National Development through Effective Infrastructure Planning."
The conference brought together members of the Institute from across the country to primarily take stock of their collective performance as an institute and elect new Executives for the next Biennial. He said the recent Population and Housing Census conducted indicated that the country's population had increased to about 30.8 million with 57.35 per cent living in the urban settlements with a housing deficit in excess of two million units, requiring the construction of houses to bridge that gap. He stated that population growth required the provision of infrastructure and amenities, including roads, power, schools, hospitals, waste management and water supply at the disposal of the citizenry and across all sectors of the economy to sustain the livelihoods, Mr Asenso Boakye said despite the Government's achievements in the provision of infrastructure development, there remained a significant gap between the infrastructure demand of the
country and what was available. Mr Kojo Mensah-Abrampa, Director-General, National Development Planning Commission (NDPC), said the relevance of planning in the development framework of the country had not been given due attention over the years as the country had adopted “short responses” to infrastructural development. He said the country’s development plans and infrastructure management must be interpreted and managed by persons who had full knowledge of what planning entailed, adding that infrastructural development must be complementary with full utilisation and keen consideration of the lifecycle of the infrastructure. “Whenever you think about infrastructure, ponder over the connectivity of the infrastructure, the multi-functionality of the infrastructure, the applicability, integration, diversity, multiscale and governance to include the private sector, continuity and the acquisition of skills,” he
emphasised. Mr Mohammed Alhassan, President, Ghana Institute of Planners, in his welcome address said, with a membership of about 1000 planning professionals, the GIP had promoted high standards of planning practice and served as a voice of the country’s planning community since its establishment in 1969. He said with the increase in population and lopsided population densities came with challenges in infrastructure delivery as demand continuously outstriped supply, adding that in spite of the fact that infrastructure served as a nominal foundation for accelerated development, there had historically been a massive deficit in its supply. He observed further that, despite years of decentralisation and local governance, not much had been achieved in terms of integrated infrastructural planning at the local level. GNA
6
FRIDAY NOVEMBER 26, 2021
7
News
FRIDAY NOVEMBER 26, 2021
Ckrowd secures pre-seed funding and export grant investment
C
krowd, Africa’s most preferred and premium content streaming platform, has secured a $60,000 of pre-seed funding and $100,000 export grant investment, respectively from an international angel investor group, as well as backing from the Export Expansion Facility Programme from NESP. The investment will be used to disrupt the African and Afrodiaspora tech and content creation market and allow African content creators across Africa and the Diaspora to monetise their content and protect their content through structured IP and copyright infrastructure. The African creative sector possesses the buoyancy and potential to earn 2.5 billion dollars, according forecast from global consultancies. This comes as a result of the Continent’s young population and the many untapped opportunities, however, the lack of immediate revenue from produced local content, the disparity in renumeration with some of the Western content creators, the lack of understanding of cultural difference across African countries, and lack of intraAfrican content integration have impeded real exponential
growth for the creative industries in Africa. The export grant will all allow many storytellers and content creators to profit from revenue opportunities on the platform, while also providing an online portal where original, exclusive varieties of African content are well organized, can be accessed with ease and consumed as on demand short videos and live series. Ckrowd’s receipt of the grant as part of the EEFP is a testament of the importance of the tech entertainment industry and how important is to diversify African digital economies, by capitalising on many verticals, including culture, edutainment,
information, and e-sports. Ckrowd’s ground-breaking use of video technology and monetisation features to securely offer a profit to content creators, also confirms the company’s commitment to promote opportunities to help increase the exports of the creative industry and revenues earned by content creators. Sensing an opportunity, Kayode and his team launched Ckrowd’s as a technology service to export African local content for global consumption and position the technology to generate foreign exchange, revenue and create job opportunities for African youth. Kayode Adebayo, Ckrowd’s
CEO said: “This is a great win for African people. The Ckrowd platform, similarly to a large arena in the cloud, can broadcast live & short on demand video content and charges access fees on behalf of the creators of those content. This allows the platform to uniquely function as an EdTech, Media-Tech & Ad-Tech hybrid. We continue to welcome investments as we continue to grow partnerships across the continent and the African Diaspora. Our mission is to tell our stories, shine a light on the beauty of African culture and lifestyle, while delivering economic value to African creators, who have always and are pioneers and trailblazers in showcasing the beauty of our culture and our people. The platform pays 70% of total income on content to creators, which we believe it’s the highest pay-out on digital content to African Creators.” Ckrowd plans to use its new capital to double down and expand with new innovative technologies and strategies to get more customers, accelerate growth and intra-African creative industries. In addition to that, the company plans to hire more talent, especially in product, R&D and engineering.
Toyota Ghana introduces New Land Cruiser 300
T
oyota Ghana Company Limited has introduced its new Land Cruiser 300 series into the Ghanaian automobile market. Since its debut in 1951, the Land Cruiser continued to be selected by customers as a safe and secure vehicle symbolising Toyota. Mr. Andrew Lamptey, the Head of Sales Operations of Toyota Ghana, said a cumulative total of approximately 10.4 million units and more than 300,000 units a year had been sold in 170 countries and regions all over the world. The redesigned new Land Cruiser is the successor to the 200 Series that debuted in 2007 - a station wagon model. Mr Lamptey said as the flagship model of the Land Cruiser series, it had in every generation led the way in vehicle evolution while incorporating the latest technologies.
"To continue to live up to its reputation among customers as a vehicle that allows people to go anywhere and everywhere and come back alive and safe, the Land Cruiser's unrivalled existence has
continued to evolve, improving its reliability, durability, and off-road performance based on the actual usage situations of customers all over the world," he added. The Head of Sales Operations
said the development objectives for the new Land Cruiser were to inherit and evolve the Land Cruiser's essence of "reliability, durability, and off-road performance." He said it was also to create a riding experience that enabled the driver to drive with ease on any type of road in the world without tiring easily. The Land Cruiser 300 comes in three variants: GX-R, VX and GRS, all coming with a V6, 3.3L twin turbo engine capacity. Mr Jerry Mensah, the National Sales and Marketing Manager for Toyota Ghana, said the new Land Cruiser 300 Series was a complete redesign of the outgoing 200 Series, launched 14 years ago. He said the vehicle's identity had also been reshaped by merging cutting-edge technologies, some (technologies) accumulated over many years.
