Business24 Newspaper 10th May, 2021 by Business24 Online

MONDAY MAY 10, 2021

BUSINESS24.COM.GH

NO. B24 / 193 | NEWS FOR BUSINESS LEADERS

MONDAY MONDAY MAY MAY 3, 2021 10, 2021

Covid drives maritime traffic to first fall in 6 years

Mark Agyemang, PIAC’s Technical Manager

GNPC’s non-core activities could derail growth plans—PIAC By Nii Annerquaye Abbey abbeykwei@gmail.com

he Technical Manager of the Public Interest and Accountability Committee (PIAC), Mark Agyemang, has said the national oil company, Ghana National Petroleum Corporation (GNPC), will struggle to become independent if it continues to engage in quasi-fiscal activities. Cont’d on page 3

Gov’t outlines 5 major interventions to fix economy By Joshua Worlasi Amlanu macjosh1922@gmail.com

By Patrick Paintsil p_paintsil@hotmail.com

hana’s maritime cargo traffic dropped for the first time in six years as the coronavirus pandemic

slowed economic activity and caused a fall in the country’s merchandise international trade. According to data released by the Ghana Ports and Harbours Authority, cargo throughput fell from 27.7m

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

inance Minister Ken Ofori-Atta has outlined five major interventions that government intends to embark on to address the economic concerns raised by the #FixTheCountry campaign.

Cont’d on page 2 INTERNATIONAL MARKET

US$1 = GHC 5.7606

GHANA REFERENCE RATE PROJECTED GDP GROWTH RATE

tonnes in 2019 to 26.4m in 2020, a reduction of 1.3m tonnes, or 4.7 percent, and the first annual drop in seaborne tonnage since 2014.

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 MAY 10, 2021

Editorial

Power outages counterproductive

ver the past few months, Ghanaians have experienced irregular power supply. While some of the outages are scheduled, others are mostly unannounced catching consumers unawares mostly are rather odd times. These power cuts bear semblance to what transpired during the peak of the load shedding era some five years ago prompting fears whether the country is indeed back to the dark days. Authorities have resisted assertions that the country has run into a power crisis that requires the proverbial timetable that will advertise a formal load shedding programme. The authorities have sought refuge in the excuse that these intermittent and frequent power cuts occur as a result of ongoing

construction works on certain key power projects in the capital. It has also become the norm for authorities to attribute some of these unannounced power cuts to maintenance works or sudden failure of key power installations. The excuses anytime the power goes out have become one too many. There is no denying that the country’s power sector is under considerable amount of pressure. The power transmission side has not seen any significant investment bar the investment being made by the Millennium Development Authority (MiDA) under its Compact II initiative. There is also the distribution challenge one of the reasons for which the ill-fated Power Distribution Services (PDS) was engaged. Since their exit, not

much has been done to deal with the problem. Of course, there is the almighty cost of power produced by the independent power producers. Government is locked in these agreements and almost cash strapped in making good its commitments leading to debt accumulation for power produced. This paper believes that all these challenges have persisted for a while and government cannot play innocent if not much was done in the past to prevent them from coming to a head. The last thing that this economy needs after the debilitating effects caused by the pandemic is power cuts – be it announced or unannounced. For many SMEs that survived the pandemic, this would provide the final nail!

Covid drives maritime traffic to first fall in 6 years Continued from cover

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The fall was driven by a steep decline—as much as 31.5 percent— in export cargo, which was partly offset by an 8.8 percent increase in import cargo together with higher transhipment and transit trade volumes. Export cargo contracted from 10m tonnes in 2019 to 6.8m tonnes in 2020, according to the data, while imports jumped from 16.2m tonnes to 17.7m tonnes in the period. The volume of cargo that was transhipped through the country’s ports—that is, cargo offloaded onto other vessels for further shipment—quadrupled from 86,813 tonnes to 366,718 tonnes, while transit cargo— that is, cargo headed for neighbouring countries—grew by 9.7 percent from 1.36m tonnes to approximately 1.5m tonnes. The data also revealed that the Tema and Takoradi ports experienced divergent fortunes in 2020: whereas traffic through Tema improved by 9.2 percent from 17.3m tonnes to 18.9m tonnes, traffic through Takoradi fell by 28 percent from 10.4m tonnes to 7.5m tonnes. Takoradi’s marked reduction in tonnage was due to the

slump in export cargo, since the port usually handles more exports than Tema. In 2019, exports routed through Takoradi amounted to 7.5m tonnes, but this plunged by 41.3 percent to 4.4m tonnes last year. Analysts said the fall in maritime traffic, though not unexpected, did not reach the

depths that were feared, with import traffic especially resilient to the economic disruptions caused by the coronavirus pandemic. The forecast for seaborne trade is for a recovery in 2021, in line with the anticipated resurgence of the economy as the effects of the pandemic wane.

MONDAY MAY 10, 2021

GNPC’s non-core activities could derail growth plans—PIAC Continued from cover The national oil company, which receives a portion of the country’s annual petroleum revenues for its operations, is expected to be weaned off the revenues in a few years as it bids to become an independent oil company. According to the Petroleum Revenue Management Act (PRMA), the national oil company should start paying dividends to government from 2026, which will be 15 years after the country started commercial oil production. But in an interview with Business24, Mr. Agyemang stated that GNPC needs to prioritise its operations and desist from making significant investments into areas which are not part of its core mandate. “GNPC is aware that a time will come when they will need to put more responsibilities on themselves, diversify their investment portfolio, and be in a profit-making position and pay dividend to the state. They cannot continue to live off the largesse of the state,” he said. “Without the meddling of

government and other stateowned agencies, GNPC would have been in a good financial position. Currently, guarantees alone to other state-owned enterprises are getting close to US$600m. And this is besides the quasi-fiscal expenditures undertaken by GNPC on behalf of government,” he added. PIAC’s Technical Manager

also mentioned that GNPC’s expenditure on corporate social investment remains high, increasing from GH¢41.49m in 2018 to GH¢49.98m in 2019. According to PIAC’s 2020 Annual Report, GNPC spent nearly 72 percent of its budget for activities relating to petroleum exploration and production on Sustainability and Stakeholder

Relations, and on its Foundation. He argued that there is the need for Parliament to consider placing some restrictions on the proportion of GNPC’s budget spent on corporate social investment and guarantees to state institutions, particularly in the light of the corporation’s inability to respond to some of their cash calls.

