Business24 Newspaper 29th March, 2021 by Business24 Online

MONDAY MARCH 29, 2021

BUSINESS24.COM.GH

NO. B24 / 177 | NEWS FOR BUSINESS LEADERS

Gov’t securities trading reforms begin next qtr

MONDAY MARCH 29, 2021

Parliamentary committee worried over railway properties encroachment By Eugene Davis ugendavis@gmail.com

he Parliamentary Committee on Roads and Transport has expressed its worry over the encroachment of properties belonging to the Ministry of Railway Development. Cont’d on page 3

Lands Ministry places embargo on forestry mining permits By Eugene Davis ugendavis@gmail.com

Ken Ofori-Atta, Finance Minister Designate

By Joshua Worlasi Amlanu macjosh1922@gmail.com

overnment will from the second quarter effect a number of changes regarding how its securities are traded on the capital market.

According to the Ministry of Finance in its 20212024 Medium-Term Debt Management Strategy (MTDS), the changes to be implemented include the new Primary Dealer guidelines that replaces the Joint Book Runners ( JBRs)

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

overnment will ensure that the Forestry Commission complies with a directive not to issue forest entry permits for mining purposes until otherwise determined, Lands Minister Samuel Jinapor has said.

Cont’d on page 2

INTERNATIONAL MARKET US$1 = GHC 5.7606

GHANA REFERENCE RATE PROJECTED GDP GROWTH RATE

with a Bond Market Specialist (BMS) group under much stricter rules, requirements, and obligations with regards to marketing, selling, distributing, and trading of government bonds.

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

CORN $/BUSHEL

$543.75

COCOA $/METRIC TON

$123.55

COFFEE $/POUND:

Cont’d on page 3

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Editorial / News

MONDAY MARCH 29, 2021

Editorial

Railway encroachment must cease

hana’s transport system is heavily dominated by road transport. Despite calls for comprehensive development of the sector, road transport remains by far the most popular and developed. Although the country had a considerable amount of railway infrastructure post independence, that mode of transport has not been too popular as railway lines and properties belonging to the Railways Ministry have been largely neglected. As a result of this neglect, many of such infrastructure has been encroached upon or taken over by squatters. Given the renewed drive by the government to resuscitate railway transport,

these encroachments are deeply worrying. Judging by how long the neglect for some of these properties has taken, it will be difficult for the Ministry to lay claim to its properties without creating a humanitarian crisis of a sort. Also, in other instances where full-blown communities have sprung up on railway lands, reclamation would be immensely problematic. Nevertheless, the Ministry has indicated its readiness to take back what rightfully belongs to it via a carefully-through plan. Much as this paper supports an aggressive development of the railway sector, it believes that the Ministry must show tact in dealing with encroachers.

The Ministry’s own neglect and lack of activity have created a problem and now will not be the best time to go about tearing through properties without requisite engagement with the affected people. This paper would like to call on the Ministry, to as a matter of urgency, notify the encroachers about its desire to reclaim their properties. Such ample notice will allow these affected people to have little complaints when the Ministry decides to descend heavily on them. The development of viable railway transport is so crucial that the Railways Ministry knows that it cannot allow encroachers to derail its vision.

Gov’t securities trading reforms begin next qtr Continued from cover

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The BMSs are institutions authorised by the Ministry of Finance and the Bank of Ghana to participate in the book-building auction of government notes and bonds. The book-building method is intended to diversify the existing resident and non-resident investor base, seeking out new investors and extending the geographical reach of government in raising funds. According to the new primary dealer guidelines, bond market specialists have been appointed from among primary dealers and licensed investment dealers to conduct government’s bond market operations. The BMSs are expected to achieve and maintain a market presence sufficient to earn them an appropriate share of secondary market turnover. Further to this, the BMSs are expected to maintain a minimum secondary market share of not less than five percent, as measured on a sixmonth rolling average. According to the Ministry, the

reforms will help resolve current inconsistencies between Primary Dealer rights and obligations and incentivise PDs who want to put more effort into domestic market development. These are in line with broader

efforts to develop a wellstructured and well-functioning money market, which will effectively help improve the efficiency and transparency of the Ghana Fixed Income Market (GFIM).

