Business24 Newspaper (May 6-2020) by Business24 Online

EDITION B24 | 40

WEDNESDAY MAY 6, 2020

THEBUSINESS24ONLINE.NET

COVID-19 dashes new oilfield dev’t plans First National Bank Ghana acquires GHL Bank MORE ON PAGE 3

Location of West Cape Three Points Block 2 (Source: Petroleum Commission Ghana)

BY NII ANNERQUAYE ABBEY

Companies seeking to develop new oil blocks off the coast of Ghana are likely to run into challenges owing to the devastating effects of the novel coronavirus, a petroleum economist, Dr. Theo Acheampong, has said. Ghana was betting on the development of new oilfields in deep waters to entrench its position as a full-grown oil producing country—but with COVID-19 crashing the price

of crude oil, Dr. Acheampong argues that such developments will likely not see the light of day. The country’s current oilfields, Jubilee, TEN and Sankofa, produce about 200,000 barrels of oil per day, and a development plan submitted by Norwegian firm Aker Energy last year for its Pecan oilfield was expected to nearly double that output by 2023. But with the price of crude oil falling below US$30 per barrel, the Norwegian firm has pulled the plugs on its US$4.4bn development, located in the

Deepwater Tano Cape Three Points block offshore, until further notice. The company subsequently announced a termination of its agreement with Malaysian shipbuilder Yinson for the provision of a Floating Production Storage and Offloading (FPSO) vessel for the project. The freezing of the Pecan field development, according to the petroleum economist, reflects the turmoil in the industry, adding that indigenous oil MORE ON PAGE 2

UBA introduces banking on WhatsApp and Facebook with the launch of LEO MORE ON PAGE 3 ECONOMIC INDICATORS

On Leadership

By: His Majesty Otumfuo Osei Tutu II, Asantehene MORE ON PAGE 7

*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

7.8%*

PROJECTED GDP GROWTH RATE PRIMARY BALANCE.

1.5% -1.1% OF GDP

AVERAGE PETROL & DIESEL PRICE:

GHc 5.13*

INTERNATIONAL MARKET BRENT CRUDE $/BARREL

1,000 mini planters, solarpowered rice mills for smallholder farmers

31.68

NATURAL GAS $/MILLION BTUS

2.08

GOLD $/TROY OUNCE

1,706.86

CORN $/BUSHEL

329.50

COCOA $/METRIC TON

2,378

COFFEE $/POUND:

+5.70 ($108.30)

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

MORE ON PAGE 3

16.39

editor@thebsuiness24online.net

NEWS/EDITORIAL

WEDNESDAY MAY 6, 2020

Subsrcibe thebusiness24online.net/subscribe

EDITORIAL

Big boost for housing sector 1

Wash your hands 2

The acquisition of GHL Bank, which specialized is mortgage financing by First National Bank Ghana is good for the real estate sector. First National Bank Ghana is a fullyowned subsidiary of the FirstRand Group, the largest financial institution group by market capitalisation in Africa. With this acquisition, we foresee

Wear a mask 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)

“Plans are well under way to merge the operations of the two banks. We further believe that this merger will demonstrate and further cement our commitment to the Ghanaian market. We recognise that the economy is under a lot of pressure as a result of the COVID-19 pandemic, but we remain excited about the future of banking in Ghana.” Customers of both banks are being advised to continue

doing business with their current bankers (i.e., either First National Bank or GHL Bank) as new developments will be communicated in due course. Business24 is optimistic that this new enterprise will benefit millions of workers eager to have a decent place to live.

COVID-19 dashes new oilfield dev’t plans (…CONTINUED FROM COVER )

Cover your cough

more investment in a sector that very few banks operate in. Indeed this will help bridge Ghana’s housing deficit. The transaction has been approved by the boards of the two banks and has received the required regulatory approvals from the Bank of Ghana and the South African Reserve Bank. Commenting on the acquisition, Chief Executive Officer of First National Bank Ghana, Richard Hudson, said:

company Springfield may follow the path of the Norwegian firm due to the same challenges. The Ghanaian firm, which made headlines last year for discovering significant oil reserves in the West Cape Three Points Block 2, was in the market for a technical partner to help develop and operate the field, expected to be one of the largest in Africa. “For Springfield, they need to find a very reputable farm-out partner, an international oil company, because they

have 85 percent equity in the field, and I don’t think they will be able to raise the financing in this environment to do the development,” Dr. Acheampong stated. Business24’s source at Springfield who asked not to be named confirmed that development plans have been iced for now, with discussions currently ongoing between the company and government. “Currently, we have put everything on hold; we are waiting till at least June 2020 to see how the situation will evolve,” he said. With the delay likely to affect Springfield’s bid to become the first fullyfledged African company

to drill in deep waters, Dr. Acheampong said there is little government can do to heal the company’s woes. “There is very little that government can do at the moment beyond the fiscal incentives. If you look at the contract [with government] there is royalties, additional rent entitlement, corporate income tax—and the way the system has been designed, if oil prices go down government will be earning lower revenues from these fields. On the tax side, I don’t think there is much that the government could actually do for them because of the stabilisation and the ringfencing provisions in the

petroleum agreement, which was supposed to be fiscallyneutral and progressive and react to swings in oil prices.” However, Dr. Acheampong believes that one of the ways government could probably help the cause of Springfield is to fast-track the approval process should the company decide on its partner for development. According to him, beyond that, any help government may seek to extend to Springfield must be an industry-wide approach that benefits all players. However, judging by how government’s revenues have been hit by the virus, such a fiscal stimulus may not be prudent, he said.

First National Bank Ghana acquires GHL Bank First National Bank Ghana has announced that it has acquired 100 percent of GHL Bank. This means effective today, GHL Bank has become a subsidiary of First National Bank Ghana. First National Bank Ghana is a fully-owned subsidiary of the FirstRand Group, the largest financial institution group by market capitalisation in Africa. GHL Bank Plc is Ghana’s leading provider of mortgage ﬁnancing. The transaction has been approved by the boards of the two banks and has received the required regulatory approvals from the Bank of Ghana and the South African Reserve

Bank. Commenting on the acquisition, Chief Executive Officer of First National Bank Ghana, Richard Hudson, said: “Plans are well under way to merge the operations of the two banks. We further believe that this merger will demonstrate and further cement our commitment to the Ghanaian market. We recognise that the economy is under a lot of pressure as a result of the COVID-19 pandemic, but we remain excited about the future of banking in Ghana.” Customers of both banks are being advised to continue doing business with their current bankers (i.e., either First National Bank or GHL

Bank) as new developments will be communicated in due course.

Richard Hudson, CEO, First National Bank Ghana

WEDNESDAY MAY 6, 2020

N E WS

Subsrcibe thebusiness24online.net/subscribe

UBA introduces banking on WhatsApp and Facebook with the launch of LEO The United Bank for Africa (Ghana) Limited has pioneered a new way of banking through a chatbot Dubbed ‘LEO’ on WhatsApp and Facebook Messenger. LEO is an Artificial Intelligence chatbot for banking services currently available on Facebook messenger and WhatsApp for both UBA and non-UBA customers. Mr. Isong Udom, the Managing Director and Chief Executive Officer of UBA Ghana in an interview said the new service is to enable the bank serve its customers better and continually provide convenience through digital banking channels. He said it was also to help deal with the issues of social distancing as a means to fighting COVID-19 together. He said the world is changing and particularly as a result of the COVID-19 pandemic

the bank is leveraging every possible technology present. “LEO product has been developed painstakingly to answer the call of the time where little or no human intervention is required. “Banking through LEO has integrated all our offerings from account opening to customer service on WhatsApp and Facebook Messenger for the comfort and convenience of our customers,” Mr. Udom added. The CEO said UBA Ghana was proud to have stepped up to the challenge as a trailblazer in providing unrivalled convenience for its customers all over the world. He said LEO has been tried, tested and refined as it is presently working wonders in 19 African countries, where UBA operates. Mr Kenneth Ugwuanyi,

the Head of Digital Banking Sale, UBA Ghana speaking on the product features, dexplained, that “ LEO is a personal banker, for the first time, you can bank on social media. Simply exchange pleasantries with LEO to initiate a conversation.” He said LEO would chat the customer into opening an account, checking their account balance, transferring funds, mobile money transactions, paying

utility bills, airtime top up and savings. He said LEO could help in linking additional accounts, customer care and other Banking Services such as request, stop, confirm cheques, block card, log & track complaints, ATM / Branch locator, freeze on account, and so much more. “Just like Microsofts Cortana, Apples Siri and Google Assistant, UBAs LEO

has been designed to deliver personalized experience. Leo is a personal relationship officer and a friend, the more you use it, the better it understands you,” he added. He said no two customers would have the same experience with LEO over time, indicating that customer shall be treated with uniqueness based on their individual needs and demands.

