Business24 Newspaper (May 13-2020) by Business24 Online

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WEDNESDAY MAY 13, 2020

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Coronacrisis chokes hotels

Finance Minister preparing resilience and recovery plan MORE ON PAGE 3

The car park in front of the reception at Golden Tulip, Accra. The hotel ceased operations in the wake of the pandemic. MORE ON PAGE 2

BY NII ANNERQUAYE ABBEY

→ Unprecedented shutdowns across the sector → Thousands of jobs hang in the balance Despite the easing of restrictions on movement as government fights to get the economy back on track following the outbreak of the novel coronavirus, the hospitality industry’s fortunes continue to plummet to further depths. As Ghana’s borders remain shut, the oxygen that gives life to the hospitality industry— travellers—has been snuffed out. The Ghana Hotels Association estimates that the travel, tourism and hospitality industry provides direct jobs to some 250,000 people in the country. A further 350,000 people owe

their livelihoods indirectly to travel, tourism and hospitality businesses, which include more than 4,000 hotels spread across the country. According to the president of the group, Dr. Edward Ackah-Nyameke Jnr., a good number of these jobs are hanging by a thread as these hotels remain shut down or are operating way below capacity. “A lot of these hotels depend on tourists’ visitations; now borders have closed and international travel has stalled,” he said. In Accra, Golden Tulip Hotel, a four-star accommodation barely three kilometers from Kotoka International Airport, epitomises the impact the COVID-19 pandemic is having on the hospitality industry. The 238-room luxurious hotel’s minimum occupancy level in normal times is about 40 percent. But before it took the decision to shut down in March, occupancy had fallen to below

Coronavirus pandemic costs international airlines US$400m → Airports Company waives rent for 3 months → Ministry ponders more measures to ease pain

MORE ON PAGE 3

Mondelez International supports Cocoa farmers in COVID-19 fight MORE ON PAGE 5

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

WEDNESDAY MAY 13, 2020

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EDITORIAL

Wash your hands 2

Cover your cough 3

Support for airlines, great move! The Ghana Airports Company Limited (GACL), following various presentations made by the Board of Airline Representatives (BARGH), has waived a number of fees and charges as part of its contribution to save an industry in intensive care following the outbreak of the coronavirus pandemic. The current pandemic has pushed the global aviation industry almost to the wall, with major international airlines cutting thousands of jobs and asking governments for bailouts.

The International Air Transport Association (IATA) estimates that the pandemic could cost the industry about US$250bn this year. According to IATA, worldwide flights were 70 percent lower at the start of the second quarter of this year. The association predicted a further decline as restrictions rise in a number of regions. It projected that though airlines have little or no revenue coming in, they have to spend about US$60bn in the second quarter, as “some costs cannot be avoided and ticket refunds [are] also burning cash.” It is these challenges that

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

various airports, gift shops, restaurants, forex bureaus and others who have been severely impacted by the lack of or reduced activities, the GACL has also waived rent for quarter two. Business24 commends the Board and management of the GACL in this bold decision. Indeed, though these are important revenue streams for the company, supporting airlines to attain pre-coronavirus levels should be the concern of everyone if we are to reap the benefits of a well-connected economy.

Coronacrisis chokes hotels (…CONTINUED FROM COVER )

Wear a mask

has necessitated the waiving of various charges by the airports operator. GACL has waived rent for all airline offices at the Kotoka International Airport and all other regional airports in the country for the second quarter of this year (AprilJune). The GACL has also waived various aeronautical charges–landing, parking and lightening, for second quarter of the year. For concessionaires operating at the KIA and all other regional airports, the GACL has also waived rent and royalty payments for second quarter of this year. For other tenants of the

10 percent, according to the hotel’s Rooms Division Manager, Lucy Ahedor. Apart from guests, mostly international travellers, not coming in because of the travel ban imposed by the government, the ban on social gatherings has meant that the hotel’s conferencing facilities have also been rendered redundant. According to Ms. Ahedor, even before President Akufo-Addo announced a lockdown of Accra and Kumasi on March 30, which was to last three weeks, the management of the hotel had decided to close it due to low patronage as well as to protect their staff from contracting the virus. Before the hotel closed, potential guests were turned away, and the few guests that were already staying transferred to nearby hotels that were still in operation at the time. The hotel had to dig into its coffers to cater for the March salaries of more than 200 employees, and is putting in place contingency plans to pay future salaries should the downturn persist. Golden Tulip is not the only big-name hotel that has halted its operations entirely as the country’s coronavirus case count surges. Other hotels like Labadi Beach, Accra City, and Holiday Inn have closed shop, with their workers’ fate uncertain and suppliers’ businesses reeling from the ramifications. Rippling effects Even though Central Region was not placed under a lockdown and its coronavirus case count remains below

the national average, hotels there are not faring any better. Located in the popular town of Pedu in Cape Coast, Nokaans is a small hotel with less than 20 guest rooms. The hotel has been feeling the pinch of the virus. According to its owner, Benjamin Aidoo, although the hotel remains open, continuously declining patronage has meant that only three of the hotel’s workers are on duty, with the rest asked to go home until normalcy is restored. Although the about 20 workers on Nokaans’ payroll received their full salaries in March, in April their salaries were cut by 25 percent. Mr. Aidoo signalled that if the situation does not improve, only the skeleton staff on duty will be paid in subsequent months. “People are not coming in, but they can’t close down the hotel because they (the skeleton staff ) live there. I have told them that if they can wait, fine, but coming May ending, I will not be able to pay them.” With government planning a GH¢600m stimulus package for SMEs via its Coronavirus Alleviation Programme (CAP), Mr. Aidoo said he and other hoteliers would consider tapping into the package if the cost and repayment terms are favourable. “If the interest rate on it is very low and the repayment is between two to three years and not a one-year loan facility, then I won’t mind applying for it.”

