Business24 Newspaper (May 11-2020) by Business24 Online

EDITION B24 | 42

MONDAY MAY 11, 2020

Haulage business sees ‘significant dormancy’

THEBUSINESS24ONLINE.NET

Gov’t to pay €25.7m to displaced persons in ECR projects MORE ON PAGE 3

NHIA pins 6.4% budget slash on ICT gains MORE ON PAGE 3

The Covid-19 crisis has caused about 80 percent dormancy in the haulage business

MORE ON PAGE 2

BY PATRICK PAINTSIL

The usual energy and bustle that one can witness at the Tema Port Transit Terminal has been downed by the coronavirus pandemic, which seems to be pulling the brakes on the haulage business. Shocks to supply chains and reduced industrial activities that have curtailed cargo traffic through the port mean there are fewer products to be moved by both transit and domestic hauliers, and this is impacting harshly on businesses on that side of the shipping value chain.

“There is significant dormancy within our sector, even though the few that are able to access cargo can still go on transit trips. Generally, the cargo isn’t easily available as it used to be and, as a result, we have a lot of our members just idling,” Ibrahim Musa, Executive Secretary of the Joint Association of Port Transport Union ( JAPTU)—a body of about 5,000 members consisting of nine Ghanaian transport associations including truck owners, truckers and hauling companies—told Business24 in an exclusive

Nsano receives payment service provider licence from Bank of Ghana MORE ON PAGE 25

Freighters push for suspension of UNIPASS at Takoradi Port MORE ON PAGE 7

ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

USD$1 =GH¢5.6896*

EXCHANGE RATE (BANK RATE)

USD$1 =GH¢5900.*

*POLICY RATE

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

6.6 % OF GDP

PROJECTED GDP GROWTH RATE PRIMARY BALANCE.

1.5% -1.1% OF GDP

AVERAGE PETROL & DIESEL PRICE:

GHc 5.13*

INTERNATIONAL MARKET BRENT CRUDE $/BARREL

29.15

NATURAL GAS $/MILLION BTUS

1.90

GOLD $/TROY OUNCE

1,717.86

CORN $/BUSHEL

329.50

COCOA $/METRIC TON

1,381

COFFEE $/POUND:

+5.70 ($108.30)

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

16.39

NEWS/EDITORIAL

MONDAY MAY 11, 2020

Subsrcibe thebusiness24online.net/subscribe

EDITORIAL

Wash your hands 2

Cover your cough 3

Enforce compliance to cargo sharing protocol to save local hauliers Haulage businesses are reeling from the harsh impact of the Covid-19 pandemic as disruptions to supply chains have cut down movable cargo. Operating at less than 20percent of their normal volumes, truckers are left idling at the various transit terminals. Their plight is further worsened by the noncompliance of their

Brought to you by

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

It however appears that some parties are not adhering to the agreed protocols, and that puts the Ghanaian transporter at a disadvantage. “When the cargo arrives, the people are looking for their compatriots to do the haulage,” Ibrahim Musa, president of the Joint Association of Port Transport Union, narrated to this newspaper, asking for speedy intervention from both the GPHA and the GSA.

“Without the enforcement of such strict cargo sharing mechanisms, Covid-19 becomes a much bigger enemy to us than it should be, he added. As the pandemic causes much pain to the haulage business, we urge the regulatory bodies to find an amicable solution to this problem.

Haulage business sees ‘significant dormancy’ (…CONTINUED FROM COVER )

Wear a mask

counterparts from the landlocked countries of Burkina Faso, Mali and Niger to a cargo-sharing deal which sought to promote fair competition in the trade. The protocol, which was negotiated by the Ghana Ports and Harbours Authority and the Ghana Shippers Authority, was to ensure that local hauliers could get a fair share of transit cargo cart to the landlocked countries.

interview. He added: “We are operating not more than 20 percent of our capacity currently compared to the virus-free period. We are caught between the devil and the hard place, but we are focused on the protocols that have been put in place to contain the virus, hoping that things return to normalcy soon.” In the meantime, their hope hangs on prudent measures that have been deployed by the Ghana Ports and Harbours Authority (GPHA) to facilitate trade at the ports which, according to Musa, was easing their pain. “The GPHA and GSA [Ghana Shippers’ Authority] have deployed certain protocols that allow agents and freight forwarders to access cargo as and when they are available. Our situation could have been worse if not for some of these arrangements,” Musa disclosed. Those interventions, he said, were borne out of

consultations with the GPHA and GSA. The plight of the Ghanaian hauliers is further worsened by the non-compliance of their counterparts from the landlocked countries of Burkina Faso, Mali and Niger with a cargo-sharing deal which sought to promote fair competition in the trade. “When transit cargo arrives at the ports, there is a 5050 sharing mechanism for transporters on each side of the divide. But as it stands, these arrangements are not been adhered to, and that puts the Ghanaian transporter under much bigger crisis. [Now] when the cargo arrives, the people are looking for their compatriots to do the haulage,” Musa narrated, asking for speedy intervention from both the GPHA and GSA. “Without the enforcement of such strict cargo-sharing mechanisms, Covid-19 becomes a much bigger enemy to us than it should be. When you have less cargo coming in as a result of the crisis and all of them are given to our counterparts to move, then it is a big problem.” Despite the unfavourable conditions they find

themselves in, the association has resolved not to lay off workers because they believe that the situation should not be an excuse to take such an action. Instead, they are poised to diversify their operations to, among others, include the

moving of cargo internally. Musa told Business24: “The hauliers will have to look elsewhere or within to see what cargo they can move around internally because the trucks, when parked for long, become even more expensive to maintain.”

DIGITAL NEWSPAPER

EXPAND YOUR REACH ADVERTISE WITH US TEL: +233 030 296 5297

www.thebusiness24online.net Business24 Ghana

MONDAY MAY 11, 2020

N EWS

Subsrcibe thebusiness24online.net/subscribe

Gov’t to pay €25.7m to displaced persons in ECR projects BY EUGENE DAVIS

Government intends to recompense persons who may be affected by works to be undertaken on the Eastern Corridor Road (ECR) projects. Construction of a 63.6km road connecting Tema Roundabout to Akosombo Junction is expected to begin this year and end by 2024, according to a parliamentary report. The construction works will require resettlement and movement of persons, and it is in this regard that government plans to pay €25.7m as compensation to persons who may be displaced. The amount is equal to 10 percent of the contract sum of €256m for the project. The funds will come from two facilities, consisting of an export credit agreement amounting to €195m as well as a term loan facility agreement of €60m between government of Ghana and KfW IPEX-Bank, and backed

by EH Credit Insurance cover. Parliament gave approval to the loan agreement before it adjourned. The Eastern Corridor Road is divided into seven lots. Lot 1 covers the stretch of road from Tema Roundabout to Akosombo Junction. The works include construction of three bridges, two interchanges, and 19 pedestrian bridges with accessibility for persons living with disability. The improvement of roads on the country’s eastern corridor is to provide accessibility and facilitate road transport for the socioeconomic development and the integration of Ghana with Burkina Faso, Mali and Niger. This will enable transport of goods to and from the port of Tema via the multimodal corridor including roads, lake transport and railroads, as well as fostering integration with the southern and northern parts of the

country. The project will create 1,000 direct jobs and a number of indirect jobs. Additionally, it will improve travel times and result in cost savings for businesses and people.

The corridor at present has no functional railway infrastructure, and several sections of the roads there are deteriorating, the parliamentary report said. This impedes accessibility

to and within the area. When completed, the road will enhance mobility and contribute to productivity and efficiency of the beneficiary communities.

