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Debt financing strategies in a pandemic
Gov't unveils Sparkup Summit to unlock Ghana's investment potentials
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See page 18
BUSINESS24.COM.GH
NO. B24 / 230 | NEWS FOR BUSINESS LEADERS
MONDAY MONDAYAUGUST MAY 3, 2021 4, 2021
Mines chamber has big ambitions for industry By Eugene Davis ugendavis@gmail.com
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he Ghana Chamber of Mines has selected a consultant to conduct a study aimed at positioning the country as a hub of mining support services in West Africa, the president of the chamber, Eric Asubonteng, has said. Ghana has overtaken South Africa as the leading gold producer on the continent, and in West Africa, it accounts for about a third of total gold
Kofi Don-Aggor, President of CCLG-Africa, delivers his address during the launch of the association.
More investments needed to combat climate change— CCLG-Africa
Cont’d on page 2
Ghana, Côte d’Ivoire asked to rebut cocoa slavery slur By Benson Afful affulbenson@gmail.com
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ico Roozen, honorary President of Solidaridad Network, has made a strong call to the governments of Ghana and Côte d’Ivoire to take urgent steps to mend the reputational damage that has arisen from the deliberate antiCont’d on page 3
By Eugene Davis ugendavis@gmail.com
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arge investments are required in the country and in Africa to combat climate change and drive inclusive growth, the President of Climate Communications and Local Governance-Africa (CCLGAfrica), Kofi Don-Aggor, has said. Cont’d on page 5
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Cont’d on page 2
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Editorial
Ghana’s credible dream to become mining services hub of West Africa
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hana’s sustained efforts and investments to the mining sector has seen the nation overtake South Africa as the leading gold producer on the continent, accounting for about a third of total gold production in West Africa. Coupled with the decline of mining in South Africa and the growth in mineral production in the sub-region, our new position provides us with a first mover advantage in positioning itself as the hub of mining support services in West Africa. Despite the country’s exploits and command over the regional mining space, most of the service industries are still based in South Africa. It is not out of place for Ghana
to be positioned as the mining services hub to attract both suppliers of machinery and goods, refineries and firms that are into the processing of gold to set up locally. It is anticipated that when this mining services hub dream is achieved, the contribution of the sector to the economy will be far more than what is currently being obtained. This makes the Ghana Chamber of Mines’ disclosure of its intention to reverse the trend of pushing exploration investments outside the country into other jurisdictions of West Africa very apt and timely. “Mining is about sustainable development and not just rent, the focus should be on harnessing the full benefit, beyond the direct
fiscal contribution and should be positioned as a catalyst for enhancing local content as well as integrating the sector into the non-mineral economy,” Eric Asubonteng, president of the chamber said. It is only appropriate for regulators and industry players collectively work to position the country as the hub for mining and allied services in Africa and we commend the Chamber of Mines on its decision to champion that cause. We posit that realizing this noble dream will require a lot of hardwork, strong political will and workable policies that will attract mining investors and businesses across the continent to buy into this noble dream.
Mines chamber has big ambitions for industry Continued from cover
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production. This, as well as the decline of mining in South Africa and growth in mineral production in the sub-region, provides Ghana with a first mover advantage in positioning itself as the hub of mining support services in West Africa, said Mr. Asubonteng. He added that the chamber is funding a study on how to realise this objective. Speaking to the press after an engagement with Parliament’s Mines and Energy Committee on Tuesday, he said: “Mining is playing a role in the economic development of Ghana, but there is so much potential that we can take advantage of, including that, as stakeholders, we work in a concerted manner to establish manufacturing bases and service delivery offices in Ghana that will serve not only the Ghana[ian] mining industry but the West Africa sub-region [too].” He added: “Most of the service industries are based in South Africa; we want them to be based in Ghana servicing the West Africa sub-region. What we want to do is to take advantage of the lead we have already, not only in production but [also] in the regulatory institutions that we have. We want to leverage that.” In view of the country’s leading
Eric Asubonteng (L) and Sulemanu Koney, CEO of the Chamber, at the meeting with the Committee of Mines and Energy
position as the top gold producer in Africa, some refineries have already been set up, with some in the pipeline, Mr. Asubonteng said. He also stated that it is the desire of the chamber to reverse the trend whereby exploration investments are pushed outside the country into other jurisdictions of West Africa. He identified high landholding costs and the Value Added Tax on key exploration inputs as disincentives to mineral exploration investment in Ghana.
Mr. Asubonteng said the chamber had been encouraged by its interaction with the committee and looked forward to continuous engagement. “Mining is about sustainable development and not just rent. The focus should be on harnessing the full benefit, beyond the direct fiscal contribution, and the industry should be positioned as a catalyst for enhancing local content as well as integrating the sector into the non-mineral economy.”
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Ghana, Côte d’Ivoire asked to rebut cocoa slavery slur Continued from cover slavery marketing approach used by chocolate manufacturers in Europe. He made the call when he led a roundtable discussion on recent cocoa developments in Europe and their implications for sustainable market access in West Africa. The event, which saw the participation of key leaders and practitioners in the cocoa sector from Côte d’Ivoire, Ghana, Liberia and Sierra Leone, was held on the back of concerns about human rights, environmental degradation and governance issues that relate to cocoa production in West Africa, which have prompted the European Commission to be at the forefront of a decisive response. These developments have implications for producer countries, especially Côte d’Ivoire and Ghana, the leading world producers of the commodity. Reputational damage owing to slavery framing At the roundtable, which saw more than 100 participants connecting physically and virtually, Nico Roozen bemoaned the reputational risk that is emanating from the misunderstanding of realities and calculated misinformation for marketing purposes. According to him, in the perception of many Western consumers, cocoa from West Africa is increasingly linked to child labour and even to what has been labelled “slavery”, just as palm oil is linked to deforestation. He cited the slavery framing by Tony’s Chocolonely, a Dutch confectionery company, that deliberately trumpets 100 percent slave-free chocolate on its packaging, featuring a brand logo with the “broken chain” of historic slavery. He added that there is no evidence of slavery in West Africa’s cocoa sector. “Tony’s Chocolonely’s argumentation on the slavery slants takes undue advantage of some reported incidence of child labour to serve its marketing interest, as this has seen the confectionery maker expand its business all over Europe, North America and even to Japan.
