Business24 Newspaper 15th February, 2021 by Business24 Online

MONDAY FEBRUARY 15, 2021

BUSINESS24.COM.GH

MONDAY FEBRUARY 15, 2021

NO. B24 / 159 | NEWS FOR BUSINESS LEADERS

Ghana unlikely to seek IMF help to rebuild finances—EIU

NPRA targets 40% pensions coverage in informal sector By Joshua Worlasi Amlanu macjosh1922@gmail.com

he National Pensions Regulatory Authority (NPRA) is targeting within the next four years to boost the coverage of pensions in the informal sector, which stood at 3 percent in 2019. Cont’d on page 3

Global financial architecture needs reform —Prof. Abor By Eugene Davis ugendavis@gmail.com

By Nii Annerquaye Abbey abbeykwei@gmail.com

he Economist Intelligence Unit (EIU) says it does not foresee Ghana seeking a programme from the International Monetary Fund (IMF) despite the devastating impact of the pandemic on government’s

finances. In its February 2021 Country Report, the Londonbased business intelligence and advisory firm explained that government is likely to pursue its own domestic fiscal policies rather than go to the Washington-based lender for support. “Although Ghana would

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

POLICY RATE

14.5% 14.77%

OVERALL FISCAL DEFICIT

11.4% OF GDP

AVERAGE PETROL & DIESEL PRICE:

4.2% GHC 5.13

he immediate past Dean of the University of Ghana Business School, Prof. Joshua Yindenaba Abor, has suggested that reforms are needed in the global financial architecture in order to achieve sustainable financial growth across Africa and the world. Cont’d on page 3

Cont’d on page 2 INTERNATIONAL MARKET

US$1 = GHC 5.7606

GHANA REFERENCE RATE PROJECTED GDP GROWTH RATE

benefit from a formal IMF programme (owing to investor concerns regarding fiscal sustainability), the government will prioritise policy independence and be reluctant to return to the Fund,” the EIU said.

BRENT CRUDE $/BARREL NATURAL GAS $/MILLION BTUS GOLD $/TROY OUNCE

CORN $/BUSHEL

$543.75

COCOA $/METRIC TON

$123.55

COFFEE $/POUND:

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Editorial / News

MONDAY FEBRUARY 15, 2021

Editorial

Pensions for informal sector non-negotiable

ensions in Ghana is very much prevalent in the formal sector. For a country that has the larger chunk of its productive force outside the formal sector, this goes to show that many people are caught outside the traditional pension schemes. Without an employer or registration of income, they do not build up any form of pension. Conservatively, this means that there are about 10 million people who are not prepared for their retirement. While the danger is not particularly visible now, the situation would detonate in the next 40 years as the share of Ghanaians over 60 years old doubles from 7% to 15%, and even more people fall in the gap.

It on the back of this grim forecast that the pensions regulator, the National Pensions Regulatory Authority has begun in earnest a strategy to find a way of getting the informal sector to prepare for their retirement. The pensions regulator’s move, albeit audacious, requires the support of every stakeholder regarding the existential threat confronting the country. With only three percent of workers in the informal sector contributing to any form of a pension scheme, the regulator targets boosting this to about 40 percent in the next four years. Any attempt to shore up pensions coverage in the informal sector would require the support of every stakeholder. The NPRA’s strategy is bolstered

by the World Bank – recognising the importance of informal sector employee pension scheme. Just like the authority, this paper also believes that leveraging pensions contribution collection this way would be critical to opening up the informal sector for participation in Ghana’s threetier pension scheme. The enormity of the work required demands a pension system that can accommodate innovation in developing private pension products, including leveraging the mobile money platform to make pensions accessible, relevant and rewarding for informal sector workers.

Ghana unlikely to seek IMF help to rebuild finances—EIU Continued from cover

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The report however argued that the reliance on homegrown policies such as the Ghana Beyond Aid agenda may yield little results as the fallout from the pandemic has put a severe strain on the strategy, aggravating existing structural weaknesses, owing to worsening investor sentiment and reduced economic activity. After a sharp slowdown in 2020, Ghana’s economy is officially projected to grow by more than 4 percent this year—but the EIU said growth will probably be near 2 percent, especially in the wake of the pandemic’s second wave, which is claiming lives at a more rapid pace than before. “With the elections completed, overall expenditure will decline, but many coronavirus-related support measures will remain in place, owing to the slow pace of recovery from the economic fallout from the pandemic, and expenditure will be diverted from other planned spending,” the EIU said. As Ghana expects to take delivery of its first batch of Covid-19 vaccines by March, the