Comeback plans Dr. Ackah-Nyameke Jnr. said the impact of the pandemic will cause serious challenges for hotels even after the virus has been dealt with. “The hotels which have been shut down are going to incur a lot of costs in bringing their facilities back to operational levels. Even the staff, some are certainly going to look for other opportunities. And this would mean that by the time the hotels come back, [some of the staff ] would not be interested [in their jobs anymore]. This would mean that hotels have to make fresh investment in training.” While commending government’s stimulus package to aid businesses, he said the total cost of a bailout programme for the industry is difficult to estimate as the situation is still fluid. He maintained that while hotels would do their bit to resume operations as early as possible, the government has the ultimate responsibility to stimulate economic activity that will support the industry’s comeback plans. “Beyond that, we as an industry will look at marketing and also focus on promoting domestic tourism.” Boosting domestic tourism, he added, would require government to liaise with stakeholders to fix nagging challenges like access to tourists’ sites, safety, and other incentives that would encourage Ghanaians to take up regular travels to other parts of the country.

WEDNESDAY MAY 13, 2020

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Coronavirus pandemic costs international airlines US$400m BY DOMINICK ANDOH

With Terminal 3 of the Kotoka International Airport (KIA), which is used for all international flights, closed to traffic—except for preapproved evacuations—and with aircraft parked in hangars and airline offices vacated, international airlines have been counting their losses. Business24 sources within the Board of Airline Representatives Ghana (BARGH) have disclosed that collectively, international airlines have lost an estimated US$400m in potential earnings since the coronavirus pandemic forced the closure of the country’s air, land and sea borders on March 22. A recent NOTAM—a directive issued by the airline industry regulator Ghana Civil Aviation Authority (GCAA)—reminded airline managers that the country’s only international terminal will be closed to traffic until May 31. All evacuation flights, the NOTAM noted, must be preapproved and conducted between

08:00-16:00 hours. While it remains uncertain when the airport will be re-opened for scheduled passenger services, airlines have had to rework their models as specific segments of the market are lost. Corporate organisations that have long-standing contracts with airlines are now resorting to video conferencing to hold their meetings and discouraging staff travels. “That segment of the market has disappeared,” Ahmed El-Banhawy, EgyptAir Country Manager, told Business24. Meanwhile, domestic airlines lost an estimated US$4.5m in revenue for the four weeks they were not able to operate because of the restrictions on movement imposed in March to help contain the raging pandemic. Airports Company acts to ease virus pain The country’s airports management company, Ghana Airports Company Limited (GACL), in response to the challenges faced by airlines, has

waived rent for all airline offices at the KIA and the regional airports for the second quarter of this year. The GACL has also waived various aeronautical charges—landing, parking, and lighting—for the same period. For concessionaires operating at the KIA and all regional airports, the GACL has also waived rent and royalty payments from April-June. For other tenants of the various airports, gift shops, restaurants, forex bureaus and others who have been severely impacted by the lack of or reduced activities, the GACL has waived rent for quarter-two. Though the move will erode the company’s aeronautical and nonaeronautical revenue, which is an important revenue stream, the GACL, according to sources, believes that supporting airlines in these difficult times is in itself an investment in its future income. Ministry ponders more measures to ease pain The Aviation Ministry, following

presentations made by the BARGH, is looking to soften the COVID-19 blow on airlines and will soon announce various measures. The current pandemic has pushed the global aviation industry almost to the wall, with major international airlines cutting thousands of jobs and asking governments for bailouts. The International Air Transport Association (IATA) estimates that the pandemic could cost the industry about US$250bn this year. According to IATA, worldwide flights were 70 percent lower at the start of the second quarter of this year. The association predicted a further decline as restrictions rise in a number of regions. It projected that though airlines have little or no revenue coming in, they have to spend about US$60bn in the second quarter, as “some costs cannot be avoided and ticket refunds [are] also burning cash.”

Finance Minister preparing resilience and recovery plan BY EUGENE DAVIS

Finance Minister Ken Ofori-Atta has been tasked by the President to formulate a resilience and recovery plan to shore up the economy, as the country continues its battle against the coronavirus pandemic and its wide-ranging socio-economic impacts. Addressing the media at the biweekly coronavirus press briefing in Accra on Tuesday, the Information Minister, Kojo Oppong Nkrumah, stated that the decision to prepare a recovery plan was one of the main outcomes of the cabinet retreat that took place last weekend. The resilience and recovery plan will cover all the broad sectors of the economy, including priority areas such as health, roads, education, food and agriculture, industry, and security. It will augment support already provided to cushion the effects of the pandemic on people’s living standards and businesses’ performance. According to Oppong Nkrumah, the plan, when ready, will be approved

by cabinet and then forwarded to parliament for its own scrutiny and approval. The coronavirus outbreak and its fallout have opened a budget financing gap of GHȼ11.4bn that

needs to be closed. The effects of the pandemic will result in significant shortfalls in petroleum receipts, shortfalls in import duties, shortfalls in other tax revenues, increased health-related