Sadly, other brands are following this bad example of stigmatising cocoa produced in West Africa.” Child labour or child work? Mr. Roozen further observed that a data-based consensus is emerging that 97 percent of occurrences of child labour are linked to children who are delivering services to their parents at a family farm or as tenant farmers, and this could better be understood as child work and not child labour. He argued that the classical definition of child labour, which takes into account a labour condition that destroys the future of the child, is rare in the sub-region, as child work that takes place in family farms does not compromise children’s schoolgoing or affect their health and wellbeing. He said available data suggests that school attendance in cocoa-growing communities has increased, citing Ghana’s
implementation of the Free Compulsory Universal Basic Education (FCUBE) as having achieved approximately 96 percent coverage.
of child work in family farms,” Roozen added.
Farmer perspectives first
Making suggestions for dealing with the issue of child work, Roozen asked rhetorically, “who else will do the work children are doing now?” He argued that solving child work is about economics. “If the farmer could afford hired labour that offers a decent workplace to an adult worker, that would have been his preference. But hired labour is too expensive in many cocoa-growing areas in Ghana, where artisanal mining tends to compete for labour and pays a higher daily return on labour than agriculture. Besides, statutory set minimum wages by national governments are often higher than what the cocoa farmer can afford given the total farmer income,” he said.
Mr. Roozen said it is inappropriate to frame farmers who seek to socialise, educate and pass on farming knowledge to their children through training as slaveholders. He shared an anecdote of a seventeen-year-old who took to spraying agrochemicals in his father’s farm. “The boy said, ‘I can read and understand the instructions on the container label, but my father cannot. Besides, I could support the family business with my strength and learn invaluable lessons by working with my father.’” “These perspectives of farmers are not cited as selected stories to prove a thesis, but they are colouring data-based findings
Only an economic lens will bring solutions
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More investments needed to combat climate change—CCLG-Africa Continued from cover According to him, policy makers and all stakeholders have an important role to play in mitigating global warming and ensuring a just global transition to net-zero emissions, as well as driving growth through advocacy at the local level. Speaking at the official launch of CCLG-Africa at Parliament House in Accra on Monday, he said: “It is my conviction that the total health conditions of any group of persons are a true reflection of their environment, and the failure of our educational set-up and religious institutions to make this a primary component of our practices has largely contributed to the fast degradation of the environment, whose effect we are all witnessing today.” CCLG-Africa is a group of media professionals and environmental experts dedicated to advocacy on climate change and the environment. The launch of the association took place under the theme “Climate Adaptation and Mitigation: A Collective Responsibility at the
Local Level”. A Deputy Minister of Local Government, Decentralisation and Rural Development, Osei Bonsu Amoah, said the government was very much aware of the adverse effects of climate change on the various sectors of the economy, especially agriculture, energy, water resources and health. He stated that the increasing negative effects of climate change have manifested in rising temperatures, reduced and unreliable rainfall patterns, extreme storm events, and changing seasonal patterns which have become more threatening in recent times. “It is therefore important that there are concerted efforts to quickly respond to this phenomenon by formulating the appropriate policies, plans and programmes, and intensifying the mobilisation of local governments to effectively mainstream climate change into interventions to adapt or mitigate the negative effects of climate change.” At the same event, the Speaker
of Parliament, Alban Sumana Kingsford Bagbin, said Ghana’s economy stands to suffer from the impact of climate change because the national economy is dependent on climate-sensitive sectors such as agriculture, energy and forestry. “Localisation of climate change and [a] decentralised system of government for the people of Ghana must ensure good governance and balanced rural-based development. That is why I am delighted to see an initiative that stems from the local voices and is built on a model of decentralised cooperation,” he added. The Minister of Environment, Science, Technology and Innovation, Dr. Kwaku Afriyie, stated that while countries strive to do their bit to tackle climate change at the national level,
they want to see more at the international level. “One major concern is the need to streamline access to international climate finance to complement national funding. Also, all other partners locally who have the resources to support or sponsor climaterelated activities should not be on the fence. We need local communication and education support to teach everybody about climate change and its effect on our lives.” The Executive Director of the Environmental Protection Agency, Dr. Henry Kwabena Kokofu, commended the organisers for “thinking about the climate and mother earth. There is no doubt that climate change is happening, and no country is immune to the impacts of climate change.”
Ghacem to invest US$ 100m to build new factory in Kumasi
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hacem, the nation’s leading cement manufacturer, is to construct a 1.5-milliontonne capacity cement production plant in Kumasi to serve the Ashanti Region and its surrounding areas. Mr. Stefano Gallini Managing Director of GHACEM, who disclosed this, said the new project had become necessary due to the growing demand for cement in that part of the country. Additionally, the Tema and Takoradi factories will be expanded to improve efficiency and timely delivery of products. Mr. Gallini observed that “the Ghanaian construction sector growth is the driving force behind this agenda and our Ghanaian customers are at the center of this.” He said, “we want to continue taking care of the Ghanaian market and as you may be aware, there has been an exponential growth in commercial activities in which GHACEM has been involved, and we want to continue with our contribution for the nation’s development in this regard.” The new plant will produce
about 1.5 million tons of cement per annum to serve the Ashanti Region, together with future plans of exporting to Burkina Faso and other neighbouring countries. The $100 million investment by the company is expected to increase employment opportunities for the cement industry, as many more projects are being undertaken. Commenting on prices of
cement products, the Managing Director explained that the company would adjust the price of its cement products if the cost of raw materials and freight witness a reduction in the coming weeks. He said the recent hike in cement prices was as a result of the high costs incurred during production and increasing freight costs.