business advisory firm stated that the drugs will likely be financed largely by donors. The EIU predicted that the country’s fiscal deficit, which shot up to double digits last year, will decline to 8.9 percent of GDP in 2021, before narrowing further to 5.8 percent in 2023 as expenditure falls and revenue picks up. However, it projected that the deficit will widen to 7.4 percent of GDP in 2024, owing to election-related spending increases (facilitated by eventually scrapping the Fiscal Responsibility Act, as the administration seeks to avoid constraints on spending ahead of the election that year), before narrowing to 5.9 percent of GDP in 2025 as expenditure is cut

again. Public debt The country’s total public debt as a percentage of GDP climbed to 75.9 percent in 2020—a figure the EIU predicted would gradually decline, settling at 70.3 percent of GDP by end-2025, owing to a period of economic growth. That notwithstanding, the government is expected to continue its dependence on borrowing from both external and domestic sources. Government has already indicated its intention of raising between US$3bn-5bn in 2021 through Eurobond issues, which will be used primarily to roll over existing obligations, alongside supporting government spending.

MONDAY FEBRUARY 15, 2021

NPRA targets 40% pensions coverage in informal sector Continued from cover In an interview with Business24, Nana Sifa Twum, Head of Corporate Affairs at the authority, said: “The pensions coverage in the informal sector is extremely low, and our target for the next three to four years is to improve it to 30-40 percent.” One of the key initiatives targeted at extending the informal sector’s coverage was the World Bank’s “First Initiative Project”, of which the first phase was completed in 2019. The initiative is focused on delivering an actionable pensions coverage strategy to guide the authority and its stakeholders to unlock the informal sector. Part of the strategy includes the identification of a centralised mobilisation platform known as “The Switch”. This is expected to be a universal switch for the pensions industry in Ghana, which would promote interaction with participants with

different contribution collection channels. The authority believes that leveraging pensions contribution collection this way would be critical to opening up the informal sector for participation in Ghana’s three-tier pension scheme.

In 2019, the authority enhanced the process for establishing specialised schemes for cocoa farmers, fishermen, and other informal sector groups. The authority believes that the pension system can accommodate innovation in developing private pension products, including leveraging the mobile money platform to make

pensions accessible, relevant and rewarding for informal sector workers. The authority says it is exploring other strategies including collaboration with government and other financial sector regulators to aggressively promote informal sector coverage as part of the larger national policy on financial inclusion.

Global financial architecture needs reform Continued from cover To this end, he advised that the Bretton Woods institutions—that is, the International Monetary Fund (IMF) and the World Bank— should focus more on their core mandates. “I believe looking at the Bretton Woods institutions and even the regional development banks, there is the need for them to focus on their core mandates. So IMF needs to focus more on surveillance of the world economy and also ensuring that macroeconomic stability among member countries is attained. The World Bank and regional development banks should concentrate on providing technical assistance in facilitating private capital flows and also serving as lender of last resort to member countries that are affected by crises.” Prof. Abor said this at the virtual launch of a book, Contemporary Issues in Development Finance,

Prof. Joshua Y. Abor

edited by himself and two others, Charles Komla Delali Adjasi and Robert Lensink. He also questioned the use of IMF conditionality, saying it is often viewed by developing countries as costly and intrusive, adding that, normally during a

crisis, reforms tend to frighten private sector participants about the seriousness of the problem. “Once you try to restructure as a condition for a facility, market players react; they think there are serious problems in the economy and that makes it difficult to restore confidence in the market. You promote moral hazard, so lending institutions and borrowing institutions would engage in acts that lead to moral hazard.” According to him, the IMF’s conditionality is biased against developing countries, stressing that developed countries do not face the kind of conditionality that is often imposed on developing countries. “We need to look at reforming the entities themselves,” he said. “Emerging economies, developing countries need to be given the opportunities to contribute resources [to the institutions] as opposed to being net borrowers. If we are seen

as net borrowers, then we take whatever is given to us. We should be given greater representation on the board, voting rights, and the appointment process must be open.” On his part, Prof. Charles Komla Delali Adjasi touched on the impact of foreign banks, indicating that their presence is good, but in terms of risks, regulators need to ensure they do not become too big, which will hurt the indigenous banks. The book provides a comprehensive and up-to-date coverage of theoretical and policy issues in development finance from both the domestic and external finance perspectives and emphasises addressing gaps in financial markets. The chapters cover topical issues such as microfinance, private sector financing, aid, FDI, remittances, sovereign wealth, trade finance, and the sectoral financing of agricultural and infrastructural projects.