NHIA pins 6.4% budget slash on ICT gains BY EUGENE DAVIS

The National Health Insurance Authority (NHIA) believes a reduction in its budget from GH¢2.5bn to GH¢2.3bn was largely due to efficiency gains made through the increased application of ICT to its operations. According to a report on the Proposed Formula for the Disbursement of the National Health Insurance Fund (NHIF) for 2020, the authority was allocated GH¢2.5bn in 2019 as opposed to GH¢2.3bn for this year, representing a 6.4 percent reduction. CEO for the authority Dr. Lydia Dsane-Selby told lawmakers following the approval of its budget that the cut was down to ICTrelated savings, adding they are desirous of making their operations as ICT-based as possible to reap more efficiency gains. Already, the mobile

Dr. Lydia Dsane-Selby expects the authority to go full digital in all its operations

membership renewal system, which is considered convenient for clients to access certain services of NHIA without visiting any of its offices, has seen its renewal rate increase to 71.2 percent as against the office renewal rate of 28.8 percent. The NHIA, as part of

data integration with other establishments, has integrated its data with the National Identification Authority (NIA) in a pilot phase. The CEO explained to Parliament that the integration will make it possible for clients to also access the services of

NHIA with their national identification cards. Other institutions such as the National Communications Authority (NCA) and the National Information Technology Agency (NITA), telecommunication companies and other service providers of the scheme

were urged by the legislature to cooperate effectively with NHIA to help improve service delivery to the Ghanaian people. The report also indicated that the NHIA relied on its Disaster Recovery Site as its main data centre because the actual one was outmoded and had challenges. However, officials of the authority revealed that an amount of GH¢21m has been allocated to upgrade the main data centre to make it functional. The NHIA has an active membership coverage of 12m, which constitutes approximately 40 percent of the estimated population of 30m for the year. The authority has set a target of increasing the membership coverage by devising strategies to be implemented in 2020. Membership of the scheme is expected to increase to about 45 percent of the estimated population.

MONDAY MAY 11, 2020

NEWS

Subsrcibe thebusiness24online.net/subscribe

Every month in lockdown costs Africa US$65.7bn—report BY BENSON AFFUL The Economic Commission for Africa (ECA) has estimated that a full onemonth lockdown across Africa would cost the continent about 2.5 percent of its annual Gross Domestic Product (GDP), equivalent to about US$65.7bn per month. This is “in addition to the wider external shock of lower commodity prices and investment flows,” the commission said in its report titled “COVID-19: Lockdown Exit Strategies for Africa”, which was issued on May 7. According to the report, businesses surveyed by ECA on average were operating at only 43 percent capacity between 14 and 20 April, though with larger firms reporting to operate at a slightly better capacity. The report cited the manufacturing, health, entertainment, utilities, transport and trade subsectors to be operating at the

lowest capacities. Localised or national lockdowns were in place in at least 42 African countries as of 30 April. Thirty-eight of these lockdowns had already been in place for at least 21 days, it found. Estimated case fatality rates for COVID-19 vary widely due to large differences in testing, reporting and

attribution across countries. As more data is collected, African countries can better ascertain the severity of population vulnerabilities, like tuberculosis or malnutrition, on COVID-19 mortality, the report added. The report said some of the challenges complained of by companies on the continent included a lack of operational cash flow

as well as the reduction of opportunities to meet new customers. Some companies also stated that their businesses were closed, in addition to a decline in workers’ productivity from working at home. During an online debate to launch the report, the ECA’s Executive Secretary, Vera

Songwe, said governments across the world are now confronted with the major challenge of putting in place appropriate exit strategies to come out of COVID-19 lockdown measures. She said any exit strategy will need to balance the preservation of lives while alleviating economic challenges and continuing to suppress the spread of the virus. In Ghana, for instance, the government lifted a 21-day lockdown on April 20 and has subsidised electricity and water consumption by households and businesses for the months of April to June, at a cost of GH¢1.3bn. In addition, it has made available GH¢600m to provide soft loans to small and medium-sized businesses. The funds are expected to support over 200,000 enterprises as part of the Coronavirus Alleviation Programme (CAP).

NAB resumes accreditation activities BY BENSON AFFUL The National Accreditation Board (NAB) has resumed all accreditation activities, including application and renewal of institutional accreditations, which were suspended when the country recorded its early coronavirus cases in March. “With reference to our letter dated March 17, 2020 on the suspension of our services due to the COVID-19 pandemic, we write to notify you on the resumption of all accreditation-related activities,” a letter to heads of tertiary institutions stated. Before the board suspended accreditation activities, some institutions that were scheduled for programme assessment exercises had their appointments abruptly terminated due to the pandemic. However, an official at NAB told Business24 that it has become necessary for the tertiary education regulator to resume activities so that institutions whose accreditations have expired can renew them and be able to issue certificates to graduating students in the coming months. “If activities are not resumed, many tertiary institutions, especially private ones, cannot issue valid certificates because

some of them need to renew their annual accreditations,” the official, who preferred not be named, said. The NAB in March this year suspended institutional accreditation services to all tertiary education institutions, a move meant to adhere to the restrictions that were imposed by President Nana Akufo-Addo to limit the spread of the coronavirus pandemic. By law, every tertiary institution is mandated to get institutional accreditation

as well as programme accreditation before it can operate. Presently, there are 180 accredited tertiary institutions in the country operating as public and private universities. Out of this number, only 16 are chartered degree-awarding universities, which by law have the power to confer degrees. The others are affiliates of chartered universities, which confer degrees on their behalf. The NAB has in recent

times charged the general public not to enrol in any tertiary institution that has not to been accredited by the board. Adhere to safety protocols The NAB stated in its letter that accreditation activities on campuses will be conducted with strict adherence to safety precautionary measures. It said institutions should ensure that social distancing protocols are observed. This means the exercise

should be done in a spacious environment with adequate spacing among panel members and school representatives. It also advised that there should be a restricted number of school representatives attending accreditation exercises conducted on campuses, and safety precautionary measures regarding wearing of face masks, hand-washing and hand-sanitising must be ensured.

MONDAY MAY 11, 2020

NEWS

Subsrcibe thebusiness24online.net/subscribe

Freighters push for suspension of UNIPASS at Takoradi Port Freight forwarders in the Western Regional capital Takoradi have expressed their displeasure about the lingering challenges with the new Integrated Customs Management System (ICUMS), otherwise known as UNIPASS, at the Takoradi Port. The freighters, on Thursday May 7, picketed the customs office of the Ghana Revenue Authority (GRA) in Takoradi to call for the immediate suspension of the UNIPASS system until the operators are able to fix problems with it. Mr. Paul Ato Bentil, an executive member of the Ghana Institute of Freight Forwarders (GIFF), said the UNIPASS system brought in to replace the existing vendors GCNet/WestBlue “has not given us any real value as was touted.” “It has really affected us in the sense that even the shipping lines and other stakeholders are having a lot of challenges. [Initially,] we felt it was just an ordinary glitch, but now we have noticed that it is taking a seed that is really worrying us. “For instance, if you send your declaration or CCVR, it was previously taking us

some short time [to process] on the GCNet/WestBlue system, but now it can even take more than three weeks and it will still be in the UNIPASS system.” Derick Prince Abodjan, the chairman of the Takoradi district of GIFF, urged government to temporarily suspend the UNIPASS system and restore the GCNet/ WestBlue system at the Takoradi Port, just as has been done at the Tema Port, while the challenges with the UNIPASS are fixed. “It is appropriate to go back to it for, say, three months [just as has been done in Tema] until all issues are solved,” he said. He added that: “All we are saying is that, if I have a machine that I’m working with and it takes me ten minutes to do a job and you bring me a new one and a better machine in this 21st century, but this machine is going to take me three hours to do the same job, then what are we talking about? Are you taking me back or into the future? “The government has to take a look at this. We the importers and the clearing agents in Takoradi are not happy. It is taking us long to clear, it is taking us more

time and more cost. Now if you happen to clear a vehicle on this UNIPASS, you get to the licensing office and it is not even in their system. “Our call on government is for government to suspend this UNIPASS system and then they should make it better and come back. Let’s use the GCNet because the government needs revenue and let’s give the government the revenue.” Minority pushes for temporary suspension The Minority in Parliament and policy think-tank Imani Africa have over the past weeks been calling for a suspension of the new

ICUMS/UNIPASS system to safeguard government revenue. Given the impact of the coronavirus pandemic, government has had to significantly reduce its revenue projections for the year. The country’s ports, however, are one of the largest revenue-generating areas that ought not to be “toyed” with, they said. Deputy Ranking Member on the Trade, Industry and Tourism Committee in Parliament, Yusif Sulemana, warned over a potential judgement debt by doing away with the current vendors.

On his part, a former Deputy Minister for Trade, Murtala Mohammed, noted that: “GCNet and West Blue are doing a tremendous job, so why will you even think of bringing in a private entity? It means all the successes we have chalked over the years will be thrown away. Let’s go and check if UNIPASS has the credibility to do what the government is asking them to do.” GCNet/WestBlue to the rescue in Tema GCNet/WestBlue earlier this month shut their systems to allow UNIPASS deploy its system fully per directives received from the Senior Minister, Yaw Osafo Maafo. However, for over two days freighters were unable to clear their goods. An Imani Africa analysis showed that Ghana earns about GH¢33m per day at its ports. Thus about GH¢66m was lost due to the challenges with the ICUMS/UNIPASS. The situation necessitated an emergency meeting between government and all stakeholders. At the end of the meeting, GCNet/ WestBlue were made to turn their systems back on to salvage the situation.