8
News
FRIDAY NOVEMBER 26, 2021
GH₵2m in cash, data and talk time for grabs in Vodafone Ɛɛkɔso promo
T
elecommunication giant Vodafone Ghana is set to reward customers with an exciting cash prize, data and talk time worth GH₵2million in the Vodafone Ɛɛkɔso Promo. The Vodafone Ɛɛkɔso promo is a coin-based consumer loyalty promo which is set to financially reward and empower Vodafone customers towards the yuletide season. Customers will earn red coins when they recharge airtime with a scratch card and via an electronic recharge or buy data via Vodafone Cash. These coins can be redeemed for awesome rewards, which are minutes for voice calls, data, or cash. Vodafone customers across the country will enjoy exciting cash prizes, data and talk time worth GH₵2million from now to February. Speaking at the launch Chief Executive Officer of Vodafone Ghana, Patricia Obo-Nai, said “Today is a very exciting day for us. The exciting part for me is that we get to reward all our customers without any subscriptions, this is the only promo that you don’t have to opt-in. Customers will be rewarded just by their engagement on our network. This is amazing, I’m not sure anybody has done
something like this. Everybody says opt-in, we don’t ask you to do that. So, to our customers, this is our way of showing love to you during this Christmas festive, please enjoy it”. For his part, Mass Segment Manager of Vodafone Ghana, Dennis Awuah said the promo is rewarding customers with exciting cash prizes, data and talk time worth GH₵2million. He stated that for the next three months, Vodafone customers across the length and breadth of this country will experience Vodafone’s definition of customer
appreciation. “Ɛɛkɔso Promo is our new promise to our customers”. “Our reward goes up to GHC500, 1GB data and 100 minutes airtime. You will receive the reward based on your need at that specific point in time. At Vodafone Ghana, we have a history of celebrating our customers in a unique way. We are people-centric and passionate about giving our customers new and amazing experiences through innovative rewards. These are the fundamental underpinnings of our business, and this continuously reflects on
our performance”, he said. Explaining the dynamics, Mr. Awuah noted that the promotion is simple, uncomplicated and it is opened to all Vodafone customers. “It’s not up to you to subscribe to Ɛɛkɔso promo. It’s not a chance game. It’s open to every consumer. Once you recharge, you build your red points. With your red points, you can redeem airtime data and cash. Very simple, no complications in this promo and we believe the customer has the power. We believe in the power of giving to customers this Christmas, this is our way of saying thank you to our customers for staying with us through all this period. So, I say it again, you don’t need to subscribe, there are no draws just top up and get your coins”, he said. Customers with 50,000 red coins will get GHc 500 cash; 10,000 red coins can get GHc 100; and 5,000 red coins can be converted to GHc 50. To check your coin, a customer has to just dial *533# or visit My Vodafone App to check, redeem red coins and convert it to either talk time across all networks, internet data or cash.
‘Rural/community banks need more support to drive local development’
T
he Acting Managing Director of the ARB Apex Bank, Mr Alex Kwasi Awuah, has called on the rural communities to show more interest in the activities of the Rural and Community Banks (RCBs). He said the impact of the RCBs on rural development had been significant and it was therefore important that community members gave them the necessary support to do more. Mr Awuah made the call at the 22nd Annual General Meeting (AGM) of the Ahafo Community Bank at Kukuom in the Asunafo South District last Saturday. While commending the Ahafo Community Bank for the modest gains made in spite of the challenges brought onto the banking sector by the COVID-19 pandemic last year, Mr Awuah urged all the stakeholders to be vigilant to ensure that the bank continued to be well managed. He appealed to the board, the workers and the shareholders to protect the interest of the bank in
order to avoid liquidation. Presenting the operational outcomes of the bank in the last financial year, the board chairman, Rev. Kofi Sakyi, said at the close of the financial year, the bank increased its total deposits by 30 per cent from GH¢12,421,428 in 2019 to GH¢16,163,690 in 2020 while assets increased by 22.66 per cent from GH¢14,985,241 in 2019 to GH¢18,380,479 in 2020. Primary reserves was 10.41 per cent, which was above the Bank of Ghana (BoG) benchmark of eight per cent. Besides, secondary reserve was 44.72 per cent in 2020 as against central bank’s requirement of 30 per cent. The bank could not declare dividend due to the COVID-19 pandemic. The board chairman said total investment in treasury bills and other short-term investment increased by 90.24 per cent from GH¢3,158,500 in 2019 to GH¢6008,500 in 2020. All was not rosy as Rev. Sakyi stated that the bank experienced
some challenges due to the reforms undertaken by the central bank. According to him, most people misunderstood the reforms which created panic withdrawals and affected deposit mobilisation. In addition, he said the COVID-19 pandemic had also affected the operations of the bank. As a result, there were some adjustments to meet eventualities. Rev. Sakyi gave an assurance that the board, management and staff would work together to do
their best to address challenges confronting the bank. Among the strategies to overcome the challenges were capacity building, technological advancement and adaptation of best practices. For his part, the Chief Executive Officer of the bank, Mr Pobi Antwi Donkor, said the bank had a commitment to effectively serve the people in its operational area with all seriousness. He called on the people to patronise the services of the bank.