“We have been exposed to rising costs of raw materials, freight and other components in the production of our cement products for the past seven to eight months, such that we have to take care of it in order not to pass it over to the consumer, looking at the economic situation. However, we commit to adjusting the price downwards if the cost of freight is reduced. For us, other raw materials can be sourced at lower prices,” he noted. He said engagements were ongoing with the Ghana Port and Harbours Authority to address some concerns with port handling charges, which also add on to the cost of production of the company. Mr Gallini said Ghacem employed about 99.5 per cent Ghanaians, which benefited the country. Ghacem pays taxes to support the Ghanaian economy, and also reinvests some of her profits to various causes in Ghana. GNA
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Five businesses receive seed capital to develop ideas
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total of $22,000 has been disbursed to five businesses as seed capital to support their business ideas under the Design and Technology Institute (DTI) incubation hub project. The five businesses participated in a community innovation competition. Adjustable Barbecue (AB Group) received $7,000, as the overall winner, with Mighty Men – Spraying Maching receiving $5,000, as the first runner-up. The second runner-up went to Haidelis Engineering and they received $4,000. The Most Promising Idea went to Cadela Company – a mechanised seed planter. They received $3,000. Best Female Enterprise went to Volkano Tech – Green Incinerator and they received $3,000. The initiative was by the Design and Technology Institute (DTI) and the Mastercard Foundation. The competition was a business pitch and accelerated programme designed to identify and scale promising women and youth-led enterprises with the potential to create sustainable employment for young Ghanaians. In a statement issued by the organisers said the programme honoured learners and enterprises with innovative and creative ideas in key thematic
sectors of the economy, including agriculture, water and sanitation, plastics recycling, e-waste, and other related industries. "Participants, as part of the programme, were involved in in-depth sector research and engagement with communities to co-design youth-led solutions for community-based problems," it said. The statement said through the DTI’s Community Innovation Hub, the emerging businesses would serve as a pipeline to unearth youth entrepreneurs, who would act as enablers in solving youth unemployment by creating an anticipated 450 direct and indirect jobs. It said as part of the competition, DTI would provide mentorship opportunities and business advisory services for the winners for 24 months. Madam Constance Swaniker, CEO of DTI said, “DTI is a private Technical and Vocational Education Training (TVET) institution that believes in creativity and innovation. We are excited to introduce the Community Innovation Competition to help develop the entrepreneurial skills of Ghana’s youth as a solution to the high unemployment rate in Ghana.” She said “We are living in a time where continuous innovation is key for sustained growth and
development. As an institution, we believe in bringing out the innovative and creative abilities of our learners as a catalyst to create jobs and provide solutions for communities and industries.” A total of 17 groups of young entrepreneurs participated in the competition, which commenced on 13th May 2021. Ten teams made it to the semi-finals held on 17th June 2021, out of, which the five most outstanding groups with the most innovative ideas and potential to scale and create jobs within local communities, emerged as winners. The competition forms part of a three-year Young Africa Works “Transforming youth TVET livelihoods for sustainable jobs’’ partnership between DTI and the Mastercard Foundation.
The programme will provide 40,000 direct and indirect work opportunities for young people in the country. Mr. James McInytre, Ghana Lead for Education and Skills at the Mastercard Foundation, said providing an ecosystem where young entrepreneurs were supported to acquire relevant skills, funding and market access would contribute significantly to catalysing work opportunities for young Ghanaians. DTI’s Innovation Hub seeks to build a portfolio of innovative grassroots start-ups to be incubated and supported with seed capital, business development services, access to market, and a maker space or work shed to grow promising innovations from ideation into sustainable businesses.
Edward Boateng appointed head of TOR to spearhead refinery’s transformation
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mbassador Edward Boateng has been appointed by President Akufo-Addo to take up the top job at the Tema Oil Refinery (TOR). The former Ghanaian diplomat Edward Boateng, who served as the 15th ambassador of the Republic of Ghana to the People’s Republic of China with concurrent accreditation to the Republic of Mongolia and the Democratic People’s Republic of Korea from June 2017 to November 2020, has been appointed by President Akufo-Addo as the managing director of the Tema Oil Refinery (TOR) to spearhead the transformation of the oil refinery sector. Boateng takes office at the Tema Oil Refinery at a time when workers at the state institution have been up in arms against the former management of the refinery for what they say is gross mismanagement of the organisation. Following the agitation by the workers, the Managing
Director of Tema Oil Refinery Francis Boateng and his deputy, Ato Morrison, were relieved of their posts on 11 June 2021 by the Minister of Energy, Matthew Opoku Prempeh. Subsequently, the Energy Minister instituted an interim management committee to oversee TOR’s affairs as part of efforts to restructure and revamp the refinery. The IMC was chaired by Nobert Cormla-Djamposu Anku. The other two members were William Ntim Boadu and Okyere Baffour.
strategic partner for the refinery. The Akufo-Addo government believes that TOR remains an extremely important asset in the list of state-owned enterprises. The incoming managing director will therefore be expected to lead TOR to ensure that the organisation is not dismembered and sold, but rather reformed. The intention is to boost the refinery’s capacity to position its operations to meet local demand and export its products in the West African subregion and beyond.
Tasks ahead
Profile
TOR, one of the premium refineries in the West African subregion until recently, has faced major challenges which resulted in the refinery’s inability to operate to its full potential. Boateng’s background as an international strategist and his experience in management, mergers and acquisitions, will be crucial as the government seeks a
The Ghana Entrepreneurs Foundation honoured Edward Boateng as Ghana’s Most Outstanding Ambassador for the years 2018 and 2019. He led Ghana’s mission in China to win recognition for it as the Outstanding Ghanaian Embassy for 2018. Boateng was also recognised by the United Nations Permanent
Representative in China as one of the most hard-working and diligent ambassadors during his term abroad. He helped organise the hitherto dormant African diplomatic corps in China into a very vibrant force. Ghana-China relations Boateng initiated and was instrumental in several programmes and projects coming to Ghana from China. Some of these are the James Town Fishing Harbour, the famed Sinohydro MPSA Agreement, restoring the US$3 billion loan that had been suspended, and the technical and vocational education and training (TVET) programme. He also succeeded in getting Ghana accepted as a member of the Asia Infrastructure Bank (AIIB). He is further credited with the leadership he showed in managing the expectations of Ghanaians in China and ensuring their safety abroad when the COVID-19 crisis began.
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Court of Appeal allows Nii Dodoo to act as receiver pending determination of appeal
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he Court of Appeal has upheld the ruling of the High Court in the case of UniBank vrs Dr Duffour and nine others for Nii Amanor Dodoo to act as the receiver. A unanimous judgment read by Justice Mrs. Margaret Welbourne, a Justice of the Court of Appeal, said the grounds of appeal contained “arguable points of law”. The court also ruled that UniBank, acting through the receiver as its legal representative, had demonstrated that there were “exceptional circumstances” supporting the suspension of the High Court’s ruling, including the impact the ruling could have on the entire financial sector. In the now-suspended ruling, the High Court had held that the appointment of Nii Dodoo as receiver of UniBank Ghana Limited was void and of no effect. In the civil case to recover over GH¢ 5.7 Billion from Dr Kwabena Duffour and the other defendants, the High Court granted an application by Dr Duffour and the other defendants and struck out UniBank’s case against them. They argued that Nii Dodoo should not have accepted Bank of Ghana’s appointment as a receiver for UniBank on the basis that he worked for less than two years on the team of the Official
Administrators of UniBank. The UniBank, acting through the receiver as its legal representative, appealed against the decision on June 28, 2021 and filed an application for Stay of Execution. It argued that the High Court’s
ruling was likely to be reversed on appeal and a successful appeal rendered useless if (while the appeal was pending) Dr Duffour, the other defendants and anybody else relied on the now-suspended ruling to the detriment of UniBank.