1,000 mini planters, solar-powered rice mills for smallholder farmers ...farmers urge openness in sharing modalities BY REUBEN QUAINOOW

The Ministry of Food and Agriculture (MoFA) has taken delivery of some one thousand mini planters and solar-powered millers from Czech Republic and currently working on modalities to distribute them to smallholder farmers across the country, sector minister Dr. Owusu Afriyie-Akoto has disclosed. In his interaction with smallholder farmers, including rice producers, in the Bono and Bono East regions as part of his 6-day tour to selected regions, the minister indicated that the equipment was acquired through a negotiated facility hence the need to work out modalities to facilitate its repayment. “Solar-powered rice mills are being experimented in four places, if successful, government intends to import

more to support farmers; meanwhile, a deal with Indian, Brazil and Chinese governments will see lots of them coming in by the close of the year,” he added. But some smallholder farmers, both rice producers and others alike, are demanding transparency in MoFA’s modalities for sharing the equipment to ensure that those in dire need of them will be able to benefit. According to them, the lack of planters and other equipment have stalled efforts at expanding farming activities to meet high demand from the local and international market. “Efforts to secure funding from local sources to scale up our activities within the agriculture value chain were fraught with several bottlenecks, eventually proving futile,” they told

Business24. A farmer in the Ketu North District of the Volta Region and Managing Director of Maphlix Trust Farms Limited, Mr. Felix Mawuli Kamassah, was particular about MoFA’s failure to engage farmers in dire need of the machines on the modalities for distribution. “Small-scale farmers are unable to purchase mini planters or rice millers and so this is a welcoming news us. But what modalities will be used to distribute the planters, will they be given on credit, and why is MOFA not involving leaders of farmer associations? he queried. The agribusiness entrepreneur who also doubles as the President of the Vegetable Producers and Exporters Association of Ghana (VEPEAG) indicated that opportunities like these mostly do not benefit the

smallholder farmers and he doesn’t kwon why he quizzed. “This planters and rice mills will be given to some persons who are not into farming; they will keep them and later sell it to us at a high price. I am speaking out of experience; that is the practice in this country,” he pointed out, urging the minister to keep an eye on the distribution process. A rice farmer in the Northern Region, Alhassan Yakubu, recounted how production constraints such as land tenure problems, absence of water control system and low profitability was making farming unattractive and urged the need for an agricultural revolution. Agriculture has a central role to play in promoting growth and poverty reduction in the Ghanaian economy at this stage of national development

and the time for an agricultural revolution is now. “Rice is by every account an important crop in the Ghanaian staple diet and its availability throughout the year is of great importance,” Alhassan said. Dr. Afriyie Akoto pointed out that his 6-day tour of the Ashanti, Eastern, Bono, and Bono East regions to interact with farmers revealed that Ghanaians were really interested in farming and related activities within the agriculture value chain. “Bankers and lecturers have invested heavily in rice and poultry farming across the country because the sector looks lucrative, they are sponsoring out-growers across communities and for me this is good news for us as a country,” he said.

WEDNESDAY MAY 6, 2020

Subsrcibe thebusiness24online.net/subscribe

NEWS

Ethiopian brings convenience to cargo customers through digitized service Ethiopian Airlines, the Largest Aviation Group in Africa and SKYTRAX Certified Four Star Global Airline, introduced a mobile app and chatbot-assisted shipment tracking service to elevate cargo customers’ experience. The mobile app, which is now available for both Android and iOS, will bring convenience to Ethiopian Cargo & Logistics Services customers through a range of self-service features including checking flight schedule, cargo tracking and charter requests at the swipe of a finger, while the Ethiopian Chatbot enables customers to access up-todate information and track their shipment on Messenger and Telegram. “As a customer-centric airline, we always seek ways to better serve our customers

and bring more digital options to their fingertips,” says Miretab Teklaye, Director Group Integrated Marketing Communications at Ethiopian. “The newly unveiled cargo mobile app and chatbot-assisted cargo tracking service will

bring convenience for our customers allowing them to access real-time updates about their shipments and to process their charter requests. As the number of mobile apps and messaging platforms users grows globally, we will leverage our

in-house digital capabilities to further elevate customers’ experience by taking our digital service to the platforms of their choice.” Users can download Ethiopian cargo mobile app from Play Store and App Store using the links: https://

bit.ly/2VJInrh, https://apple. co/3c1dg13 Telegram users can access Ethiopian Chatbot using ethiopian_chat_bot while Facebook/Messenger users can access it at https://www. facebook.com/etchatbot/.

PMI Ghana supports government’s fight against COVID-19 The Project Management Institute (PMI) Ghana, the third largest Chapter in Africa, has geared up in support of the fight against the deadly COVID-19 pandemic. The President of PMI Ghana, Ms. Jumoke Lafenwa and her team supplied healthcare and personal protective equipment totalling GH¢35,000 to the Domestic Violence and Victims Support Unit of the Ghana Police Service and the Ga East Municipal Hospital in Accra. The PMI Ghana President noted that, the Institute was moved to support the two institutions mainly due to the roles they play in society. According to the President. PMI Ghana; One of its most valuable assets is the ‘Community’. Ms. Jumoke Lafenwa indicated that, “since the government cannot do it alone, we are duty bound as project management professionals to collaborate with the frontline institutions to help safeguard communities (i.e. Our world today is a result of the people in the community, a better world tomorrow would also be borne out of the people in the community).” She further stated that, the gesture is to complement

government’s efforts at stopping the spread of the virus in the country. The items supplied include disposable gowns, face masks, tissues, head covers, non-contact thermometers and Veronica buckets. The PMI Ghana President added that, the institute is open and willing to offer more support to the government in the areas of managing the pandemic and other disasters through careful planning, effective

project management and post disaster recovery support programs. Additionally, she stated that, the Institute is equipped with an unmatched professional resource from every sector or industry which is helping and ready to assist governments in delivering exceptional value solutions across all sectors of the economy. C/Supt. Ms. Owususaa Kyeremeh, Director of DOVVSU (Domestic Violence

and Victims Support Unit) received the items on behalf of the Police Unit with expression of appreciation to the Project Management Institute Ghana. She stated that, the items would be put to good use adding that investigators cannot go out to protect others without first protecting themselves”. Dr. Ebenezer Oduro Mensah, a member of the COVID-19 Management Team at the Ga East Municipal

Hospital, lauded PMI Ghana for the gesture, and cautioned Ghanaians not to think that the disease does not exist simply because they’re not seeing physically sick people. He called on the public to abide by all health practices and measures approved by the Public Health Division of the Ghana Health Service including social distancing and regular hand washing under running water.