MONDAY MARCH 29, 2021

Parliamentary committee worried over railway properties encroachment Continued from cover According to the Committee, the sad development is threatening the expansion of some of the key railway infrastructure. The Committee made this observation when it approved an amount of GH¢512m as the Ministry’s allocation for the 2021 financial year. The Roads and Transport committee noted that with the current state of the railways, most of the railway assets across the country have been abandoned and some have been encroached over by private sector individuals and organisations. The Committee was, however, assured that the Ministry intends pursuing a programme to identify and ascertain the state of all railway assets across the country and take steps to reclaim these assets as well as update the railway asset database for proper inventory and management.

John Peter Amewu is the Railway and Development Minister

According to the Minister for Railway Development, John Peter Amewu, government was committed to providing an alternative means of transport with the development of the railway and will stop at nothing to ensure the sector thrives Budget allocation According to the report by the Committee, the key

priority programmes, projects and activities planned for 2021 include development of sections of the Western Railway Line on Standard Gauge, development of the Eastern Railway Line on Standard Gauge, development of the Tema to Mpakadan Standard Gauge Railway Line, development of Ghana-Burkina Faso Railway Interconnectivity

Project, construction of the Accra to Kasoa suburban railway line. Others are maintenance of sections of the narrow-gauge railway network, procurement of new standard gauge rolling stock and land acquisition for railway development. Chairman of the Roads and Transport committee, Kennedy Osei Nyarko said it is significant for government to resource the sector by way of staff since it is faced with inadequate staff and few staff who are knowledgeable in railways. The ranking member, Kwame Governs Agbodza also stated that government should resource the railway sector to secure more investments to enable it build a better railway sector. The report also revealed concerns of committee members which had to do with human resource capacity and office accommodation challenges, ineffective legal, regulatory and institutional regime, operational challenges and encroachment of railway lands.

Lands Ministry places embargo on forestry mining permits Continued from cover Presenting a statement to mark the United Nations International Day of the Forest last week, Mr. Jinapor maintained that the Forestry Commission, has been directed -- except in exceptional circumstances -- not to issue Forest entry permits for mining purposes. “Collectively, and with a determined resolve, we must and will enhance our measures to regulate small-scale mining and eliminate or reduce its adverse consequences on our environment,” he added. Ghana joined the world in recommitting itself to the principles which animated the United Nations General Assembly to designate 21st March as the International Day of Forests. In this regard, he stated the consequential adverse impact of climate change on the livelihoods and economic development of many nations, especially developing countries, contributed significantly to this global consciousness on the need to protect the global eco-system. On each International Day of Forests, countries are encouraged to undertake local, national and international efforts to organise activities involving tree planting

campaigns. Ghana, in order to meet its national policy on forestry, aims to plant 5million trees in a day, with a project dubbed The Green Ghana Project. This project will see to the planting of five million (5,000,000) commercial and other trees, in all sixteen (16) Regions, in one day.

Tentatively scheduled for 11th June 2021, President AkufoAddo is expected to plant a commemorative tree on that day, with the Vice President, the Speaker of Parliament, and the Chief Justice all doing same. Other prominent citizens of society such as the Asantehene, the Yaa-Naa, and a host of other

distinguished personalities will be called upon to support the project. The Minister in his statement also urged Ghanaians to renew their commitment to plant trees as well as commit themselves to nurture and preserve existing forests and trees outside forest enclaves.

MONDAY MARCH 29, 2021

News

MONDAY MARCH 29, 2021

Ghanaian businesses eager to do business with Rwandan counterparts

hanaian and Rwanda businesses have expressed the optimism that trade between the two countries will be enhanced after participating in the first Rwanda-Ghana Business Summit held virtually on Thursday with more than 300 businesses and regulators joining in on the call to learn and understand the business and investment opportunities that exist in both Rwanda and Ghana. The Summit, organized by the Rwanda Development Board (RDB) and the Ghana Export Promotion Authority (GEPA) with the Rwanda High Commission in Ghana playing a facilitation role to connect and promote exchange of goods and services between Rwanda and Ghana and profile investment opportunities offered by both countries, had the Ghana Investment Promotion Council and the Rwanda Development Board as well as the Food and Drugs Authorities (FDA) of the countries making presentations to the participants on the available opportunities in the two countries. Break-out sessions on the virtual summit held for businesses with interest in the manufacturing, agro-processing and services sector brought participating entities closer to one another on collaborating on other partnership opportunities amid the implementation of the Africa Continental Free Trade Area Agreement (AfCFTA).