REAL ESTATE CORNER

MONDAY MAY 11, 2020

Subsrcibe thebusiness24online.net/subscribe

Hotels as the hot next big thing! BY JORGE OSORIO

any industries have been hit hard by the coronavirus pandemic, but one of the industries that has been hit hard the most is the hospitality and aviation industry. Airports, hotels and resorts have become empty as a result of travel bans, lockdown and other restrictions on movement have resulted in empty airports, hotels and resorts, all over the world. This pandemic has compelled millions of people to forfeit their international travels for work, and even leisure or vacation. With all these in mind, many will ask, “why should one invest in the hospitality industry at this time or why is investing in the hospitality industry still a good idea?” Just read on, at the end of this article, you will understand why investing in the hospitality industry at this time is considered a good idea. As I explained a few weeks ago, this is the best time to invest, precisely on the current economic recession. The president on Sunday lifted the partial lockdown on Accra and some parts of

the country; making Ghana one of the first countries worldwide to ease restrictions on movement. By history we know that the economy will recover although it might be slow. Countries will not be locked down forever, companies are finding safer and smarter ways to run and before long, life will go back to normalcy. For instance, Emirates Airlines became the first commercial airline to introduce on-site rapid COVID-19 testing to its passengers. We will soon see many other companies innovate and put measures in place to boost consumer confidence and patronage, and given the blow the pandemic has dealt with the hotel industry, we can be certain that it will not be left behind. Now, let us narrow down to Ghana’s hotel industry, particularly in Accra. According to a report that we have just received from HTI, our preferred partner in feasibility studies when it comes to hospitality, and data gotten from STR, a global hospitality data analytics firm, the average annual international hotel occupancy rate in Accra grew 22% between 2016 and 2019 and

stood at 66%. This growth despite the increased number of hotels in Accra, like Kempinski, Marriott, Kwarleyz, and Ibis’ rebranding. Average daily rates in Accra, for the same period, increased by 23%, from 714 to 877, and the average revenue per available room (RevPAR) increased by amazing 55% to 578. (A hotel’s RevPAR is determined by dividing its total room revenue by the total number of available rooms). So, why is Accra one of the best hotel market performers in Africa? This is because of the large demand and few existing quality international hotels. STR has classified Accra as one of eight cities in Africa with the highest RevPAR and one of three in West Africa, in addition to Abuja and Dakar. Cities such as Nairobi and Johannesburg with significantly higher levels of investment in tourism development and infrastructure, were ranked with lower RevPAR (under US$60). This obviously implies that, there is a lot of room for growth in Accra’s hotel

industry to provide a wider range of options that suit different needs and budgets. As Ghana continues to explore its untapped tourism potential, investment in infrastructure such as hotels, will undoubtedly grow exponentially, beginning in the country’s capital. With this in mind, I want us to consider three major important reasons why investing in a hotel in Accra in the best investment today. First and foremost, there are different kinds and sizes of hotels, from small boutique establishments to global hotel chains. As such, a hotel investment may not be as out of reach or beyond your budget as you might think, especially through a smart investment. This usually involves a collective investment in a single, professionally managed hotel property. A smart hotel investment is led by a clear strategy to maximise value, and increase a hotel’s income-earning ability and profitability to investors. Secondly, unlike other types of commercial real estate, like residential property or retail spaces, hotels can adjust their room rates daily.

There is no fixed mediumto-long-term lease: each night is an opportunity to increase revenue by raising prices to match demand. Although this means that the hotel industry is usually one of the first to suffer in an economic downturn (as is the case presently), it also means that it has the capacity to recover quicker than other industries. Finally, hotels are a tangible asset to invest in. Unlike shares and bonds, they can be experienced by both investors and patrons alike. They are also unique from other commercial real estate because of their operational nature, which offers the flexibility to enhance value and sustain customer loyalty. And let’s face it, it’s sexy to say to your friends and network that you own or partially own a notorious hotel, right? To conclude, please note that hotels typically have three major stakeholders – an owner, an operator and a brand (in some cases brand and operator may be the same). For example, Devtraco Hospitality Holdings (operator), is constructing its first hotel in Accra in partnership with an international hotelier (brand) and offering Ghanaian individuals the chance to invest in this development (owner). For now, this project is called the Pelican Hotel but very soon we will disclose the name of the international brand. Investors will have the added benefit of enjoying complementary services in addition to a guaranteed return on their investment. I urge you to explore and give some thought to investing in hotels in order to reap great rewards when business is booming. As always, I will be happy to answer any questions you might have via email to jorge. osorio@DevtracoGroup.com

Jorge Osorio

MONDAY MAY 11, 2020

BANKING

MONDAY MAY 11, 2020

Subsrcibe thebusiness24online.net/subscribe

Banking in the next decade: ‘Unusual’ banking in the COVID-19 era BY EBENEZER ASUMANG “It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country.” Adam Smith – “The Father of Economics”

anks worldwide have taken various proactive measures as ways to curtail the spread of COVID-19. Series of actions include inter alia, suspending largescale gatherings, segregating teams, alternating staff remotely, establishing a central task force and refreshing external-vendorinteraction policies. Beyond these immediate and basic actions however, banks should prioritize measures tailored to the particular combination of biological and market stresses and how they affect the global market. These points draw on the experience of China, Italy, and several other countries, acknowledging that differences exist in economic and political structures, healthcare systems, social and cultural norms among these countries. 1. Make essential banking services available to retail customers. People will still need essential banking services through these trying times. Banks should continue branch and ATM operations with the appropriate safeguards, while encouraging widespread use of remote services. This approach will account for needs and preferences across all consumer segments, including the older part of the population that is both more vulnerable to COVID-19 and less likely to adopt digital channels. Institutions can continually monitor and assess consumer demand for inperson services to adjust capacity and minimize risks. For example, in some areas of China, banks observed limited demand for services other than ATM access and so were able to close most of their branch locations without disrupting customer

service. Banks in several regions, including Hong Kong, Italy, and Germany, have also closed (some) branches restrict staffing and hours when the risk to the public and employees was deemed to outweigh the need to maintain the branch. In Korea, which has adopted aggressive virus testing, branches have tended to remain open unless active cases are detected. 2. Digital offerings with employee support and safe environment. At the same time, banks should encourage and support customers to use digital and other virtual channels, wherever possible. To encourage customers to use existing remote channels and digital products, institutions can launch positive and safetyoriented messaging aimed at reducing reliance on branches for services that are digitally available, while also providing tutorials online and by phone and increasing remote support options. Banks can also enhance their current digital offerings, identifying key functionalities that can be improved quickly; for example, they can increase the limit for online activities, and they can simplify the procedure to reset passwords. Institutions in both Italy and China have

found that many people readily used remote channels and digital offerings. 3. Creating unusual staffing work schedules for sustainability As a top priority, nearly all firms have already taken proactive measures to protect their people and to contain the spread of COVID-19. These include restricting travel and taking other prevention-oriented policies, emphasizing workplace hygiene, offering alternative ways of working, and initiating proactive communication. However, health measures to contain propagation may take months, not days or weeks, as we’ve seen in China. Therefore, banks will need to make sure the measures they have put in place are sustainable and designed to get the best out of their people, while preserving their mental and financial well-being over such a period. Further, specific consideration will be required for contingent and contract workers, who might be most immediately impacted. Because banks are providers of essential services to customers and communities, and the markets more broadly, they will need to adopt a carefully segmented approach to workforce

management, informed by service criticality and exposure risk. Particularly careful attention is required for those in the workforce who provide critical services that are either customer facing or that require infrastructure only available at work premises. 4. Fulfilling an unusual CSR to support households and businesses with credit. Many households and businesses will be affected negatively by the unprecedented nature and extent of the current health and safety measures. There are individuals who will likely need further support from banks to support day-to-day liquidity needs through credit. This is as a result of crunching resulting from the current pandemic. The stress will be especially acute for those who are already in debt. Even in places where household savings rates are high, such as in some Asian countries, a greater connection to global markets means more households and businesses are likely to be affected. Among businesses, the impact will vary significantly by sector and by company. It seems quite likely at this point that travel and tourism, entertainment, automotive, oil and gas, and healthcare

industries will be most affected due to disruptions in supply and demand. Within these sectors, smaller businesses, such as those that cannot shift to remote work and online delivery and those catering to the most vulnerable segments, are likely to be more affected. From a credit perspective, banks should rapidly identify most affected sectors and customers to understand how they can be most supportive to their clients and community. Supporting clients in these critical times will deepen customer relationships and reaffirm the role of banks as key enablers of the economy.