expenditures, and tight financing conditions. The financing gap includes the cost of revenue losses and additional COVID-19-related public spending, which together is pegged at GHȼ9.5bn (2.5 percent of revised GDP). Meanwhile, the economy’s growth rate, which surpassed 6 percent in each of the last three years and was initially projected at 6.8 percent for 2020, could fall to a record low of 1.5 percent. It is in this regard that the Finance Minister reckons more resources need to be explored to ensure the country battles the virus head-on. “We will certainly have a steep decline, and for two or three years we expect a sloping curve downwards before a gradual recovery—and we must get ourselves ready for that,” he told lawmakers before their recent adjournment. Ghana has already accessed a US$1bn rapid credit facility (RCF) from the International Monetary Fund (IMF) to support the country’s efforts to tackle the pandemic.

WEDNESDAY MAY 13, 2020

NEWS

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Mondelez International supports Cocoa farmers in COVID-19 fight About 174,000 cocoa farmers in 450 cocoa growing communities in Ghana have received Personal Protective Equipment (PPEs) worth GH¢ 454,000. The items, procured by the Mondelez International in partnership with Child Rights International (CRI), is meant to assist cocoa farmers in the fight against the deadly respiratory disease. The items were handed over to COCOBOD and subsequently delivered to the farmers at a ceremony held in Accra on Tuesday. The items include: thermometer guns to check the temperature of people, public address system to roll out public education on the coronavirus pandemic, modernised hand washing machine, nose mask, soups and sanitizers. Speaking at the presentation ceremony, the Country Director of Mondelez International Cocoa Life Programme, Mrs. Yaa Peprah Amekudzi, said the organisation was determined to contribute its quota in the fight against the spread corona virus. She said some of the items were meant to directly help cocoa farmers

adhere to precautionary measures while the remaining items would be given to hospitals or clinics within cocoa growing communities. Recognising the role cocoa farmers play in Ghana’s economic development, Mrs. Amekudzi, said Mondelez International and Child Rights International thought it wise to extend a helping hand to cocoa farmers. She, therefore, appealed to cocoa farmers to adhere to the various precautionary measures to avoid infection. The Executive Director of CRI, Mr. Bright Appiah, said apart from the PPEs presented to the cocoa farmers, more measures were being rolled out to ensure that the effect of the corona virus was minimised. He particularly mentioned that CRI would soon roll out an e-learning programme for children of cocoa farmers to ensure that their time at home becomes productive. The e-learning project would be tailored to suit the specific needs of the children based on the data available to CRI regarding children within those communities. Mr. Appiah said one of the major

concerns of CRI was the safety and wellbeing of children and that the organisation would stop at nothing in ensuring that nothing untoward happened to them. The Deputy Chief Executive Director in-charge of Operations at COCOBOD, Dr. Emmanuel Opoku, commended Mondelez International and Child Rights International for gesture. He also applauded them for their

various role in helping enhance the operations of cocoa farmers in the country. Mr. Opoku stressed the need for people to adhere to basic precautionary measures and warned against belittling the deadly COVID-19. He said it would be unwise for any person to underestimate the corona virus and urged all to protect themselves.

Brussels Airlines to lay off 25 percent of staff as part of survival strategy Brussels Airlines is to lay off 25 percent of its staff as part of measures to ensure the survival of the European carrier. The company in a statement issued on Tuesday, May 12 and copied to AviationGhana said the decision was down to the negative impact of the coronavirus pandemic and ongoing low demand for air travel. Since the temporary suspension of all its flights on March 21st, the airline loses one €1m million a day due to revenue losses and costs that cannot not be avoided, such as aircraft leasing and maintenance costs. “To grant a future for Brussels Airlines, the carrier needs to structurally reduce its costs to a competitive level. In addition, to overcome the present unprecedented crisis, the company asks for support from both, its shareholder Lufthansa and the Belgian government. Within its turnaround plan, Brussels Airlines is structurally tackling its cost structure and optimizes its network by cutting marginally profitable and unprofitable routes, resulting in a fleet reduction of 30%. The overall size of the company, and as a consequence of its workforce, will be 25% smaller,” the statement said.

Brussels, a member of the Lufthansa Group, noted that as a socially responsible employer, it will work together with its social partners to reduce the number of forced dismissals to an absolute minimum. “The company is confident that with its turnaround plan it will be able to safeguard 75% of its employment and grow again in

a profitable way as soon as the demand for air travel has recovered to a new normal, which is expected as of 2023. Achieving structural profitability is essential to secure the company’s future and new investments, while also being able to protect itself against possible new headwinds.” Across the world, the Coronavirus crisis is putting unprecedented

pressure on airlines with a total revenue impact expected to exceed €240 billion. Incoming bookings dropped by more than 60% and cancellations reached record heights. As a consequence, many airlines across Europe and beyond are obliged to go for massive job cuts.