9
News
FRIDAY NOVEMBER 26, 2021
Scheme to improve cocoa farmer incomes launched
A
farmer support scheme aimed at improving the livelihoods of cocoa farmers across the country has been launched. Dubbed: ‘Kookoo Daakyepa’, the scheme is an initiative of a leading British chocolate maker and cocoa grower, Hotel Chocolat, through its partners, the Cocoa Horizons Foundation, the Green Topics Group (GTG) and Nyonkopa Cocoa Buying Ltd. Under the Kookoo Daakyepa scheme, Hotel Chocolat and its partners are to pay GH¢100 premium on every standard cocoa bag directly to farmers at the end of the cocoa season. The payment is to be done through Nyonkopa Cocoa Buying Ltd, one of the partners. A statement from the partners said the amount would be adjusted yearly, taking into consideration the increases in the cost of living for farmer families. “Farmers will also benefit from subsidies on pre-harvest farm activities such as pruning and agricultural extension services, promotion of agroforestry and efforts to eradicate child and forced labour. This programme is also aimed at creating a local hands-on approach where farmers are educated on doing the right thing for the planet and communities through good farming practices,”
the statement said. It said the scheme would target 2,500 farmers around Nkawkaw and Juaso, adding that Hotel Chocolat, through Nyonkopa and Green Tropics, was aiming to put enough money into the pockets of cocoa farmers in the districts to ensure a decent standard of living. The Chief Executive Officer of Hotel Chocolat, Mr Angus Thirlwell, expressed optimism that the scheme would have a significant impact on the lives of Ghana’s hardworking cocoa farmers, who contributed massively to economic development. “I will like to emphasise that this is not charity or philanthropy.
We are paying more, voluntarily, because that is what the fine quality Ghanaian cocoa is worth to our brand. For 15 years, we have been operating our own organic cocoa farm in the Caribbean on an island called Saint Lucia.” “We are farmers too, highly unusual among chocolate brands. Everything we have learned as farmers has been folded into this programme,” he said. The Chief of Obomeng Traditional Area and chairman of the event launch, Nana Effah Pinamang III, urged farmers in the municipality and surrounding areas to take advantage of the scheme by ensuring that they sold their cocoa to Nyonkopa Cocoa
Buying Ltd. He said by selling to the company, the farmers could benefit from the programme. He also advised cocoa farmers engaged in or are planning to engage in illegal mining or galamsey to desist from the act, given the devastating effects it posed to the cocoa production. The statement explained that the Kookoo Daakyepa scheme also aimed to promote good farm practices among farmers. It said such practices were necessary to protect nature to ensure the viability of a more sustainable effort to curb challenges associated with climate change. “The scheme also requests and requires that farmers plant more indigenous trees on their cocoa farms to reduce moisture evaporation from the earth due to the shade, which increases biodiversity of pollinating insect and animal life and serves as a sequester carbon, benefiting all mankind. It said Hotel Chocolat had worked with the Green Topics and farmers within the Nkawkaw and Juaso districts since 2002. It added that in 2018, Hotel Chocolat partnered the Cocoa Horizons Foundation, via its Horizons chocolate purchases programme, to drive positive impact in the above communities.
Indian government set to ban cryptocurrencies
I
ndia is set to go ahead with its plan to ban most cryptocurrencies in the country under a long-awaited bill. Expectations had grown in recent months that the government may soften its view on digital currencies. The ban would relate to all private cryptocurrencies with certain exceptions to allow the promotion of the underlying technology and its uses. Cryptocurrency prices dropped on Indian exchanges after the decision on the bill's future was announced. According to a government bulletin, the ban is part of the proposed Cryptocurrency and Regulation of Official Digital Currency Bill that will be introduced in its winter session. The planned legislation aims "to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI)".
The plan to prohibit all private cryptocurrencies appeared to be essentially the same as an earlier draft of the bill submitted in January. In recent months it was thought the government may soften its stance on cryptocurrencies, possibly seeking to have them regulated as assets instead of a means of payment. While the description of the bill has remained the same, the exact differences have yet to be confirmed because the latest draft is not yet publicly available. The value of several digital currencies reportedly dropped following the announcement of the bill. Bitcoin fell more than 13% on the Indian exchange site WazirX, while Shiba Inu and Dogecoin both dropped more than 15%. However, Glen Goodman, author of The Crypto Trader, told the BBC's World Business Report radio programme that the global impact was "relatively small".
"Even when China decided to ban cryptocurrency - and that was a really big deal - it didn't completely massacre the crypto markets," he said. According to a video report by local news publication India Today, cryptocurrency trading is likely to continue under the proposed bill, as long as users buy from exchanges which meet certain requirements. The report added that the bill may focus on restricting who is allowed to create cryptocurrencies, with the aim of protecting investors. 'Serious concerns' According to the CoinDesk website, the RBI, the country's central bank, is regarded as having conservative views about cryptocurrency. In March 2020, India's supreme court overturned a digital currency trading ban imposed by RBI for two years. And last week, RBI governor Shaktikanta Das said the bank
had "serious concerns from the point of view of macro-economic and financial stability", and that blockchain technology can thrive without cryptocurrencies. However Mr Goodman pointed to the recent ban in China, and El Salvador's plan to build a Bitcoin city at the base of a volcano with the cryptocurrency used to fund the project. "Governments take very different approaches to how they see it," he said. "As a threat, an opportunity, or somewhere inbetween." Mr Goodman said the Chinese government wants to get rid of all digital currencies except the one it is creating. "They want to dominate cryptocurrencies, and it seems to me like the Indian government has got the same idea. "They think, 'well if China is doing it, then so can we'." bbc
10
News
FRIDAY NOVEMBER 26, 2021
Our babies, our future; Jumia partners NICU soldiers to raise funds for preterm babies on oxygen in Ghana
T
o save a nation, we always need to save our children. Great nations have been built by ensuring that their foundation (babies) are well cared for and protected. Often, when children are spoken of, many people narrow their minds down to the young walking ages of between 2-5 years. However, it encompasses a wider group than this. According to the World Health Organization, every year, an estimated 15 million babies are born preterm (before 37 completed weeks of gestation), and this number is rising. Preterm birth complications are the leading cause of death among children under 5 years of age, responsible for approximately 1 million deaths in 2015 alone. Three-quarters of these deaths could be prevented with current, cost-effective interventions. Across 184 countries, the rate of preterm birth ranges from 5% to 18% of babies born. These facts are alarming and beg the need for someone out there to do something to save our future leaders and change-makers. November each year is considered ‘’World Prematurity Month’’.This year, it was celebrated on 17th November under the theme 'Zero Separation', with the tagline 'Act now! Keep parents and babies
born too soon together'. Babies who are born prematurely are admited to the Neonatal Intensive Care Units popularly referred to as NICU. Here, they receive delicate care and attention to help them develop fully in a healthy and controlled environment. Although there have been several awareness campaigns in Ghana about preterm births, there seem to be more preterm babies than there are NICU’s. This particular challenge gets even worse when we consider the inadequate equipment at some of the already existing NICU centres. Throughout November, an
organization known as NICU Soldiers have partnered with the logistics arm of Africa’s leading e-commerce ecosystem Jumia and Fiona’s foods to raise funds for preterm babies on oxygen in a project dubbed #sconesforlife. The fundraiser is in the form of delivering scones and pies to generous people who buy them at higher amounts than their original costs just to support the project. Every Friday and Saturday, Jumia Logistics Ghana’s delivery agents send the scones/ pie orders to these consumers at no cost of delivery. On Friday 19th November
2021, NICU Soldiers together with Jumia Logistics Ghana and Fiona Foods also provided food to the nurses at the NICU unit of the Korle-Bu Teaching Hospital and the media team at Peace FM for their support in helping save the lives of these preterm babies. Over the past 3 weeks, quite a good number of scones have been delivered to consumers in Accra and Tema with the hope of selling more scones in the coming week. Organizers of this great initiative say that there will be many more projects like this to raise more funds for our future leaders.