Ebenezer ASUMANG (CGIA) worked in mainstream banking and NBFIs. He is a Google Certified Digital Marketer, an Author and a Chartered member of the CGIA Institute, USA. www.ebenezerasumang. com /eben_asumang@yahoo. com/0242339145 LinkedIn – Ebenezer Asumang Facebook – Ebenezer Asare Asumang Twitter - @kwabenasumang

MONDAY MAY 11, 2020

F E AT U R E

MONDAY MAY 11, 2020

Subsrcibe thebusiness24online.net/subscribe

Will the Covid-19 costs be another budget ‘footnote’? BY SETH E. TERKPER

1. Introduction A critical question is whether the exceptional expenditures relating to COVID-19 or Corona Virus will be recorded as mere (a) “footnote”; (b) Budget Appendix item; (c) “belowthe-line” item; and (d) isolated from so-called “headline” budget deficit and public debt in Ghana’s fiscal records. If this continues, it will be the fourth year of departing from the all-inclusive approach that Ghana has used since it started streamlining its fiscal records from the late 1980s and 1990s—when consistent fiscal records are available for verification. It will rekindle the debate over whether the Government of Ghana (GOG) has been presenting parallel number to its citizens and others. This significant departure from Ghana’s “all-inclusive” approach to adding all “exceptional” expenditures to the substantive fiscal record. A January 2020 article [Reading IMF Between the Lines] and earlier ones argue that this results in using parallel figures to show impressive and accelerated, yet complacent, pace of fiscal consolidation to citizens while endorsing worse performances to the international community. GOG does not follow recent IMF lead in adding all “exceptional” expenses to arrears, payments, budget deficit, borrowing and public debt. For example, the Statements to Parliament in March and April 2020 to seek approval for the COVID-19 RCF loan gave the fiscal deficit as 4.7 percent. This consistently excludes the financial and energy sector bailout costs or arrears that are footnotes and appendix memoranda in the Budgets. However, GOG endorsed the IMF Board’s disclosure of provisional actual and estimated 7 to 9 percent fiscal deficit, with “of which [o/w]” bylines, in both IMF RCF and Article IV statements. 2. Fiscal accounting under an IMF Program The GOG logic means it will treat the recent IMF’s US$1 billion Rapid Credit Facility (RCF) for “exceptional” COVID-19 expenditures as footnote, appendix, or memo items. The precedents are in 2017 Budget, which did not have an estimate for energy and financial sector arrears or bailout costs. In 2018 and 2019, GOG showed the bank bailout costs as memos and footnotes, not as substantive items, in the Budgets and Public Debt Report, with virtually no links to the dedicated ESLA flows. In the 2019 Supplementary Budget, GOG showed the energy sector cost as amortization (i.e., potential debt service) without increasing arrears. The change from “all-inclusive”

fiscal rule, used since the 1980s, occurred under the recent 2014 ECF Program under two (2) governments. The implications for the consistency rule or standard in fiscal and financial accounting include an appearance of treating similar exceptional items under the same Program differently: (a) wage overruns relating to the Single-Spine Salary Scheme (SSSS); (b) Ebola virus costs; (c) impact of two Global (Financial) Crises (i.e., 2008 and 2014) without relief or loan; and (d) two-and-half years of power crisis caused by damage to the West Africa Gas Pipeline—over which GOG did not have any controls. 3.Contrived deficit, debt, and fiscal consolidation As Table 1 shows, the impressive budget outcomes from 2017 to date are based on a narrow definition of budget deficit or fiscal balances, which shows the exceptional financial bailout costs as an Appendix item. The narrow deficit and debt basis, and other factors, give impressive pre-COVID fiscal situation but it did not hide a worse performance by showing the true deficit in the Budget. Fiscal balances: the narrow and broad fiscal balances in the Budget show substantial differences: 4.8 percent (2017: no bailout provision); 3.9 versus 7.1 percent (2018); 4.7 versus 5.2 percent (2019); and projected 4.7 percent. No bailout costs in 2017 even though ESLA generated about Ghc3 billion in 2017 and, by end-2016, NDC used Ghc250 million to inject cash and restructure Ghc2.2 billion of banking sector costs without loss of jobs and depositors’ funds or extra debt burden. Energy sector arrears as amortization: The 2019 Mid-Year Review and 2020 Budget have two major anomalies: no provision for bailout costs and energy sector arrears added to amortization (debt service) without increasing arrears, borrowing, public debt. The practice since the 1980s is to add all exceptional costs (e.g., wage overruns due to Single Spine; HIPC and Divestiture flows, etc) to cash or accrued expenditures in calculating the fiscal deficit. The current government has not followed this practice from 2017 to date. 4. Financing the Budget: problem before COVID-19

Despite a boost from two (2) more oil fields, the current administration has not shown a better revenue generation or expenditure management record than its

Table 1: Fiscal deficit (excluding exceptional expenditures)

Table 2: Revenue and expenditure performance

Table 3: Elevated fiscal deficit or balance position

Table 4: Elevated Debt situation

Table 5: Total Tax revenue and spending constraints

Sources: Budgets and MOF Website; 2016

predecessor. While oil revenues have quadrupled since 2017, the effect of a sluggish performance of non-oil revenues leaves the peak revenue performance still at end-2015 and 2016 at 17.8 and 15.7 percent of GDP. Similarly, the Minister for Finance has corrected the fiscal “offset” of 2.3

percent. Therefore, as Tables 2 and 3show, the end-2016 expenditure levels will be lower and, therefore, expenditures, deficits, and debt show worse fiscal outcomes from 2017 to date. 5.IMF shows worse fiscal balances than GOG

MONDAY MAY 11, 2020

F E AT U R E

(…CONTINUED FROM PAGE 12 )

Table 3 shows that the IMF differs from GOG in recent analysis (Article IV and RCF-COVID-19) by including the exceptional costs in fiscal balances and public debt. It shows an elevated deficit position with the energy and bank bailout costs and higher COVID-19 current and projected expenditures—besides 2017 but without provision for exceptional costs. 6. Public debt has not improved since end-201 Table 4 shows that the borrowing to finance an expanded expenditure program is taking a toll—ahead of increased borrowing in 2020 to cover COVID-19 and election costs. The risks confronting the country includes committed loans, contingent liabilities and, as noted, off-budget treatment of some expenditures and debt. GOG has not officially revised its estimate of public debt for end-2020 and beyond but IMF RCF shows them as 69 percent (2020) and 67.2 percent (2021)—an upward revision from its December 2019 Article IV estimates of 63.3 and 63.1 percent respectively. The rising debt and less declining revenue will make it difficult for GOG

to meet its debt service commitments promptly. As Table 5 shows, in 2019, the country used over 98 percent of tax revenues to meet two (2) statutory and discretionary commitments: interest and personal emoluments (i.e., wages, salaries, and allowances) It is important to note that the use of “broad” and “narrow” expenditures distorts a smooth comparison. On public debt, the Fund notes in its Debt Sustainability Analysis (DSA) on Ghana, in the 2019 Article IV report: “The financial sector clean -up costs and the materialization [i.e., crystallization] of contingent liabilities in the energy sector in 2018-19 highlight the risk from offbalance sheet liabilities” (emphasis added). As the Fund notes, these could increase costs, including: bank bailout [4.6 percent of GDP in 201819; energy sector [1 percent annually to 2025, in Table 3] costs, after ESLA absorption; guaranteed SOE debt; and 35 percent of PPP costs. 7. Underlying fiscal challenges make COVID-19 a hurdle The question on proper fiscal treatment is important since, at the request of GOG, the US$1 billion RCF loan is classified as budget support— not conventional Balance of Payment (BOP) support that the IMF provides to central banks (i.e., BOG) to beef up reserves and support the local