The High Commissioner of Rwanda in Ghana, Dr. Aisa Kirabo Kacyira

The Summit, which was held in just days after a Ghanaian business delegation returned to Accra from a familiarization tour to Rwanda, is set to consolidate the strong relations between the two growing African economies and help to push trade volumes up in the face of a stronger partnership and collaboration between the various bodies; GEPA and RDB, the two FDAs and between the Chamber of Commerce Ghana and Private Sector Federation as more engagement and support is expected to follow soon. The High Commissioner of Rwanda in Ghana, Dr. Aisa Kirabo Kacyira in a remark to open the Summit talked of the relations between Rwanda and Ghana and that the establishment a chancery in the country will help

businesses in both countries to connect and do business. “It is about creating relationships and partnerships in the face of boasting intra-Africa tourism and trade,” she added. Presently, bilateral trade data available at the Ghana Export Promotion Authority shows that trade between the two burgeoning African economies is very low at less than US$1 million but there is a growing confidence among policymakers and businesses that measures put in place to expand trade volumes between the two countries will yield significant results in the next few years. This is particularly so as the low volume and value of trade between the two countries present an opportunity for businesses to do more amid

both bilateral and multilateral measures to boost intra-Africa trade. The Deputy CEO of GEPA, Sam Dentu commenting on the tyrade relations between Rwanda and Ghana at the Summit said: “Trade between Rwanda and Ghana is very low. It is imperative for our two countries to intensify our trade relations. Today is an engagement we hope will bring meaningful collaboration between Rwanda & Ghana.” This virtual trade promotion event thus builds upon a number of initiatives implemented over the last one year in line with strengthening economic and trade relations between the two sister African countries. Among others, RDB conducted a successful trade mission in the first half of 2020, during which trade and business opportunities in both countries were mapped. This mission also played a key role in establishing contact between counterpart institutions as well as kick-starting engagements with Ghana’s Private Sector as it culminated in the signing of a Memorandum of Understanding between the Ghana Chamber of Commerce and Industry (GCCI) and the Rwanda Private Sector Federation (PSF) aimed at promoting and facilitating trade between both countries. It is expected that the Summit has paved way for more business deals among Rwanda and Ghanaian businesses and will further open trade opportunities in both countries.

Ghana Card, TIN required for registration of new companies — Registrar General

he Registrar-General’s Department (RGD) says effective Thursday, April 1, 2021 all clients registering new companies should provide both their National Identification Number (Ghana Card) and the Tax Identification Number (TIN) for the process. A statement signed by Mrs Jemima Oware, the RegistrarGeneral, and copied the Ghana News Agency, said the TIN would only be generated in the RGD offices temporarily in the transitional period, which ends on Tuesday, April 30, 2021. However, the National Identification Authority (NIA) would mount a desk at the RGD premises to issue Ghana Card to clients who were only registering their businesses and not for any other purposes.

“This measure has become necessary following the President’s 2021 State of the Nation Address in Parliament in which he indicated that all National Identification Numbers would become Tax Identification Number (TIN) and SSNIT numbers,” the statement said. It said the directive applied to all registration types, namely; companies limited by shares and by guarantee, unlimited liability companies, partnerships, sole proprietorships, subsidiary business names and external companies. The statement said clients were to note that Business Registration Forms would not be processed without the Ghana Card and advised them to desist from dealing with middlemen (goro boys) when registering

their businesses. “Please visit our website www.rgd.gov.gh to download Registration Forms, complete them before submitting it at any of the Registrar-General’s

Department Offices across the Country. For inquiries, please contact the Public Relations Unit on 055-765-3130,” the statement said. GNA

MONDAY MARCH 29, 2021

VACANCY

Feature

MONDAY MARCH 29, 2021

Exploring current issues in development finance

A new book provides comprehensive coverage of contemporary issues in development finance from both domestic and external finance perspectives