MONDAY FEBRUARY 15, 2021

News

MONDAY FEBRUARY 15, 2021

SSNIT presents brand new Toyota four-wheel drive pickup vehicle to NPA

anagement of the Social Security and National Insurance Trust (SSNIT) has presented a brand-new Toyota pickup vehicle to the National Pensioners Association (NPA). The vehicle was handed over at a short ceremony held at the SSNIT Pension House in Accra, today, 10th February, 2021. The presentation is in response to an earlier request for the Trust to assist the Association to address transportation challenges. The donation is expected to assist the Association in the discharge of their daily activities. Speaking at the presentation ceremony, the DirectorGeneral of SSNIT, Dr. John Ofori Tenkorang noted that the gesture is one more demonstration of the Trust’s commitment to make the pensioner the center of all major activities. He explained that the value SSNIT places on pensioners has guided and helped the Trust to strengthen the relationship that exists between SSNIT and the NPA over the past four years.

“I want to assure our cherished pensioners of Management’s continuous support for their activities. “Despite the adverse impact of Covid-19 on businesses, we will continue, as I have said, to pay your monthly pensions without fail or delay,” he noted. Earlier, the Corporate Affairs Manager of SSNIT, Afua Sarkodie in her welcome address noted a little above 1.6 Million people,

Ofori-Atta off to USA to seek treatment after Covid complications

inance Minister-designate Ken Ofori-Atta is off to the United States of America to seek medical treatment after developing medical complications following his recovery from Covid-19. A statement signed by the Finance Ministry said Mr. Ofori-Atta who caught Covid in December 2020 recovered but

developed medical complications which doctors advise, require further interventions not currently available in Ghana. The statement said the Finance Minister-designate, who was scheduled to appear before the Appointments Committee of Parliament on Tuesday February 16, 2021 is expected to be away for two weeks.

representing about 11% of workers in the country are actively contributing to the Scheme. “This should concern all of us and we must support the Trust to register more people to join the Scheme so that every worker in Ghana after having toiled for several years can retire without angst and in relative comfort,” she said. The Acting General Secretary of the NPA, Mr. Stephen Boakye

appreciated the Management of SSNIT for yet another kind gesture to the Association. He also commended SSNIT Management for previous donations especially the Gh¢800,000 meant to support the medical care of pensioners under the Pensioners’ Medical Scheme (PMS). “We appreciate SSNIT’s assistance and corporation. The relationship that has existed between NPA and SSNIT over the past years, especially under the current Management has been very cordial. We express our utmost appreciation and state that the vehicle will be used for its intended purpose,” Mr. Boakye said. In November last 2020, the Association honoured the immediate past Chairman of the Board of Trustees of SSNIT, Dr. Kwame Addo-Kufuor and the Director-General of the Trust, Dr. Ofori-Tenkorang for their immense contributions to the welfare of the Association. The Trust has in time past provided and renovated office accommodation for the Association for their smooth operations.

Seize opportunities made possible through AfCFTA – SA High Commissioner

he South African High Commissioner to Ghana, Grace Jeanet Mason has called on all South African businesses in Ghana to maximise the opportunities made possible under the African Continental Free Trade Agreement. Speaking at the annual general meeting of the Ghana-South African Business Chamber, the High Commissioner said, “I wish to make a clarion call to all members to seize the opportunities made possible through the AfCFTA.” “It was also pleasing to see that the first consignment of goods being from Ghana to South Africa under the AfCFTA, thereby attaining the first certificates of origins under the agreement,” she added. “We now have a bi-national commission. Effectively, what this means is that the respected Presidents of both nations will meet twice a year to strengthen the political trade and political relation between the two countries,” the High Commissioner noted. She said that, “The conclusion of the bi-national commission

by the two presidents of our respected countries will indeed enhance and deepen economic relations and thus further enhance conducive business environment between our two respective countries.” Ghana SA Business Chamber The Chamber currently boasts a membership of 63 companies across most sectors ranging from extractives, financial services, oil & gas, IT services, advertising, retail, agriculture, & engineering. And now for the first time we can add education providers to the sectors our members operate in.