Subsrcibe thebusiness24online.net/subscribe

currency. The Staff Appraisal part of the IMF Board Statement notes (par. 25 page 12): “25. Staff support the authorities’ request for a disbursement under the Rapid Credit Facility [RCF] in the amount of SDR 738 million (100 percent of {Ghana’s} quota]. Given the large fiscal financing gap, staff also supports the request that the disbursement be made directly in theform of budget support.” (some emphasis added). It continues to emphasize the importance of approving the facility to fill the fiscal gap, of which does not appear to be related to the COVID-19 crisis. “The disbursement under the RCF would allow to close the fiscal financing gap together with other expected exceptional financing from other multilateral institutions, savings from government expenditure switching and cuts, withdrawals from the oil fund, and additional domestic debt issuances.” (emphasis added). The toll COVID-19 toll on human and budget or fiscal costs is exceptional, including travel bans, border closures, quarantines, lockdowns, and loss of jobs. The narrative suggests that it cannot be a trivial footnote in history—a fact that includes the loans (e.g., World Bank and IMF), donations, taxes

MONDAY MAY 11, 2020

(including petroleum revenues) and debt that we will throw at it. 8. Conclusion Question is if Ghana’s Budget will also refrain from recent practice and not classify the US$1 billion IMF facility and other loans, drawdown of the Stabilization Fund, and donations as “fiscal footnotes”. The related expenses include personnel protection equipment (PPEs), frontline and other costs in community health facilities, subsidies for utilities, security expenses, and feeding costs. The departure from the “all-inclusive” approach will not serve the narrative well for history. The term “one-time” cost is meaningless since these substantive expenses have become normal in year, since 2017 and earlier. Further, the Tables show that estimates of the energy and financial sector costs alone average 1-3 percent annually to 2025. Hence, it is ridiculous to base the national fiscal data on a narrow definition of deficits, financing, and public debt. It leads to the type of complacency that makes a country, with the promise of more petroleum flows in the future, spend those resources and even borrow huge amounts to satisfy unsustainable consumption expenditure programs—often as untargeted social intervention policies.

MONDAY MAY 11, 2020

TO U R I S M

Subsrcibe thebusiness24online.net/subscribe

MONDAY MAY 11, 2020

Coronavirus-Africa/Middle East: International tourist numbers could fall 60-80% in 2020, UNWTO reports

nternational tourism down 22% in Q1 and could decline by 60-80% over the whole year; 67 million fewer international tourists up to March translates into US$80 billion in lost exports; UNWTO has outlined three possible future scenarios depending on how the crisis unfolds. The COVID-19 pandemic has caused a 22% fall in international tourist arrivals during the first quarter of 2020, the latest data from the World Tourism Organization (UNWTO) shows. According to the United Nations specialized agency, the crisis could lead to an annual decline of between 60% and 80% when compared with 2019 figures. This places millions of livelihoods at risk and threatens to roll back progress made in advancing the Sustainable Development Goals (SDGs). UNWTO Secretary-General Zurab Pololikashvili said: “The world is facing an unprecedented health and economic crisis. Tourism has been hit hard, with millions of jobs at risk in one of the most labourintensive sectors of the economy. Tourism has been hit hard, with millions of jobs at risk in one of the most labour-intensive sectors of the

economy Available data reported by destinations point to a 22% decline in arrivals in the first three months of the year, according to the latest UNWTO World Tourism Barometer. Arrivals in March dropped sharply by 57% following the start of a lockdown in many countries, as well as the widespread introduction of travel restrictions and the closure of airports and national borders. This translates into a loss of 67 million international arrivals and about US$80 billion in receipts (exports from tourism). Although Asia and the Pacific shows the highest impact in relative and absolute terms (-33 million arrivals), the impact in Europe, though lower in percentage, is quite high in volume (-22 million). International Tourism 2020 Scenarios Prospects for the year have been downgraded several times since the outbreak and uncertainty continues to dominate. Current scenarios point to possible declines in arrivals of 58% to 78% for the year. These depend on the speed of containment and the

duration of travel restrictions and shutdown of borders. The following scenarios for 2020 are based on three possible dates for the gradual opening up of international borders. • Scenario 1 (-58%) based on the gradual opening of international borders and easing of travel restrictions in early July • Scenario 2 (-70%) based on the gradual opening of international borders and easing of travel restrictions in early September • Scenario 3 (-78%) based on the gradual opening of international borders and easing of travel restrictions only in early December. • Under these scenarios, the impact of the loss of demand in international travel could translate into: • Loss of 850 million to 1.1 billion international tourists • Loss of US$910 billion to US$1.2 trillion in export revenues from tourism • 100 to 120 million direct tourism jobs at risk This is by far the worst crisis that international tourism has faced since

records began (1950). The impact will be felt to varying degrees in the different global regions and at overlapping times, with Asia and the Pacific expected to rebound first. Experts see recovery in 2021 Domestic demand is expected to recover faster than international demand according to the UNWTO Panel of Experts survey. The majority expects to see signs of recovery by the final quarter of 2020 but mostly in 2021. Based on previous crises, leisure travel is expected to recover quicker, particularly travel for visiting friends and relatives, than business travel. The estimates regarding the recovery of international travel is more positive in Africa and the Middle East with most experts foreseeing recovery still in 2020. Experts in the Americas are the least optimistic and least likely to believe in recovery in 2020, while in Europe and Asia the outlook is mixed, with half of the experts expecting to see recovery within this year.

MONDAY MAY 11, 2020

AVIATION WITH DOMINICK ANDOH

Subsrcibe thebusiness24online.net/subscribe

MONDAY MAY 11, 2020

COVID-19 Outbreak: KLM reports €275m Q1 loss KLM has reported a first quarter loss of €275 million largely as a consequence of the Covid-19 outbreak. The record loss is € 228 higher than the €47 million loss recorded by the Dutch carrier within the same period last year. KLM President & CEO Pieter Elbers notes that the airline is currently going through a very difficult storm. “KLM is currently navigating a storm of unprecedented severity, as reflected in the figures for the first quarter of 2020. While the first two months started positively, the downturn from the start of March has been enormous. In the course of March, most of the fleet was grounded and the number of flights operated was reduced to less than 10% compared to the situation before Covid-19.

“At the same time, we are proud that – as KLM – we have in recent weeks contributed significantly towards repatriating hundreds of thousands of Dutch citizens from elsewhere in the world, as well as carrying essential medical relief supplies to the

Netherlands by operating (addition) cargo flights.” He added that: “In recent weeks, KLM has adopted numerous measures in an effort to compensate for the consequence of this crisis in relation to the medical, operational, personnel and financial fields. This week, a number of initial flights were cautiously added and supplementary measures were taken in relation to facial protection to additionally guarantee the safety of both customers and staff. “As a result, KLM is now operating 15% of its original scheduled network. KLM is now also taking all possible measures to be in a position to once again operate a large proportion of its network later this year. Expectations are that it will nonetheless take a long time for KLM and Transavia to recover.”

South African court halts Turkish Airlines to layoffs at ailing airline SAA resume flights in June South Africa’s Labour Court ordered a halt to layoffs at ailing South African Airways (SAA) on Friday, siding with two trade unions who had argued that the airline’s administrators had acted unfairly. The decision throws efforts to rescue SAA into greater disarray after the administrators said the airline had run out of cash and the minister responsible for SAA criticised their efforts to rescue the company. State-owned SAA has been fighting for its survival since entering a form of bankruptcy protection in December, with its fortunes deteriorating further when the coronavirus pandemic forced it to halt all commercial passenger flights and the government said it would not provide further funding. The administrators have until the end of the month to draft a rescue plan for SAA but have told creditors that a wind-down or liquidation are likely outcomes. Public Enterprises Minister Pravin Gordhan said on Wednesday that the government wanted to avoid SAA being liquidated and preferred to see it restructured into a new airline. The administrators started consultations with unions in

March about layoffs, but two unions - the National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) - said those consultations should wait until the administrators had presented a business rescue plan. The Labour Court sided with the unions, ruling that the layoff notices were “procedurally unfair” without the rescue plan having been published and ordering the administrators to withdraw the notices. Administrators are still permitted to offer voluntary severance packages and employees can accept them, the court said. The administrators, who had suspended a deadline for staff to agree to layoff terms while the court made its decision, said they were considering their next steps.