WEDNESDAY MAY 6, 2020

C E L E B R AT I N G A G R E AT K I N G

Subsrcibe thebusiness24online.net/subscribe

On Leadership

By: His Majesty Otumfuo Osei Tutu II, Asantehene

t will be highly presumptuous of anyone to suggest he can pinpoint exactly where the line is crossed between the developed and the yet struggling states of Africa. Many great thinkers who have averted their minds to the issue will point out a highly complex web of factors which cannot be over-simplified. However, I think we can all safely agree that of the many attributes on which the stability of developed nations depend, one fact is incontestible: they all stand upon the pillars of robust, resilient, institutions of state—institutions with varying degrees of autonomy that, over time, have become the shock-absorbers of social dysfunction, able to keep the ship of state sailing through the stormiest seas. All the body of knowledge of comparative history and the evolution of political ideas should tell us that in none of the nations of Europe or North America were the institutional structures of the state built overnight. Among the large body of intellectual texts on comparative history and

political science, the work of the respected American political theorist Prof. Francis Fukuyama, may be the most relevant to our subject. In his The Origin of Political Order, Prof. Fukuyama defines “three characteristics of institutions that constitute a political order: the state, rule of law and mechanisms of accountability” and traces the emergence of societies as political entities from the dawn of mankind to the French and American Revolutions. But it is in his companion volume, Political Order and Political Decay that we see the extraordinary journey mankind has undergone in the development of the institutions which constitute the modern state and the contrast between the developed nations and the fledgling states in Africa. He draws a distinction between nation building and state-building which he refers to as “the creation of tangible institutions—armies, police, bureaucracies, ministries, and the like” and he goes on “it is accomplished by hiring staff, training officials, giving

them offices, providing them with budgets, and passing laws and directives.” Nationbuilding by contrast, is the creation of a sense of national identity to which individuals will be loyal, an identity that will suppress their loyalty to tribes, villages, regions or ethnic groups.” While the distinction is understandable, what is also clear is that the nation, so called, can only really exist on the base of the builtstate that is to say on the institutions that constitute the state. But as Prof. Fukuyama asserts, it took the French Revolution to produce Europe’s first modern law code, the so-called Code Napoleon in 1804, followed by the establishment of the first administrative mechanism for the implementation of the code. This was to be the model bureaucracy that was to fundamentally change the ways in which the affairs of states are managed. Side by side with these innovations was the creation of a new educational system providing for the establishment of a special institution of higher learning for the specific training of civil

servants, the Ecole Normaile Superiore, the forerunners of the Ecole National Administrative (ENA) which to this day remains France’s and one of the world’s most outstanding administrative and diplomatic training institutions. The Code Napoleon migrated to much of Europe and to lands as distant as Japan, Argentina, and Egypt. Most importantly, the triumph of Napoleon Bonaparte over the supposedly technically superior Prussian army in the Battle of Jena in 1806 persuaded the Germans also to undertake fresh reforms of the state. The SteinHardebern reforms of 1807 incorporated some of the French reforms including the adoption of the French principle of carriere ouvert aux talents (carrier open to talent). The United States stands at the spearhead of liberal democracy and the standard bearer of good governance, and the prime driver of the world economy. But as Fukuyama makes clear, the United States invented what he calls clientelism, the institutionalized form

of political patronage and incipient corruption by which “ambitious but nonelite politicians” became wealthy and increased their standing in society. It was not until 1883 that Congress passed the milestone Pendleton Act which created an autonomous public service, removed powers of appointment from party bosses and, among others, barred public servants from handing back part of their salaries to political parties which appointed them. Even the Pendleton Act did not completely end the era of the political bosses and the control of political patronage. We have to wait until well into the 20th century for the new dawn of governance in the United States. While the experiences of the nations of Europe and North America have helped them solidify the institutions of state on which they are secured today, the same cannot be said of the states of Africa which until the postWorld War II years had been under colonial subjugation. Indeed it is interesting that Fukuyama classifies the African states as being in the

8 (…CONTINUED FROM PAGE 7) phase of clientelism which dominated the American political system even beyond Pendleton. Understanding the historical context in which today’s China, Europe and North America have grown presents us with two emotions: On the one hand, it offers comfort that in the fullness of time, it should be within our capacity to overcome the challenges of our present circumstance and build for ourselves too the institutions on which we can secure our future. On the other hand, we also face the reality that we do not have the luxury of time given the revolution of rising expectations of our people. We gained the status of nationhood in 1957 with a Constitution that in many respects provided for the basic structures for a stable state. We had all three basic structures of statehood: an elected executive, an elected legislature and an independent judiciary proudly modelled on the finest traditions of our departing colonial power. Behind them a civil service, an army and a police service all designed to operate with appropriate degrees of autonomy, all of them reflecting our attachment to the Westminster model of governance. In the euphoria of independence, we failed to appreciate the potential fault-lines in our independence constitution and while the political forces of the time maintained its grip for a time, neither the constitution nor the state survived for one decade. It was overthrown in 1966. For two and a half decades thereafter, Ghana went through a series of military juntas and an aborted civilian rule before finally recommitting to a return to democratic governance. In 1992, we gave ourselves a new Constitution, the essential conditions of which were to banish any notion of a one-party state and install a multi-party democracy based upon the rule of law and fundamental human rights. The constitution was the product of our shared experiences and founded on all the values of human rights, individual freedoms and the rule of law. Crucially, it was not lacking in the architecture of institutions needed to ensure the stability and good governance of the state. We have a President, chosen by universal suffrage, as the Executive Head of State and who appoints a

F E AT U R E Cabinet to assist him in the administration of the state. We have an elected Parliament with the authority to provide appropriate oversight over the actions of the executive and to make laws by which the state will be governed. We have a Judicial Service whose independence is guaranteed by the constitution and who, in turn, is expected to provide an indestructible pillar for the protection of the constitution and the rule of law. From the collapse of the First Republic, the nation determined that the protection of human rights and individual liberties had to be the cornerstone of any constitutional arrangements. While recognizing the courts as the ultimate guarantors of individual liberties, it was thought that other agencies were needed that would more readily be accessible to the people whenever their rights are threatened. The idea of an Ombudsman was mooted and out of that evolved the creation of a Commission on Human Rights and Administrative Justice. Having opted for a democratic multi-party state, we created an institution to provide an even playing field for all political actors and guarantee free and fair elections for all. That was the Electoral Commission. Our constitution provides for the freedom of the press and the freedom of expression and to give effect to this, it created a National Media Commission to insulate the media from political control and ensure the media can exercise its function of holdujnmhying authority to account without hindrance. We have always been proud of our armed forces. The nature of their incursions into politics at some point will always be a matter of controversy, but no doubt we have all learnt our lessons and we see our armed forces today as exemplifying the professionalism any nation can be proud of. Our Police service too acquits itself with distinction on international assignments. The Ghana Civil Service gave the world Busumuru Kofi Annan, one of the finest international public servants in history. Before him, men and women like A.L. Adu, Robert Gardner, M.F. Dei-Annan, Kenneth Dadzie, Chapman, E.M. Debra, Caseley Mate, Kwame Kwateng, Richard Akwei, Nathan Quao, Gloria Nikoi, Chinerey-Hesse had adorned the service and made it one

Subsrcibe thebusiness24online.net/subscribe

to behold. With all these institutions fully protected under the constitution, how could we possibly falter? And yet we cannot deny that we have faltered and are now faced with a serious problem over the very institutions we have created for our protection and the facilitation of the development of our nation. The reason is that unfortunately, the twists and turns of our political history continue to cast their shadow over our institutions and the overhang of our conflicted past has robbed some of them of their sense of security and left them too fragile for their tasks. It was one thing adopting a constitution with all the lofty principles enshrined in the 1992 constitution but quite a different matter clearing the deck of all the garbage from the past. The troubling fact is that we did not succeed, despite some grand efforts, in clearing the decks and the garbage of the past has continued to infest the new constitutional order to this day. Politics is not an unworthy pursuit in any society. It enables us seek the best way to organise our lives, consort with others of like minds to explore the best means of managing resources to obtain an outcome which improves the lives of all the people. Political parties have become the critical instruments in this process. But politics can also be unhealthy and, in the wrong circumstances, almost destructive. This is particularly relevant with political parties and their

mode of operations, and, critically, their impact upon governments. In the modern state, Political parties are indispensable. They provide the platform for the ideas around which citizens coalesce and through which they can pursue their shared goals for national development. But political parties also have a history we tend to but should not ignore. It is instructive to note that the Constitution of the United States did not provide for political parties and the first President George Washington was so deeply opposed to their emergence that he famously used his valedictory address to caution the new nation against the divisiveness of parties. And once the parties took hold, they brought with them the system of political patronage and clientelism to which we have referred earlier. Indeed, Fukuyama’s description of the clientelistic state must have deep resonance to many Ghanaians: “in a clientelistic system, politicians provide individualised benefits only to political supporters in exchange for their votes. These benefits can include jobs in the public sector, cash payments, political favours, or even public goods like schools, and clinics that are selectively given only to political supporters.” It took more than a century before the United States was able to clean the system and put an end to both political patronage and the scourge of clientelism. And the United States has been all the stronger for it.