Gov’t outlines 5 major interventions to fix economy Continued from cover In a press briefing yesterday at the Ministry, Mr. Ofori-Atta said, “In the coming days, we will move swiftly to address some of the issues that the #FixTheEconomy [protestors] have raised. “First, I will be working with the Minister for Water and Sanitation to immediately ensure water to areas of critical need. Second, I’m working with the Ministers of Roads and Highways, Transport and Interior to address congestion along the Weija-Kasoa highway.” For a long time, residents of Kasoa have called for the relocation of the Weija-Kasoa tollbooth, which has been the cause of traffic congestion and long hours of travel to Accra. Mr. Ofori-Atta said the third intervention will focus on fasttracking the implementation of the GH₵200m jobs and skills programme and the economic transformation programme to

enhance job creation. “This intervention will facilitate new and expanded private sector businesses to employ a lot more people. This, we believe, is a more sustainable way to repair the economy, instead of expanding government employment schemes.” The jobs and skills programme will offer competencybased apprenticeship and entrepreneurial skills development to the youth, and offer grants to individuals as

well as micro and small enterprises to create decent jobs or establish new businesses. G ove r n m e n t expects to create a total of 199,500 jobs, made up of 94,000 direct jobs and 105,000 indirect jobs, from the programme, which will be implemented over a six-year period ending June 30, 2026. For the fourth intervention, the Minster said, “This month, we are rolling out eight additional interventions under the ‘Ghana CARES Obaatanpa’ programme. This will be in health, agriculture, tourism, trade, digitisation, science and technology, housing and financial services.” According to the government, the GH₵100bn “Ghana CARES Obaatanpa” programme will

provide fiscal stimulus to drive growth and economic transformation post Covid-19. For the fifth intervention, the Minister said by the end of July, government will establish a new development bank, capitalised with about US$500m, to provide long-term wholesale financing to the private sector through commercial banks and non-bank financial institutions such as venture capital companies. It is expected that the bank will source funding from the domestic market as well as regional and international markets through the periodic issuance of domestic bonds, diaspora instruments, and direct borrowings from international financial institutions and capital markets Government has indicated that the establishment of the bank has so far generated a high level of interest from the international bodies such as the World Bank, European Investment Bank, KfW and DFID.

MONDAY MAY 10, 2021

News

MONDAY MAY 10, 2021

BoG commits US$363m to FX forwards in Jan–Apr By Joshua Worlasi Amlanu macjosh1922@gmail.com

he Bank of Ghana has in the first four months of the year committed a total of US$363m to the forex market through its forex forward auctions. Bids submitted during the auctions in the four months amounted to US$662.65m, out of which US$531.65m and US$129m were for the first quarter and April, respectively. The bids submitted were for the 7-day, 15-day, 30-day, 45-day, 60-day, and 75-day tenors. The activities of the central bank on the forex market continue to drive the stability of the cedi

Dr. Ernest Addison

this year despite the coronavirus pandemic. So far this year, the local currency has appreciated against the dollar by 0.5 percent. Following the issuance of the

US$3.025bn Eurobonds, market analysts are anticipating the cedi to remain stable during the year. Governor of the Bank of Ghana Dr. Ernest Addison has said the bank remains confident that the

reserves it has amassed so far, coupled with other measures to be implemented by the government, should see the local currency maintain its throughout the year.

Private sector expands faster securing materials meant that in April

hana’s private sector witnessed a firmer expansion in April on the back of the continuous rise in both output and new orders amid stronger demand, according to the latest Stanbic Bank Ghana Purchasing Managers’ Index. The Ghana PMI recorded the fastest expansion in April 2021 at 52.4 from 51.8, after it declined to its lowest point in April 2020 at 31.7. This means that the private sector is experiencing a continual period of growth at present, with sustained improvements in customer demand helping to fuel increases in output, purchasing and employment. The index points to the ninth straight month of expansion in the country’s private sector. The index, which is based on data compiled from monthly replies to questionnaires sent to purchasing executives in approximately 400 private sector companies, suggests that businesses increased employment at a modest rate, but this was insufficient to keep on top of workloads as difficulties

backlogs of work rose at a record pace. “As a result, firms increased their purchasing activity at a solid pace amid efforts to secure inputs. Regarding prices, inflationary pressures remained sharp,” the report said. “However, finally, business sentiment dipped to the lowest for a year, reflecting ongoing concerns about the impacts of the COVID-19 pandemic and price increases” “New business has expanded in each month since June 2020. Stronger customer demand was also the main factor behind a further rise in output. Business activity increased at a solid pace, and one that was slightly quicker than seen in March,” the report said. Panelists listed this as the key reason for a sharp accumulation in backlogs of work, and one that was the steepest since the survey began in January 2014. Wider goods shortages were also responsible for longer suppliers’ delivery times in April. Lead times lengthened for the fifteenth successive month, albeit marginally

GSE extends time for some companies to submit earnings results

he Ghana Stock Exchange (GSE) has granted permission to three listed companies and a company whose bonds are listed on the Ghana fixed income market to delay the submission of their audited 2020 earnings results. The companies include the Trust Bank Plc, Bond Savings & Loans Plc, and Dannex Ayrton

Starwin Plc, whose deadline to submit their 2020 financial reports has been extended to June 30, 2021. The GSE has also granted a further extension of time, to May 31, 2021, for the submission of year-end 2020 and first quarter 2021 financial statements by SIC Insurance Company Plc.