NUMSA and SACCA welcomed the judgment and said they were working on their own turnaround plan for SAA. Gordhan said in a statement that his ministry’s lawyers would study the ruling to assess the implications for rescue efforts. SAA has not made a profit since 2011 and has received bailouts worth more than 20 billion rand ($1.1 billion) over the past three years, a major drain on public resources alongside struggling state utility Eskom at a time of weak economic growth. The airline said on Friday that it would continue repatriation flights “during the month of May and beyond” and that it was in talks with officials on places where South Africans might be stranded abroad. (Reuters)

Looking to restart domestic and international flights after a suspension due to coronavirus, Turkish Airlines has drafted a flight plan for June, July, and August. Turkey’s national flag carrier will resume domestic flights in June and reintroduce international flights gradually, said the sources, who spoke anonymously due to restrictions on speaking to the media. According to the threemonth flight plan, starting in June Turkish Airlines will fly to 22 destinations in 19 countries, including Canada, Kazakhstan, Afghanistan, Japan, China, South Korea, Singapore, Denmark, Sweden, Germany, Norway, Austria, the Netherlands, Belgium, Belarus, Israel, Kuwait, Georgia, and

Lebanon, with a weekly frequency of 75 flights. The airline is projected to operate 60% of domestic flights to all destinations, then to add destinations in July and August. The number of destinations and flight frequency on international routes will rise to 103 and 572, respectively, in July, and to 160 and 937 in August. Turkish Airlines had suspended all domestic or international flights until May 28 as a public safety measure against the novel coronavirus (COVID-19) pandemic. Aviation is among the industries hardest hit by the pandemic, which has struck 185 countries and regions since emerging in China last December (hurriyetdailynews).

MONDAY MAY 11, 2020

AG R I B U S I N E S S

Subsrcibe thebusiness24online.net/subscribe

MONDAY MAY 11, 2020

COVID-19, Lockdowns and Food Production JANET AWOPOLE YEPAKEH TIAH AND VINCENT AMANOR-BOADU

ithout knocking, a novel virus entered the lives of Ghanaians – and others the world over – at the beginning of the year, just as farmers were getting ready to celebrate the end of harmattan and begin their crop production plans. Unlike other countries, the Ghana Government was proactive in leveraging available science to develop and implement policies that have so far, knock on wood, prevented Ghana from experiencing the devastating human tragedy seen elsewhere. Although farmers and others in the food supply chain were excluded from the mandatory stay-in-place policy (lockdown), the risks of infection have caused many actors in the food supply chain to voluntarily curtail their activities. When market women from Accra or Kumasi do not go to Techiman or Mankesim to purchase food products, not only is this a direct loss to farmers, but the livelihoods of the market women, the drivers, the porters, and all who contribute to getting that food to consumers in markets in our cities. Scientists rightly tell us that until there is a COVID-19 vaccine, it is prudent to reduce infections by enforcing social distancing. An alternative to social distancing is testing everyone, and isolating those who test positive. Unfortunately, this is too expensive, grossly impractical and utterly ineffective. Testing negative today does not mean you will not test positive tomorrow or the day after. Given this reality, people must assume they are susceptible to being infected, and everyone they encounter outside their immediate household is infected. When we live by this assumption, social distancing is not an imposition by the government, it is self-preservation and common sense. The question arising in farming communities is how crop production is going to be done this year given COVID. First, farmers are not included in the mandatory lockdown policy. So, that is not where the problem is. The problem is getting workers to help with land preparation and planting, while ensuring their safety as well as the farmer’s. The recommended safe distance is six feet (two meters). Farmers planning on using non-family members for labor this planting season need to have this in mind for their own safety and that of their workers. They should start with identifying how many workers they need based on their land area. Next, they should rethink how they organize their hired labor to prepare the land and plant seeds with safety from COVID in mind. When weeding, farmers may place workers at least six feet from each other, and instruct them to move in a single direction, maintaining six feet

between each other at all times. That means, they should weed from right to left (only because most people are right-handed) and move forward in a way that ensures they are six feet from each other at all times. In large plots, it may be more effective to organize the workers into small groups of two or three and assign them a plot area to work in ways that maintains their six feet separation. Once they get to the point where they have less area to clear than can accommodate more than one person with six feet separation, all workers but one leave, and the last worker finishes the remaining area. The same approach is used when seeding. Usually, someone is making holes, and another is putting the seeds or plantlet in them. Using the six feet separation rule, the person making holes starts ahead of the person seeding, and maintains at least six feet distance from each other. When it comes to refreshments, each worker should be provided their own water in any format practical for the farmer hiring them. The important thing to think about is ensuring people are not sharing cups or touching the same containers. The farmer should provide a hand washing station, with soap and water and paper napkins for workers to wash and dry their hands. Meals should be served and placed such that there is no contact between the server and the recipient. And people may eat together, as long as they

are sitting at least six feet from each other. The suggested processes challenge our normal communal encounters, but these are not normal times. Staying healthy and alive allows us to return to our normal lives later. Granted, doing these will increase labor cost, but this will be less than the cost of one or more workers falling sick. Let us call it the cost of self-preservation. We recommend using this approach throughout the season, from weeding and fertilizing, through to harvesting. Once a vaccine has been found and community members have been vaccinated, life can return to normal. The good news is farmers will know when to return to normal when they have been vaccinated. At that time, they can confirm people they are hiring have also been vaccinated, and use this to complete their hiring to minimize potential seed of the but risks. The foregoing is what farmers can do to protect themselves, their workers, and their community. What can the government do? With the major seed distributors in cities under lockdown, government should ensure adequate seeds are available at seed centers around the country. Additionally, fertilizers and chemicals, cutlasses and hoes, and others inputs must be made available as close as possible to farmers, and in so reducing travel-related risks. Extension services may use local radio to provide information

on crop production during this COVID period. Without knowing when a vaccine will be available, government must start planning and putting resources aside to purchase not only grains, but roots, fruits and vegetables that are produced this year in case lockdowns are still in force when these crops are harvested. This could provide the opportunity to invest in effective storage and processing facilities to ensure the viability of farmers during the unfolding hard times, and into the future. COVID is going to change how we farm in one form or another. The primary focus now should be on life and its preservation through minimizing infection risk. The ideas presented here are aimed at contributing to this primary objective. They are the first steps towards ensuring COVID does not limit Ghanaian farmers’ continued contributions to the country’s food security and the wellbeing of its rural communities.

Janet A.Y. Tiah is a Research Associate at USAID-METSS, and Vincent Amanor-Boadu is an agribusiness economics and management professor at Kansas State University and principal investigator of USAID-METSS. Disclaimer: The institutions we work for do not necessarily share the opinions expressed in this paper and the authors are wholly responsible for all errors and omissions.

MONDAY MAY 11, 2020

N E WS

Subsrcibe thebusiness24online.net/subscribe

MONDAY MAY 11, 2020

GARDJA launches advocacy initiative on cashew sector BY REUBEN QUAINO

The Ghana Agricultural and Rural Development Journalists Association (GARDJA), the umbrella body of agricultural journalists in the country, has launched an advocacy initiative to help create a sustainable cashew sector in Ghana. As part of this initiative, GARDJA will work with various partners to increase cashew related visibility in the Ghanaian media, as well as strengthen capacities of media stakeholders so they can put cashew issues at the fore front of media and political discussions. The initiative will also seek to bring to the fore issues around the current state of local processing of cashew and provide answers to questions on how an enabling environment for the sector can be created. “Overall, the objective of this collaboration is to strengthen and build the technical capacities of jour-

nalists and editors, as well as other relevant media stakeholders on the cashew value chain through training, field visits, and support for the publication of cashew related stories,” president of GARDJA, Richmond Frimpong, said at the launch event. “As an association of more than 200 journalists and communication experts within the agricultural value chain, it is our hope at GARDJA that this initiative will go a long way to help create a sustainable cashew sector that both supports good quality livelihoods for cashew farmers, and improve upon the Ghanaian economy,” he added. Cashew is increasingly becoming a key agricultural export commodity, raking in millions of dollars for the country’s economy. According to the Ghana Export Promotion Authority (GEPA), the country earned $981 million from the export of cashew in 2016, making it one of the leading agricultur-

al export commodities after cocoa. The crop is currently grown on more than 89,000 hectares of farmlands across the country, creating an estimated 40,000 jobs in production and even more in processing and logistics. Ghana has the capacity to

grow more cashew because of its potential to adapt to climate change effects, and its profitability. But according to the GARDJA boss, this possible expansion is being hindered by a number of challenges including difficulty in accessing finance, weak or-

ganisation of stakeholders, underexploited potential of local processing, low yields and insufficient access to improved planting material, as well the overall absence of an enabling policy environment. He indicated: “Ghana has the capacity to grow more cashew because of its potential to adapt to climate change effects, and its profitability but this possible expansion is being hindered by these number of challenges.” Mr. Frimpong said information on agronomic practices of cashew, farmer-related activities, organisation of stakeholders, prices, climate change adaptation and mitigation, among others, will be disseminated to journalists. “We look forward to working with various stakeholders including the Ministry of Food and Agriculture, cashew farmers, cashew processers, among others to make this initiative as success for the benefit of mother Ghana,” he noted.