he impact of the Covid-19 pandemic on economies around the world has been extensive – businesses have lost out, trade came to a halt, and health infrastructure has been struggling. These challenges show the huge gaps that exist in access to infrastructure development, says Charles Adjasi, a professor in Development Finance at the University of Stellenbosch Business School (USB) and editor of a new book titled Contemporary Issues in Development Finance. “We need resilient, inclusive and sustainable economies; we need to be able to utilise technology to drive development and growth. This draws our attention to a key challenge – to attain equitable growth and development we need to be able to address some of these gaps we have,” he says. “We need to invest in education, health, infrastructure, and industrial strategies that can help grow small and big businesses.” He adds that the financial system of a country must be welloiled to address these issues. “If the financial system is not efficient, we would not know how to mobilise resources, both domestically and internationally, to do this.” The book, which covers topical issues such as microfinance, private sector funding, aid, trade finance, and sovereign wealth, was recently launched during an online engagement hosted by

the business school. Prof Adjasi and fellow editors Prof Joshua Abor and Prof Robert Lensink unpacked current coverage of policy issues in development finance from both domestic and external finance perspectives. They were joined by contributors Prof Victor Murinde, Dr Pieter Opperman, and Dr Hanna Fromell. Foreign banks’ impact on domestic economies Prof Adjasi says the presence of foreign banks in countries positively contributes to the competitiveness of the domestic financial sector. “Typically, foreign banks would locate into another local environment as a means of diversification to seek areas to make more profit or to expand. From a receiving economy’s point of view, it is important to look at a few things: If a bank gains entry into the local economy, is it going to promote competition and efficiency? Will it deepen the financial sector? Will it encourage outreach, and will it make the financial sector stable?” He says the empirical evidence so far shows that the presence of foreign banks in financially constraint environments with structural gaps in the financial market, has increased the competitiveness and efficiency while growing the depth in the financial markets. However, he warns that the presence of

foreign banks can also pose a risk as they can imports risks from the country where they are coming from or they can easily leave when a crisis strikes. “We must allow foreign banks, but we must just watch the risks. Within Africa there’s Equity Bank Kenya that is spread around east Africa and seems to have been doing quite a lot in inclusive finance by increasing the technological-enhanced financial products,” he adds. Relooking global financial architecture Prof Abor, who lectures in the Department of Finance at the University of Ghana, says some issues need to be addressed in terms of reforming the global financial architecture. “The issue of reforms of the global financial architecture has been on the drawing board for a very long time, even before the global financial crisis. As much as there has been some improvement in terms of improving global finance, a significant amount of reforms are still needed to enhance the ability to safeguard global financial stability and also address a global crisis,” he says. He adds that it is important to look at how African countries are managing their resources and economies. “In the book, we try to capture some cases such as the Structural Adjustment Programmes (SAPs) in countries

like Uganda and whether they have been successful or not.” Abor says the Bretton Woods system, and international and regional development banks should concentrate on their core mandates. “The International Monetary Fund (IMF) needs to focus more on surveillance of the world economy and also ensuring that macroeconomic stability among member countries is attained. “The IMF needs to look at its role as lender of last resort to member countries that are affected by crisis and countries should focus on being prequalified for assistance as opposed to imposing conditionality because conditionality hasn’t worked and we need to take a second look at that,” he cautions. “Conditionality is biased against developing countries and Africa. Developed countries don’t face or experience the kind of conditionality that is often imposed on developing countries.” Abor adds that a reconsideration of the entities themselves is also needed. “Emerging economies need to be allowed to also contribute resources as opposed to always being net borrowers. If we are seen as borrowers, then we take whatever is given to us. We should be giving greater representation on the board, the issues of voting rights need to be looked at,

CONTINUED ON PAGE 11

MONDAY MARCH 29, 2021

Feature

MONDAY MARCH 29, 2021

The Importance of setting Goals for your Business

t’s never a bad time to sit down with your team to set goals. A strategic plan with targets will help you grow, confront challenges and make adjustments to changing conditions. By setting goals, you encourage your employees to generate action. This is how you achieve your vision for the business When a company sets goals, it makes its priorities clear for everyone involved in the organization. The purpose of goal setting is to show employees what they need to focus on the most during the upcoming quarter, which then helps them to be able to prioritize their tasks.