WEDNESDAY MAY 6, 2020

There is a lot of force in the view often expressed that perhaps we are being too hard on ourselves if we expect to accomplish in 60 years what powers like the United States took centuries to achieve. But I am not sure there can be any argument for persisting with what one sees to be wrong when there is a better alternative on offer. As already noted, the independent state of Ghana began with a constitution designed to create a Westminster model of democracy. It is said that we strayed from the chosen path and ended in 1960 with a One Party state which collapsed landing us with two decades of military intervention. We thought having liberated ourselves from the monolithic ideology of a one-party state, the worst of politics was over for good. But if we are honest, we should ask ourselves whether the worst is truly over. Yes, we have the luxury of joining the party of our choice and the supreme right to choose which party manages our affairs. But what difference does the change bring if the new system also makes party loyalty the source of all rewards? Any serious analysis of the clientelistic system will reveal that it imports all the conditions we find unacceptable in a one party state except that they come in a refined package labeled multi-party democracy. The only reason this remains is that we have accorded politics a hallowed status in our society and made it virtually the sole source of rewards in our lives. Politics is not only a worthy pursuit, it is the only worthy pursuit. It is not only a leading profession, it is the only profession. All the great professions and institutions of the world have been subjugated to the power of politics to such an extent that their most eminent minds are obliged either to kowtow to political authority or to leap onto the political bandwagon. Thus, our most eminent doctors are tempted to exchange their stethoscopes for the megaphones while patients are dying from the inadequacy of medical attention. This only happens when politics becomes the source of all rewards and all rewards come with the unmistakable attachment of party loyalty.

Excerpts of Speech delivered by His Majesty Otumfuo Osei Tutu II, Asantehene at the Annual Leadership Lecture of the University of Professional Studies, Accra

WEDNESDAY MAY 6, 2020

F E AT U R E

Subsrcibe thebusiness24online.net/subscribe

WEDNESDAY MAY 6, 2020

The Problem with MMT BY WILLEM H. BUITER

odern Monetary Theory (MMT) offers a dangerous half-truth that has become particularly seductive now that governments are desperate for tools with which to keep their economies afloat. A recent statement by MMT proponent Stephanie Kelton to the Financial Times is a case in point. Referring to the United Kingdom’s current Conservative government, she argues that, “They’re going to have massive deficits. And it’s fine.” The problem is that while this assessment is correct for now, it won’t necessarily be correct in the future. Indeed, we should anticipate that the year following the end of the COVID-19 lockdown could be when MMT falls flat on its face – starting, perhaps, with a burst of inflation in the UK. But, even barring that specific outcome, policymakers are flirting with disaster if they accept MMT’s main message, which can be paraphrased as: “Deficit, schmeficit. Just boost public spending or cut taxes, then monetize the resulting imbalance.” To be sure, some parts of MMT make sense. The theory views the treasury (or finance ministry) and the central bank as components of a single unit called the state. The treasury is the beneficial owner of the central bank (or, put another way, the central bank is the treasury’s liquidity window), which implies that centralbank independence is an illusion, especially when it comes to its fiscal and quasifiscal operations. MMT holds, correctly, that because the state can print currency or create commercial bank deposits with the central bank, it can issue base money at will. And because the monetary base is irredeemable, it is not in any meaningful sense a liability (even though it is certainly viewed as an asset by the holder). As long as the non-monetary debt issued by the state is denominated in domestic currency, sovereign default is a choice, not a matter of necessity, because debt servicing can always be funded (by creating money). But if sovereign default is a choice, there are circumstances in which it

Willem H. Buiter

might be chosen. If the deficit that needs to be monetized is large enough, and if the interest on the public debt accounts for a significant part of that deficit, the monetary financing required to maintain sovereign solvency might result in a politically unacceptable rate of inflation. In that case, the sovereign might opt for the “lesser evil”: defaulting on its domestic-currencydenominated debt. To get to the heart of the matter, forget about issues such as bond financing, and focus directly on how the state funds the deficit by creating money. Assume that public spending and tax revenues are fixed in real (inflation-adjusted) terms. The resulting real deficit will be equal to the increment in the real stock of base money that the private sector must be willing to absorb each period. There are two “regimes” for base-money demand.

The first is where many of the advanced economies now find themselves: in a liquidity trap at the effective lower bound (ELB) for the nominal policy rate. At the prevailing near-zero risk-free short-term nominal interest rate, the effective demand for real-money balances is infinitely elastic. In this case, it is proper for fiscal authorities to follow a simple dictum: when in doubt, shovel it out. “Helicopter money” – monetized increases in public spending or tax cuts – is an appropriate policy response under such extraordinary conditions. So long as interest rates are stuck at the ELB, cash disbursements will not be inflationary. Yet one must remember that domestic or foreign developments affecting financial markets or the real economy can quickly eject a country from its ELB perch, landing it in what economists would call a normal

monetary regime, where the policy rate is above the ELB. With Japan stuck at or near the ELB for the past 20 years, the concept of “normal” may require some rethinking. Nonetheless, it would be reckless to design policies on the assumption that the neutral interest rate (the interest rate that would prevail with the economy at full employment and inflation on target) will hover near zero for the foreseeable future. In this second, normal scenario, there still would be no inflationary threat so long as the economy has excess capacity (idle resources). But when demand for the monetary base is constrained by interest rates and the level of economic activity (measured, say, by income or consumption), the unbridled monetization of state deficits eventually would eventually exhaust what slack there is, putting upward pressure on the rate

of inflation. At this point, no one can know whether the COVID-19 pandemic will have lasting effects on supply relative to demand. Although weak investment and strong precautionary saving are likely to depress neutral and market interest rates while the pandemic persists, we should be prepared for when social distancing becomes a thing of the past and supply chains are at least partly restored. Governments will have to adjust their fiscal position and its financing accordingly. MMT thus ignores the level of demand for base money at its peril.

Willem H. Buiter, a former chief economist at Citigroup, is a visiting professor at Columbia University. Copyright: Project Syndicate, 2020. www.project-syndicate.org

WEDNESDAY MAY 6, 2020

F E AT U R E

Subsrcibe thebusiness24online.net/subscribe

WEDNESDAY MAY 6, 2020

The case for deeply negative interest rates BY KENNETH ROGOFF

or those who viewed negative interest rates as a bridge too far for central banks, it might be time to think again. Right now, in the united states, the federal reserve – supported both implicitly and explicitly by the treasury – is on track to backstop virtually every private, state, and city credit in the economy. Many other governments have felt compelled to take similar steps. A once-in-acentury (we hope) crisis calls for massive government intervention, but does that have to mean dispensing with market-based allocation mechanisms? Blanket debt guarantees are a great device if one believes that recent market stress was just a short-term liquidity crunch, soon to be alleviated by a strong sustained postcovid-19 recovery. But what if the rapid recovery fails to materialize? What if, as one suspects, it takes years for the us and global economy to claw back to 2019 levels? If so, there is little hope that all businesses will remain viable, or that every state and local government will remain solvent. A better bet is that nothing will be the same. Wealth will be destroyed on a catastrophic scale, and policymakers will need to

find a way to ensure that, at least in some cases, creditors take part of the hit, a process that will play out over years of negotiation and litigation. For bankruptcy lawyers and lobbyists, it will be a bonanza, part of which will come from pressing taxpayers to honor bailout guarantees. Such a scenario would be an unholy mess. Now, imagine that, rather than shoring up markets solely via guarantees, the fed could push most shortterm interest rates across the economy to near or below zero. Europe and japan already have tiptoed into negative rate territory. Suppose central banks pushed back against today’s flight into government debt by going further, cutting short-term policy rates to, say, -3% or lower. For starters, just like cuts in the good old days of positive interest rates, negative rates would lift many firms, states, and cities from default. If done correctly – and recent empirical evidence increasingly supports this – negative rates would operate similarly to normal monetary policy, boosting aggregate demand and raising employment. So, before carrying out debtrestructuring surgery on everything, wouldn’t it