MONDAY FEBRUARY 15, 2021

Feature

MONDAY FEBRUARY 15, 2021

New-model central banks

By Barry Eichengreen

e are used to thinking about the remit of central banks as focusing narrowly on price stability, or at most as targeting inflation while ensuring the smooth operation of the payment system. But with the global financial crisis of 2008 and now COVID-19, we have seen central banks intervening to support a growing range of markets and activities, using instruments that extend well beyond interest rates and open market operations. An example is the US Federal Reserve’s Paycheck Protection Program Liquidity Facility, under which the Fed provides liquidity to lenders who extend loans to small businesses in pandemicrelated distress. This, clearly, is not your mother’s central bank. Now we hear calls to broaden this ambit still further. European Central Bank President Christine Lagarde and Fed board member Lael Brainard have each urged central banks to tackle climate change. Against the backdrop of the Black Lives Matter movement, US Representative Maxine Waters of California has pushed Fed Chair Jerome Powell to do more about inequality, including specifically racial inequality. Such calls horrify centralbanking purists, who warn that charging central banks with these additional responsibilities risks diverting them and their policy instruments from their primary objective of inflation control. They caution that monetary policy is a blunt instrument for tackling climate change and inequality, which can be more effectively

addressed by taxing carbon emissions or strengthening equal housing laws. Above all, the critics worry that pursuing these other objectives will jeopardize central banks’ independence. Central banks enjoy operational independence in order to pursue a specific mandate, because there is a consensus that the mandated objectives are best taken out of elected officials’ hands. But independence does not mean central bankers are unaccountable to politicians and public opinion. They must justify their actions and explain how their policy decisions advance the mandated objectives. Their success or failure can be judged by whether or not the central bank achieves its independently verifiable targets. With a greatly expanded mandate, the relationship between policy instruments and targets would become more complex. Justifications for policy decisions would be harder to communicate. Success or failure would be more difficult to judge. Indeed, insofar as monetary policy has only limited influence over climate change or inequality, targeting such variables would be setting up the central bank to fail. And frustration over failure might lead politicians to rethink the central bank’s operational independence. These arguments are not without merit. At the same time, central bankers cannot snooze quietly in their bunks in the face of an all-hands-on-deck emergency. Calls for central banks to address climate change and inequality reflect an awareness that these

problems have risen to the level of existential crises. If central bankers ignored them, or said, “These urgent problems are best addressed by someone else,” their response would be seen as a haughty and perilous display of indifference. At that point, their independence would truly be at risk. So, what to do? Central banks as regulators have tools with which to address climate change, and their responsibility for ensuring the integrity and stability of the financial system gives policymakers the mandate to use them. They can require more extensive climate-related financial disclosures. They can impose stricter capital and liquidity requirements on financial institutions whose asset portfolios expose them to climate risk. Such tools will discourage the financial system from underwriting brown investments. The challenge of understanding the risks to financial stability from climate change is that climate events are irregular and nonlinear. When modeling them, it will be important for central banks to avoid the mistakes they made in modeling COVID-19. Those problems arose because economists and epidemiologists worked in their separate silos. So, one might ask advocates like Lagarde and Brainard: How many climate scientists have central banks hired? When will they start? When it comes to inequality, some central banks already have the relevant mandate. In the United States, the Community Reinvestment Act of 1977 tasks regulators, including the Fed,

with ensuring that low- and moderate-income families have adequate access to credit. The Fed has delegated this responsibility to its 12 regional reserve banks, each of which fulfills it in different ways. Stronger guidance from the Federal Reserve Board on exactly how to ensure equal access to credit, with explicit attention to racial disparities, would reinforce existing efforts. It would be a departure for other central banks, such as the ECB, to address the credit access of minority and underprivileged groups. But the European Parliament can so instruct it. And the ECB Board can work with the national institutions that make up the European System of Central Banks in meeting that call. Monetary policy has implications for issues beyond inflation and payments, including climate change and inequality. It would be disingenuous, even dangerous, for central bankers to deny those connections, or to insist that they are someone else’s problem. The best way forward for central bankers is to use monetary policy to target inflation, while directing their regulatory powers at other pressing concerns. About the author Barry Eichengreen is Professor of Economics at the University of California, Berkeley, and a former senior policy adviser at the International Monetary Fund. His latest book is The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era.