MONDAY MAY 10, 2021

News

MONDAY MAY 10, 2021

Cocoa Abrabopa partners Mars, 3 others to protect rights in cocoa supply chain By Reuben Quainoo, Contributor

ocoa Abrabopa Association (CAA) has partnered with Mars Wrigley, Sucden and ASCOT Amsterdam and the International Cocoa Initiative (ICI) to set up the Integrated and Supportive Child Labour Monitoring and Remediation System (CLMRS) to address concerns of risks of child and forced labour within the cocoa supply chain. “The association believes it is important to make sure that robust systems are in place to prevent, monitor and remediate the risks within its supply chain. CAA does not have the capacity currently to do this alone and therefore we are partnering with our customers, supply chain actors and ICI,” the CAA said. With the technical support and guidance of ICI, the association will train its staff and design and set up a robust child labor

monitoring and remediation system (CLMRS). As part of the set-up, a diagnostic assessment was conducted by ICI to analyse the strengths and weaknesses of CAA with regard to its processes to monitor and remediate human rights risks in

its cocoa supply chain. The CLMRS starts with a detailed household survey for cocoa producing members of CAA and a community profiling for communities in the selected areas. This data is analysed to then identify child labour cases,

determine households at risk of child labour and communities vulnerable to child labour and which support is needed. Newly-employed child development officers will conduct in communities a number of activities on a daily basis to identify children engaged or at risk to be engaged in child labour activities. This will include: household visits, community profile surveys, awareness raising sessions at household level and community level, unannounced farm visits, deployment of needed remediation activities to support children and their families and the communities they live in. The CLMRS will guide CAA to provide support to member families and communities where it’s needed and will also focus on increasing school attendance as a key strategy to protect children and ensure their healthy development.

Demolish structures along right of way for railway projects -- Asantehene

The Asantehene, Otumfuo Osei Tutu II has charged the Mayor of the Kumasi Metropolitan Assembly to go ahead with its intended demolition exercise of all unauthorised structures along the six-kilometer Kumasi (Adum) to Kaase section of the Western railway line. Otumfuo Osei Tutu II added that no compensation will be paid to anyone whose property would be affected by the demolition exercise. Although the Asantehene pledged his full support for the construction of the new standard gauge railway line, he blamed

the railway workers for failing to protect key railway lands from squatters, traders and private developers. He condemned the act and called on the Minister for Railway Development, John-Peter Amewu to partner the Kumasi Metropolitan Assembly to carry out the demolition exercise. He advised the sector Minister to put aside partisan politics and act accordingly to achieve the President’s vision to build a modern railway network. Otumfuo made the comments when the Minister for Railway Development Mr. Amewu paid a courtesy call on him at the Manhyia

Palace in Kumasi on Wednesday 5th May 2021 to inform him of the intended demolition exercise to be carried out to enable the Contractor, Messrs David Walter who has already mobilised on site to commence the construction works. Recounting on the once vibrant railway system, His Royal Majesty said the railway system under the then Gold Coast was used for the transportation of gold, bauxite, manganese among others which created job opportunities, improved the living conditions of the people and also enhanced economic growth. However, the several years of neglect has killed the rail transport system in Ghana. He

was hopeful that Government’s commitment to revamp the rail sector will ease the pressure on the roads and will also change the economic fortunes of the country. Otumfuo therefore urged the Railway Minister to take the necessary actions so that work can commence in ernest. On his part, the Railway Minister expressed concern over the numerous encroachments on the right of way. The sector Minister reiterated that President AkufoAddo is committed to building a modern railway network and this he is committed to. He expressed his kind gratitude to His Majesty for his support towards the rail project. The Minister was accompanied by the Chief Director, the Ag. CEO of the Ghana Railway Development Authority and some officials of the Ministry, the contractor Messrs David Walter as well the project designers TEAM Engineering. President Akufo-Addo on Wednesday 30th September 2020 cut the sod for works to commence on the 83.5-kilometer standard gauge railway line from Kumasi (Adum) through Kaase, Eduadin to Obuasi. The line forms part of the new Western Railway line being constructed on standard gauge.

MONDAY MAY 10, 2021

Banking & Insurance

MONDAY MAY 10, 2021

GCB adopts three-pronged strategy to drive sustained growth

ndigenous bank GCB Bank Limited will focus on the core pillars of revenue growth, operational resilience, and talent to drive sustained profitability in an ever-changing fiscal financial terrain with significant pandemicborne induced disruptions, Managing Director John Kofi Adomakoh has said. According to him, developments such as the continental single market as well as intense competition from both industry and non-industry players, including fintechs, has have inspired the need for a renewed strategy with strong execution. “Through wide stakeholder engagements, we have refreshed our strategy with a sharpened focus on three pillars: revenue growth and proﬁtability; operational resilience, ; and talent and culture. The changing business environment and disruptions across many fronts demand a relevant strategy and a proactive business that meets the needs and expectations of clients to be able to generate sustainable profits and returns,” he said in the bank’s

2020 annual report. The bank also plans to leverage digitisation and customer loyalty to explore opportunities and expand market share and profit in its consumer banking segment. “We will continue to make the relevant investments in technology, digitisation and people to grow our market share of the payments industry in the country,” Mr. Adomakoh said.