better to try a dose of normal monetary stimulus? A number of important steps are required to make deep negative rates feasible and effective. The most important, which no central bank (including the ecb) has yet taken, is to preclude large-scale hoarding of cash by financial firms, pension funds, and insurance companies. Various combinations of regulation, a time-varying fee for large-scale re-deposits of cash at the central bank, and phasing out largedenomination banknotes should do the trick. It is not rocket science (or should i say virology?). With large-scale cash hoarding taken off the table, the issue of pass-through of negative rates to bank depositors – the most sensible concern – would be eliminated. Even without preventing wholesale hoarding (which is risky and expensive), european banks have increasingly been able to pass on negative rates to large depositors. And governments would not be giving up much by shielding small depositors entirely from negative interest rates. Again, given adequate time and planning, doing this is straightforward. Negative interest rates

have elicited a blizzard of objections. Most, however, are either fuzzy-headed or easily addressed, as i discuss in my 2016 book on the past, present, and future of currency, as well as in related writings. There, i also explain why one should not think of “alternative monetary instruments” such as quantitative easing and helicopter money as forms of fiscal policy. While a fiscal response is necessary, monetary policy is also very much needed. Only monetary policy addresses credit throughout the economy. Until inflation and real interest rates rise from the grave, only a policy of effective deep negative interest rates can do the job. A policy of deeply negative rates in the advanced economies would also be a huge boon to emerging and developing economies, which are being slammed by falling commodity prices, fleeing capital, high debt, and weak exchange rates, not to mention the early stages of the pandemic. Even with negative rates, many countries would still need a debt moratorium. But a weaker dollar, stronger global growth, and a reduction in capital flight would help, especially when it comes to the larger

emerging markets. Tragically, when the federal reserve conducted its 2019 review of policy instruments, discussion of how to implement deep negative rates was effectively taken off the table, forcing the fed’s hand in the pandemic. Influential bank lobbyists hate negative rates, even though they need not undermine bank profits if done correctly. The economics profession, mesmerized by interesting counterintuitive results that arise in economies where there really is a zero bound on interest rates, must share some of the blame. Emergency implementation of deeply negative interest rates would not solve all of today’s problems. But adopting such a policy would be a start. If, as seems increasingly likely, equilibrium real interest rates are set to be lower than ever over the next few years, it is time for central banks and governments to give the idea a long, hard, and urgent look.

Kenneth Rogoff, A Former Chief Economist Of The Imf, Is Professor Of Economics And Public Policy At Harvard University. Copyright: Project Syndicate, 2020. Www.Project-Syndicate.Org

WEDNESDAY MAY 6, 2020

F E AT U R E

Subsrcibe thebusiness24online.net/subscribe

WEDNESDAY MAY 6, 2020

COVID19, imposition and lifting of lock downs in Africa: Disproportionate role of health, economic, social and colonial factors BY OPOKU-MENSAH FOSTER ABRAMPA

(CONTINUED FROM PAGE 10 OF WEDNESDAY APRIL 29 EDITION) Economic related factors Of course, it is a common knowledge that the imposition and lifting of lockdowns have implications on the economy. As a result, the government cannot shy away from the fact that its actions and inactions are influenced by economic factors. For example, the government might have failed to close the nation’s borders in mid-February (to prevent the virus from entering the country altogether) because of the fear of the country loosing revenue. Therefore, it was better to continue allowing movement of goods and humans in and out the country even if we risked having the virus. It seems this is what happened. The virus finally came, borders were closed and partial internal lockdown imposed. During the 3 weeks lockdown, the country obviously lost revenue. Aside the money lost to slow down or blockade of commercial activities, government spent huge amounts feeding some alleged 400000 vulnerable people. Resources were also spent on security enforcing the lockdown. Experts kept saying this was fast plunging the economy into recession. So to avoid further economic disaster, the president might have decided to sacrifice the health of the people to save the economy. Social related factors It is possible the imposition and lifting of the lockdown was influenced by pressure from individuals, civil society organizations, political groups, labor unions etc. For instance before the imposition of the partial lockdown, the TUC have come out to appeal for it. It is possible the president’s decision to impose a lockdown was influenced by this and other appeals. Then as the lockdown was imposed, some celebrities were calling for lifting of the lockdown. A portion of the masses were also complaining of hunger and dying businesses. These and others might have influenced

the president’s decision in lifting the lockdown. Possible Colonial influences ‘Colonial’ in this context means foreign influence especially from the West, Americas, and the East. Such influence could have come from disease entrepreneurial governments, individuals and companies or it might even have come from multinational organizations like the WHO. While there might not be any data to back this argument, unfolding events add up to make a near perfect equation. i. One, there have been allegations of the virus being intentionally created as a weapon of another WW. If this is true, it means, the viral entrepreneurs have a lot of soldiers at the warfront controlling where, when and how the virus should move and stop. ii. Two, the issue with the 5G connection with the virus also seems to have not been fully settled. The 5G argument also means somebody somewhere is controlling the spread of the virus. iii. Then the timing and actions of our own president (just as some African leaders) towards the virus is not in total conflict with the above conspiracy arguments. The nature of our responses seems to indicate that, as a

country we dare not refuse the virus entry or stop it from spreading. The nature of the spread of the virus by end of January (when WHO has already declared an international crisis), coupled with other factors such as our fragile healthcare systems was enough for any African country to close boarders and Airports latest by mid-February. That is, if we really did not want to have the virus, I think this would have saved lives and doubled as an economical option. However, almost all heads of states in the continent will have to wait for the arrival of the unwanted novel virus before closing their ports with some of them sometimes boasting of how prepared they were to containing the virus should it arrive, expectedly. Gradually, it arrived, they now closed borders and begin to nurse it domestically. Probably they refused to close borders earlier because of economic reasons. But what makes this a defeatist argument is this, for whatever we did not want to lose by closing borders, we have eventually lost it in uncountable folds. The government and its officials cannot convince us if they say they did not know we were definitely going to have the virus once we kept our borders opened. They can also not be convincing if

they say they did not know once we have the virus, we were going to lose far more than if we had kept our borders closed earlier. If they knew all these and still kept borders opened until they finally welcomed the virus, is it not possible their decisions were influenced by some modern day colonial masters who advised them against taking measures that will prevent the viruses entry? More colonial reasons! The virus was finally here. We were among the laggards in terms of welcoming the disease. But once we welcomed it, we have well and fast nurtured the virus to become one of the leaders in the continent, currently on 5th position. Nevertheless, evidence available indicates, these large figures are a good and not a bad omen for us. They are as a result of the governments’ aggressive strategies like contact tracing, mass testing, lockdown etc. In fact evidence for instance has it that, not a single country in the world successfully went ahead of the virus (in terms of testing) in its first month of a recorded case like the government of Ghana did. In their address to the nation, government officials, more notably the minister for Information, has often said “we are leading the virus and will not allow it

to lead us. At the time the government was doing well in this and most meaningful Ghanaians thought the head of the snake must be cut to make sure it is completely dead, the government now let the snake loose claiming “a careful balance of many factors” were taken into consideration. The question stands, what might those factors be? Others may also ask, has the virus now been paralyzed? Doesn’t “the virus…” now “…move when we [human beings] move”? Has the virus now learn to stay when we move instead? After reflecting on these questions for a little while, I only came across further questions instead of answers. Is it not because somebody somewhere realized that the aggressive strategies of the government’s COVID19 team was about ending the life of the virus in Ghana-a situation that will defeat the purpose of exporting it to the country? So the warning was like, jack, let loose small? Once again, government and his functionaries will be less successful if they argue the action was taken to save the economy. Because they are fully of the known that, should the virus spark, the cost will be proportionally unbearable. Conclusion Just as the article raises mind boggling issues about the delay in imposing lockdown in Ghana and a seeming rush in lifting, it must be admitted that the president and his team took a bold decision, a decision which has been described by a section as a gamble. It is hoped that the virus does not get out of hands like its being predicted. Because, I could see when it does happen, the president and his team will be crucified. In fact, the people might not treat it as a global crises but a problem created by the president and his team. Of course, there is no way cases will not go up but marginal rise is expected be negligible. I also hope that, the president and his team shall be given all the credit if this strategy becomes a success. Opoku-Mensah Foster Abrampa Email: ofostera@yahoo.com WhatApp: +233247163769