The decision by the second highest court was that Nii Dodoo could continue to act as receiver of UniBank while the appeal progresses. GNA
Labour Commission directs UTAG to call off strike
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he National Labour Commission (NLC) has invited the University
Teachers Association of Ghana (UTAG) and the Senior Staff Association-Universities of Ghana
(SSA-UoG) to appear before it on Thursday, August 5, 2021 for the hearing of their matters in dispute
with their employers. With its intervention, the commission has directed the two associations to call off their indefinite strike. A statement signed by the Director, Administration and Human Resource of the NLC, Dr. Mrs Bernice A. Welbeck, said UTAG must appear before the commission at 11 a.m., with the SSA-UoG appearing at 12:30 p.m. The National Executive Committee (NEC) of the University Teachers Association of Ghana (UTAG) directed members to withdraw all teaching and related activities on campus beginning Monday (August 2, 2021). The decision to embark on an industrial strike, according to the NEC, was borne out of the government’s refusal to heed to calls by the Association to improve the worsening conditions of service of the university teachers.
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‘Winning in The Jungle’ a self-consciousness book launched
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inning in The Jungle, a self-consciousness book described as an epic piece, designed for anyone striving to win in the workplace or overcome any tough hurdles in life, has been launched and available for public consumption. The book, which is authored by a Chartered Insurer and Seasoned Human Resources (HR) Professional, with over 25 years’ experience, Dr. Hazel Pobewa Berrard Amuah, seeks to help individuals understand themself, others and distinguish oneself from a place of commonality and complexity. Drawing inspiration from an African proverb that says “The world is a jungle, you either fight or run forever,” the book makes compelling reading, as it defines and ably discusses the subject of real and pragmatic skills and intelligence needed to truly overcome the though hurdles of life. This interesting book explores a number of contemporary everchanging world of work and business environment issues that are recognized as important drivers of one’s ability to fail or excel and the required soft skills. Speaking at the book launch, Chairman of the occasion and General Overseer, International Central Gospel Church, Dr. Mensa Otabil, expressed that considering the author Dr, Berrard years of professional experience in the human capital sphere and leadership credentials, winning multiple awards with her dynamic approach to people management making her the most soughtafter expert in her field, this intellectual piece has been long anticipated for. “This masterpiece is definitely an eye-opener as it conveys rich
knowledge on how to distinguish yourself, grow through challenges while keeping your eyes on the goal set before you. A journey in the jungle through the lens of this book will equip you with varying knowledge on not only how to survive, but how to thrive and excel in this fast-paced challenging world,” he said. Lawyer and International Elections Consultant, Charlotte Ama Osei, in her endorsement message on the book indicated that what makes the book even more noteworthy is the writer’s ability to rightly start with the area of self-knowledge and emotional mastery, to address issues around emotional intelligence in the workplace, non-verbal communication and important leadership skills. “Dr Amuah’s book ‘Winning in the Jungle’ addresses the complexities of today’s workplace: people from different generations, cultural backgrounds, genders and social and cultural backgrounds -all out together in one space or post COVID-19, several workspaces are expected to deliver results and thrive,” she said. To buttress Madam Osei’s point of view, Chairman of Zenith Bank and former Chief Executive of Nestle Ghana, Freda Y. Duplan, reiterated that the ever-changing world of work and the business environment are indeed a jungle requiring certain soft skills and knowhow to be successful and profitable. “This definitely requires a combination of soft skills (running) and knowhow (Fighting) as you cannot run forever or fight forever. How one determines what is the winning combination is what Dr Berrard nailed successfully,” she said.
Author of the book: “Winning in the Jungle” Dr, Hazel, in her remarks provided the motivation for writing the book, thematic pillars the book was built on, and their relevance to the jungle journey if one wants to survive and become a winner. She emphasized that lessons that can be leant from this book includes adaptation of both emotional intelligence and cultural intelligence as the only ways to survive in the jungle of this world. “We can win from a place of commonality if we learn to understand both ourselves and other creatures. To survive in a global village and put food on the table, we must learn to relate with people who are from territories
and cultures unknown to us,” she stated. Guest of honour Rev. Dr. Joyce Aryee, stated that winning in the jungle does not mean deliberately pushing others out, but to find ones niche, work hard at it and become successful. "With this book, one can say to their jungle bring it on, I am waiting for you," she said. The book was reviewed by David Ofosu-Dorte, Founder and Senior Partner of AB & David, Africa, and Patrick Afari, Senior Manager Procurement, MTN Ghana. Author’s profile Dr. Hazel Pobewa Berrard Amuah 0244339733 email: Hazelberrard@gmail.com
Rebecca Foundation builds crèches in selected markets
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he Rebecca Foundation has embarked on building crèches in some select markets after the market women narrated their ordeal of balancing their trade with child care. The crèches will provide a place for babies and children to be cared for while their mothers are able to focus on their trades. Having access to safe and affordable childcare gives women and families with children the choice and opportunity to work.