Map out when, where and how you will invest to achieve your growth and efficiency goals. One important area to consider is boosting your commitment to technology. 3. Look at your HR needs Growing companies also often have trouble finding skilled labour. This is a good time to plan your staffing needs so you can get a head start on finding the best people. Also, take a look at whether you currently have the right people in the right positions. It is not easy, but the beginning of the year is a good time to make necessary personnel changes. 4. Check your Radar

Here are some tips on how to plan and set goals for the year ahead: 1. Set Measurable Objectives Setting financial and operational targets allows you to monitor your business’s progress through the year. They encourage you to hold yourself and your team accountable for your performance and push to reach your goals as the months unfold. 2. Plan your Investments

Gather as much information as you can about the external environment and your competition. The outlook for the economy, changes in customer needs and tastes and your competitors’ strategic direction. You want to both protect your market position and be in a position to seize opportunities as they present themselves. 5. Look to Improve What projects can you plan for the coming year that will improve

your performance and efficiency in such areas as financial management, operations, sales and marketing, HR and customer service? Sometimes you have to challenge yourself to examine how you are doing things.

6. Work with your partners One way to improve your products, processes and management practices is to seek the help of your partners. These are your business associates, customers and suppliers. Growing companies often want to do everything by themselves but you can often get further by collaborating with others. While rigorous annual planning is essential for building a healthy business you have to maintain the flexibility to adjust to changing conditions and seize business opportunities as they arise during the year.

Authored by: BforB Ghana | Networking Clubs 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 MARCH 29, 2021

Energy

MONDAY MARCH 29, 2021

Tullow makes a move towards next-phase of Ghana’s Offshore Wells

s restrictions on lockdown and travel bans amongst nations are lifted, the new normal is being instituted into company operations. Many businesses have taken strategic decisions to ensure business continuity, whiles others have sold assets to remain relevant and resilient towards the shock being brought by the new normal. Tullow Oil with its headquarters in London, United Kingdom has very keen interest in investing in its assets in Ghana. In recent past, the company had had a purchase agreement with Panoro Energy towards the sale of some of its assets of up to $180million. In efforts to concentrate on a flagship field, the company has outlined ways towards executing the next phase of their Ghana offshore projects. This move has resulted in a drillship Maersk Venturer to begin a sail trip to Ghana to execute a four-year multi-well program, starting next month for Tullow and her investment partners.

• Two production wells

This was enabled by the;

TEN Field, is to drill, • One gas injector well to provide pressure support for two Ntomme oil producers. This decision will offset the near production declines suffered by the company with the next 2022 restoring and sustaining production for the long term. Hopefully, the lessons learnt from previous programs will be taken into consideration and may result in the cost cutting of around 20% of drilling cost through the combination of simplified well designs, improved rig reliability and supply chain management. Around 2020, production from Jubilee field averaged 83,600 b/d and TEN 48,700 b/d.

• Increased gas offtake nominations from the Government, • Approval from the Ministry of Energy to increase flaring, • Uptime of over 95% at both FPSOs, and • Improved well optimization and water injection (now above 200,000 b/d) on the Jubilee floater. Tullow and its partners are considering a potential second loading line following the completion of the jubilee FPSO’s turret remediation project. Following the installation, commissioning of the CALM buoy, and offloading line, the

tanker support vessels have been released despite being on contract since 2016. Going forward, the company clearly pointed that, over the next three years, the partners plan to raise Jubilee’s gas handling capacity and perform process modification on TEN, with a view to eliminating routine flaring in Ghana by 2025. Will this, drive the company’s operations to be environmentally friendlier? I hope that this can be a step towards implementing a possible policy of executing a net-zero action plan. Writer: Donald Marshall Company: Mframadan Energy Management & Research Institute (M.E.M.R.I). Contact: 00233-24-4550854 Email: donaldamus@yahoo.com

Is this a return trip for the drillship? Information gathered indicates that, this ship had been working on Tullow’s previous drilling campaign but the contract was terminated as a strategic business decision to respond to the impact COVID-19 had on global oil prices which in trickling effects, made the entire business operation less economically viable. The activities detailed for the ship for 2021 include: Jubilee Field, is to drill, • One water injector

The drillship Maersk Venturer. (Courtesy Maersk Drilling)

Exploring current issues in development finance CONTINUED FROM PAGE 7 and the appointment process must be open,” he says. Microfinance vs financial inclusion Lensink, a professor of Finance and Financial Markets at the Department of Economics, Econometrics and Finance at the University of Groningen in the Netherlands, says the global discourse around financial development has shifted towards financial inclusion, “which is much more important so that we

include everybody in the financial system of financial development”. He says the concepts of microfinance and financial inclusion should not be confused. “Although related, these are two different concepts. Microfinance predominantly deals with credit to a particular group of poor people, while financial inclusion is much broader; it is not only credit from a microfinance institution to poor people, but it is the financial inclusion of everybody in the economy.” He adds that it is different in the sense that microcredit while

focusing on the poor, is very often not available to the very poor. “When you talk about financial inclusion, you want everybody in the economy to be included; not just the moderately poor. Microfinance in itself will never lead to the financial inclusion of everybody but rather forms part of financial inclusion, which is much broader. We need financial instruments and institutions to enable each person to be included in the financial system in the end.” The full recording of the event is available on the University of