AfDB outlines new health infrastructure strategy to health Dunford, Bank Vice President instruments to leverage private ministers in ECOWAS for Agriculture, Human and sector resources, debt and
A
frican Development Bank Vice President Dr. Beth Dunford has outlined the details of a new strategy that seeks to boost access to health services across the continent. Dunford delivered the message in a keynote speech at the 22nd Ordinary Session of the Economic Community of West African States Assembly of Health Ministers in Abuja. Opening the meeting on behalf of Nigeria’s President Muhammadu Buhari, the country’s Health Minister Osagie Ehanire, noted that the Covid-19 pandemic had exposed the fragility of health systems and infrastructure in the sub-region. “The challenges posed by the pandemic have strengthened our collective resolve as a region to build back better, and part of our strategy is to work together as a regional bloc. It is in this regard that we appreciate and commend
the support and leadership role of our development partners such as African Development Bank Group in the development of quality health infrastructure across the continent,” the Health Minister said. Representing Bank Group President Dr. Akinwumi A. Adesina at the event, Dunford explained that the strategy focuses on three categories: primary healthcare infrastructure for underserved populations; developing new secondary and tertiary healthcare facilities alongside specialist facilities for cancer diagnosis and treatment, dialysis and pain management; and building diagnostic infrastructure for efficient and effective disease diagnosis across Africa. “Covid-19 is a wake-up call on the central role of health systems and infrastructure for inclusive economic growth,” said
Social Development. “Developing quality health infrastructure is a triple imperative – health infrastructure is fundamental to public health, has significant economic impact, and is of strategic importance for governments,” she added. Currently in the consultation phase, the strategy entails policy dialogue and technical assistance on effective financing strategies, including expanding health insurance. Its implementation will boost the continent’s efforts to achieve the UN Sustainable Development Goal 3 which refers to good health and well-being. Dunford said the Bank was poised to play a critical role as a health infrastructure financier by drawing on its expertise in infrastructure development and working with sector partners. “The portfolio will include investment projects, resultsbased financing, risk-sharing
equity investments in private companies, and the promotion of innovative sources of finance, such as diaspora funds.” Dunford said filling the financing gap for health infrastructure would require mobilizing finances from the private sector, development finance institutions and diaspora groups. “The Bank cannot do it without your ownership and support,” she said. Stanley Okolo, Director General of the West African Health Organization, welcomed the Bank’s initiative to support the development of quality health infrastructure across Africa. The African Development Bank launched a multi-billion-dollar Covid-19 Response Facility and issued a $3 billion Covid-19 bond to support the efforts of African countries to mitigate the health and economic impacts of the pandemic.
11
Feature
FRIDAY NOVEMBER 26, 2021
The keys to inclusive growth
By Philippe Aghion, Aymann Mhammedi
T
he COVID-19 pandemic has highlighted major weaknesses of both the US and European models of capitalism. In the United States, the crisis has shown the limits of an economic system that fails to protect individuals against the effects of creative destruction and the social consequences of a macroeconomic shock. In Europe, it has revealed the insufficient dynamism of the region’s innovation ecosystem – particularly in the biotech sector, which holds the key to ending the pandemic. For all the harm it has caused, therefore, the COVID-19 crisis is also a wake-up call to rethink capitalism. We do not regard the US economic model’s lack of protection and inclusiveness as a necessary price to pay for greater innovativeness. Nor do we think that Europe’s lack of innovativeness is a natural consequence of greater inclusion and better social protection. So, besides calling for greater investment in education, we advocate two policies that should both stimulate innovation-based growth and make it more inclusive and/or protective: beefed-up competition policy, and a Danishstyle “flexicurity” system in the labor market. Competition-policy discussions should start by asking why the innovative US economy, which spearheaded the informationtechnology revolution, has suffered from declining productivity growth over the past two decades. Among the various possible explanations for this trend, two have emphasized a competition problem.