WEDNESDAY MAY 13, 2020

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F E AT U R E

COVID-19 CONUNDRUM

Lockdown and unlocking lessons from Wuhan, China DR. SAVIOUR AYERTEY NUBUOR

n the later days of December 2019, an outbreak of a viral disease commonly referred to as Covid-19 was identified in Wuhan-Hubei Province, China. By 23rd January, 2020, a lockdown was imposed in the City and the surrounding areas in the Province. On 8th April, 2020, the strict lockdown came to an end. What did the leadership and people of Hubei Province and for that matter China do during the lockdown and after easing the strict lockdown measures? Among others, during the lockdown, only one person from a household was allowed to go out once in every two days to buy groceries at specific locations for the household with the exception of those with permission. Most communities kept one entrance and one exit point opened with all others tightly closed. Outing in the night was forbidden in key areas. Everyone entering or exiting a

neighborhood was compulsorily expected to be in a mask and their temperatures were taken upon every exit and entry. Most requests to resolve issues were made through communal social media platforms like â&#x20AC;&#x2DC;wechatâ&#x20AC;&#x2122;- a platform where people chat, receive money and pay for goods and services.1 They monitored all residents in an area, painfully ensured social distancing protocols, test, isolate and quarantine all those suspected to have had contact with Covid-19. Food and other items were provided to most International Students by the Office of International Education at a subsidized fee or sometimes free of charge. Prior to the easing of the strict lockdown, some major areas were disinfected and public education on upcoming measures were carried out. Immediately the lockdown was eased, everyone who wished to go out was expected to be in a mask. Wearing of the appropriate

masks, checking of temperatures and limiting access to and from residential as well as commercial facilities were ensured and the people adhered to those measures. The adherence to the mask etiquette in particular was because of the availability of the masks and the low-price tag on each of them. The success in containing and controlling the spread of the virus in China particularly Wuhan was relatively, due to the top-down governance approach and strict exertion of external discipline discipline emanating from others to ensure order. It is evident that top-down leadership approach, trust in leadership, public education, attitudinal change and external discipline affected compliance with lockdown and post-lockdown regulations and measures. Again, though people were isolated, a sense of togetherness was created even in the midst of the isolation

through sharing of chats, calling and checking on each other and supporting one another with some necessary food items and basic services. In the end, it is clear that individual and collective responsibilities are both essential in fighting Covid-19 in Wuhan-China.

Dr. Saviour Ayertey Nubuor is a Project Management Professional (PMP) and a Lecturer at the University of Ghana Business School. He can be contacted via email: sanubuor@ug.edu.gh

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F E AT U R E

Mitigating the hunger surge caused by the COVID-19 recession before it is too late BY: MARCO V. SÁNCHEZ CANTILLO

any uncertainties haunt the world’s campaign to counter the COVID-19 pandemic, but one thing is now sure: Global economic activity will suffer greatly, with large-scale consequences for the incomes and welfare of all, but especially for the most vulnerable food import-dependent countries. In the absence of timely and effective policy responses, this will exacerbate an already unwelcome increase in the number of people who don’t have enough to eat. Last year The State of Food Security and Nutrition in the World, the SDG2 monitoring report that the Food and Agriculture Organization of the United Nations (FAO) produces in collaboration with other UN partners, warned that economic slowdowns and downturns helped explain rising undernourishment levels in 65 of the 77 countries that recorded such rises between 2011 and 2017. The International Monetary Fund has just slashed its global gross domestic product forecast by a huge 6.3 percentage points, making FAO’s analysis all the more relevant as part of a worldwide toolkit to prevent the health crisis from triggering starvation. In January, the IMF anticipated global GDP would expand by 3.3 percent, but in April, when much of the world was shutting down to contain contagion, it issued a new forecast of minus 3.0 percent. Sub-Saharan Africa, a region that is home to the world’s highest

hunger rates and where the average age is around 20 years, must now brace for its first recession in a quarter of a century. Analyzing data of food supply since 1995, linked to FAO’s statistical development of the prevalence of undernourishment (PoU) indicator, and correlating them to past local economic trends in countries that are net food importers, we find that millions of people are likely to join the ranks of the hungry as a result of the COVID-19-triggered recession. That number will vary according to the severity of GDP growth contractions, ranging from 14.4 million to 80.3 million depending on the scenario, with the latter figure a truly devastating contraction of 10 percentage points in all 101 net foodimporting countries’ GDP growth. The actual outcome could be worse if current inequalities in access to food are worsened – something that absolutely should not be allowed to happen. The world is not facing food shortages, which is why FAO has from the pandemic’s outset advocated that all countries must do their best to keep food supply chains alive. With the new estimates emerging from a strictly economic analysis – based on food supply and availability and not other central pillars of food security – FAO is emphasizing that all countries must also foster measures to protect people’s ability to access food that is locally, regionally and globally available.

The nexus between undernourishment and economic performance was already driving the world away from the goal of eradicating hunger by 2030. FAO’s global PoU number has been rising since 2015, albeit slowly, ending decades of decline. It is now around where it was in 2010, and undernutrition affects one in nine people globally, with much higher rates in large swathes of Africa and Asia. Governments are rolling out unprecedented fiscal and monetary stimulus to conserve economic capital and support safety nets for the newly unemployed. Many countries lack the tools to deploy such liquidity injections and public spending commitments. The international community must facilitate their capacity to act, while these countries must exert fiscal responsibility and objectivity to reallocate their own resources along with assistance to the most urgent needs that the COVID-19 pandemic has created. Health is the first priority, but sufficient and healthy food is a central part of the health response to the pandemic. Inadequate action will also severely weaken vulnerable populations for years to come. This would make prospect of achieving the Sustainable Development Goals all the more difficult. So not only must efforts focus on keeping food supply chains alive, but it’s imperative to focus on food

accessibility for all. Governments have an opportunity to tackle this issue head on by targeting the required official stimulus packages to the poorest and undernourished. Tools such as cash and in-kind transfers, new credit lines, safety nets, food banks, keeping schoollunch programmes alive can be useful. Keep in mind that emphatically focusing on “have nots” will have a doubly positive effect, both helping those most in need and maximizing the impact of public resource outlays on maintaining the dynamism of demand. There could be a third positive effect as well: Minimizing outright hunger in ways that avoid food insecurity and malnutrition will reduce the long-term scars inflicted by the recession, fostering more vitality and less dependence in the future. Indeed, insofar as possible stimulus measures that tackle the current menace to food access should be designed with a view to start building the resilience of food systems to safeguard them against economic slowdowns and downturns in the future.