The bank’s flagship mobile money wallet platform, G-Money, will be critical in leading its digitisation agenda, providing an expanded payment channel and convenient banking services for individual and corporate customers, he added. GCB Bank posted a 6.5 percent increase in profit before tax of to GH¢610.83 million due to broad-based growth in revenue,

supported by balance sheet growth, higher transaction volumes and acquisition of new clients. Net interestinterest income was up 29.1 percent, from GH¢1,.168.457milliobn to GH¢1,.508.701 milliobn, whilst net trading income grew by 17.6 percent to GH¢166.63 million from GH¢141.75 million. The bank’s net fees and commission income also increased by 15.1 percent to GH¢277.98 million from GH¢241.51 million in the previous year, with operatingoperating income surging from GH¢1,.572.87 milliobn to GH¢1,967.68.97 milliobn, reflecting an increase of 25.1 percent over the prior year. Total assets recorded a growth of 23.5 percent from GH¢12.52 billion in 2019 to GH15.45 billion in 2020, funded mainly from a 21.8 percent increase in deposits from GH¢9.82 billion in 2019 to GH¢11.96 billion in 2020. There was also an increase in customer loans by 0.3 percent to GH¢3.81 billion in 2020 from GH¢3.80 billion in 2019. as well as Total equity which recorded a growth of 23 percent from GH¢1.78 billion in 2019 to GH¢2.19 billion in 2020.

Serene Insurance courts clients for its marine insurance policies

erene Insurance, one of Ghana’s leading indigenous insurance companies, has called on the trading public to purchase its attractive marine insurance policies during the importation and exportation of their goods to and from the country. Marine Insurance has become imperative for shipping worldwide from both a legal as well as a business perspective. Its importance to international trade cannot be overemphasized. Speaking on Eye on Port, the TV show highlighting developments in the maritime sector, on the impact of marine insurance on Ghana’s maritime trade, the company’s Head of Marketing , Mrs. Eugenia AgyiriTettey, entreated the importing public in Ghana to purchase its marine insurance policy, which covers transfer of goods from the warehouse of the supplier abroad to the warehouse of the buyer in Ghana. According to her, purchasing marine insurance saves traders from the dire situations associated

with loss or damage of expensive cargoes. “These are capital- intensive investments. Assuming someone is sending in a 40-footer container of pharmaceutical products from abroad, it can run into billions of cedis. You can’t bank in on hope that it will arrive safely. You have to protect the goods,” she said. Mrs. Agyiri-Tettey argued that contrary to the opinion of some sections of the public,added that the company in addition to its attractive policies, has the capacity and experience to provide marine insurance covers to all types of exporters and importers.. She added: “There is what we call reinsurance where once a big claim comes our way, all equally liable companies that we gave insurance to, contribute to pay the claim.” Contributing to the subject, the Head of Underwriting at Serene Insurance, Mr. Kingsley AkuokuBoakye, said the patronage of marine policies locally has been woefully inadequate, with his company selling just around 500

Head of Marketing at Serene Insurance, Eugenia Agyiri-Tettey (left), and Head of Underwriting, Kingsley Akuoko-Boakye (right).

policies per annum. While calling for increased patronage of its marine insurance policies, he assured of efficiency when it comes to the payment of claims at Serene Insurance. Kingsley Akuoko-Boakye revealed thatsaid both the company’sits marine hull and marine cargo categories of insurance should be patronized patronised by actors in the shipping industry.

“Marine hull type insures the vessel against any damage to vessel of any liability assumed from your fault while marine cargo protects the goods on the vessel,” he explained. He also urged the Ghanaian trading community to purchase these policies which are comprehensive in nature but have been simplified to be understood by the ordinary businessman.

MONDAY MAY 10, 2021

Energy

MONDAY MAY 10, 2021

The World Bank Group’s new Climate Change Action Plan 2021 – 2025

he world currently is battling a global pandemic and a lot has been invested and attention focused on arresting the menace. Climate Change may seem to be that silent killer, working slowly to gain fame as the next global pandemic. A pandemic that will not heed to a vaccine. A pandemic that will not find mercy on humanity. A pandemic that will have all at her mercy. Bill Gates in his book, “How to Avoid a Climate Disaster” highlights certain figures one needs to understand and work towards. They are: Where we are today; - 51 Billion - How many tons of greenhouse gases the world typically adds to the atmosphere every year. What we need to aim for;

- Zero (0) - Stop the warming and avoid the worst effects of Climate Change. Mframadan Energy Management & Research Institute (MEMRI) in an interview explained that, fighting Climate Change is multi-faceted. There is the policy side, there is the education side and there is the financing side. This year, COP 26, which originally was to take place from 9th - 19th November 2020, will take place from 1st - 12th November 2021 in Glasgow, UK. Nations, world leaders and NGOs are getting prepared to submit their findings, state of progress and their respective Climate Change action Plan for the years ahead. The World Bank Group, a key stakeholder in the fight, is raising its ambition and committing to doing more than ever in its new Climate Change Action Plan (CCAP). On 2nd April, 2021, the World Bank Group President, issued a

statement on their new Climate Change Action Plan (CCAP). He stated, “I am pleased to announce that yesterday we presented to our Board the key elements of the World Bank Group’s new Climate Change Action Plan. Our collective responses to climate change, poverty and inequality are defining choices of our age. The World Bank Group is already the largest multilateral provider of climate finance for developing countries, and has increased financing to record levels over the past two years. To deliver on our twin goals of reducing poverty and boosting shared prosperity, it is critical that the World Bank Group help countries fully integrate climate and development. It is also important we help countries maximize the impact of climate finance, with measurable improvements in livelihoods through adaptation, and measurable reductions in greenhouse gas emissions through mitigation.