MONDAY FEBRUARY 15, 2021

Feature

MONDAY FEBRUARY 15, 2021

Be an Early Bird – And maximise your BforB experience!

he early bird, as the proverb goes, catches the worm. And it’s true for business networking: arrive early, and make the connections that the latecomers might miss out on. Networking is an essential part of growing a business – whether you’ve just started it, or whether you want to build it and grow. However valuable a service you offer, however good your product, the simple fact is this: none of us have a divine right win to people’s trust and custom; if only life was that easy. Obviously, we’re biased about the virtues of referral marketing, and networking at BforB meetings. We host meetings that begin at members’ convenient times of the day, from breakfast to mid-morning, from lunchtime to early evening – you can network to suit your busy schedules, though many opt for the fortnightly early start to the day; BforB networking is every other week, because many people told us the weekly commitment is often too consuming. So you sign-up to the fortnightly BforB commitment, and that’s great; we welcome you on board. But the next step is maximising your investment, and making sure that BforB leads to new connections, great referrals, and business being done, through our virtue of ‘know-like-trust’. What you’ll get at BforB is great support and advice, but one of

the first things we always say to guests who indicate they are thinking of signing up with us: arrive early for your meetings. That’s not to say an hour before, or even half an hour: but aim to be there before the official start time, because you’d be surprised how quickly you can make a connection and find synergy with a guest or fellow member in the time spent open networking over a cup of tea or coffee, before the formality of the meeting gets underway. If you are one of the early arrivals, you have the advantage of being there to welcome members and guests when they arrive, and therefore being in the position of being well placed to strike up an immediate conversation. Who knows where that might lead. If you arrive earlier, you have more time to network! Devora Zack, the author of “Networking for People Who Hate Networking,” says that introverts thrive in small group conversations, but clam up in crowds. So if you are an introvert, there’s another reason for turning up early: there are fewer people around, and therefore it’s easier to strike up conversations. Being an early arrival means you can engage in one-to-one conversations with other ‘early birds’ before the room starts to fill up, and with it, the noise and buzz that surrounds a busy room full of people in full conversation. It can make for an intimidating

environment to those not used to large groups, or still new to business networking. You also have the luxury of making the first impression in people’s minds before everyone is surrounding them with handshakes and offering their business cards. If you have a good experience from the outset of turning up for your networking event, then the rest of the meeting will be an easy one. You will become much more relaxed, far less intimidated, and therefore confident and more comfortable ahead of delivering your 60 seconds pitch. And look at it from another point of view: if you arrive late, think of what you miss out on – potentially fruitful conversations. Not only that, you find yourself chasing conversation, rather than starting it. You then become a bit flustered, and you are still settling in when the meeting officially gets underway. Time is precious at networking events: maximise it to your advantage. Be there early, give yourself plenty of time to chat, introduce yourself, further develop friendships, and make connections before your meeting even gets underway. After that it all falls into place: confident, relaxed, enjoying yourself – and who knows, from an early introduction comes a quick one-to-one meet up, building up trust between you and others, and who knows:

business being done in no time. As we said at the start: the early bird catches the worm! Authored by: BforB Networking Clubs

Ghana

Business for Breakfast (BforB) is internationally recognised for creating successful networking meetings, events and training for referral marketing. Our global offices are in Australia, Germany, Czech Republic, Spain, Slovakia, Ghana and headquartered in UK. We create an environment where you can build quality relationships within your group, backed up by an ongoing member support programme. BforB is committed to helping small to medium scale businesses expand. In our professional network, members meet regularly in business networks to develop relationships, support each other and to share and record referral business. We are here to help you get new business from quality business introductions and referrals made through our meetings. Kindly join our next meeting using this link: https://rb.gy/qrf4pl Contact us: 059 4 016 432 | info@bforbgh.com | Facebook & LinkedIn: @bforbghana | www. bforb.co.uk

MONDAY FEBRUARY 15, 2021

Energy

MONDAY FEBRUARY 15, 2021

Panoro Energy in agreement to purchase some of Tullow Oil West Africa Assets for up to $180million

n the 9th February, 2021, Tullow Oil signed two separate sale and purchase agreement for some of its nonoperated offshore oil fields in Equatorial Guinea (The EG Transaction) and the Dussafu assets in Gabon (The Dussafu Transaction), with Panoro Energy. This agreement is a strategic business decision to enable both companies execute their respective business growth plan. Tullow Oil has keen interest in Ghana and boost immensely of the flagship fields it operates in the West African Country. The move will help reduce Tullow’s debt pile of about $2.4billion, which is about four times its current market cap of $577million. An initial amount of $140million will be paid with an option of $40 million, which will be tied to oil prices and the performance of the acquired assets. Tullow is already discussing with its lenders to restructure its debt to narrow its focus to the operating fields in Ghana. Is this a move to push for more