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Debt financing strategies in a pandemic By Abdul- Jaleel Hussein, CFA Head, Commercial Banking, Stanbic Bank
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he COVID-19 pandemic has had a devasting impact on the operations of businesses across the world. Amid lockdowns in many parts of the world, businesses had to deal with perhaps the most challenging situations in running their businesses. From laying off staff, to pay cuts and total shutdowns, the pandemic has shaken the foundations of many businesses. As cashflows for businesses were deeply affected, businesses had to incur debts to keep afloat as they found it difficult to retire debts already owed. In this article, we will discuss some measures businesses can adopt in financing debts amid this pandemic. Debt vulnerabilities during crisis In economies like Ghana’s, the biggest debt provider to businesses and individuals are commercial banks, who redistribute money from those who have excess (depositors) to those who need money for consumption or investment (borrowers). For this reason, banks may not have sufficient liquidity to lend to borrowers should the existing borrowers not repay their debt or pay on time. In very extreme but rare cases, banks may not be able to have sufficient funds to return the depositors funds to them when they need it. During a pandemic, there is a general decline in demand of goods and services, which will impact the revenues of the businesses. Most businesses will have fixed costs like paying of salaries, utilities, and other operating expenses. If a business does not have sufficient cash buffers to close the revenue gap, it means the requirement for external financing will increase during this period. The pandemic also brings along with it uncertainty and general economic frailties which makes lenders, like commercial banks, tighten access to credit to businesses to enable them minimize their exposure to the general uncertainty; and their ability to keep depositors money safe. Also, for businesses, contracting more debt during this period may not be the best option, given that debt repayments are fixed and not dependent on the business cycle. Therefore, the risk of inability to repay the debt
is pronounced and may lead to debt distress, which could ultimately bankrupt the business, if not managed well. To manage your debt vulnerabilities, these are some steps businesses may take: Re-negotiate terms of loans Businesses should actively engage their debt providers to renegotiate payment terms – interest rates, tenure of debt, repayment amounts. While most lenders will want to be proactive in these negotiations, it is advisable for the business to take the first step before any repayment challenges begin to set in. It is also much easier to re-negotiate if the business has demonstrated meeting the terms of the debt arrangement prior to the pandemic. Re-negotiation of Payment Terms with Suppliers and Clients Liquidity is a key ingredient for any business during a pandemic. It is therefore important to keep money in the business if possible. Renegotiating with key suppliers for longer payment terms while ensuring faster collection from clients will help a great deal to improve the liquidity in the business. This may come at the expense of sacrificing some margins. It is a balancing act that
businesses will have to deal with during these difficult times. To improve chances of renegotiation, it is important to keep good relationships with suppliers and clients during “normal” times. Government stimulus packages Given the global nature of pandemics and the importance of businesses to all economies, governments and other stakeholders usually intervene with various programmes to support businesses. This could come in the form of stimulus packages, grants, support to lenders to reduce cost of borrowing or improve liquidity of lenders to enable them to provide more debt. As a business, it is important to be on the lookout for such programmes. Some of these programmes come at no cost or no expectation of paying back and may be passed through lenders or other institutions. There would be selection criteria depending on the programme, and it is important the business familiarizes itself with the requirements. Efficient business practices Probably an immediate action within the control of businesses is to identify and eliminate wastes within the business and improve efficiencies. During “normal” times, some business activities may
be taken for granted as necessary for the business. However, in a pandemic, it is crucial to seek out areas within the business where improvements can be achieved to reduce waste and cost. Some of these such areas include reducing power consumption, water consumption, fuel consumption, stationery and printing, etc. You would be surprised at how much a business can save with these simple steps to improve efficiency. At the height of a pandemic, success may just mean keeping the business afloat. In that case, decisions should be taken to keep the business afloat so that when the tide starts to rise, the business can rise with it. Equity – skin in the game While the general slowdown during pandemics impact everyone and every business to a large extent, shareholder support during this period can go a long way to bolster the business to enable it to survive the stressed conditions. Shareholders have more skin in the game amongst all stakeholders; and should they have the ability, it will be a good option to inject more financing into the business during a pandemic or general stress. Shareholders can be called on to provide additional equity or even shareholder debt, which usually comes at better terms to commercial lenders.
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How technology helped OZE entreprenuers to weather the Covid-19 storm and grow their business
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mall businesses are the backbone of the Ghanaian economy and yet many, if not most, cannot tell you how much they have earned, how much cash they have in reserve, and how much profit they have made. In the best of times, this prevents them from accessing opportunities like successfully bidding for large contracts or attracting investors. But if the economy is strong, they can likely still survive, even if they don’t grow. In the worst of times, not understanding your business performance means that the business will fail and fail quickly. The entrepreneur and their family will be left with no income and no understanding of how they ended up going bust. The COVID-19 pandemic brought the worst case scenario to everyone all at once, but the businesses using the OZÉ app were able to survive it. OZÉ is a mobile app that makes it easy for entrepreneurs to track business data such as sales and expenses as well as money that is owed to them. They can also use it to send digital receipts and invoices. The data is analyzed to provide recommendations and reports. As they use OZÉ to manage their business and learn how to run it better, OZÉ learns about them. Leveraging machine learning, it assesses their credit risk to provide them with capital from our banking partners. OZÉ Entrepreneurs were not immune to the downturn. Around 60% of our active businesses saw their revenue go to zero by the end of March 2020. An additional 15% saw a reduction in revenue in the last week of the month compared to the previous three weeks. In many cases, these are businesses that were profitable and on a solid growth trajectory before the pandemic. “Almost every business was hit in the jaw by the coronavirus pandemic early [last] year. My company wasn't far from the hit. Averagely, my monthly revenue decreased from GHC 10,000 to Ghc 4,000 because nobody was buying footwear due to a partial lock down,” shared Emmanuel Atakora-Manu, the CEO of Ifok Handmade, a company that manufactures men’s shoes in Kumasi. Companies, like Ifok Handmade, that used OZÉ to keep records had the information to even know how much sales had decreased. Using their OZÉ
dashboard, OZÉ customers could see their current cash balance and their monthly spending broken by category. Using this information and the help of their OZÉ Business Coach, they could calculate how many days, weeks, or months their business could survive on a 60%-100% reduction in revenue. They could also know which customers owed them money and reach out to them to remind them to pay or figure out if they couldn’t. Our Business Coaches also kicked into high gear and provided workshops and consulting to help our entrepreneurs adjust their operations and marketing to be pandemic-proof. But OZÉ also acknowledges that information and coaching can only go so far. Many businesses needed a loan to survive the lockdown. This is why OZÉ launched COVID-19 Relief Loans available to businesses who were actively recording sales and expenses in the app. Mr. AtakoraManu received one of these loans. “Whatever dead or deferred hopes I had were resurrected because this loan helped me pay suppliers and other outstanding payments just so to keep the business running again,” he said. Some businesses were lucky enough to be in a position where their products were in higher demand and they needed more cash to stock up. Unfortunately many banks were closed and
even when open, it can be hard to get a loan from your bank. Rita Nutsugah runs Ethical Ghana Limited, a company which deals in the manufacture and distribution of handwash detergent, bathing and body wash products. During the Covid-19 period, her business was faced with certification challenges as the Food and Drugs Authority cracked down on illegal sanitiser and detergent products. She took a loan to complete the certification processes. Now that she has FDA, her business is growing even faster. She raised enough money to rent a new office and warehouse for her business by the Spintex road in Accra. With the support of the OZÉ App and Coaches, all OZÉ Entrepreneurs who benefited from the loan have paid it back or are in the process of paying back. With a 0% default rate, OZÉ was able to convince banks to partner to expand access to low-interest, no collateral loans for OZÉ entrepreneurs as long as they are actively recording on the app. -Business owners and entrepreneurs can get access to the OZÉ app for free on Google Play or the Apple App Store. After using the app for 30-90 days they become eligible to apply for a loan. Financial Institutions who want to use OZÉ to originate MSME loans can reach out to Coach@oze.guru.