Highlights of the new Climate Change Action Plan, as presented by World Bank Group (WBG) President David Malpass are captured below; Is the world ready to attack the silence of another pandemic waiting to happen? Over the past five years, WBG has delivered over $83 billion in Climate Finance and reaching an all-time high of $21.4 Billion only in 2020. In the new Climate Change Action Plan (CCAP), World Bank Group plans to do more in terms of funding (Cash) and awareness (Impact). In creating awareness and making accessible all the billions, will human activities change towards emissions from energy, transport and even cement production? Will the world’s poorest countries, be most impacted by Climate Change whiles they emit less? Will again, the world super powers, the global economic giants continue to emit massively at the expense of the entire globe? A lot needs to be done. Action towards the fight against Climate Change should be focused oriented and action plan delivery should be decentralised. Writer: Donald Marshall Company: Mframadan Energy Management & Research Institute (M.E.M.R.I). Contact: 00233-24-4550854 Email: donaldamus@yahoo.com

Source: World Bank Group

MONDAY MAY 10, 2021

Feature

MONDAY MAY 10, 2021

Network marketing, the gateway to future financial freedom

ulti-level marketing simply refers to a business model where people get the opportunity to generate wealth from becoming consumers of a company’s products or services, sharing their experience and testimonies while consuming the products or service and recommending to friends and family. Take for instance, Bob is a consumer of Longrich products, he shares his testimonies about how Longrich toothpaste solved his toothache to Eddie who also becomes a consumer of the products. Bob in turn earns from Longrich for Eddie becoming a consumer of Longrich products. Eddie in turn recommends the products to Jill, Rosie and others from his experience of the products and he also earns as well as Bob also earning from Eddie’s recommendations (successlines). The network of consumers keeps growing in that manner and everyone in the network keeps earning in the same manner. This is what we simply mean by network marketing. Have you ever used a product, recommend it to a friend and get a monetary “thank you” from the company that produced the product? Has the person you recommended the product to also used this product and get monetary benefits or even a form

of a gift, a free product, a voucher or anything like that from also recommending the product to another? The answer as I can guess you will give is obviously, No. Network Marketing Companies give this opportunity for all consumers of their quality products to earn an income just by recommending to others and those others also recommending to others and on and on (as the saying goes, tell a friend to tell a friend to tell another friend). Usually, because products or services rendered by network marketing companies are products of necessity, they are hence likely to be on regular demand, thus you never run out of the opportunity to recommend. Take the Longrich toothpaste example above; Kofi bought the toothpaste from Longrich and recommends it to Kuku who comes to buy. Kofi gets paid by Longrich for recommending to Kuku. For every recommendatory purchase made, the one who recommended and his/her uplines gets paid, and that is the medium network marketing uses to encourage its partners and consumers to use the products. That is how wealth is generated from the MLM model. Let’s look at this also, Kofi could have been an employee, and hence has a busy schedule,

however he is able to recommend on the go and get paid because he needs no specific time and space to recommend. This portrays that network marketing can be performed anytime, any place and at any circumstance. Network marketing companies reward their consuming partners with incentives as their network of referred consumers(direct/ indirect) grows. These incentives include: all-expense paid vacations abroad, car funds, scholarships, electronic gadgets, house funds, and many more. Network marketing companies also allow their consumers to transfer their positions in the organization to their generations which does not usually occur in the corporate world. Some network marketing companies go to the extent of giving opportunities to investors to acquire franchise to either open branches locally, regional or nationwide. These investors in turn get to enjoy marginal profits from the markets in which they acquired the license without directly getting involved in the referral or recommendation business. Most network marketing companies also give the opportunity to sales men or women to retail or wholesale their products in order to build their network business. Below

are some beneficiaries of wealth creators in the world of network marketing: • Titilope Ejimagwa, Nigeria • Seun Oshofisan, Nigeria • Vivian Mokome, South Africa • Nick Owusu, Ghana • Solomon Ababio Agyemang, Ghana • Kwabena Yeboah of Edwom.com, Ghana. In conclusion, network marketing has come to stay, and everyone is encouraged to embrace it, if not for themselves, but for the benefit of all mass unemployed citizens, as a retirement plan, as an alternative to an employment income, and for balancing of individual’s investment portfolios. --The author Kennedy Amoako is a Network Marketing Professional and a Chartered Accountant

MONDAY MAY 10, 2021

Feature

MONDAY MAY 10, 2021

The logic of US-China competition

By Joseph S. Nye, Jr.

n his recent address to the US Congress, President Joe Biden warned that China is deadly serious about trying to become the world’s most significant power. But Biden also declared that autocrats will not win the future; America will. If mishandled, the US-China great-power competition could be dangerous. But if the United States plays it right, the rivalry with China could be healthy. The success of Biden’s China policy depends partly on China, but also on how the US changes. Maintaining America’s technological lead will be crucial, and will require investing in human capital as well as in research and development. Biden has proposed both. At the same time, the US must cope with new transnational threats such as climate change and a pandemic that has killed more Americans than all the country’s wars, combined, since 1945. Tackling these challenges will require cooperation with China and others. Biden thus faces a daunting agenda, and is treating the competition with China as a “Sputnik Moment.” Although he referred in his address to President Franklin D. Roosevelt and the Great Depression, and avoided misleading cold-war rhetoric, an apt comparison is with the 1950s, when President Dwight Eisenhower used the shock of the Soviet Union’s satellite launch to galvanize US investment in education, infrastructure, and new technologies. Can America do the same now? China is growing in strength but also has significant weaknesses, while the US has important long-

term power advantages. Start with geography. Whereas the US is surrounded by oceans and friendly neighbors, China has territorial disputes with India, Japan, and Vietnam. Likewise US advantage. America is now a net energy exporter, while China depends on oil imports transported across the Indian Ocean – where the US maintains a significant naval presence. Furthermore, the US wields financial power as a result of its global institutions and the dollar’s international hegemony. While China aspires to a larger global financial role, a credible reserve currency depends on currency convertibility, deep capital markets, honest government, and the rule of law – all of which China lacks. The US has demographic advantages, too: its workforce is increasing, while China’s has begun to decline. America has also been at the forefront of key technologies, and US research universities dominate global higher-education rankings. At the same time, China is investing heavily in research and development, now competes well in some fields, and aims to be the global leader in artificial intelligence by 2030. Given the importance of machine learning as a general-purpose technology, China’s advances in AI are particularly significant. Moreover, Chinese technological progress is no longer based solely on imitation. While the Trump administration correctly punished China’s theft and coercive transfer of intellectual property, and unfair trade practices, a successful US response to China’s technological challenge will depend more on improvements at home than on external sanctions.