Figure 1

exploration activities in Ghana because of the high quality in the crude? Panoro plans to finance with a $70million private equity placement and $90 million in debt underwritten by commodities trader Trafigura. The marketing of the oil obtained from these acquired fields will be done by Trafigura. The deal covers a 14.25% stake in Block G offshore Equatorial

Figure 2

Guinea and 10% in Gabon’s Dussafu Marin Permit, in which Panoro already has some presence. The fields are shown in the drawings in figure 1 and 2 below For Panoro, this deal adds 6,900bbl/d to their net production, which is quadrupling to their current production. This projected production numbers will enable Panoro to start paying dividends in 2023.

According to the CEO of Panoro, John Hamilton, the company will continue to look at acquisition opportunities of this sort in the future. During an interview with Reuters, Panoro CEO said, “There are a number of companies, including the oil majors, who are busy looking to rationalize their portfolios in some of these countries and we do see growth opportunities in these areas,”

United Kingdom to reduce carbon emissions from industries using Green Hydrogen projects Marian Garfield, Head of

he prime minister of UK, Boris Johnson, has plans to making UK the world leader in clean energy. The focus is to invest in projects across the green sector, as well as upgrade infrastructure and facilities. This will further push the government’s agenda towards a net zero emission by 2050. According to the IEA, energy consumption will increase, and prediction on global energy demand will continue to soar by between 25% and 30% by 2040. By this, there is the need to look at alternative sources of energy as well as taking into consideration its climate friendliness. Swansea University in collaboration with Hanson UK are looking at innovative technologies to reduce industrial carbon emission. A process of electrolysis is used to produce hydrogen, with the source of energy being renewable. By this philosophy, a new hydrogen demonstration unit has been developed and installed at Hanson UK’s Regen

GGBS plant in Port Talbot, South of Wales as part of the £9.2m ERDf funded RICE project. The aim of this demonstration unit is to confirm that, the use of green hydrogen is cleaner than natural gas since rather than CO2 being emitted, the process emits water. However, according to IEA, this method of producing green hydrogen would save the 830 million tonnes of CO2, emitted annually when this gas is produced using fossil fuel as the source of energy. A typical target for this technology is in cement production since it is energy intensive due to the high temperatures required to produce the clinker (main Portland cement component). However, even Regen GGBS, which can be used to replace about 80% of cement component in concrete; has carbon footprint of about one tenth of Portland cement. Let us assume a Regeb GGBS plant is green hydrogen powered, using a renewable source of energy in the electrolysis process.

Sustainability at Hanson UK, said: “It is estimated that cement is the source of just under 1.5 per cent of UK CO2 emissions. With demand for cement and cement replacement products predicted to increase by a quarter by 2030, researchers and industry are working hard to reduce the level of carbon emissions associated with production.” He further stated, “As a leading manufacturer, we take our responsibility very seriously. In the UK we have already achieved a 30 per cent reduction in CO2 emissions since 1990 across the business and have set an ambitious new target of a 50 per cent reduction by 2030 from the same baseline. We are constantly looking to improve energy efficiency and carbon reduction at our cement and Regen plants, so we are delighted to be involved with this innovative research project.” Dr Charlie Dunnill, who is leading the team based at the Energy Safety Research Institute, added: “It has been a pleasure to work with the staff at Hanson

and is amazing to see technology from our labs interacting in real time with local industry, actually producing hydrogen that can be burned in exchange for natural gas to lower their green-house emissions.” The future looks greener as this technology is being developed and when careful infused into other sectors like industries, transportation and homes, the goal of reducing carbon will be less of a tussle. Writer: Donald Marshall Company: Mframadan Energy Management & Research Institute (M.E.M.R.I). Contact: 00233-24-4550854 Email: donaldamus@yahoo.com