Marco V. Sánchez Cantillo, is the Deputy-Director, Agricultural Development Economics Division of the Food and Agriculture Organization of the United Nations.

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Navigating Deglobalization BY MOHAMED A. EL-ERIAN

aving already been buffeted by two big shocks in the last ten years, the global economy’s highly interconnected wiring is suffering a third because of the COVID-19 pandemic. Globalization thus faces a three-strikes-and-out situation that could well result in a gradual but rather prolonged delinking of trade and investment, which would add to the secular headwinds already facing the global economy. Appeals to recommit to the current globalization process are almost certain to fall on deaf ears – particularly because this latest shock will be driven simultaneously by governments, companies, and households in developed countries. Those keen to preserve globalization in the longer term would instead be better advised to focus on minimizing the disruption caused by the coming period of deglobalization and laying the groundwork for a more sustainable process thereafter. For starters, it is already clear that many firms will look to strike a more risk-averse balance between efficiency and resilience as they emerge from the damaging pandemic shock. The corporate world’s multi-decade romance with cost-effective global supply chains and just-in-time inventory management will give way to a more localized approach involving the reshoring of certain activities. This inclination will be reinforced by government mandates to secure safer inputs for sectors deemed to be of national-security interest. We are already seeing such requirements in the United States for energy generation, telecommunications, health-care materials, and pharmaceuticals. It is only a matter of time until this trend spreads to other sectors and countries. The aftermath of the current crisismanagement phase is also likely to feature an intensified blame game, adding a geopolitical impetus to deglobalization. Already, the US is complaining that China didn’t do enough to contain the spread of the virus and inform other countries of its severity. Some US politicians have even called for China to pay reparations as a result. And many in America and elsewhere perceive China’s initial COVID-19 response as yet another example of the country failing to live up to its international responsibilities. Moreover, the worsening geopolitical situation will likely intensify the weaponization of economic-policy tools that accelerated during the recent China-US trade war – the second recent blow to the globalization process. That in turn will confirm many multinational companies’ fears that they can no longer rely on two key operating assumptions:

the ever closer integration and interconnectedness of global production, consumption, and investment flows; and the orderly and relatively predictable resolution of trade and investment conflicts through multilateral institutions applying the rule of law. Today’s anti-China rhetoric will also give fresh momentum to the first pushback against globalization that emerged a decade ago. With some segments of the population feeling alienated and marginalized by the process, the anti-establishment backlash gave rise in some places to more extreme political movements that have scored some surprising successes, not least Brexit. Such developments greatly weakened global policy collaboration, as has been starkly evident in the world’s uncoordinated approach to containing COVID-19. This is not an ideal time for the world economy to undergo secular deglobalization. Most countries, and virtually all segments of their economies (companies, governments, and households), will emerge from the crisis with higher levels of debt. Absent a major round of debt restructuring, developing countries in particular will find their ability to service this debt hampered

by high levels of unemployment, lost income, more sluggish economic activity, and, perhaps, less dynamic consumption. Against this background, those who appreciate the power of crossborder interconnectivity to unleash win-win economic opportunities and reduce the risk of major military conflicts will be inclined to defend the pre-pandemic status quo. But this approach is unlikely to gain traction at a time when governments have become more inward-looking as they battle the pandemic’s direct and indirect damage, companies are still reeling from disruptions to their global supply chains and markets, and households have a heightened sense of economic insecurity. Rather than fight an unwinnable war of principle, advocates of globalization should adopt a more pragmatic approach that focuses on two priorities. First, they should find ways to manage an orderly and gradual process of partial deglobalization, including avoiding a descent into selffeeding disruptions that result in unnecessary pain and suffering for many. Second, they should start putting in place a firmer foundation to relaunch a more inclusive and sustainable process of globalization

in which the private sector will inevitably play a bigger design and implementation role. To revert to the baseball analogy, this third strike against globalization has sent it back to the dugout for now. But, as in baseball, there will be another at-bat. The challenge now is to use the time on the bench to understand the situation better and come back stronger.