In his 2019 book The Great Reversal, Thomas Philippon argued that the main reason for the slowdown in US productivity growth was the weakening of antitrust policies. According to Philippon, this gradual shift has led to greater concentration in many economic sectors and eroded business dynamism, especially the creation of new firms. An alternative explanation, which one of us (Aghion) developed with Antonin Bergeaud, Timo Boppart, Peter J. Klenow, and Huiyu Li, also features inadequate competition, but centers on the IT revolution. In a nutshell, rapid technological advances have enabled superstar firms – those that have accumulated social capital and know-how that is difficult to imitate, and/or have developed strong networks – to control a larger share of economic sectors. This explains the acceleration of US productivity growth between 1995 and 2005, especially in ITrelated sectors. But in the longer term, superstar firms will discourage innovation by non-superstar firms in all the product lines they control. This is because challengers attempting to dethrone a superstar firm must drastically reduce their prices and thus their innovation rents. So, the IT revolution, by enabling superstar firms to grow rapidly and control ever more sectors, ends up reducing market entry, innovation, and growth in the overall economy. This explanation implies that maximizing the IT revolution’s growth potential requires reforming competition policy to account better for the effect of mergers and acquisitions on future innovation and market
entry. Such an approach should both foster innovation-led growth and make it more inclusive by allowing new innovative players to enter the market. That innovation, particularly by new entrants, should also encourage greater social mobility. Flexicurity schemes, meanwhile, can help to address deep-seated labor-market problems, including in the US. In a 2017 article, Anne Case and Angus Deaton showed that, following a long period of decline, mortality within the middle-aged (45-54), non-Hispanic white population in the US began to rise in the early 2000s, and accelerated sharply after 2011-12. Their most striking finding was the rapid increase in what they called “deaths of despair,” resulting from suicide or substance abuse, primarily among low-skilled workers. This phenomenon has no contemporary equivalent in other developed countries. Deaton and Case attributed this trend reversal in mortality among America’s non-Hispanic white population to mounting job insecurity associated with creative destruction, which often results in increased family household instability. More generally, we have moved from a world where many people could expect to spend their entire career in the same firm, with the likelihood of moving upward, to one where frequent disruption has become the norm. Is it possible to design a system that makes creative destruction more palatable by allowing individuals to navigate periods of unemployment with greater serenity and in a way that benefits the economy as a whole? An important 2017 study by Alexandra Roulet suggests
that Denmark, which introduced a flexicurity system in 1993, may have found the right formula. The Danish system has two pillars. It makes the labor market more flexible by simplifying employee-dismissal procedures for firms. But, to protect laid-off workers, the government provides generous unemployment benefits, as well as substantial investment in professional training to give people the skills they need to reenter the labor market. Roulet compared the health of Danish workers whose workplace closed between 2001 and 2006 with that of workers with the same profile (including age, experience, and skills) whose employer did not close. Her findings were striking: firm closures did not affect some important individual health indicators, in particular the consumption of antidepressants or the probability of consulting a general practitioner. Nor did a firm’s closure affect the mortality rate among its workers. By establishing its flexicurity system, Denmark achieved two goals simultaneously. First, it fostered innovation-led growth by making creative destruction easier to implement and also more efficient (owing to the accompanying public investment in professional training). Second, the scheme made innovationdriven growth more protective and inclusive by providing income support to facilitate laid-off workers’ re-entry into the labormarket employment. One of the COVID-19 pandemic’s many economic lessons is that innovation and inclusion need not be mutually exclusive. By pursuing the right policies, Western governments can promote both and thereby help to bring about a dynamic and equitable recovery.
12
AfCFTA News Briefs
FRIDAY NOVEMBER 26, 2021
Young entrepreneurs seek better execution of gov’ts financial support initiatives
C
hief Executive Officer of the Ghana Chamber of Young Entrepreneurs (GCYE), Sherif Ghali, has welcomed government’s 2022 budget proposition to allocate GHS1bn yearly towards advancing the interest of youth entrepreneurs in the country, calling for its effective implementation. “That’s one key thing if we want to solve our unemployment issue in Ghana; government will need to promote youth entrepreneurs by setting up a support framework for them to be able to have access to finance,” he told Single African Market on the sidelines of the chamber’s three-day summit in Accra. He added: “It’s good that the government has finally come to understand and will be deliberate about supporting youth entrepreneurship in Ghana. We believe that setting up GHS 1bn annually for the next few years will be helpful to youth entrepreneurship.” Mr. Ghali however bemoaned poor implementation of such interventions as several youth-centered policies and programmes have not achieved their intended purpose because they were not led by the private
sector. “With this very good initiative, government should work with organised groups and academia to identify viable young businesses that must be needed the training and funding,” Mr. Ghali said. He also called on government
should also go beyond the financial support and make deliberate efforts to help young entrepreneurs sustain their enterprises. “We need to have a database, identify the various markets outside Ghana that we can
produce and supply to as a means of boosting industrial capacity. If we are not deliberate about the AfCFTA, we can push in money alright but others will come in and reap the benefits,” he added.
Chamber holds workshop on AfCFTA opportunities for young entrepreneurs
T
he Ghana Chamber of Young Entrepreneurs (GCYE) has organised a workshop
for young entrepreneurs in the country to identify and explore existing opportunities in the
African Continental Free Trade Area (AfCFTA). The three-day summit was
also to educate and encourage participants to play an active role in the single continental market. This year’s summit was on the theme “Supporting the implementation of the AfCFTA; the role of youth and green business”. “With the commencement of trade in the AfCFTA and Ghana’s target to promote industrialisation, summit brought together various stakeholders including young entrepreneurs, policymakers, the private sector and researchers to examine ways and means that the youth and green businesses could effectively participate and contribute to the implementation of the single market,” CEO of the chamber, Sherif Ghali, said of the summit. A panel discussion saw the young entrepreneurs briefed and how they can prepare themselves to take advantage of the AfCFTA.
13
AfCFTA News Briefs
FRIDAY NOVEMBER 26, 2021
Ghanaian SMEs demand harmonized standards for effective intra-Africa trade following IATF 2021
G
hanaian operators of small and medium enterprises have called for the immediate harmonization of standards of goods across the continent to ensure the smooth movement of goods and products under the AfCFTA. “If I have FDA certification from Ghana, it should be able to permit my goods into other African markets because acquiring multiple certifications come with costs. So, this is one area that the AfCFTA will have to fast-track in the interest of cross-border trade,” Anne Ewurabena Sarfo, CEO of Anne’s Perfections, shared with Single African Market. The young female entrepreneur and her compatriot, Rose Nunya Wetsi, Chief Executive Officer of Afro King Salon, producers of natural hair products said the issue of certification came up strongly from their participation in this year’s Intra Africa Trade Fair (IATF 2021). “For my goods, the South African market wants to see something similar to FDA certification like we have in Ghana. So, I’ll quickly have to get that before the shops and individual buyers can accept
them. That will also help my business expansion,” Ms. Wetsi indicated. They admit the trade fair has revealed to them the need to acquire other regulatory requirements from South Africa to be able to fit in that market but with harmonized standards, it will be easier for them to expand into other markets.