WEDNESDAY MAY 6, 2020

F E AT U R E

WEDNESDAY MAY 6, 2020

Subsrcibe thebusiness24online.net/subscribe

Covid-19 must awaken Ghana’s sleeping industrial giant BY PRINCE H. ARMAH PHD

Amidst the haze of uncertainty around the global corona virus crisis, there is one thing that is certain – we will not have the luxury of returning to the old order. Whenever this crisis ends, however it does, it will leave in its wake an upended global order that must be radically rethought. It is not just because we need to insulate ourselves against the next possible pandemic or something similar, it is because we have been forced to confront the weaknesses of the current settlement. Over the course of the last generation, the neo-liberal consensus, as we have come to refer to it, has brought tremendous progress to people in all corners of the world. The marketled approach, for all the criticism it gets from furious ideologues, has lifted more people out of poverty than any other system in history. Around the world, quality of life has been vastly improved and access to life’s necessities and comforts are available to more people than could have been imagined by people living even three decades ago. So in many senses, the way in which we have crafted the world has worked and it is worthy of commendation, even protection. But complex global supply chains, just-in-time manufacturing, stateless companies and offshoring of critical goods and services have long had an untested soft underbelly. Until Covid-19 however, we had not been forced to confront or even contemplate this elephant lurking in the room. A crisis that forces us to close our borders and shut off interaction with other countries however has a way of forcing a reckoning. So when eventually we are able to shake hands again – assuming we will – we will need to recalibrate much more than our social conduct. Ghana has of course not been exempt from all this. Since the 1980s when we had to submit to the Bretton Woods packages, we have gradually lost our production capacity. With ever cheaper imports ever more accessible, local firms, unable to compete have folded up or reduced capacity. While our

deindustrialisation had been on a march even before that, local conditions and global progress have accelerated our slide in manufacturing and even agriculture to the point where we have to import nearly everything. For many of us, this has been a worrying trend. An overdependence on foreign production is not just economically imprudent; it is also a national security threat. A sovereign nation that is entirely reliant on conditions in other countries for its basic needs is setting itself up for exactly the near-crisis we had when Covid-19 struck and we found ourselves at the mercy of price gougers looking to extract the last possible penny for a bottle of hand sanitizer. With our ports shut and no imports coming, however, an amazing thing has happened. Local ingenuity and enterprise has stepped in to protect us from our bad decisions. To their credit, liquor manufacturers utilised their production units and raw materials to help meet the demand for hand sanitizers. Local dress makers and tailors as well as others with the capacity, are providing nose masks. We have seen thrilling innovation from people around the country who are crafting hand washing and sanitisation devices fit for our peculiar no-contact moment. At a much higher

level, we have seen the Kwame Nkrumah University for Science Technology develop a ventilator and team up with local firm INCAS to produce a rapid test kit for easy diagnosis of Covid-19 infections. And we cannot forget the heroic work of the team at the University of Ghana and Noguchi Memorial Institute for Medical Research whose work sequencing the genome of local strains of the virus has added to our understanding of it. What all these sprinklings of innovation and enterprise tell us is that our problem has not been so much one of capacity or ability. With our self-indulgent dependence on other nations’ hard work, we have allowed our own industrial and production systems to wither, while complaining that we do not have it in the first place. Thank God, they did not die entirely and have risen in the face of this necessity to show the invention that has kept us going these last few weeks. This must be our turning point. Whenever Covid-19 and the data and science around it allow us to return to normal, it must not be the old normal. Our economy will need rebuilding and the relationship between the state and the citizen would need to be redefined. We must start this process by placing the citizen’s welfare

and the health of our local production systems at the centre of our plans. We cannot leave citizens on their own to rebuild their lives and we cannot allow imports to be our default choice. And these two considerations are continent on each other. Now that we have concrete evidence of the capacity and ingenuity of local businesses, we have to have a plan to support them to grow. It is gratifying that while the crisis has been on-going, President Nana Addo Dankwa Akufo Addo has met leaders of industry. These discussions, I believe should crystallise into a grand, consensusdriven plan to kindle and sustain the sleeping giant of Ghanaian industry. One way to do this would be to assure local industries of custom by applying the awesome procurement might of central as well as local governments in their favour. We cannot ban imports but our government must no longer feed mouths in other countries with our tax Cedis. It must spend the money here whenever possible. On the supply side, we now have to take even more seriously, the government’s plan for a factory in every district. Partisan bickering aside, this is a laudable plan that assures us of jobs, evens out development across the country and will place us in a much better position to withstand the next global crisis, whenever it comes.

On both sides of the political aisle, we must recognise these essential truths and work together to make this plan a success. Whether through direct intervention, enhanced support or even through regulatory revisions, we have to make sure that we have industrial units ticking across this country. Our post-Covid 19 reality must not be the same as before. We have had a jarring wake-up call and while it looks like we may yet escape relatively unscathed, we must not go back to sleep. We have to use this moment as one to fundamentally redefine how our country works. And we must begin, I submit, by rebuilding our economy’s industrial and agricultural base. That’s how we will do even better when the next crisis comes.

Prince H. Armah PhD is the Executive Secretary of the National Council for Curriculum and Assessment and an aspiring parliamentary candidate of the New Patriotic Party in Kwesimintsim in the Western Region.

WEDNESDAY MAY 6, 2020

F E AT U R E

WEDNESDAY MAY 6, 2020

Subsrcibe thebusiness24online.net/subscribe

Planning for an American bankruptcy epidemic BY BEN IVERSON AND MARK ROE

eiman Marcus and J.C. Penney, two of America’s retailing giants, recently failed to pay interest on their debt. We should expect one or both firms to file for bankruptcy soon, heralding a surge of US business failures caused by the COVID-19 pandemic. And with most American households currently lacking the cash to pay expenses for three months, many families and individuals will declare bankruptcy, too. Before long, the United States could face a trifecta of millions of insolvent consumers, thousands of small-business failures, and many bankruptcies of large public firms, with whole industries going broke at the same time. Bankruptcy filings in the US have historically peaked several months after a surge in unemployment. And US unemployment is now rising at an unprecedented rate, with more than 30 million claims filed in the last six weeks. If historical patterns hold in the coming months, the bankruptcy surge could be the biggest that the US court system has ever experienced. Bankruptcy

works well enough and quickly enough in normal times, particularly for restructuring large public firms. But it cannot work well, and the economy will suffer, if the system is overloaded and businesses become stuck in legal proceedings. If bankruptcies surge as they did following the 2008-10 financial crisis, then, based on how long it takes to handle each case, we calculate that a US bankruptcy judge would have to work close to 50 hours per week to keep up with the increased caseload. In fact, the economy is already contracting more sharply than during the 2008 financial collapse,

suggesting that a bankruptcy surge at double the 2010 rate is plausible. Even if only a minuscule 0.9% of the 30 million newly unemployed filed for bankruptcy, the bankruptcy caseload would exceed the 2010 peak. No one can expect bankruptcy judges to work 100 hours per week. They will have to cut corners and neglect some cases by judicial triage. Government support

under the Coronavirus Aid, Relief, and Economic Security (CARES) Act will prevent some immediate bankruptcies. But many businesses still will struggle to meet their obligations to creditors, employees, and suppliers. And then, like Neiman Marcus, J.C. Penney, and much of the oil industry, they still will be unable to pay their debt. Bankruptcies surged during the 2008-10 crisis, too, despite substantial government economic aid. Contrary to what many may believe, bankruptcy is not a death knell, particularly for public companies with a viable underlying business. For businesses that can make money, bankruptcy does

not mean a shut-down and liquidation. With the proper resources, bankruptcy judges are extremely effective at restructuring such firms into viable, competitive companies. Over the last few decades, for example, most US airlines have restructured in bankruptcy and emerged healthy. Moreover, bankruptcy allows smallbusiness owners – say, failed restaurateurs – to put their debts behind them and start anew. So, maintaining an effective bankruptcy system process is important for the US economy’s health. Clogged bankruptcy courts will have a negative feedback effect on the economy. For starters, special procedures are needed for bankrupts to pay critical suppliers and sometimes employees. If courts are backed up, these payments will be delayed, causing disruptions to ripple throughout supply chains. Furthermore, some bankruptcy decisions must be made almost immediately, so that businesses can get and keep enough cash to stay alive through their next payroll. One of us recently published a study showing that when bankruptcy courts become crowded, cases take longer to resolve, too many small businesses are liquidated, and creditors recover less of what they are owed. Worse, companies on the edge of bankruptcy a few months from now will have far too much debt to operate effectively. Over-indebted firms often refuse to, or cannot, pursue even good business projects, further reducing employment and