Stellenbosch Business School’s YouTube channel. Watch it here If you would like to order a copy of the book, click here Contact us for more information on the programmes offered by the University of Stellenbosch Business School (USB): Dr Marietjie van der Merwe USB Representative marie@globalnatives.com +230 606 2341 / +230 5 701 1362 Click on the link for more details on the programmes: https://www.usb.ac.za/academicprogrammes/

MONDAY MARCH 29, 2021

News

MONDAY MARCH 29, 2021

VRA donates educational, COVID-19 materials to 30 selected basic schools By Joshua Worlasi Amlanu macjosh1922@gmail.com

he Volta River Authority (VRA), as part of the celebration of its 60th anniversary, has donated educational and COVID-19 materials to 30 selected basic schools in its impacted communities across the country. At the donation last Friday, Emmanuel Antwi-Darkwa, Chief Executive Officer explained that the goal of the VRA is to ensure that everyone in the classroom is equipped with the fundamental tools to thrive and also to support families and schools in the provision of such items Given that the COVID-19 pandemic has seriously affected the traditional way of learning and the entire academic calendar, the CEO called on all to adhere strictly to the health and safety protocols. “We urge you to continue to wear your face masks, regularly wash your hands with soap under running water, use hand sanitizers where there is no running water, cover your mouth when coughing, cove nose when

Display of item donated by VRA as part of its 60th Anniversary

sneezing, no hand-shaking, and also remember to observe social distancing. It is in the light of this that our package to every child includes COVID-19 preventive items such as face masks and hand sanitizers,” he said. The items donated comprise of VRA’s 60th Anniversary branded school bags, exercise

books, math sets, pens, pencils, water bottles, face masks, and sanitizers. “In all, 16,000 school children in the 30 schools, in the Eastern, Volta, Western, Bono East and Greater Accra regions will receive a package of these items while the schools will receive Veronica buckets in addition, as our way

of motivating them to aim high in their educational pursuit,” Mr. Antwi-Darko said. The special Veronica Buckets provided for the school is to ensure the enforcement of regular washing of hands by the pupils, staff, and visitors to the school.

AfCFTA Secretariat partners UNDP to support world’s largest free-trade area towards SDGs

he African Continental Free Trade Area (AfCFTA) Secretariat and the UN Development Programme (UNDP) have announced a partnership, through the signing of a Memorandum of Understanding, to promote trade as a stimulus for Africa’s socioeconomic recovery from the COVID-19 crisis, This is also serving as a driver of sustainable development particularly for women and youth in the Decade of Action for the SDGs. The partnership will leverage UNDP’s presence in all African countries, working in close collaboration with other UN entities, to address inequalities, promote value addition and create jobs by targeting critical hurdles faced in exporting within Africa such as SME export competitiveness; rules of origin; technical and product safety standards. It will also enhance AfCFTA advocacy among policy makers,

business, civil society, academia, youth and other stakeholders. The partnership signing is part of a two-day official visit to New York by the AfCFTA Secretariat Secretary General. The African Continental Free Trade Area (AfCFTA), the world’s largest free-trade area, started trading on January 1, 2021, creating a market of 1.2 billion people, the eighth economic bloc in the world with a US$3-trillion combined GDP. Since its launch, the AfCFTA has been ratified by 70% of countries, and already possesses 90% of tariff offers and 34 services offers, which enables sound business and investment decisions in intra-African trade, strengthening accelerated action for trade as a means of implementation for the Africa We Want, and for the SDGs. While in New York, the Secretary General will meet with groups of investors, including from the African diaspora, under the auspices of the Office

of Historically Black Colleges and Universities Development and International Cooperation

(OHBCUD) and meet with other senior UN officials.