According to the two female entrepreneurs, their participation in IATF 2021 was very successful and impactful to the growth of their businesses and networking. “I’ve gotten quite a number of deals that I’ll be following up on, including those that want to become distributors for my products. This fair has been a good experience that has given
me the exposure not only in South Africa but other countries that were represented,” CEO of Anne’s Perfection indicated. They expressed that the IATF has laid the foundation for successful intra-Africa trade and urged urgent action on the traderelated challenges that came up at the fair.
48 Ghanaian SMEs showcase products and goods at IATF 2021
T
he Ghana Export Promotion Authority (GEPA) facilitated the participation of about 48 small
and medium enterprises at this year’s Intra Africa Trade Fair (IATF 2021) which came off last week in Durban, South Africa.
The one-week fair which was organized under the auspices of the Africa Continental Free Trade Agreement Secretariat and
Afrexim Bank was themed on “Building Bridges for a Successful AfCFTA”. It aimed to provide a platform for networking, facilitating trade investment and opportunities for investors to initiate and seal business deals. Chief Executive Officer of the Ghana Export Promotion Authority (GEPA), Dr. Afua Asabea Asare, indicated that small and medium enterprise remain the key to providing employment for many youths in Africa. She is optimistic that the fair will contribute to reducing barriers to trade in Africa, especially for young businesses and startups of the continent. A number of Ghanaian exhibitors including Annie’s Perfection, received good reviews and commendations from some South African visitors to Ghana’s pavilion. Meanwhile, Ghana’s pavilion won the award of being the best pavilion at the fair, which was decorated with the Independence Ark, won the most Extraordinary Experiential Stand at this year’s fair.
14
FRIDAY NOVEMBER 26, 2021
15
Opinion/Analysis
FRIDAY NOVEMBER 26, 2021
High oil prices can help the environment
ByJeffrey Frankel
P
rices of fossil fuels increased sharply in October. European prices for natural gas hit a record peak. Prices for thermal coal in China have also reached all-time highs. The price of US crude oil is above $80 a barrel, its highest level in seven years, prompting US President Joe Biden’s administration in August to call on OPEC and other major oil-exporting countries to increase production. Although these high prices partly reflect country-specific factors, there must be some more fundamental cause. After all, as with fuel prices, indices of mineral and agricultural commodity prices have also recovered from a six-year slump, re-attaining their 2014 levels. The longstanding correlation of different commodity prices suggests a common macroeconomic explanation. And the obvious reason why energy prices have risen in 2021 is rapid global economic growth. But what are the environmental implications of elevated fossilfuel prices, specifically with respect to the fight against climate change? The question is particularly salient as officials from over 200 countries prepare to gather in Glasgow for the UN Climate Change Conference (COP26), where they are expected to declare their intention to achieve net-zero carbon-dioxide emissions by 2050. On one hand, the effect of high oil, gas, and coal prices on consumers is good for the environment, because they discourage demand for fossil
fuels. On the other hand, the effect of high prices on producers is bad for the environment, because they encourage supply. But today’s higher fossil-fuel prices have so far provided a weaker-than-expected stimulus to private investment in the sector. This suggests that firms may have reached a tipping point in how seriously they take the need to combat global warming. They know a green-energy transition is coming. Now might therefore be the right time for the United States to reconsider a carbon tax or a (largely equivalent) system of tradable emissions permits, also known as “cap and trade.” Currently, much of the revenue from higher oil and gas prices goes to Russia, Saudi Arabia, and other foreign producers. Why not keep this revenue at home? The proceeds of the tax or permit auction could be returned as a dividend to citizens by cutting other taxes, thereby maximizing the scheme’s political acceptability. The important point is that putting a price on carbon would be by far the most efficient way to achieve the CO2-emissions reductions necessary to limit global warming to 1.5° Celsius, relative to pre-industrial levels. In the US, a cap-and-trade system has been considered politically impossible since the demise in Congress of the McCainLieberman Climate Stewardship Act in 2007 and the WaxmanMarkey American Clean Energy and Security Act in 2009. But perhaps the failure earlier this month of Biden’s attempt to get a clean electricity program through
Congress offers an opening for a sensible alternative: a carbon tax. True, the effective regulation of greenhouse-gas (GHG) emissions – such as through a carbon tax or a cap-and-trade scheme – can generate strong political resistance anywhere. Lawmakers may balk at imposing an extra operating cost on US manufacturers if socalled carbon leakage, or the relocation of carbon-intensive activities to countries with a lower carbon price, put these firms at a competitive disadvantage. But, logically, the US is perhaps the last country that should worry about others free-riding on its climate efforts. The free-rider problem discouraging most other countries from fully implementing the 2015 Paris climate agreement is above all a fear that the US will not take strong action to cut GHG emissions (and that China’s emissions will continue to grow rapidly). If America assumes a climate leadership role, others are likely to follow. The US has historically been the world’s largest CO2 emitter. China now emits far more in total, but US per capita emissions are still more than twice as high as China’s. European countries have perhaps done the most to cut emissions. And ironically, the supposedly more statist Europeans have adopted market mechanisms in pursuit of this goal, while the market-oriented US has considered this approach to be less feasible politically than direct regulation. Europe has two particularly important market mechanisms: high taxes on gasoline, and the European Union’s Emissions
Trading System. This scheme’s current substantial price of €59 ($69) per ton of emitted CO2 is credibly expected to rise over this decade. What about countries that don’t do their fair share? The EU is now moving forward with a carbon border adjustment mechanism, which imposes a levy on imports of carbon-intensive steel, aluminum, cement, fertilizer, and electricity from countries that are not imposing a carbon price comparable to the EU’s. In general, there is an acute danger that such border adjustment tariffs could be protectionist and violate World Trade Organization rules. But they need not do so if implemented under rules established multilaterally as an adjunct to the Paris accord. An elementary requirement of such a regime is that the country, or group of countries, that imposes a carbon border adjustment tariff (CBAT) must be a participant in good standing under the international agreement. The US would not currently meet this requirement. It would first need to do its share to fight climate change before it qualified for a USCBAT that could assure domestic industry of continued international competitiveness. The US should thus move swiftly to tax carbon (incidentally reducing the need to import oil). As the northern winter draws closer, surging fossil-fuel prices have left many consumers worried. But there may be a silver lining in the form of more effective US efforts to tackle climate change – provided the political will for such measures exists.