Mohamed A. El-Erian, Chief Economic Adviser at Allianz, was Chairman of US President Barack Obama’s Global Development Council. He is the author, most recently, of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse. Copyright: Project Syndicate, 2020. www.project-syndicate.org

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A pandemic of hunger BY ESTHER NGUMBI

round the world, food insecurity is spiking. Experts predict that the number of hungry people will double during the COVID-19 pandemic. Throughout Africa, governments struggle to provide for the neediest. In Burkina Faso, which at one point had the highest number of deaths from COVID-19 in Sub-Saharan Africa, more than 2.1 million people don’t have enough to eat. In Nairobi, people are fighting over their next meal. In Cape Town, police recently clashed with residents who didn’t receive parcels of rice, beans, oil, and other supplies. But it is not just Africa. The tragedy is unfolding on screens across the globe. In Phoenix, cars begin lining up two hours before boxes with non-perishables were distributed. In Ohio, more than 4,000 people recently waited for hours to pick up packages of cereal, oatmeal, and pasta. It is urgent that leaders find ways to ensure sufficient food supplies during the COVID-19 crisis. Because of lockdowns, sickness, and lost incomes, hunger will rise. And, because developed and developing countries are equally affected, we must find solutions together. Data analytics is a key way to track food insecurity. What is needed is a real-time mapping tool like the data dashboard developed at Johns Hopkins University’s Center for

Systems Science and Engineering to track confirmed coronavirus cases. And governments, NGOs, and others on the front lines of the fight against hunger should support the effort. After all, timely information is vital to diagnosing and eliminating the problem. Real-time data inform local and national leaders, food banks, and NGOs how to prepare for and respond to emerging needs. For example, farmers who have excess perishables can report them on the map, and pick-ups and shipments can then be arranged to redistribute the food to communities and households in need. Likewise, targeted policies are essential. Leaders must establish initiatives to ensure that people know where they can get their next meal. In the United States, the $2 trillion stimulus adopted in March will help, to the extent that it supports household incomes. And in April, New York City Mayor Bill de Blasio announced a $170 million initiative to curb hunger. Other US states are launching similar efforts. In Africa, policymakers must make food security a top priority while stay-at-home orders are in effect. Citizens should not have to fight each other for their next meal. Governments need to pass stimulus packages that help all citizens, or seek aid that provides the necessary funds. While pay cuts like those taken by South

African President Cyril Ramaphosa, cabinet ministers, and business leaders are symbolically important, governments must provide cash or sustenance for their citizens. Many lived from hand to mouth before the crisis and now face a choice between starvation and sickness. Asking people to stay at home without providing resources is both immoral and unlikely to work. Finding creative ways to distribute aid during the COVID-19 pandemic is crucial. For example, Vietnam now has rice-dispensing ATMs. More innovations like that are needed. Most important, however, world leaders must remove trade barriers, so that supply continues to flow across borders – a point that the CEOs of Unilever, Nestlé, PepsiCo, and other multinationals recently emphasized. The reality is that the pandemic affects all of us, and we must all do our part to mitigate the impact on the most vulnerable. Some among the wealthiest have begun to combat the problem. Leonardo DiCaprio and Laurene Powell Jobs organized a GoFundMe page via America’s Food Fund. So far, it has raised more than $26 million. Several celebrities, including Lady Gaga, Rihanna, Justin Bieber, and Oprah Winfrey, have donated to charities such as No Kid Hungry and Feeding America. Business executives are contributing, too. Apollo Global

Management CEO Leon Black and his wife, Debra, have given $20 million to a program that is providing supplies to health workers. Hedge fund billionaire David Tepper has donated $22 million to relief efforts. Celebrities in Africa are pitching in, too. But let’s not fool ourselves: charity will never be enough. Stepping up efforts to ensure food security for all is essential to preventing the COVID-19 crisis from becoming a humanitarian calamity, and that objective is above all an imperative for policymakers.

Esther Ngumbi is Assistant Professor of Entomology and African-American Studies at the University of Illinois at Urbana-Champaign. Copyright: Project Syndicate, 2020. www.project-syndicate.org.

WEDNESDAY MAY 13, 2020

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Emirates Group announces 2019-20 results

he Emirates Group has announced its 32nd consecutive year of profit, against a drop in revenue mainly attributed to reduced operations during the planned DXB runway closure in the first quarter, and the impact of flight and travel restrictions due to the COVID-19 pandemic in the fourth quarter. Released in its 2019-20 Annual Report, the Emirates Group posted a profit of AED 1.7 billion (US$ 456 million) for the financial year ended 31 March 2020, down 28% from last year. The Group’s revenue reached AED 104.0 billion (US$ 28.3 billion), a decline of 5% over last year’s results. The Group’s cash balance was AED 25.6 billion (US$ 7.0 billion), up 15% from last year mainly due to a strong business performance up to February 2020 and lower fuel cost compared to previous year. Due to the unprecedented business environment from the ongoing pandemic, and to protect the Group’s liquidity position, the Group has not declared a dividend for this financial year after last year’s dividend of AED 500 million (US$ 136 million) to the Investment Corporation of Dubai. His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “For the first 11 months of 2019-20, Emirates and dnata were performing strongly, and we were on track to deliver against our business targets. However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions. “Even without a pandemic, our industry has always been vulnerable to a multitude of external factors. In 2019-20, the further strengthening of the US dollar against major currencies eroded our profits to the tune of AED 1.0 billion, global airfreight demand remained soft for most of the year, and competition intensified in our key markets. “Despite the challenges, Emirates and dnata delivered our 32nd consecutive year of profit, due to healthy demand for our award winning products and services, particularly in the second and third quarters of the year, combined with lower average fuel prices over the year. “Every year we are tested on our agility and ability. While tackling the immediate challenges and taking advantage of opportunities that come our way, our decisions have always been guided by our long-term goal to build a profitable, sustainable, and responsible business based in Dubai.” In 2019-20, the Group collectively invested AED 11.7 billion (US$ 3.2

billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and employee initiatives, a decrease following last year’s record investment spend of AED 14.6 billion (US$ 3.9 billion). It also continued to invest resources towards supporting communities, environmental initiatives, as well as incubator programmes that nurture talent and innovation to support future industry growth. At the 2019 Dubai Air Show in November, Emirates placed a US$ 16 billion order for 50 A350 XWBs, and a US$ 8.8 billion order for 30 Boeing 787 Dreamliner aircraft. With first deliveries expected in 2023, these new aircraft will add to Emirates’ current fleet mix, and provide deployment flexibility within its long-haul hub model. In line with Emirates’ long-standing strategy to operate a modern and efficient fleet, these new aircraft will also keep its fleet age well below the industry average. dnata’s key investments during the year included: the significant

expansion of catering capabilities in North America with the opening of new operations in Vancouver, Houston, Boston, Los Angeles and San Francisco. dnata also completed the purchase of the remaining stake in Alpha LSG, to become sole shareholder of the UK’s biggest inflight catering, on-board retail and logistics company. Across its more than 120 subsidiaries, the Group’s total workforce remained nearly unchanged with 105,730 employees, representing over 160 different nationalities. Sheikh Ahmed said: “In 201920, we were steadfast with our cost discipline while investing to expand our business and revenues opportunities. Through ongoing reviews of our work structures and the implementation of new technology systems, we’ve improved productivity and retarded manpower cost increases. As the pandemic hit, we’ve taken all possible measures to protect our skilled workforce, and ensure the health and safety of our people and

our customers. This will remain our top priority as we navigate a gradual return to operations in the coming months.” He concluded: “The COVID-19 pandemic will have a huge impact on our 2020-21 performance, with Emirates’ passenger operations temporarily suspended since 25 March, and dnata’s businesses similarly affected by the drying up of flight traffic and travel demand all around the world. We continue to take aggressive cost management measures, and other necessary steps to safeguard our business, while planning for business resumption. We expect it will take 18 months at least, before travel demand returns to a semblance of normality. In the meantime, we are actively engaging with regulators and relevant stakeholders, as they work to define standards to ensure the health and safety of travellers and operators in a post-pandemic world. Emirates and dnata stand to reactivate our operations to serve our customers, as soon as circumstances allow.”

WEDNESDAY MAY 13, 2020

NEWS

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Work on Pokuase bulk supply point is 61 percent complete Work on the US$50 million Pokuase Bulk Supply Point (BSP) is 61 per cent complete and expected to be handed over to the Electricity Company of Ghana (ECG) and GRIDCo by the end of the first quarter of 2021. The BSP Project started on April 30 last year, and being funded by the Millennium Challenge Corporation (MCC) and Ghana Government, under the Ghana Power Compact Programme. Upon completion, the BSP Project would supply reliable electricity to 350,000 residents within its catchment area, including businesses, public institutions and health facilities. A statement issued by the Communications and Outreach Unit of Millennium Development Authority (MiDA) and copied to the Ghana News Agency in Accra, said the six major transformers for

the Project arrived in the country from Turkey on April 27 and May 4 respectively. The transformers, which come in two sizes, 145 MVA and 39 MVA, would support the operations of GRIDCo and ECG for efficient and reliable power supply in the beneficiary communities. The statement said the transformers had been subjected to Factory Assessment Tests in the presence of the officials of MiDA, ECG GRIDCO and other stakeholders committed to the project. It said MiDA and the Project Contractors have put in place the necessary safety protocols to safeguard the health of workers undertaking the construction works and residents within the project catchment area.GNA

VAOB Foundation donates GUTA calls for workable stimulus package committee essential items and cash to Accra Psychiatric Hospital

The Ghana Union of Traders’ Associations (GUTA) has called for the institution of a committee involving all relevant stakeholders to discuss and come up with a workable plan for distributing government’s stimulus package. The Association said it had become necessary as there were no stakeholder engagement to discuss and advise the government on how best its stimulus package for the informal trading sector and the small scale industries could be effectively managed to serve its intended purpose. The government, in its quest to salvage business in the country as part of the measures to curb economic hardship in the wake of the COVID-19 pandemic, announced a one billion Ghana Cedi stimulus package for the informal trading sector and the small scale industries on Friday, March 27. A statement signed by Dr Joseph Obeng, GUTA President and copied to the Ghana News Agency in Accra said President Nana Addo Dankwa Akufo-Addo’s first statement on the

stimulus package indicated that the fund would be disbursed through Trade Associations and the National Board for Small Scale Industries (NBSSI). It indicated that Mrs Kosi YankeyAyeh, the Chief Executive Officer of the NBSSI stated that she was expecting about 200,000 businesses to access the fund. This, the statement added that would strike an average threshold of GH¢3,000.00 per a beneficiary, “which is grossly inadequate”. It said the statement of the NBSSI CEO fell short of disclosing the modalities and specific target groups for the disbursement as well as the threshold and interest rates involved. The statement said it was important to alert the government that the announcement of the stimulus package had generated a lot of interests and expectations among greater majority in the business community. It said: “Government should consider this fact, engage with us to think through the entire package.