Covid-19: Microfin Rural Bank donates relief items to 300 savings groups Microfin Rural Bank (MRB), located at Gomoa Pomadze in the Central Region, has presented some personal protective and safety items to the bank’s 300 savings groups as part of efforts to keep their customers safe and secured during the coronavirus pandemic. The bank donated Veronica buckets, hand sanitisers, tissues, nose masks, gallons of detergents and other items to the leadership of all the groups that are based in several communities within its operational areas. Acting General Manager of MRB, Samuel Bentum, indicated that the gesture was the bank’s way of ensuring the safety and wellbeing of their clients and customers amid the coronavirus crisis. “A lot of measures have been put in place to protect by institutions to curtail the spread of the virus and as a bank, we are adhering strictly to them. In doing so, we thought it wise to lend our support to our customers—specifically the over 300 savings groups that do business with us— to keep them safe and protected. The ideal means of protecting oneself from

the virus include washing of hands frequently under running water, wearing of nose masks and sanitisers as well as social distancing and we believe these items will help them to stay safe as they do business with us.

According Mr. Bentum, the bank has also embarked on an extensive awareness creation on the pandemic in several communities within its operational area urging people to take the virus seriously and adhere to the

mandated precautionary measures. “We entreat our customers to observe the various preventive measures that have been put in place for them to safe so we can

continue doing business together,” he added. Victor Yaw Adu, a customer and leader of ‘Asempa 2’ one of the savings groups based in Pomadze, expressed gratitude to the bank for the show of love and care in times of crisis. He said: “This gesture show that we are doing business with a compassionate bank, not all banks will do this for their customers. For thinking about our welfare and reaching out to customers with some of their profits, we are extremely glad and appreciative of this gesture.” Another customer, Comfort Nyarko, representative of the group named “Shepherd’ in Ansaful, a nearby community, was equally enthused about the bank’s support. “MRB has gone beyond the usual business of banking with us and have come to our aid with these items to keep us safe from the virus and we are very grateful,” she said. The bank’s 300 savings groups are comprised of members from communities far and near including Kasoa, Mankessim and Swedru.

MONDAY MAY 11, 2020

F E AT U R E

MONDAY MAY 11, 2020

Subsrcibe thebusiness24online.net/subscribe

Building food security during the pandemic TONY BLAIR, AGNES KALIBATA

Protecting food supply chains is the key missing component of an effective COVID-19 strategy. Global partnerships – particularly among the private sector, governments, development banks, and farmers’ organizations – must be established rapidly to prevent a catastrophic food crisis in developing countries.

very year, some nine million people worldwide – equivalent to the population of Austria – die of hunger or hunger-related diseases. That is tragic enough, but COVID-19’s disruption of food supply chains risks doubling this number in 2020. This is the hidden cost of the coronavirus pandemic, and it will fall on the poorest and most vulnerable. To prevent these avoidable deaths, we must first recognize that Africa, South Asia, and other poorer regions cannot go into lockdown or seek to contain the disease by mimicking measures adopted in the West. Instead, they must find their own way to balance the risks of the virus with the risks to livelihoods and lives arising from attempts to defeat it. Above all, however, the international community must act now to keep food supply chains operating. Otherwise, for the poorest parts of the world, the unintended consequences of the cure will be worse than the disease. The United Nations World Food Programme has identified 26 countries that are most at risk from increased food insecurity because of the COVID-19 crisis, with Ethiopia, Nigeria, and Mozambique among the most vulnerable in Africa. In these three countries alone, the WFP estimates that 56 million people (out of a combined population of about 334 million) were already chronically food insecure. In addition, of the 1.5 billion children worldwide who are currently out of school because of the pandemic, 350 million depend on school meals to avoid going hungry. COVID-19 is presenting poorer countries with four main foodsecurity challenges. For starters, households have less income to buy increasingly expensive food. Per capita output in Sub-Saharan Africa is set to contract by more than 4% in 2020 owing to the pandemic, while remittances from Africans working abroad are plummeting – by 80% at one payment company in the United Kingdom. And a household survey in Bangladesh shows that the poor have already seen their incomes drop by a staggering 70%; almost half are now reducing their food consumption as a result. Second, transporting food has become more time-consuming and costlier. Global shipping activity dropped by 25% in the first

quarter of 2020, while the cost of sending cargo across the Pacific Ocean tripled in March alone. And new hygiene and social-distancing measures are delaying goods clearance and delivery. Third, the pandemic is disrupting the global supply of agricultural products. Farmers in India have been asked by the Indian Council of Agricultural Researchto postpone their wheat harvest until after the lockdown, while countries such as Vietnam and Cambodia are restricting rice exports. This directly affects Africa, which imports $4.5 billion worth of rice each year. In addition, food is becoming more expensive as poorer countries struggle to secure foreign currency to pay for imports. For example, rice prices in Nigeria increased by 30% in the last week of March, partly because of a steep decline in export revenue following the global oil-price collapse. There are also mismatches between supply and demand. In the UK, five million liters of milk are at risk of being thrown away every week because of reduced restaurant demand . But this surplus could instead have been turned into powdered milk and exported to where it was needed. Finally, COVID-19 is affecting farming and food availability in markets, as inputs remain scarce and vital agrochemicals are delayed in ports and at customs checkpoints. The World Bank estimates that agricultural production in Africa could decline by up to 7% in 2020, depending on the extent of trade blockages. Given these challenges, governments should provide cash transfers and safe food distribution channels to ensure that vulnerable

citizens are protected. Crucially, policymakers need to focus on clearing logistics bottlenecks in both domestic and international value chains, so that food can move freely between and within countries. Furthermore, investing in the planting season now will boost countries’ adoption of technological solutions and reduce their reliance on food imports. At the global level, four types of action are needed. First, the international community must increase funding for food-relief and social-protection measures. This support must come quickly, because otherwise the eventual bill will be larger as famine spreads and agricultural systems’ viability is undermined. The second priority is to invest in local agricultural production. Disruptions to local and regional food-production systems should be mitigated swiftly, particularly at critical times in the planting season, when the distribution of inputs such as fertilizer is crucial. Other investments should aim to help poorer countries build up three months’ worth of strategic food reserves, as the Alliance for a Green Revolution in Africa (AGRA) recently recommended. And supporting market systems for food and non-food crops alike would help poorer countries to become more resilient. Third, we must alleviate disruptions to global food and agricultural produce supply chains by supporting regional and local logistics hubs. The WFP is best placed to coordinate such hubs and needs $350 million immediately for that purpose. That is not a lot of money to ensure that food goes quickly to where it is

needed most. Finally, we need to incentivize the private sector to fund agroprocessing and agtech companies. Resources should be channeled rapidly toward investment opportunities that are emerging as a result of the pandemic, especially for innovative value-chain solutions. Priorities include supporting e-commerce and e-market platforms in developing countries – especially in Africa – and propping up food processing. Commercial travel, workplace arrangements, and much else are already affected by COVID-19. The pandemic creates an opportunity to transform food systems as well. The new partnership in Kenya between the African online retailer Jumia and Twiga, an e-market platform for local farmers, is a great example of what can be done. Protecting food supply chains is the vital missing element of an effective COVID-19 strategy. While the challenges involved are huge, they can be solved through global partnerships, particularly among the private sector, governments, development banks, NGOs, and farmers’ organizations. But these solutions must be implemented rapidly if we are to prevent a catastrophic food crisis in developing countries.

Tony Blair

Agnes Kalibata

Tony Blair, Prime Minister of the United Kingdom from 1997 to 2007, is Chairman of the Institute for Global Change. Agnes Kalibata, President of the Alliance for a Green Revolution in Africa, is the United Nations Secretary General’s Special Envoy for the 2021 Food Systems Summit.