ally C. Davies, Jeremy Farrar im O’neill

MONDAY MARCH 29, 2021

Feature

MONDAY MARCH 29, 2021

All eyes on digital payments

By Raghuram G. Rajan

igital payments are attracting growing interest, and eyepopping numbers abound, as demonstrated by the US payment processor Stripe’s recent $95 billion valuation. Why all the excitement, and why now? At one level, the reason is straightforward: digital payments allow buyers to pay sellers without physical currency changing hands. Though the technology has been around for a long time, it is finally becoming much easier to use for small-value retail payments. Moreover, the pandemic has accelerated the switch to digital payments, as people have shifted to e-commerce and taken steps to avoid handling currency in ordinary purchases. Digital payments also generate real-time data on sellers’ businesses, the timing of cash flows, and buyers’ purchasing habits, allowing payment providers to offer credit, savings, wealth management, collections, insurance, and other financial services. Where credit was once the way to draw in customers and offer a panoply of financial services, payments may be a safer channel for such upselling. But a provider who handles only a fraction of a customer’s payments has only a partial picture of that customer. Payment providers therefore are eager to control all means of payment: bank accounts, e-wallets, credit cards, cryptocurrencies, and so on. And e-commerce and socialmedia platforms want to go a step further by combining their powerful data-collection engines with payments. With near-total knowledge of users’ behavior, a provider can both address customers’ every need (directly or through partners) and lock them in

for the long term, because the costs of seeking similar services elsewhere will be too high. This tie-in need not be entirely exploitative: a merchant who uses a provider for a wide suite of services can be offered more credit, because she will be less likely to risk losing those services by defaulting. There is also much excitement about cryptocurrencies, which are just one form of digital payment, typically requiring an initial exchange of a fiat currency like the US dollar into a given unit. A cryptocurrency like Bitcoin offers ostensible benefits as a means of payment because, unlike fiat currencies, it cannot be inflated away (because its supply is fixed), and it allows for decentralized payment verification, eliminating the need for any party to trust the others involved, let alone trusting government or regulators. But there are impediments to Bitcoin’s use. Its value is not managed by a central bank, so it can fluctuate wildly. Firms, barring those led by true believers, do not want to keep a currency whose value can fluctuate by 10% every day. And Bitcoin transactions are expensive and inefficient, owing to the costly decentralized verification process. By some estimates, the annual electricity use needed to verify Bitcoin transactions exceeds that of a medium-size country. It is hard to imagine that such an environmentally destructive process will be tolerated indefinitely. Other cryptocurrencies have a fixed value, because they are pegged to a currency like the dollar and fully backed with cash reserves. These “stablecoins” are easier to use in payments; but like other traditional means of exchange, they are dependent on (those pesky) regulators. While some stablecoins have tried

different methods of payment verification than Bitcoin’s, none has emerged as the next “killer app.” Cryptocurrencies are thus a work in progress. By design, Bitcoin addresses the lack of trust in fiat currencies, central banks, and governments. But, beyond the paranoiac, criminal, and terrorist communities, such concerns are not widely shared. That could change if more people start believing that central banks are out to debase fiat currencies, or if the world breaks up into USand Chinese-led blocs that don’t trust each other’s currency or settlement systems. Of more immediate use would be a cryptocurrency that focuses on reducing transaction costs in difficult payment situations such as small-value or crossborder exchanges. For example, a voracious but eclectic reader could make micropayments for every article she reads online without taking on a bunch of costly subscriptions. Equally promising are proposals for smart contracts that would deliver a payment automatically once some verifiable condition has been met (eliminating the need to trust humans). In any case, the emergence of a dominant digital-payment provider, cryptocurrency or otherwise, would raise important public policy concerns, such as whether it could be trusted to collect and handle customer data responsibly. Owing to its mixed track record on data and privacy issues, Facebook’s proposed stablecoin (Libra, which has since been rebranded as Diem) met with skepticism from financial regulators. For its part, Europe has made an initial attempt at regulating data use under its General Data Protection Regulation. But the law will need to be fine-tuned in light of developments in the digital-payments sphere.