As China, India, and other emerging economies continue to grow, America’s share of the world economy will remain below its level of about 25% at the beginning of this century. In addition, the rise of other powers will make it more difficult to organize collective action to promote global public goods. Nonetheless, no country – China included – is about to displace the US in terms of overall power resources in the next few decades. Rapid Asian economic growth has encouraged a horizontal power shift to the region, but Asia has its own internal balance of power. China’s strength is balanced by Japan, India, and Australia, among others, with the US playing a crucial role. If America maintains its alliances, China will have slim prospects of driving it from the Western Pacific, much less dominating the world. But competing with China is only half the problem facing Biden. As the American technology expert Richard Danzig argues, “Twenty-firstcentury technologies are global not just in their distribution, but also in their consequences. Pathogens, AI systems, computer viruses, and radiation that others may accidentally release could become as much our problem as theirs.” For that reason, Danzig argues, “Agreed reporting systems, shared controls, common contingency plans, norms, and treaties must be pursued as means of moderating our numerous mutual risks.” In some areas, unilateral American leadership can provide a large part of the answer to the problem of providing public goods. For example, the US Navy is vital to policing the law of the

sea and defending freedom of navigation in the South China Sea. But when it comes to new transnational issues like climate change and pandemics, success will require the cooperation of others. While American leadership will be important, the US cannot solve these problems by acting alone, because greenhouse gases and viruses do not respect borders or respond to military force. In the domain of ecological interdependence, power becomes a positive-sum game. America thus cannot simply think in terms of its power over others, but must also consider its power with others. On many transnational issues, empowering others can help America to achieve its own goals; the US benefits if China improves its energy efficiency and emits less carbon dioxide. America thus has to cooperate with China while also competing with it. Some worry that China will link cooperation on tackling climate change to US concessions in traditional areas of competition, but this ignores how much China has to lose if Himalayan glaciers melt or Shanghai is flooded. It was notable that Chinese President Xi Jinping participated in Biden’s recent global climate conference despite bilateral tensions over US human-rights criticisms of China. A key question when gauging the success of Biden’s China policy will be whether the two powers can cooperate in producing global public goods, while competing strongly in other areas. The US-China relationship is a “cooperative rivalry,” in which the terms of competition will require equal attention to both sides of the oxymoron. That will not be easy.

MONDAY MAY 10, 2021

Feature

MONDAY MAY 10, 2021

Can technology replace the good old-fashioned face-to-face relationship in business?

“Clients do not come first. Employees come first. Take care of your employees and they will take care of the clients.” Richard Branson Virgin boss, Richard Branson, is an advocate for recognizing that ultimate success in business relies heavily on its most important asset – having great people. So why are we focusing so much of our energy on developing machines that replace our manual routines and human interaction? Microsoft has amassed incredible wealth by creating icons and buttons to help the least intelligent of our species enjoy being computerized and not to mention those game designers who have transformed the lives of teenagers in the 21st century world. Everything we do is governed by technology, and despite there being a hundred different ways to communicate, we are actually communicating and building relationships less effectively than ever. Organizations are making choices about the integration of intuitive technology which will impact the way they do business every day. The agility of businesses to adopt technology is demonstrating the possibility

that people can be replaced. Remember that feeling when you shopped online for the first time? Did you ever think that one day our local shop owners would be replaced by that one decision? When you first searched something on Google, rather than ask an expert; or when cars, machines, planes and submarines were built by manual labour, rather than robots. It’s not that farfetched to imagine a day in the not so distant future when factories have eliminated people clocking in and out and shops are no more. Here at BforB we focus on face to face collaboration, direct interdependence and market intelligence to pursue progress by understanding the people that build businesses from source. As technology advances the necessity of human contact has become increasingly important. Integrating talented people and building a community of entrepreneurs who can work together for mutual benefit is our mission. We see technology as an enabler to improving human interaction not replacing it. Innovating networking by adopting the use of technology in the process to improve how the

world does business. Good people are no longer alone. They can and do connect with like-minded relationship builders to help deliver the business greater good. Increasingly we yearn for the use of technology for competitiveness to satisfy the endless quest for a better experience. As a people organization we feel the increasing need for humanity to ‘get connected and stay connected’ is even more important than ever. Our people are an asset that we are prepared to invest in to support proactive business relationships all over the world. We are only a phone call away or email mel@bforb.com for any query about this blog. 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. Contact us: | mel@bforb.com | LinkedIn: @bforbuk | www.bforb. co.uk 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 MAY 10, 2021

Energy

MONDAY MAY 10, 2021

Total’s upstream oil and gas business boosts Q1 recovery

otal has reported a strong first-quarter recovery in its upstream oil and gas business, with higher prices leading to almost triple the level of adjusted operating profit in the segment compared to a year ago, but also noted continued market volatility and “very poor” refining margins. Total also reported record-high adjusted operating profit from its ‘integrated gas renewables & power’ division, which includes its LNG business. The company’s LNG sales were stable compared with a year ago at 9.9 million mt, but the company said it had more than doubled its installed renewable power generation capacity in the last year from 3 GW to 7.8 GW, and the division as a whole generated 8% more in adjusted operating profit. The French major forecast its oil and gas production would remain stable in 2021 compared with 2020 levels, even though first-quarter hydrocarbon production was down 7% on the

year at 2.86 million b/d of oil equivalent, within which liquids output fell 11% to 1.51 million b/d. The fall in upstream output was due to reductions under the OPEC+ agreement, which crimped volumes from Kazakhstan, Nigeria and the UAE, as well as unplanned Norwegian maintenance, Total said. But the company also benefited from a recovery in Libya and growth from new projects, notably Culzean and Johan Sverdrup in the North Sea, North Russkoye in northern Russia, and Brazil’s Iara sub-salt field. “The group maintains its expectation for stable hydrocarbon production in 2021 compared to 2020, benefiting from the resumption of production in Libya,” Total said. CEO Patrick Pouyanne went on to say that the upstream division had “fully captured the higher oil price and provided a strong cash flow contribution of $3.8 billion,” noting the company’s decision to advance Uganda’s long-delayed