MONDAY MAY 11, 2020

Subsrcibe thebusiness24online.net/subscribe

NEWS

Ghanaian joins oversight board for Facebook and Instagram content Ghanaian human rights lawyer and Program Manager at the Open Society Initiative for West Africa, Afia Asantewaa Asare-Kyei, has been appointed as a Board Member of the newlycreated Oversight Board for Facebook and Instagram content. Afia joins two other Africans - Julie Owono, a digital rights advocate and Executive Director of Internet Sans Frontières from Cameroon and Maina Kiai, a human rights activist and Director of Human Rights Watch’s Global Alliances and Partnerships program from Kenya – on the 20-member Oversight Board. The Oversight Board will review certain content decisions by Facebook and Instagram and make binding decisions based on respect for freedom of expression and human rights. The Oversight Board will tackle increasingly complex and contentious debates about what types of content should and should not be permitted on

Facebook and Instagram and who should decide. The Board will prioritize cases that potentially impact many users, are of critical importance to public discourse, or raise questions about Facebook’s policies. Decisions made by the Board must be implemented by Facebook, as long as they do not violate the law. Oversight Board Members are independent from the company, funded by an independent trust and cannot be removed by Facebook based on their decisions. “The very act of creating this Board shows Facebook has taken the criticism leveled against it seriously and I hope my membership can help address some of these criticisms. I am particularly focused on the Board’s role in improving transparency and accountability, and creating an appeal process where people can bring their content issues. I feel strongly that the Board needs to be truly representative, not just in terms of geography, but age, subject matter and

breadth of issues covered as well.” Afia Asantewaa AsareKyei said. Ms. Asare-Kyei will work in collaboration with 19 other Members who speak over 27 languages and have diverse professional, cultural, political, and religious backgrounds and viewpoints. Over time, the Board will grow to around 40 Members. While no one can claim to represent everyone, Members are confident that the global composition will underpin, strengthen and guide decision-making. Designed with transparency in mind All decisions of the Board will be made public, and Facebook must respond publicly to them. All Board decisions will be published on its website, while protecting the identity and privacy of those involved. Additionally, the Board will issue a public annual report on its work to evaluate how the Board is fulfilling its purpose and whether Members believe Facebook is

Facebook, which will fund its operations and cannot be revoked. The Oversight Board is focused on addressing some of the most significant content moderation decisions on Facebook and Instagram that are referred by both users and Facebook. The Oversight Board will begin hearing cases in the Afia Asantewaa Asare-Kyei, coming months. Initially, users will be able to appeal living up to its commitments. to the Board in cases where Members are independent Facebook has removed their content. Over the following from Facebook Members contract directly months, the Board will also with the Oversight Board, be able to review appeals are not Facebook employees from users who want and cannot be removed by Facebook to remove content, Facebook. Members will including advertising. The serve for a maximum of Board will not be able to three 3-year terms and case make decisions on all of the panels will be confidential many thousands of appeals and assigned at random; from users that it anticipates no Member can choose receiving, but it will prioritise the panel they sit on, cases that potentially impact and all opinions will be many users, are of critical to public anonymous. The Board’s importance discourse or that raise financial independence questions about Facebook’s is also guaranteed by the establishment of a $130 policies. million trust fund that is completely independent of

Nsano receives payment service provider licence from Bank of Ghana The Bank of Ghana has awarded the first ever Payment Service Provider (Enhanced) License to one of the nation’s foremost financial technology companies, Nsano Limited. As part of efforts to foster soundness in the financial services sector, the Ghanaian Central Bank has tightened its controls of the country’s financial ecosystem; consolidating and formalizing its oversight of financial technology companies in order to promote innovation and growth, without jeopardizing the safety, security, and stability, of the financial services sector. The Payment Systems & Services Act 2019 (Act 987), provides the legal and regulatory framework for the orderly development of Ghana’s payment system and grants the Bank of Ghana the mandate to duly license and supervise financial technology companies operating within the country.

Nsano Limited, a diversified financial technology solutions provider which currently maintains its focus on building custom mobile financial service applications for banks and insurance companies, providing merchant payment solutions, offering remittance services, and playing the role of an aggregator in connecting various entities to the nation’s mobile money operators, is the first to have been granted the Bank of Ghana Payment Service Provider (Enhanced) License. The license, among other things, supports the provision of services including electronic funds transfer, facilitation of interoperability of payment systems and services, payment system aggregation, provision of electronic platforms for payment or receipt of funds, and the provision of technological services to facilitate switching, routing, clearing and data management.

Obtaining the license buttresses Nsano’s position as a progressive industry leader, and a formidable technology partner of financial institutions, merchants, digital solution providers, remittance companies and other fintechs aiming to be guided to obtain a PSP (Standard) License. Following its establishment in Ghana some years ago, Nsano launched operations in other markets across Africa including Zambia, Uganda and Cote d’Ivoire, in a steady attempt of realizing its vision of processing 50% of Africa’s GDP by 2025. The PSP license which follows closely after the company’s ISO 27001:2013 certification, the unveiling of its state-of-the-art Fraud Centre, and the award of the Remittance Grant Facility, is indicative of the company’s commitment and adherence to international best practices and world class standards in ensuring

Kofi Owusu-Nhyira

customer protection and satisfaction, inhibiting fraud, as well as contributing its quota to promoting digitization, financial inclusion, and inclusive sustainable economic development. Whilst expressing excitement at the award of the license, Mr. Kofi OwusuNhyira, a director of the company, indicated that it was a privileged to serve the country, particularly in such times when the COVID-19 pandemic has revealed the true essence of digital

financial services. He further pledged the company’s commitment to playing its part in innovating and adapting in response to the country’s financial technology service needs during these unusual times, and to support the Bank of Ghana in leveraging digital channels to minimize risks and operational disruptions to both customers and providers of financial services.

MONDAY MAY 11, 2020

A DV E RTO R I A L

Subsrcibe thebusiness24online.net/subscribe

Rotarians in Ghana support fight against Covid-19 Rotarians in Ghana Donate PPEs, PCR Test Kits and Swabs to Ghana Health Service and Noguchi Memorial Institute

A group photograph after the presentation at Noguchi Memorial Institute

otarians in Ghana, with funding from the Reserve Account of Rotary International District 9102 (made up of Ghana, Togo, Benin and Niger) donated Personal Protective Equipment (PPEs) to Ghana Health Service and PCR Test Kits and Swabs to the Noguchi Memorial Institute for Medi- cal Research in two simple events last Tuesday, May 05, 2020 to further support the fight against COVID-19 in the country. The two donations cost the organization about US$50,000. This is in addition to an earlier donation of PPEs and related items worth GHS 142,000 to the Ghana Association of Doctors in Residence, mainly funded with contributions from Rotary Clubs in Ghana, individual Rotarians, their families and friends. In the presentation to the Ghana Health Service at their forecourt complex, Dr. Nii Akwei Addo, Assistant Governor, Rotary Interna- tional District 9102, noted the long-time partnership between Rotary and the Ghana Health Service in the area of Disease Prevention and Control. Dr Patrick Kuma-Aboagye, Direc- tor-General of the Ghana Health Service (GHS), lauded the existing relationship between the GHS and Rotary. “On behalf of the Service and the Minister of Health, we want to really thank Rotary. Rotary has been a good friend for a long time from the immunization days, to polio and to Rotary Family Health Days and it would have been surprising if we did not hear from you,” he said. “We are grateful and this will go a long way to helping the health service workers who need these items.” In the second presentation at the Noguchi Memorial Insti- tute for Medical Research, the Administrator of the Insti- tute, Mr. Theodore Ahuno, expressed gratitude to Rotary for the support saying, “We are very happy that Rotary has come to our aid with the procurement of testing equipment. It will go a long way by helping us increase the tracing and testing so that together we try to end this pandemic (COVID-19) earlier than we think so that we go back to our

“We are grateful and this will go a long way to helping the health service workers who need these items”

Assistant Govenor, Dr. Nii Akwei Addo presenting a certificate of donation to Dr Patrick Kuma-Aboagye, Dir. Gen. Ghana Health Service

normal duties and to help ourselves in terms of leading, serving as we fellowship in diversity with health issues, economic and our daily lives” On integrity - our priceless values. his part, Dr. Nii Akwei Addo intimated the need for bodies such as Rotary to this pandemic ABOUT ROTARY: Rotary brings together a by combining our efforts. He further added that global network of volunteer leaders dedicated to Rotary, being an international organization tackling the world’s most pressing humanitarian focuses on humanitarian programmes across challenges. We connect 1.2 million members from the globe by taking appropriate and swift action more than 35,000 Rotary clubs in almost every initiated by people from diverse country in the world. Their service background and cultures. improves lives both locally and Disease Rotary builds capacities and internationally, from helping those strengthens health systems, Prevention and in need in their own communities to provides supplies and critical Control is one working toward a polio-free world. equipment, engages in public of the Six Areas Visit Rotary.org and endpolio.org for health education, while chammore about Rotary and its efforts to pioning Polio eradication- from the of Focus of eradicate polio. face of the earth and many others. Rotary. Rotarians are People of Action,

MONDAY MAY 11, 2020 THEBUSINESS24ONLINE.NET