A related issue concerns antitrust. Does a single payment provider that handles all business services – including e-commerce and logistics – have an excessive amount of market power? The recent tensions between Chinese regulators and Ant Group owe something to the fear that e-commerce platforms like Alibaba (Ant’s parent company) are using their market power – enhanced through payments – to restrict competition. One remedy here would be to create public payment bridges, such as India’s Unified Payments Interface, where the key payment services are open to all comers and not controlled by any one private entity. But perhaps the greatest regulatory concern is systemic risk. When one or two providers dominate an entire country’s digital retail payments, commerce could be devastated if anything goes wrong. Advances in cryptography (through quantum computing) may make it easy to subvert existing schemes of digital verification. And public bridges, while increasing competition, may concentrate risk. The only way around this is to have multiple providers, multiple bridges, and multiple technologies in the payment arena. Central banks are now contemplating getting into the digital-payments game themselves. They fear losing control over payments as physical cash becomes redundant, that the private sector will get it wrong, or that other central banks will steal a march on them. Central bank digital currencies would ensure a public presence in payments; but, again, this option would concentrate data and risk, while also raising questions about the viability of private digital payments. But that’s a subject for another (my next) commentary.

MONDAY MARCH 29, 2021

Markets

MONDAY MARCH 29, 2021

Markets

MONDAY MARCH 29, 2021

More companies to delay release of audited FY2020 figures

he Ghana Stock Exchange (GSE) has granted permission to six companies to submit their audited financial statements for full year 2020 by the end of April 30, 2021 instead of the usual March 31, 2021. Three of the companies listed their shares on the GSE while the other three companies have listed fixed income securities on the GSE. A release by GSE noted that the “Ghana Stock Exchange announces for the information of the general investing public that, the underlisted Companies have been granted extension of time to submit their audited Financial Statements for the year ended December 31, 2020 by April 30, 2021” The companies that have listed shares on the GSE include Fan

Milk Plc, Trust Bank Limited (The Gambia) and Dannex Aryton Starwin Plc.

And the remaining three companies have listed fixed income securities on the GSE

include Letshego Ghana Savings & Loans Plc, Daakye Trust Plc and E.S.L.A. Plc.

China’s answer to YouTube slumps on market debut

hares of Chinese video platform Bilibili have slumped at their launch on the Hong Kong stock exchange. The shares opened at HKD$790 ($101.6 ; £73.7), which is 2.2% below their issue price, before slipping another 4%. Bilibili is similar to YouTube, but the company hopes to increase revenues through Netflix-style subscriptions. The listing is the latest in a large number of “homecomings” for US-listed Chinese companies. The Chinese firms have sought out secondary listings in Hong Kong due to increased scrutiny from US regulators, which began under President Donald Trump. In January, The New York Stock Exchange suspended statebacked telcos China Telecom, China Unicom and China Mobile. “Homecoming” listings have not always generated the same level of excitement from investors as some other tech listings. Shares of the internet search giant Baidu only edged slightly higher when they listed in Hong Kong last week, while ecommerce giant JD.com also had a lacklustre secondary launch last year. After pricing shares at $104 each last week, Bilibili raised $2.6bn, which was short of the $3bn it had anticipated. The company’s launch is the

weakest major share market offering in Hong Kong since Yum China Holdings shares shed 6.3% on debut in September last year, according to Refinitiv data. Premium content Currently, Bilibili is a lossmaking company, although its prospectus says its revenues have nearly tripled since 2018. According to the prospectus, the video platform had 202 million monthly average users in the last quarter of 2020, an increase of 55% over the same quarter in 2019. That’s less than a third of rival video platform Kuaishou, which surged nearly a 190% at its share market launch last month before paring back some of those gains. Bilibili also faces increasingly stiff competition from a range of other home-grown Chinese video platforms. However, the company hopes to follow in the footsteps of Netflix, and turn a profit by offering premium content to subscribers. Already, the company has 14.5 million subscribers, and has plans to convince more of its users to pay for content. The company also makes money from advertising, mobile gaming and e-commerce.

Parkstone Capital voluntarily cease capital market operation

arkstone Capital Limited, a licensed fund manager that engaged in fund management activities in the securities industry, has voluntarily ceased operation. The Securities and Exchange Commission (SEC) in a release noted that granted this request after a thorough assessment of the circumstances, incident to the request “Parkstone Capital Ltd. is no longer mandated to carry out any Fund Management activities

within the securities industry,” the Regulator said. “All investors, market operators, and the general and investing public are hereby assured that the SEC is committed to ensuring rigorous enforcement of all the rules for operators in the capital market in order to promote the growth and development of efficient, fair, and transparent securities market in which investors and the integrity of the market are protected.”

MONDAY MARCH 29, 2021