investment. Such overindebted businesses can now restructure quickly in bankruptcy. But that will not be possible if courts are overloaded six months from now. As if all this were not enough, 65% of US bankruptcy judges are older than 60. With coronavirusrelated health reasons to work remotely, they will foregoing the “in-chambers” meetings where they often induce debtors and creditors to compromise. While this outlook is bleak, if historical pattern holds and bankruptcy filings peak several months after a recession begins, there is a window to act. If bankruptcies peak more quickly this time, there is no time to lose. The US Congress should double the number of available bankruptcy judges and support personnel. In particular, legislators should create new, temporary judgeships, redeploying other federal judges, and moving bankruptcy judges in less busy courts to places where they are most needed. These are low-cost, highreturn measures. While the increasingly partisan nature of judicial nominations could make some in Congress hesitate, bankruptcy judges are appointed by federal appeals court judges, not by the president, and do not require the Senate’s approval. Partisanship should not impede the expansion of bankruptcy courts’ capacity. We need to strengthen that capacity now, just as

we wish we had increased our health-care system’s COVID-19 capacity months ago. The best solution to the threat of a bankruptcy overload is an early end to the public-health crisis and a rapid economic recovery. But we cannot count on that. We now have the lead time to secure the business equivalent of the missing virus tests and ventilators. We should not repeat the mistake of squandering it.

Ben Iverson

Mark Roe Ben Iverson is a professor at Brigham Young University. Mark Roe is a professor of corporate law at Harvard Law School. Copyright: Project Syndicate, 2020. www.project-syndicate.org Accompanying this commentary is a graph, which can be downloaded here.

WEDNESDAY MAY 6, 2020

F E AT U R E

Subsrcibe thebusiness24online.net/subscribe

WEDNESDAY MAY 6, 2020

Innovation in public sector organisations, my take BY MICHAEL BREMFI

f Orville and Wilbur Wright a.k.a, the Wright brothers, had a board of directors at their Dayton bicycle shop that was evaluating their new transportation concept, we could expect one or all of the following answers: “It’s not part of our current core competencies.” “It’s not aligned with our corporate strategic plan to expand into the tricycle market.” “We don’t even have the funds available to explore this idea due to recent input cost increases in bicycle seats.” Again, in a discussion on innovative ways to fighting the Covid 19 pandemic, Professor Abraham Anang of the Noguchi Memorial Institute of Medical Research said “some few weeks or months back, if you made a suggestion that one ventilator will be used for two people, even just two at the same time, medical professionals will tell you that you are mad, there is something wrong with you, but now we find a way of using one ventilator for four people without crossinfection, concluding that necessity is the mother of invention”. So, although many embrace the idea that innovation can contribute to improving the quality of public services, the extra mile to actually create new ideas and change to actualize the progress we all desire to see, painfully remains a big farce. Concept of innovation Until recent, I perceived innovation only as something drastic, out of the blue, which no man has ever done, or attempted to do on the planet. Not to say that radical innovation is undesirable, but ignoring, the little, stepby-step, daily improvements, known as “kaizen”, that can collectively bring about a significant change and progress, for some wild radical ideas which may not even be realized, is what is worrying. One perspective “conceives innovation as an outcome and thus organisations would innovate under certain contextual, structural and process conditions”. Another perceives “innovation as a process that emerges,

develops and becomes a part of routine activities of an organisation”. The most basic forms are product, service, technological as well as process innovations. Again, an innovation can be generated by an organization or adopted from others. Public sector organisations and innovation There is a general perception and practically true to some extent, that the public sector is slowmoving, conservative, and too bureaucratic. However, “research shows that superior market performers are essentially companies that are able to innovate and constantly transform their value proposition”. Juxtaposing the phenomenal speed, flexibility, and top-notch customer service, which are mostly outcomes of innovation, identical in most private sector institutions, the public sector in Ghana woefully lags behind on these dimensions and many more. Meanwhile, the muchneeded effectiveness, efficiency, and solutions to societal problems such as addressing unemployment, improving revenue mobilization, improvement in urban transportation management, health and

education could all be tackled through innovation. Barriers to innovation So why is innovation in Ghana’s public sector so low if not non-existent in some cases, and why are some organisations more innovative than others? Again, what organizational structures, and management processes facilitate or inhibit innovation in public sector organisations. First, how can one act “outside the box”, in the spirit of being innovative, and still avoid the risk of running into the legal conundrum of, “it is not in your mandate and jurisdiction to do this”, for which some public officials have found themselves in prison. Again, what level of failure in attempting to be innovative are we as a people prepared to tolerate without crucifying innovators. Otherwise, the “do not fear to fail” preaching will continue to be a motivational talk but in practice will never imbibe faith for action. My meagre thirteen years in public service might not be enough to make this generalization that the public sector generally does not reward innovation but permit me. This is because one could easily find contemporaries in the private sector who are constantly recognized and rewarded for being

innovative. Such level of motivation would always spur one on to even desire to exceed the expectations of top management. Also, excessive bureaucracy is one common feature in public sector organisations that inhibit innovation. Sometimes the sheer number of consultations and clearance that one has to go through in order to initiate what I call basic operational level changes and new ideas, are enough discouragement to even think of trying to do something outside the box. I also find the lack of target setting in most public sector organisations unlike in the private sector where performance targets drive innovation and growth. Even where there may be targets, applying appropriate sanctions for non-achievement fall short. It is also not difficult to find budget allocations for training and development aimed at making employees skillful and innovative in almost all public sector organisations. But the question is how many of those training and learning programmes are executed at the end of the year and what is the quality of the learning, such that employees can improve on their performance by creating new ideas? The inadequate or in some cases, utmost lack of

structures or mechanisms for the enhancement of organisational learning therefore keep employees going in circles. Lastly, resources will always be scarce since human wants are insatiable, “ceteris paribus”. But for the fact that private sector organisations which face similar resource constraints are able to equip their employees to constantly be creative, and try newer things as well as excelling, means it is not an excuse why public sector organisations cannot do same. “Human beings are not robots”. “And you cannot continue to do things the same way and expect different results” says Prof. Augustine Ocloo.

Michael Bremfi Commercial Manager, Centre for Plant Medicine Research e-mail: mikaelbremfi@yahoo.com

WEDNESDAY MAY 6, 2020

Subsrcibe thebusiness24online.net/subscribe

F E AT U R E

The Millennial and COVID-19 BYOMAR-TAUFIC ABBEY, ISHMAEL YAMSON & ASSOCIATES

OVID-19, declared a pandemic by the World Health Organisation (WHO) on March 11 2020, has become a global emergency, given its impact on the entire world economy and population. The pandemic has torn through human life, harming our health and reshaping our world and we are handicapped because we were inadequately prepared for a crisis of this nature. Our knowledge of the enemy (COVID-19) is limited and our fight has so far been on a trial-and-error basis. For the first time in my millennia, we must live by a new rule - “divided we survive and together we perish”. Social distancing protocols and stay-at-home orders have become our best bet of survival and in their wake, countries across the world have been forced into lockdowns and the closure of businesses and economies. Even though everyone is negatively impacted by this outbreak, the most vulnerable among us, millennials and their Ghanaian counterparts who are already living through constant economic anxiety have been hit hardest. The health of millennials, our education, lifestyles, employment opportunities and finances have all taken a beating from this overbearing health crisis. The woes of the millennial is unfortunately not limited to just us the millennials, the whole economy takes a hit as a result. The effects of this crisis are however, not just doom and gloom, there are number of positives, and opportunities have emerged. Millennials can take the positives and capitalize on the opportunities created to accelerate our personal development and help deliver productivity, growth and global competitiveness for Ghanaian businesses. Health Before anything else COVID-19 is a health crisis, a health crisis that has caused more damage in all other aspects of human life. It is not playing favourites as to who gets infected or not, every living human on the face of our planet regardless of position, status, age, location, or net worth is susceptible. This coupled with the unavailability of a cure or any vaccine for the