About the author: Meghan McCormick is a systems thinker and strategist, passionate about designing solutions that bring real value to customers, corporations, and communities. She has spent her career focused geographically on African markets and functionally on innovation strategy. She started her work as a Community Economic Development Volunteer in the Peace Corps in Guinea. During her service, she founded Guinea’s first business accelerator, Dare to Innovate, and scaled it to be Frenchspeaking Africa’s most active small business accelerator. Currently, Meghan is the CoFounder & CEO of OZÉ, a fintech company that equips African entrepreneurs to make datadriven decisions to both improve their business performance and access capital. Outside of her entrepreneurial endeavors, Meghan worked as an Innovation Strategist at Doblin, the innovation unit of Monitor Deloitte. Meghan has an MBA from MIT where she was a Legatum Fellow for Entrepreneurship in Emerging Markets and an MPA from the Harvard Kennedy School where she was a Cheng Fellow in the Social Innovation and Change Initiative and a Foreign Language and Area Studies Fellow focused on West Africa.
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Automobile
WEDNESDAY AUGUST 4, 2021
The evolution of Volkswagen
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olkswagen was set up in 1937 by the German Labor Front (Deutsche Arbeitsfront) in Berlin. In the mid-1930s, vehicles were a luxury – most Germans could manage the cost of nothing more detailed than a motorcycle. Just a single German out of 50 owned a vehicle. Looking for a likely new market, some vehicle creators started autonomous "individuals vehicle" projects – the Mercedes 170H, BMW 3/15, Adler AutoBahn, Steyr 55, and Hanomag 1.3L, among others. History of Volkswagen -VW Type 82E Erwin Komenda, the longstanding Auto Union chief designer built up the vehicle body of the model, which was unmistakably the Beetle known today. It was one of the main vehicles designed with the guide of a wind tunnel—a technique utilized for German airplane design since the mid-1920s. The car designs were gotten through thorough tests and achieved a record-breaking million miles of testing before being considered a finished project. 1961–1973: Beetle to Golf The 1961 Type 1 Beetle had a 36 hp 1200cc four-chamber aircooled level four contradicted OHV motor made of aluminum amalgam square and heads. By 1966, Type 1 accompanied a 1300 motor. By 1967 Type 1 had a 1500 motor, and 1600 out of 1970. The air-cooled motor lost courtesy in the United States market with the approach of non-leaded fuel and exhaust cloud controls. These air-cooled motors were normally tuned to be fuel-wealthy to
control motor overheating, and this prompted extreme carbon monoxide discharges. VW creation hardware was ultimately moved to Mexico where vehicle discharges were not directed. Scarabs were mainstream in the USA West Coast where the restricted limit lodge warming was less badly designed. Insects were promoted on the USA West Coast as seashore carts and hill carriages. Volkswagen added a "Super Beetle" (the Type 131) to its setup in 1971. Type 131 contrasted from the standard Beetle in its utilization of a MacPherson swagger front suspension rather than the typical suspension bars. The Super Beetle included another hooded, cushioned scramble, and bent windshield (from 1973 model year on up). Rack and pinion guiding supplanted recycling ball controlling pinion wheels in the model year 1975 and up. The front of the vehicle was extended 2 inches (51 mm) to permit the extra tire to lie level, and the blend of these two highlights expanded the usable front baggage space. In 1973, Volkswagen presented the military-themed Type 181, or "Trekker" in Europe, "Thing" in America, reviewing the wartime Type 82. The military rendition was created for the NATO-time German Army during the Cold War long periods of 1970 to 1979. The U.S. version sold for two years, 1973 and 1974. 1991–1999 - Volkswagen Golf In 1991, Volkswagen dispatched the third-generation Golf, which was European Car of the Year for 1992. The Golf Mk3 and Jetta Mk3 showed up in North America in 1993. The sedan variant of the Golf was badged Vento in Europe
but remained Jetta in the United States. The Scirocco and the later Corrado were both Golf-based roadsters. The Volkswagen New Beetle In 1994, Volkswagen unveiled the J-Mays designed Concept One, a "retro"- themed car with a similarity to the first Beetle, because of the foundation of the Polo. Because of a positive reaction to the idea, a production version was created as the New Beetle, in light of the Golf's bigger stage. 2000–2016 -The Fifth Generation Volkswagen Jetta Volkswagen started presenting a variety of new models after Bernd Pischetsrieder became Volkswagen Group CEO (liable for all Group brands) in 2002. The 6th era VW Golf was dispatched in 2008, came runner up to the Opel/Vauxhall Insignia in the 2009 European Car of the Year and has generated a few cousins: VW Jetta, VW Scirocco, SEAT León, SEAT Toledo, Škoda Octavia, and Audi A3 hatchback ranges, as well as a smaller than usual MPV, the SEAT Altea. The GTI, a "hot hatch" performance version of the Golf, flaunts a 2.0 L Turbocharged Fuel Stratified Injection (FSI) direct infusion motor. VW started promoting the Golf under the Rabbit name by and by in the U.S. what's more, Canada in 2006. The sixth-generation Passat and the fifth-generation Jetta both appeared in 2005, and Volkswagen announced plans to grow its setup further by bringing back the Scirocco by 2008. Different models in Wolfgang Bernhard's include the Tiguan average-sized SUV in 2008 and a
Passat Coupé. In November 2006 Bernd Pischetsrieder announced his resignation as Volkswagen Group CEO and was replaced by Audi overall CEO Martin Winterkorn toward the start of 2007. The Volkswagen Passat (3C) In May 2011, Volkswagen finished Chattanooga Assembly in Chattanooga, Tennessee. The Chattanooga Assembly plant marked VW's first plant since the plant at New Stanton was shut down. The facility has created Volkswagen vehicles and SUVs specifically designed for the North American market, starting with the Passat B7 in 2011. The organization as of late announced plans to extend further by contributing $900 million to add floor space to the factory. $100 million interest in Silicon Valley-based solid-state battery startup QuantumScape, turning into the startup's biggest auto investor and gaining reputation on its board. In February 2019, Volkswagen announced that it would launch an entry-level Jetta sub-brand in China focused on young buyers. Three models were declared in July 2019, a car and two SUVs, each of the three of which will be manufactured in China as a piece of Volkswagen's joint-venture with FAW. In September 2019 at the Frankfurt Motor Show, Volkswagen officially unveiled a refreshed logo (a more slender, two-dimensional form of the past logo) and new sonic marking, which will go with the recently dispatched ID.3 electric vehicle. Volkswagen expressed that the ID.3 implied the beginning of a "new era" for the company.