MONDAY FEBRUARY 15, 2021

Opinion

MONDAY FEBRUARY 15, 2021

Of GHAFTRAM, Nibima and false accusations …the COVID-19 treatment turf war

Nana Kwadwo Obiri, Secretary of GHAFTRAM

By Wisdom Jonny-Nuekpe

llegations by the Ghana Federation for Traditional Medicine Practitioners (GHAFTRAM), accusing the Food and Drugs Authority (FDA) of misleading the public on the use of the herbal Criptolepis sanguinolenta, locally known as Nibima for the cure of COVID-19 is worrying and should be considered as false by those who closely followed recent media attacks and accusations on the FDA by the Federation, concerning the use of Nibima for COVID-19 clinical trial. The FDA in a press statement on February 1, 2021, mentioned that it has approved Criptolepis sanguinolenta (Nibima) for clinical trials for a possible COVID-19 treatment. Indeed, a related press statement from the Kwame Nkrumah University of Science and Technology COVID-19 Clinical Team, attested that the herbal medicine in question was not for treatment in its finality but for a phase II clinical trial on COVID-19 patients. However, a publication in the Informer Newspaper on Friday, February 5, 2021 with the headline, ‘Confusion lingers over Nibima medicine …as Traditional Herbalists expose FDA…’ accused the FDA of misleading and creating misunderstanding within the public, regarding the endorsement of the herbal medicine as a cure for the virus. False claims Indeed, no part of the FDA release mentioned that Nibima can cure the dreaded COVID-19. The statement in part said, “In the search for the treatment

for the ongoing COVID-19 pandemic, researchers from the School of Public Health at the KNUST submitted a clinical trial application in September 2020 to assess the safety and efficacy of Cryptolepis Sanguinolenta as a potential treatment for COVID-19”. Conversely, it is unfortunate that the said newspaper alleged that the FDA deceived the public by endorsing Nibima as cure for COVID-19. The second paragraph of the Informer story reads, “The KNUST statement was to clarify the misunderstanding by the general public regarding Nibima as a cure to the virus, which was fueled by the FDA”. The paper, however failed to appreciate that both the KNUST and the FDA were communicating same procedure and messages in their separate statements. The newspaper gave an impression that the FDA by its release, attested to the efficacy of Nibima for the final treatment of COVID-19, which is false, and does not correspond to the Authority’s position in the statement. The statement was emphatic on ‘possible clinical benefits’ on the basis of initial findings which corresponds with what KNUST said in their statement. Favoritism Suspicions and allegations of favoritism to the detriment of GHAFTRAM and herbalists in the same Informer story is also out of place. GHAFTRAM’s Secretary, Nana Kwadwo Obiri, was quoted as saying that, the association submitted 33 different herbal products to the FDA and the Ministry of Health to be approved for COVID-19 treatment.

GHAFTRAM, he said, was later surprised that the FDA had gone ahead to approve another herbal medicine without the association’s knowledge. The question here is, ‘must the FDA notify or engage the herbal medicine association before considering and approving clinical trials of that nature? Indeed, reliable information indicates that the 33 herbal medicines were submitted to the Minister of Health, who later presented it to the Centre for Plant Medicine Research (CPMR), Mampong, for further studies to be done before approval. Those 33 medicines were not presented to the FDA as the Informer story claimed. Key questions Is GHAFTRAM aware that the 33 herbal medicines would have to go through testing at CPMR? If no, then obviously, the Federation does not acknowledge the role of CPMR in such matters. If yes, then such grievances must be channeled to CPMR for answers and not the FDA. Moreover, 33 products will definitely take a long time to go through testing and for the best due diligence. We must not lose sight of the fact that even the Nibima herbal product, was submitted in September 2020 and it was not until February 1, that it met all the necessary requirements to commence clinical trials. This is just one product, taking almost six months for answers to be provided. How much more 33 products? Ghana’s robust herbal medicine industry

It is significant to note that the FDA, through regulations, has made Ghana’s herbal medicine industry an envy to many countries on the African continent. In testament to this position, my findings revealed that other countries like Rwanda, Ethiopia and Kenya have come to Ghana through the FDA to study our industry. It is therefore imperative for us as a country to uphold these legacies and build on them. The impression created by GHAFTRAM in the said articles denote that the FDA was against the indigenous herbal industry. Bad faith The Secretary of GHAFTRAM, Nana Kwadwo Obiri, who was a board member of the FDA, per the claims of his Federation, has exhibited some amount of bad faith through assertions in the articles, with full intent to settle matters in the public domain. Nana Kwadwo Obiri should not have projected his stands as having the interest of GHAFTRAM more than the FDA and vice versa, since he represents both entities. At best, such allegations and claims, even if they were found to be true, could have been settled indoor without necessarily engaging in public accusations. Conclusion As the FDA is more focused in playing its regulatory roles to navigate the country through this pandemic, key stakeholders including GHAFTRAM, can only collaborate and contribute to the national effort to collectively fight the virus.