Lake Albert oil project, with an agreement signed April 11 on the East Africa Crude Oil Pipeline project. Pouyanne also highlighted that adjusted profit for the quarter was higher than the same quarter two years earlier, in 2019, reinforcing hopes for recovery. However, “the oil environment remains volatile and dependent on the global demand recovery, still affected by the COVID-19 pandemic,” the company added. Underlining the precarious state of European refining, Total said European refining margins were 80% lower than a year earlier, at $5.3/mt, reflecting a 2 million b/d drop in European

demand for refined products, to 13 million b/d. Total reduced its refinery throughput by 38% globally and 81% in France, to 1.15 million b/d and 114,000 b/d respectively, as it works to reduce capacity or convert facilities to renewable fuel production. Poor refining results were, however, offset by strong petrochemical performance and “resilient” marketing and services, Total said. Overall, Total reported a 69% year-on-year increase in adjusted net profit, to $3 billion for the quarter. Source: hellenicshippingnews

Eni swings to 1Q profit on higher oil, gas prices

taly’s Eni swung to a profit of €856mn ($1.04bn) in the first quarter, up from a loss of €2.93bn a year earlier, as stronger oil and gas prices offset a decline in production. “The first quarter of 2021 has been significantly impacted by ongoing national lockdowns, however despite this Eni has achieved significantly improved results, most notably driven by E&P [Exploration & Production] and the chemicals business,” chief executive Claudio Descalzi said. “With the pandemic situation

gradually improving, and a broadening economic recovery looking more likely, we have been able to improve our outlook for the coming months, forecasting free cash flow generation in 2021 of more than €3bn under a Brent scenario of $60/bl.” Eni’s upstream oil and gas production fell by 5pc from a year earlier to 1.7mn b/d of oil equivalent (boe/d) in JanuaryMarch on reduced spending to develop reserves. This was partly offset by increased gas production in Egypt on higher demand, Eni

said. First-quarter production was in line with the firm’s full-year guidance of 1.7mn boe/d, which assumes a 35,000 boe/d impact from Opec+ cuts through the year and a 2021 budget for organic capital expenditure (capex) of €6bn. Eni’s refining business continued to feel the effects of lower fuel demand across Europe in the first quarter, with the Covid-19 pandemic resulting in additional lockdowns and delays in the recovery to air traffic. The Standard Eni Refining Margin —

which represents the benchmark for the level of profitability of Eni’s refineries before fixed cash expenses — was in negative territory at -$0.6/bl in JanuaryMarch, compared with $3.6/ bl a year earlier. Refinery runs averaged around 6.4mn t (521,000 b/d) in January-March, a 6pc rise from a year earlier, with lower throughput in Italy more than offset by higher runs elsewhere. The firm said it expects to be able to generate enough cash flow to cover organic capex and its “floor dividend” of €0.36/share at a $51/bl Brent crude price this year. It will reassess its outlook for oil prices in July to establish whether to complement the floor divided with an additional “variable dividend” and resume share buybacks. Eni introduced an oil-price linked dividend policy last year. “In this environment, we will continue implementing our decarbonization and energy transition strategy, maintaining a strong focus on the robustness of the balance sheet and targeting a competitive distribution policy to our shareholders,” Descalzi said. Source: argusmedia

MONDAY MAY 10, 2021

Feature

MONDAY MAY 10, 2021

How coaching can strengthen the relationship between millennials and employers

By Chantelle Solomon and Prof Salomé Van Coller-Peter

very new generation of workers brings fresh perspectives and skill sets to organisations. This infusion of new blood can be energising, but it can also present challenges – particularly when looking for a comfortable fit between older and younger workers whose life experiences, attitudes and professional expectations differ. Millennials (born between the early 1980s and the late 1990s), also known as Generation Y, will soon outnumber their Generation X predecessors (born between 1965 and 1980) in the global workforce. Once referred to as the leaders of tomorrow, millennials have become the leaders of today. Organisations are under pressure to find ways to productively meld younger, millennial mind-sets with more traditional corporate values and work methods. During millennials’ formative years, the world was more prosperous than it is today. Also, the internet was coming into its own, which explains the ease with which millennials adapt to the latest digital devices and technologies. While often viewed as innovative, adaptable and confident, millennials have also been labelled entitled, demanding and emotionally shallow. It has been suggested that over-protective parenting and the pressure to measure up to unrealistic standards

of success (often inspired by social media) have left many millennials with underlying anxieties and an inability to cope with stress or failure. It has even been postulated that millennials have lower self-esteem than earlier generations and require constant reassurance. Influenced by the power and speed of technology, they also tend to be impatient and in need of instant gratification. Easy access to realtime information via YouTube, Facebook and Twitter, for example, helps to feed this need. As a result, millennials are often considered ‘tough to manage’. Common characteristics of millennials Millennials constitute the largest segment of the global workforce today. Although one should not generalise too much, millennials tend to have some common characteristics. • Millennials are smart when it comes to technology. Having grown up with the internet, millennials are more comfortable with technology than many of their older peers. This generation could not conceive of life without digital devices and online services. Millennials are known for their technological shrewdness and ability to use technology to enhance their efficiency and productivity in the workplace. The downside of millennials’ technological proficiency is that they prefer to communicate