16
FRIDAY NOVEMBER 26, 2021
17
Feature
FRIDAY NOVEMBER 26, 2021
The inflation conundrum
By Kaushik Basu
U
ntil a few months ago, talk of inflation was little more than a murmur: dry data from the statistical office, reports tucked away in the newspaper, and an occasional commentary. Now the discussion is urgent and anxious, as news of rising price levels comes in from economies around the world, including Argentina, Brazil, Turkey, India, and, most important, the United States. The surge in inflation in the US, the world’s largest economy, is causing the greatest concern because its spillover effects are invariably far-reaching. The trouble is that – in a debate bookended by Paul Krugman and Olivier Blanchard – no one fully understands what is happening. Krugman thinks the current inflationary pressure is a short-term episode triggered by supply-chain disruptions, while Blanchard sees it as the result of the large spending under President Joe Biden’s American Rescue Plan, and as a prelude to a longer battle. Unlike Krugman, I believe that rising US inflation, currently at a 30-year high of 6.2%, is caused by this big spending package. But I also believe, contrary to Blanchard, that Biden’s policy intervention was right, and that higher inflation is a price worth paying for the benefits the rescue plan has brought, particularly to the most vulnerable Americans. This relief is reflected in the latest US data. During three months preceding September, the US saw higher wage increases than any time in the last 20 years. Workers have gained a stronger
bargaining position, and have even stayed away from the labor market when their wage demands have been unmet. To be sure, US policymakers will have to navigate some difficult terrain ahead, because the COVID-19 crisis has left many open wounds. A recent University of Michigan survey found that one-quarter of Americans expect their financial situation to worsen in the near term, a level of pessimism not seen since the Great Recession of 200809. All this is cause for global worry, because a US slowdown with elevated inflation will have adverse effects worldwide. The US Federal Reserve will likely have to raise interest rates more substantially than it is currently indicating (which no doubt reflects a desire to discourage speculative dollar appreciation). But the US has expertise enough to pull out of this inflationary period, and its monetary and fiscal policies are broadly on the right track. Other important economies, such as Turkey and Brazil, face a direr situation. Turkey currently has an alarming annual inflation rate of 19.9%. Making matters worse, President Recep Tayyip Erdoğan has strong (and wrong) views about how to control inflation. He believes the right response is to reduce interest rates. This can very occasionally be the right policy, such as when there is a lot of carry trade. But it is not the correct response now. It is thus not surprising that the Turkish lira has been losing value sharply, prompting some to warn of a currency meltdown. Brazil has recently joined the list of countries with double-digit
price growth, with annual retail inflation of 10.7% causing huge hardship for the poor. Moreover, inept policymaking by President Jair Bolsonaro’s government – the Economist recently criticized its “fiscal incontinence” – has stoked fears that the economy is on the verge of a technical recession. Unlike in many previous global inflationary episodes, what is remarkable this time is how different the cross-country experiences have been. The reason is probably that, while the current inflationary trends have a common cause, namely, the rebound from the pandemicinduced slowdown, countries’ diverse responses to this novel crisis have led to varied economic performance. India, for example, faces an especially tricky inflation problem. Retail inflation is elevated but not at the level seen in many other economies. It rose to 4.5% in October, up slightly from 4.4% in September, and has been hovering around this range for several months. But wholesale price inflation, which increased sharply to 12.5% year on year in October, from 10.7% in the previous month, is getting out of hand and has reached its highest levels since the late 1990s. This poses an unusual policy challenge. The wide divergence between wholesale and retail inflation is evidently squeezing small manufacturers, the selfemployed, and workers. Those who buy from the wholesale market and sell on the retail market are seeing their profits tumble. They are cutting back on production and this, in turn, is adversely affecting workers. If the government allows this
divergence to persist on the grounds that consumers are not being badly hit, growth will likely decline as small businesses, already under strain, reduce output and cut employment – and possibly shut down. On the other hand, if the government tries to narrow the gap by letting retail inflation rise, consumers will be hit hard. Given that India was among the world’s worst-affected economies during the pandemic and is only now beginning to recover, this would be a huge setback for many citizens. The only reasonable way out is for policymakers to tackle wholesale price inflation directly. This will require a combination of fiscal and monetary measures, like reducing the high tax on fuel that helps to fund government expenditures and slashing all non-essential spending (while supporting those hit hardest by the pandemic). It may also be time for the Reserve Bank of India to consider hiking interest rates. Inflation management is no easy task. We do not fully understand the links between the world of money and liquidity, on one hand, and that of goods and services on the other. Policymakers must therefore rely on a combination of science – based on the regularities observed in the vast amounts of data available to central banks and treasuries – and judgment. But there is one thing we do know: politics must be kept out of it. Kaushik Basu, a former chief economist of the World Bank and chief economic adviser to the Government of India, is Professor of Economics at Cornell University and a non-resident senior fellow at the Brookings Institution.