MONDAY FEBRUARY 15, 2021

Feature

MONDAY FEBRUARY 15, 2021

Markets

MONDAY FEBRUARY 15, 2021

Downward trend in inflation could trigger policy rate cut in first half-2021

hana’s inflation has decelerated quickly to 9.9%, which is within the central bank’s target range of 6-10%, in January 2021 on the back of slowdown in the growth of food prices. Food inflation dropped by 130bps to 12.8% in January 2021 from 14.1% in the previous month. However, non-food inflation remained unchanged at 7.7% in January 2021, partly due to the stability of the GHS against the USD in January, buoyed by robust BoG support via regular interventions in the foreign exchange market and USD inflows from foreign portfolio investors who are keen on local bonds. The higher-than-expected deceleration in inflation to within the central bank’s target range is likely to provide strong support for a policy rate cut in the next MPC meeting in March, subject to the outcome of February inflation, which faces immediate risks from higher crude oil prices. We believe that Ghanaian authorities would be keen to cut

the policy rate within the first half of 2021 for two main reasons. Firstly, given that the first wave of the covid-19 pandemic led to contractions in economic activity, the authorities need to use monetary policy instruments to energise economic activity in 2021 in the midst of a second wave of covid-19 infections in the country. Secondly, the authorities are keen to reduce government’s cost of borrowing in the midst

of mounting public debts that could require more than half of government revenue to service. Meanwhile, in the fiscal space, the government plans to access majority of its funding needs from external sources in 2021, largely via a planned USD5 billion capital raising from the international capital market. This would reduce the government’s dependence on the domestic market, and could allow commercial banks to redirect funds to expand credit

to the private sector to drive economic activity in 2021. The combination of this fiscal move, slowdown in inflation and a monetary policy rate cut could provide a very strong support for the ongoing downward trend in short term yields. Since the beginning of 2021, yields on the 91-day, 182-day and 1-year note have dropped by 27bp, 11bps and 4bps to 13.82%, 14.01% and 16.96% respectively in the primary market. The yield on the 6-year bond also declined by 25bps to 19.25%. There are compelling reasons for the authorities to cut the benchmark policy rate, but whether that happens in March or May depends on the evolution of inflation within that period. Despite risks from higher crude oil prices, we believe that the sustained stability of the GHc against the USD plus sustained slowdown in the growth of food prices could continue to support the downward trend in inflation within the first half of 2021. Source: Doobia.com

Ecobank Nigeria issues first non-sovereign bond from Africa

he subsidiary of Ecobank Transnational Incorporated (ETI), Ecobank Nigeria has announced issuance of the first non-sovereign bond from Africa in 2021. The US$ 300 million bond issued will matured in February 2026, with settlement of the bond to take place on 16 February 2021. The fixed-rate, US dollardenominated bond, with a tenor of 5 years, carries a coupon rate of 7.125% and will be listed on the London Stock Exchange. It is accompanied by an Issuer Rating of B- from Fitch Rating Agency and S & P. The coupon / yield represents the lowest ever coupon / yield achieved by a Nigerian financial institution for a benchmark bond transaction. At the peak of marketing the transaction, the issue was over 3 times oversubscribed, with significant interest from international investors. The transaction opened with Initial Price Thoughts (‘IPT’s’) of 7.75% and finally tightened to close at 7.125% on the back of robust demand. The strength and depth of the book demonstrated global investors’ strong appetite for the Ecobank franchise in Nigeria, a testament to the strength of the

Ecobank Group. This transaction is the first non-sovereign bond from Africa in 2021 and is a milestone capital raise for the banking sector in Nigeria, giving Ecobank access to global debt capital markets, and more favorable credit terms, commensurate with its strong financial position and robust capital structure. For international investors, it represented an attractive option to gain exposure to Nigeria. This transaction followed a

series of virtual global investor calls, with a number of blue-chip local, regional and international financial institutions, led by Citi, Mashreq, Renaissance Capital and Standard Chartered Bank as Joint Lead Managers and Bookrunners. Commenting on the issuance, Mr. Patrick Akinwuntan, Managing Director of Ecobank Nigeria, said: “Despite the challenging global environment owing to the COVID-19 pandemic, and on the back of a successful

NGN 50bn Tier 2 issuance in December 2020, ENG was able to successfully issue and price Nigeria’s first 2021 senior unsecured 5 year bond transaction. Ecobank Nigeria, through this issuance, is being proactive in optimizing its capital structure as it continues to drive its medium term growth strategy of establishing itself as a leading facilitator of pan-Africa and international trade and payments.”

MONDAY FEBRUARY 15, 2021

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