electronically rather than face to face, often at the expense of personal relationships. • Millennials are used to disruption and change. Although millennials grew up in a comparatively prosperous era, they have nevertheless experienced periods of disruption and uncertainty, including the fall of the Berlin Wall, the bursting of the dot-com bubble in the early 2000s, the bombing of New York’s Twin Towers in 2001 and the subsequent war on terror, and the global financial crisis in 2008-2009 and its lingering aftereffects. They have also witnessed the collapse of major corporations (such as Enron, Arthur Andersen and Barings Bank) in the wake of unethical leadership, which has robbed scores of hardworking people of their jobs and livelihoods. In many ways, these events have taught millennials to anticipate and accept change, and to be adaptable. However, they have also made them less trusting of, and less loyal towards, their organisations. • Millennials are ambitious and achievement-oriented. Millennials are known to value meaningful, challenging and varied work. They expect their superiors to set high standards and to provide clear direction, but they also want the flexibility to do some things their own way and to learn by trial and error. Millennials seek self-actualisation and a progressive career path, supported by appropriate

training and development. They take responsibility for managing their own careers and building skills that will enhance their employability. • Millennials need support and recognition at work. Despite their assertiveness, millennials need their superiors to provide guidance and regular feedback, as well as recognition for good work. Some would say that they require constant reassurance, which could reflect a cosseted upbringing. They also thrive in teams, where colleagues support and cooperate with one another. Like previous generations, millennials view their salary package as an important indicator of their perceived worth, but they also prize assorted perks and bonuses. • Millennials are prone to job-hopping. Millennials have a reputation for hopping from one job to the next, particularly in emerging markets. They often decide to move on after working for an organisation for only a few years, seeking new professional challenges and more attractive remuneration packages. A short tenure can be disruptive and costly to an organisation, particularly if large sums have been spent on employees’ training and development. • Millennials value a good work-life balance. Millennials understand the value of a healthy work-life balance. One could say that they work to live, not live to work.

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22 CONTINUED FROM PAGE 21 They often prioritise family over work and value flexible work schedules that allow them to balance their professional and personal commitments. Such an attitude might be mistaken for a lack of commitment or loyalty towards the organisation. Yet, it might actually encourage better results from the employees in question, and longer tenures. Can coaching help to forge greater alignment in the psychological contract? The expectations of employers and employees regarding their reciprocal obligations in the employment relationship form the core of their ‘psychological contract’. For example, employees are expected to perform to a high standard and manage their time efficiently; in return, employers are expected to provide employees with support, fair remuneration and opportunities for personal advancement. In short, there should be mutually beneficial outcomes for the parties. A psychological contract in the work environment is more likely to be successful if there is alignment between an employer’s and employee’s expectations regarding job scope and content, quality of outputs, professional development, rewards and job security. The greater the alignment in their psychological contract, the more harmonious and productive their relationship is likely to be, to the benefit of the individuals concerned and the organisation as a whole. Conversely, a lack of alignment or mutual fulfilment could disrupt the working relationship and negatively affect an employee’s performance. Achieving mutuality in psychological contracts can be difficult, particularly when employees’ and employers’ world views are shaped by different forms of upbringing and life experiences. Professional coaching could play an important role here. Coaching helps people to recognise their particular strengths, weaknesses and latent talents that need nurturing. It also teaches people to acknowledge the importance of diverse views and capabilities, and how employees can find their particular niche in an organisational context. Although extensive research has been conducted on the consequences of breaches of psychological contracts, much

MONDAY MAY 10, 2021

less attention has been given to how psychological contracts are established and maintained over time, while almost no research has been done on the benefits (or otherwise) of coaching millennials. The study on which this article is based sets out to address this research gap by investigating how coaching might help to align the psychological contract between young millennial professionals (YMPs) and the organisations for which they work. The study sample comprised a selection of YMPs who had undergone coaching in their organisations (‘coachee participants’) and individuals who had been their coaches (‘coach participants’). The coachee participants were all under the age of 30 and had either just entered corporate life or were already building their careers in various organisations. Most of the coach participants were professionals with their own consultancies. Interviews were conducted with the coachee and coach participants to establish whether and/or to what extent the coaching experience had contributed to a better alignment in the psychological contract between the coachee participants and their organisations. What the study revealed The coachee participants reported that they had benefited from the coaching in three key respects: • Enhanced awareness. They said they had acquired deeper self-awareness, a greater sense of personal responsibility and accountability, and a more realistic sense of the value they brought to their organisations.

They came to recognise both their strengths and the areas needing improvement, how their behaviour influenced their personal interactions at work, and what they wanted from their lives and careers. The coaching imbued in them a clearer sense of purpose which, they said, would help them plan their careers with greater precision. One coachee participant came to the realisation that the organisation (and the world, for that matter) did not owe them anything; rather, they themselves had to demonstrate their worth and add value. • Improved confidence. They also said they had become more confident, which made it easier to ask for help or to challenge decisions or instructions. Their new-found confidence also enabled them to speak up about what they expected of the organisation in terms of their immediate working environment and longer-term career prospects. • Enhanced ability and motivation to engage in tough conversation. Engaging in conversations to establish or review an employer‒employee psychological contract can be challenging as it might reveal the parties’ conflicting aspirations and expectations. Yet it is for this reason that such conversations are crucial. The coaching had helped some coachee participants approach tough conversations with greater confidence and conviction, which in turn had led to more mutually beneficial outcomes. Regular communication was seen to be useful in defusing potentially contentious encounters between coachee participants and their superiors.

A win-win for millennials and their organisations Coaching has the potential to positively influence millennials’ perceptions of themselves, their value to the organisation and their prospects of professional success. Such revelations might persuade them to stay longer in their jobs and to strive for stronger and more enduring partnerships with peers and superiors alike. Importantly, the study has shown that coaching helps today’s employees and their employers find themselves and each other, and that generation gaps can be bridged more easily than many would think. • Find the original article here: Solomon, C. & Van CollerPeter, S. (2019). How coaching aligns the psychological contract between the young millennial professional and the organisation. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 17(0), a1146. https://doi.org/10.4102/ sajhrm.v17i0.1146 • Prof Salomé van CollerPeter lectures in Management Coaching and Managing Transformation at USB. • Chantelle Solomon is an MPhil in Management Coaching alumnus of USB. 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/