virus has forced the human race to retreat to our various safe havens like snails and tortoises at the sight of danger with very drastic life altering measures. However, free spirited millennials who believe their lives are out there and not on the couch are more susceptible to catching and spreading the virus due to their inability and lack of experience thereof and sheer unwillingness to staying at home and also observe the social distancing protocols. Education amid COVID-19 Secondary education in Ghana is on hold for junior and senior high school students. No one knows what will become of the existing educational calendar since the Basic Education Certificate Examination (BECE) and the West African Senior School Certificate Examination (WASSCE) have been suspended indefinitely. A large number of students in remote parts of Ghana are on “holidays”, and have not seen their books since the closure of schools was announced on March 16 2020. Most have no idea about the distance and e-learning platforms set up by the government in its attempt to mitigate the impact of COVID-19 on education. Those who know about it do not have the means to access it. The effectiveness of these measures to students who have the resources to access them is also questionable. Parents who have attempted home-schooling their secondary school wards, are realising very quickly why they chose to pursue other career paths instead of teaching. Teachers suddenly seem like superheroes to parents. Tertiary institutions have also taken a hit and although some universities are using built-in, already existing e-learning platforms to facilitate teaching and learning. Some lecturers however are not technologically literate and may face a few challenges in their attempt of administering lessons online. Even if these measures contribute to lessons being successfully administered, tertiary students may not be any better off as the final year students will be graduating into an economy scarred in unfathomable ways by the pandemic. As

a result of the coronavirus, many of tertiary students are watching their planned post-graduate jobs or paid internships evaporate before they submit their thesis and acquire their degrees. The structure of our education in Ghana which is far from the best and needed to be massively reformed has been seriously exposed by this health crisis following the closure of all educational institutions in the country.. The inadequacies and inefficiencies of Ghanaian education have been thoroughly exposed by the COVID-19 pandemic, which is a positive as far as I am concerned. I say this because all we are left to do now is invest adequate resources in finding solutions to the exposed issues in our educational structure. Come to think of it it’s not easy as I make it seem. After all “ibi Ghana we dey”. Employment and Finances Governments all over the world are implementing social distancing protocols and issuing stay at home orders that have plunged the world economy into recession with stock markets and oil prices crashing to alltime lows. In these uncertain times of COVID-19, the issue of greatest concern to millennials is the status of our employment and how to keep ourselves employed. The latter however in not entirely up to us. Those deciding our fate will be the largest employers of millennials - governments and small and medium-sized private businesses owners as they make decisions on what to do with their investments. Most millennials have already been rendered jobless due to the impact of Covid-19 on the industries in which they work and a large number hold tenuously on to their jobs. Even those who feel they have a “safe” job are wondering if it’s just a matter of time before they don’t. Meanwhile, workers in the creative arts industry, majority of them being selfemployed, independent contractors, and freelancers are experiencing income loss and the structure of their jobs leaves them without the support of severance or benefits. Most millennials freelance and also pursue side hustles in an attempt to earn extra income. They

are blowing through their savings way faster than anticipated and a large number of millennials who live pay-check to pay-check are struggling to survive. The only group of millennials who seem to have enjoyed some level of job security has also experienced a hike in the risks associated with their jobs as they are on the frontline of this fight. Medical and essential services workers are deservedly still fully employed with even better conditions of service. This development though is not considered as exciting since it will last only two short months. If investment in medical consumables, services and research rises significantly it would create employment and other opportunities that would be of great benefits to millennials in that industry – another potentially positive COVID-19 effect. Already, a number of young people have also been employed in the local production of Personal Protective Equipment (PPE’s). COVID-19 has also taught us that there are a number of things beyond our control, our status of employment may be one of such things but it is also up to us to be innovative, find and harness our entrepreneurial skills, capitalize on the numerous opportunities created by this unfortunate pandemic to create value for ourselves, colleagues and the national

economy. Lifestyle Our lifestyles, our earning potential and major life choices, like having kids, saving for retirement, or potentially becoming caretakers for our own parents have all been altered by the COVID-19 forever,. The social culture on weekends – night-time partying, going out with friends, watching and arguing about sports are all on hold indefinitely because we have to avoid public places like bars and restaurants. Some positive COVID-19 effects may be that we now travel less and shop online for the essential items we need to survive, and spend less on organising marriage ceremonies, business conferences, funerals and other major social events because no more than 25 individuals may attend. However, we lose the major aspect of these events which is networking and socialization. This pandemic has forced us to take a long overdue break, de-stress, spend more time with our loved ones and catch up. We can also inspire ourselves and use this “free” time at home to be innovative, improve our family dynamics, develop self-care routines and motivate creativity. We will win against this virus and come out better off.

WEDNESDAY

MAY 6, 2020 THEBUSINESS24ONLINE.NET

Government must cushion the transport industry – PROTOA Progressive Transport Owners’ Association (PROTOA) has appealed to government to institute measures to cushion the transport industry from the economic hardship occasioned by the closure of Ghana’s borders to contain COVID19. It said the government should among other things, reduce fuel prices to support the commercial transport operators to stay in business as they adhered to directives, including reducing the number of passengers to contain the spread of COVID-19. The Union said costs of fuel, maintenance, body parts, income tax, insurance cover, roadworthy, road tolls and parking tolls remained high and must be brought down. Mr. Benjamin Agorsu Katsekpor, Chairman of Aflao branch and acting National Chairman, PROTOA, in an interview with the Ghana News Agency said government’s intervention was needed to save the

industry. “We mostly rely on the border for passengers and since the closure, no passengers. Our clients are now people who travel to Ho and other places which are indeed few. Fewer cars load the Tema-Madina-Kasoa and Accra-Kumasi... before the border closure, we were loading 50 to 52 cars daily but now, four to six. “What’s more, we’re adhering to the Presidential directive to reduce the number of passengers and charge old fares because we’re a compliant union. This makes some of our drivers unwilling to go for trips because they’re not breaking even meanwhile they have families to feed in addition to other financial obligations to meet to keep their vehicles on the road,” he added. Mr Katsekpor said the decrease in business had implications not only for drivers but porters/bookers with the Aflao branch whose livelihood and that of their

families was depended on the loading of vehicles “We have a bargaining agreement with about 68 personnel who take charge of booking and ticketing on a shift basis. Since we are having virtually no passengers following the closure of the borders and

the subsequent partial lockdown, we gave them leave with some incentive package because nothing was happening but most of them have started coming to work now after the lockdown was lifted because staying at home and doing nothing is worse off.”

The Chairman, therefore, appealed to the government to consider a reduction in insurance cover for commercial vehicles, fuel price and income tax to lessen the economic burden stakeholders in the industry were facing. GNA

Faytex pad4All project launched in Accra The “Pad4All” Project, an initiative aimed at advocating the need to focus on menstrual hygiene among adolescent girls and women, has been launched in Accra. The project is also to ensure the less privileged females in society maintains personal hygiene during the COVID-19 pandemic and beyond. The initiative is sponsored by Fay International-producers of Faytex Sanitary Pad—and Angeles Foundation and Repairer Foundation as organizers will be extended nationwide to ensure that menstrual hygiene protocols are observed by many females. For over twenty years, Fay International has been the sole manufacturer of safe, healthy, sanitary and maternity pads free from any harmful byproducts and carcinogens. Speaking on what necessitated the action, celebrated media personality, staunch Made-in-Ghana product campaigner, and PR practitioner, Kobi Hemaa Osisiadan-Bekoe, who is the founder of Angeles Foundation, explained

that menstruating girls and women face inadequate access to toilets and water and lack the most basic materials needed for managing their menses. Mary Achieng Ojuka, CSR coordinator for Fay International Limited led her team in educating the women on menstrual

hygiene. “When you are on your period, you should keep your genitals clean. Since the vagina has a sensitive balance of useful and nonuseful bacteria, it is best to avoid any soaps or vaginal cleaning products and wash with warm water instead. Taking a bath regularly helps you keep clean.” She advised

On his part, the CEO of Angeles Foundation, Boris Nimpong-Osisiadan, encouraged males to support females to improve menstrual health and hygiene. He suggested that proper menstrual hygiene will not only benefit those who menstruate, but entire societies across generations.

At Bukom, professional boxer, Braimah Kamoko, popularly known as Bukom Banku was present to support the initiative. Assemblymen for both Mamprobi and new Mamprobi lauded the “Pad for All” initiative and encouraged them to extend to other parts of the country.