18
FRIDAY NOVEMBER 26, 2021
19
Energy
FRIDAY NOVEMBER 26, 2021
How far has Africa come with wind energy? By Mary-Anne
R
enewable energy sources in an effort to transition from fossil fuels to achieve a net zero emission in energy generation has become the next target for many countries across the world in fulfillment of the fight against climate change per the Paris Agreement and the UN SDGs. Renewable resources span from hydropower (electric energy from moving water), geothermal power (energy stored in rocks and fluids obtained from the heat below the earth surface formed as a result of decayed materials.), biomass (simply energy derived from plant/animal materials), wind energy and solar energy. It is however obvious that solar energy remains the most popularly spoken about renewable energy source on our continent, Africa due to the natural advantage the sun gives in its generation. A lot more investments have been made in favour of solar seeing supportive initiatives from some financial institutions such as Ecobank’s Green Climate Fund, and Stanbic Bank’s support for Green Enterprises programmes. It is worth noting that the financial investment support promised above are not limited
to solar energy projects alone but encourages initiatives that promote clean energy for sustainable development. This is why Africa must not only focus on solar but open up to the other green sources and may begin with wind in the immediate future. Africa has tapped not more than 1% of its wind energy. Meanwhile, the total wind energy potential on the continent alone is over 59,000 GW according to the latest wind resource data published in October 2020 by the World Bank’s International Finance Corporation, enough to power the continent’s energy demand 250 times and the coastal
lines can be one of the potential locations best suited for wind power turbines in wind energy generation. Countries like Kenya with its Lake Turkana Wind Farm generates about 300MW which can power over a million household is actually a private investment valued at about US$600m. Senegals Taiba N’Diaye wind farm produces 158MW of wind power has capacity to generate up to 400Gwh clean electricity annually increasing total power output by 15% for the country. South Africa has the most wind farms in Africa currently
owing many private wind farms such as the 140MW twin wind farm called the Khobab & Loeriesfontein supplying to the country’s national power grid. Its installation comprises of 122 wind turbine generators which currently powers over 200, 000 households in South Africa. The country boasts of yet another farm of same capacity, the Kangnas Wind Farm 140MW capacity generating more than 500,000MW/h per year provide electricity for over 150,000 households. If Africa wishes to meet its environmental pollution target per the Convention on Climate Change (Paris Agreement) as well has make a valuable contribution to the UN-SDGs then it must consider tapping into other sources of renewable energy of which wind energy is one of the cost effective potentials which is yet to grow on our continent and efforts through government policies and as part of private sector strategic decisions, research and education to drive attention to its potential in order to bring the global green environment target to a reality. Mary-Anne Corporate Energy
Communications
-
Kosmos Energy makes progress in oil production amidst COVID-19
M
r Joe Mensah, Senior Vice President and Head of Ghana Business Unit, Kosmos Energy, says the deepwater oil and gas exploration and production company made a steady leap in production despite the effects of the COVID-19 pandemic. The Senior Vice President,
speaking in an interview with the Ghana News Agency on the sidelines of the commissioning of the Kosmos Energy Hunger Relief project at the James Camp Prison, said: “We went through some struggles during the COVID-19 times, and now our production has been quite steady and running,” he said.
He said the Jubilee Field was now producing 80,000 barrels of oil per day and close to 30,000 barrels from TEN fields. He noted that for the next 10 years, Kosmos Energy intended to go into partnerships and invest about $4.2 billion, saying, “We're going to drill a lot more wells next year, which will further increase
production.” Kosmos Energy acquired an additional 18.0 per cent interest in the Jubilee field and an additional 11.0 per cent interest in the TEN fields in Ghana from Occidental Petroleum (OXY) for a purchase price of $550 million That, Mr Mensah said, would see a further surge in production, stressing that, “ it is an indication that we are going to be here for the long haul” The Senior Vice President said in addition, “we're going to take advantage of our gas, because the country has plenty of gas. We need to now work with government to consider the production of fertilizer with our gas.” He said with that, the needed urea could be gotten to complement agriculture as it has always been the mainstay of the country, contributing to about 20 per cent of the country’s Gross Domestic Product. GNA
20
Markets
FRIDAY NOVEMBER 26, 2021
WEEKLY MARKET REVIEW FOR WEEK ENDING NOVEMBER 19, 2021
CONTINUED ON PAGE 21
21
FRIDAY NOVEMBER 26, 2021
CONTINUED FROM PAGE 20
WEEKLY MARKET REVIEW FOR WEEK ENDING NOVEMBER 19, 2021
BUSINESS24.COM.GH
22
FRIDAY NOVEMBER 26, 2021
NO. B24 / 279 | NEWS FOR BUSINESS LEADERS
MONDAY MAY 3, 2021
FRIDAY NOVEMBER 26, 2021
GCB Classica Medal Golf competition to tee-off on December 4
G
CB Bank in collaboration with the Bok Nam Kim Golf Club is set to organize the maiden GCB Bank Classic Medal competition. The golf competition, which will tee off at exactly 6:30am on Saturday, 4th December at the Bok Nam Kim Golf Course, Airforce Officers Mess, is expected to attract over 80 golfers from around the country. The Managing Director of GCB Bank, Mr. Kofi Adomakoh, explained that GCB’s foray into Golf is to help promote the game in line with the Bank’s focus of supporting lesser-known sports. He added that the Bank will be sponsoring Golf Clinics to encourage staff to take up Golf as part of promoting a healthy lifestyle. Prizes will be awarded for the first three positions in the Men’s Categories A & B and Ladies’ competition. Prizes will also be awarded for longest drive and nearest to the pin.
Onix Accra Data Centre joins Elite Global Club of tier 4 data centres
T
he management team of the Onix Data Centres Limited (“Onix DC”)
platform, is pleased to announce that the Accra Data Centre has been certified a Tier 4 ‘as built’
facility by the Uptime Institute. The company Ngoya ETIX DC (Ghana) Limited trading as “ONIX” including its primary asset, the data centre, was acquired by AIIM and the ONIX team in February 2021 from ETIX. The certification is a major milestone in ONIX’s strategy to create a World Class hub in Ghana to service the local market, the greater West African market as well as the international market. The accreditation will satisfy the increasingly stringent requirements laid down by regulated entities such as banks, healthcare providers and certain arms of Government which manage sensitive information. The data centre comprises two modules. The first module is fully operational comprising 170 installed racks with 450KVA of compute power. The second module will have two and a half times the compute power of module one (over 1MVA) and is designed for the “Hyperscaler” that requires greater power density. This is scheduled for
completion in Q3 2022. The data centre is partly powered by the adjacent ONIX solar farm which provides exceptional climate and ESG credentials and further sets it apart from most other local and international data centres. The Tier 4 certification was overseen by ONIX’s technical partner CKR who are recognized as one of the leading data centre experts in Africa. Michael Nahon, CEO ONIX, commented: “I am extremely pleased that we have managed to achieve this milestone, which will now set us apart and allow us to service the market with full confidence. I commend CKR for their role in securing the Tier 4 status. The installation and commissioning of the Internet Exchange Point (IXP) allows ONIX to act as a regional connectivity hub.” The Global Data Center Authority’s “Uptime Institute” is responsible for the proprietary “Tier Standard System”.