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News
WEDNESDAY AUGUST 4, 2021
Gov't unveils Sparkup Summit to unlock Ghana's investment potentials
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he maiden Sparkup Summit will come off at the Kempinski Gold Coast City Hotel in Accra on Monday, September 6, 2021 to identify and account for the $2. 7 billion Foreign Direct Investment (FDI) Ghana received last year. The summit will be opened by President Nana Addo Dankwa Akufo-Addo and will attract ministers of state, heads of financial institutions, facilitator agencies, local communities, young entrepreneurs, regulators, and private sector service providers to deliberate on ways of unlocking the country's investment potentials to promote economic growth. The event is on the theme: “Reawakening the Giant; Maximising Ghana's Investment Potentials". It is being organised by the Ghana Investment Promotion Centre (GIPC) in collaboration with the Ministry of Information. Interested individuals and organisations can visit:www. sparkup.gipc.gov.gh to register to participate. Information Minister Kojo Oppong Nkrumah, who officially launched the summit in Accra on Tuesday, said the $2.7 billion FDI received into the various sectors of the Ghanaian economy went into 279 projects in eight regions and expected to create 27,000
jobs. He said the focus of the Summit hinged on three ‘Os’ - Opportunities, Open, and Optimistic - intended to create opportunities for Ghanaian businesses, young entrepreneurs and promote partnerships between local businesses and foreign investors. Mr. Oppong Nkrumah said it would also create a platform for national conversation among key stakeholders and re-ignite the passion and desire to add value to the natural resources for economic growth. He said over the past five years, Ghana had registered 721 foreign direct investments and the
summit would be an opportunity to assess how those investors navigated their way in terms of registering their businesses, connecting electricity and water to their factories, acquisition of land and other services and suggest ways to improve upon them. Mr. Yofi Grant, the Chief Executive Officer of GIPC, in his welcome remarks, said the Sparkup Summit would be organised annually to boost FDI and lead the way for the country's economic emancipation. He said despite the COVID-19 pandemic that had resulted in 3.5 per cent global economic contraction, with the Sub-
Sahelian economy contracting by negative three per cent, the Ghanaian economy showed resilience, growing by 0.4 per cent in 2020. Mr. Grant noted that even before the emergence of the Covid-19 pandemic, the country witnessed an average economic growth of seven per cent from 2017 to 2019. "We must, therefore, position ourselves properly and strategise to attract more Foreign Direct Investment to boost the economy, create jobs and ensure wealth creation," he said. Mr. Grant said with the country hosting the Africa Continental Free Trade Area (AfCTA) Secretariat, coupled with stable democratic credentials, it was imperative to make a headway in enhancing the productive sectors of the economy to create jobs and move from a developing nation status to a developed one. He was with the conviction that the 100 billion GHANACARES programme and other flagship initiatives such as the 'One-District, One-Factory’ and 'Planting for Food and Jobs' would go a long way to rejuvenate the economy and businesses, ravaged by the COVID-19 pandemic. GNA
GEA establishes financial services department to support MSME’s
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he Ghana Enterprises Agency (GEA) has established the financial services department to develop strategies to address challenges for access to finance for Micro Small Medium Enterprises (MSME’s). It is to position the MSMEs to become key players in the government’s industrialisation programme. Mrs Kosi Yankey-Ayeh, the Executive Director of GEA, said the agency is expected to play a key role in supporting the MSMEs to become players in the value chain of the industrialisation process. Mrs Yankey-Ayeh was speaking at the commissioning of the GEA Access to Finance Technical Committee in Accra. The committee is to provide inputs for the creation and implementation of the MSME fund, identify partner institutions
to drive GEA’s access to finance initiatives and provide inputs that will help expand GEA’s funding portfolio and global reach. They are also to provide inputs into national policies related to MSMEs access to finance and any additional matters delegated to the committee by GEA. The committee’s mandate, which shall be in force for one year, has representatives from Ministries of Trade and Industry and Finance, Association of Bankers, Bank of Ghana, a universal bank and ARB Apex Bank. Others are representative from GHAMFI, an Angel or Impact Investment community, GWES Network, ASSI and AGI and GEA She said this, therefore, required strategic support to build capacities and competitiveness of the MSMEs to suppliers or partners, creating the necessary forward and backward linkages.
The Executive Director said the GEA Act 2000, Act 1043 which transformed the NBSSI, expanded the mandate of the institution as the apex body for the MSME sector. "One of the objects of the agency is to facilitate the access by MSMEs to financial and nonfinancial resources including credit facilities and professional services, machinery, equipment, and raw material inputs from domestic and international sources," she said. Mrs Yankey-Ayeh said the National MSME and Entrepreneurship Policy, the blueprint for the growth and development of the MSME sector proposes some policy prescriptions to be implemented by the government to improve access to reliable and affordable funding for MSMEs. These include re-orienting and encouraging financial institutions,
export finance institutions and leasing companies to scale-up special lending windows for MSMEs; supporting MSMEs to access innovative long-term financing packages for their sustainable development and encouraging Angel financing and Venture Capital arrangements to inject capital into viable start-ups and MSMEs.