The Vera Abena Okyerewaa Burckson (VAOB) Foundation, a subsidiary of the VAOB Group, has donated essential items to the Accra Psychiatric Hospital to support the hospital’s efforts to manage the spread of COVID-19. The items, which were presented by a director of VAOB Group, Leslie Okyere and the Head of Operations, Shana Keller include: Veronica buckets, KN 95 face masks and locally made cloth masks, temperature guns, bottled water, and a cash donation of GH¢ 20,000. Speaking on the reason behind the donations VAOB Group’s Managing Director, Tony Burkson, said: “By now, it is apparent that we are all directly impacted by the Covid-19 pandemic currently ravaging our world. No one, regardless of class or creed has been spared, and humanity has had to re-evaluate the things that matter most; and kindness ranks high. VAOB is privileged, to contribute towards the urgent support needed to help fight and overcome this virus. Even as we rally global support to fight this disease it’s important to throw our individual might into the fight. I am honoured to be able to present these items to an institution that will put it to good use, and do so in honour of my mother whose life of kindness and service to mankind is worth commemorating”. VAOB Group is an Africa-focused advisory firm with extensive experience in originating,

structuring and financing infrastructure projects while providing government relations and market entry advice to multinationals and governments across Sub-Saharan Africa. Over the last 2 years, the group has advised on almost US$300m worth of infrastructure projects in SubSaharan Africa, covering the construction of Hospitals, Bridges and other critical infrastructure. In addition to the foundation, VAOB has two other subsidiaries - V-Energy and V-Oil focused on the renewable energy and oil & gas sectors respectively. Primary services provided include Infrastructure Advisory, Corporate Finance and Market Entry With offices registered in Ghana and the UK, business operations cover a number of African countries and the UK. The team has decades of experience in taking infrastructure projects from conceptualisation to the execution stage by capitalising on existing relationships and a good track record with credible international banks to develop financing strategies for infrastructure projects. The VOAB foundation has outlined two specific areas where it will focus most of its efforts- Mental Health and Wellbeing and Women’s Empowerment. These were both causes that the foundation’s honouree was most passionate about during her lifetime.

WEDNESDAY MAY 13, 2020

NEWS

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COVID-19: Sahara Group highlights critical role of intraAfrica-led interventions Intra-Africa-led collaboration and interventions by the private sector can help the continent bolster ongoing efforts geared towards containing the spread of COVID-19 and promote sustainable development across the continent, Temitope Shonubi, Executive Director, Sahara Group has said. Speaking while taking journalists on a tour of the completed over 300-bed COVID-19 Isolation and Treatment Centre in Abuja, Shonubi said leading African businesses can leverage their membership of trade associations, the Private Sector Advisory Group platform of the United Nations and the African Influencers for Development (AI4Dev) platform of the United Nations Development Programme (UNDP) to drive a more cohesive and effective response to the COVID-19 pandemic in Africa. “Sahara Group, through our operations across Africa, has consistently demonstrated its support for intra-Africa led approach to promoting economic prosperity and sustainable development on the continent. Sahara Foundation, our corporate citizenship vehicle conceptualized the Abuja Isolation Centre project, partnered with the This Day media group and worked with other partners to deliver a

world-class facility that will help save lives. Sahara is also supporting COVID-19 interventions across Africa and is exploring areas of further collaboration with other partners for the benefit of over 1.3 billion people that call Africa home,” he said. Shonubi said Sahara Foundation’s concept for the project was driven by the desire to make a difference in how nations respond to the pandemic in terms of physical, mental, and socio-economic wellbeing of all Africans. “In addition to playing a major role in delivering the centre, Sahara and its entities have been involved in providing personal protective equipment and relief materials to help medical personnel and the vulnerable cope with the impact of the pandemic. We believe the ‘Africa for Africa’ message is one that can bring hope and succour to Africa at this time.” According to Shonubi, who is also a member of UNDP Africa’s AI4Dev initiative, Sahara Group is also providing dry and cooked food to over one million beneficiaries, face masks, hand sanitizers and relief materials to communities where its power affiliates (Ikeja Electric,

Executive Director of Sahara Group Temitope Shonubi is of the view that intra-Africa-led interventions could drive sustained prosperity across the continent.

Egbin Power and First Independent Power Limited), upstream and other Sahara affiliates operate across Africa. In Zambia, Asharami Energy Limited Company donated tens of thousands of hand-made fabrics/ Chitenge masks to shore up access to PPE and slow the spread of the virus. The company also publishes materials in English, Bemba, and Nyanja to facilitate the dissemination of information about the pandemic. In Kenya, Asharami Synergy Limited donated thousands of 5 litre jerrycans of hand sanitizers, whilst oxygen has been donated to hospitals in Ghana as well as Cote d’Ivoire to boost life support

operations. Sahara’s Downstream entity, Asharami Synergy, working in collaboration with other members of the Depot and Petroleum Marketers Association of Nigeria (DAPMAN), is providing support towards the completion and equipping of the Nigerian National Petroleum Corporation in Abuja. Located at the THISDAY Dome in Abuja, the centre was delivered by a coalition of partners including Sahara Foundation, THISDAY, CCECC, Arise News, The Presidency, Egbin Power, Abuja Electricity Distribution Company, Federal Capital Territory Authority, the Nigeria Centre for Disease Control, the Federal Ministry of Health, the African Finance Corporation, Central Bank of Nigeria through CaCovid. Wood Factory, the Regents school, the three fashion brands of Ebewele Brown, Traffic Clo and Syari Clothiers, Kenol, Mama Cass, 54 Gene and Central Park. The Centre which will be overseen by the FCTA under the supervision of NCDC has a capacity of a minimum of 300 beds with provision for additional 8 Intensive Care Unit beds, ventilators, dialysis machines, protective equipment, and mobile facilities for testing.

WEDNESDAY MAY 13, 2020

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