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Feature
WEDNESDAY AUGUST 4, 2021
China’s unavoidable financial rise
By Zhang Jun A decade ago, few economists were bullish about the growth of China’s external financial strength. But the government’s commitment to capitalmarket opening and renminbi internationalization – together with China’s sheer size – have fueled a rapid financial rise that will only continue. The great powers in history have tended to have one thing in common: size matters. While a large market does not guarantee dominance in other realms, it certainly helps, perhaps more than any other single factor. This was true of the United States, and now it applies to China. Beyond being a leading economic and trading power, China is increasingly – and inexorably – becoming a global financial power. Somehow, too many economists in the West did not see this coming. Even a decade ago, few were bullish about the growth of China’s external financial strength, with skeptics highlighting the country’s vulnerabilities. A rare exception is Brown University’s Arvind Subramanian. In his 2011 book Eclipse: Living in the Shadow of China’s Economic Dominance, Subramanian argued that China’s dominance was not only more imminent, but would also be broader than virtually anyone expected, involving huge financial influence among the domains that China would reshape. Given his prescience, the title of the Chinese translation of his book – The Big Forecast – might have been more apt. Why did Subramanian see so clearly what most economists didn’t? His model, unlike the standard analytical framework of economics, included the variable of size. A decade later, China’s financial
influence is becoming impossible to ignore. In the 20 months beginning on April 1, 2019, 364 renminbi-denominated onshore Chinese bonds – issued by China’s government and “policy banks” – were added to the Bloomberg Barclays Global Aggregate Index. The first time domestic Chinese bonds were included in a major global index was a milestone in the opening up of China’s financial markets. And it was followed by more progress, with JP Morgan adding Chinese government bonds to its flagship index in the first quarter of 2020. FTSE Russell will follow suit, beginning later this year. With that, Chinese bonds will be included in all three of the major bond indices tracked by global investors. It should not be surprising, then, that the RMB Globalization Index, which measures growth in offshore renminbi usage, reached new highs this year, following three years of 40% annual growth. The rapid internationalization of China’s bond market has accelerated the internationalization of the renminbi – a process the government has long sought to facilitate. In 2010, China allowed central banks, renminbi offshore clearing banks, and offshore participating banks to invest in China’s interbank bond market. China launched the ShanghaiHong Kong Stock Connect in 2014 and the Shenzhen-Hong Kong Stock Connect two years later. Both use a two-way renminbi-settlement system. The People’s Bank of China (PBOC) has also allowed eligible foreign institutional investors to access the China Interbank Bond Market directly, without quotas or restrictions, since 2016. And in 2017, it established China Bond Connect, which gives overseas investors access to fixed-income markets in mainland China via trading infrastructure in Hong
Kong. These efforts are bearing fruit. According to the Financial Times, overseas investors have bought a net $35.3 billion worth of Chinese stocks through the Shanghaiand Shenzhen-Hong Kong Stock Connects so far this year, an annual increase of about 49%. As of July, they held more than $228 billion in renminbi-denominated A-shares of China-based firms through these channels. Moreover, overseas investors have purchased more than $75 billion worth of Chinese government bonds this year, up 50% year on year, and about $578 billion in Chinese bonds through the China Bond Connect channel. Foreign investors now hold a total of $806 billion in Chinese stocks and bonds, up 40% from a year ago. Ultra-loose monetary policy in the US and the European Union during the COVID-19 pandemic has undoubtedly helped to fuel this surge in purchases of Chinese assets. A huge amount of money is flowing out of the US and the EU, and China is a safer destination for it than other emerging-market economies. But that does not mean this is a short-term trend. The annual Global Public Investor Survey, published by the Official Monetary and Financial Institutions Forum, shows that 30% of central banks plan to increase their renminbi holdings in the next 12-24 months, compared to 10% last year. In Africa, almost half of central banks plan to increase their renminbi reserves. As a result, the renminbi’s share of global foreign-exchange reserves is on track to rise at an average annual rate of roughly one percentage point for the next five years. Research by Goldman Sachs and Citi predicts that the renminbi will be among the world’s top three currencies within a decade. As China opens its capital
markets, it is also quietly pushing forward the development of its central bank digital currency (CBDC), the e-CNY. The CBDC is currently being tested in a representative sample of ten key cities, placing China well ahead of the vast majority of other central banks: while 80% have begun to design a digital-currency system, only 16% of them have reached the pilot stage. China has also been developing a digital cross-border payment system. Now, the PBOC has joined with the Hong Kong Monetary Authority, the Bank of Thailand, and the Central Bank of the United Arab Emirates to launch a multilateral research project, Multiple CBDC Bridge, which will explore ways to incorporate digital currencies into crossborder payment systems. While the e-CNY is currently being positioned as a cashpayment voucher, its potential is huge. As China’s Belt and Road Initiative facilitates an increase in trade and investment flows, the e-CNY will expand the renminbi’s use in settling crossborder transactions, reduce dependence on the US-led SWIFT network, and lay the groundwork for the establishment of a more convenient regional digitalcurrency payment network led by China. Most importantly, the e-CNY will certainly help China to internationalize its multitrillion-dollar domestic debt, thereby creating a huge market to turn the renminbi into an internationalization currency. Zhang Jun, Dean of the School of Economics at Fudan University, is Director of the China Center for Economic Studies, a Shanghaibased think tank.
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Markets
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NO. B24 / 230 | NEWS FOR BUSINESS LEADERS
MONDAY MAY 3, 2021
MONDAY AUGUST 2, 2021
Ghana, Angola sign MoU on political consultations, economic collaboration
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hana and Angola Monday signed a Memorandum of Understanding (MoU) to hold consultations to boost political and economic ties between both nations. By the MoU, the two nations have established a consultative mechanism that would enable them interact regularly on areas of mutual interest, particularly in mining and hydrocarbon industry development, agriculture, education, tourism, transportation, and maritime security. Angola looks to explore Ghana's vast experience in the mining and cocoa sectors, whilst Ghana seeks to benefit from Angola's rich knowledge in the oil and gas sector. The MoU was signed by their respective foreign ministers at the Jubilee House, Accra, in
the presence of President Nana Addo Dankwa Akufo-Addo and President João Manuel Gonçalves Lourenço of Angola, who is on a three-day official visit to Ghana. President Akufo-Addo prior to the signing of the MoU, held a closed-door meeting with President Lourenco, during which some bilateral arrangements were reached. The high point of the bilateral talks was the need to enhance partnerships and exchange of ideas and experiences of mutual interest. The two leaders underscored the need for their respective countries to learn from each other, and to find solutions to the common issues that beset them. They also called into focus the need for a common front to address the maritime security challenges of the Gulf of Guinea,
stressing that all the 21 countries that border the Gulf of Guinea should collaborate to keep the area safe for the economic development of the entire region. The two undertook to develop the fisheries sectors of both countries, as well as establish a direct transport route from Accra to Luanda to facilitate seamless travel between Ghana and Angola. President João Lourenço spoke highly of Ghana’s tourism sector, mining, and cocoa production, indicating that the collaboration would be an opportunity for his country to learn from Ghana He said the mining industry in Angola was still at its development stage and welcomed investors from Ghana to share their knowledge and experiences in mining to help develop the Angolan mining sector. The Angolan President also
pointed out the need for the two countries to explore the possibilities of collaboration to develop their agro livestock industries. He commended Ghana’s democratic credentials, indicating that his country supported Ghana’s candidature to host the secretariat of the African Continental Free Trade Area (AfCFTA) due to the country’s stable “behaviour” on the continent. President Akufo-Addo described the Angolan leader’s visit as a successful step in deepening the bilateral ties between the two countries. He said Ghana had a lot to learn from Angola’s hydrocarbon industry and was positive that Ghana had much to gain from that country's experience in that sector.
Court of Appeal dismisses Sankofa Oil Field application
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he Court of Appeal has dismissed an application by the operators of the Sankofa Oil Field which sought to stay the execution of the judgment delivered by the High Court pending the determination of an appeal filed in respect of the ruling. The High Court had ordered operators of the Sankofa Oil Field to preserve 30 per cent of all the revenues which would be accrued from the field until the final determination of a legal dispute relating to it. A three-member panel of the Court of Appeal, presided over by Justice Barbara F. AckahYensu, in a ruling, held that no exceptional circumstance had been established to warrant the grant of stay of execution. Other members of the panel are Obeng-Manu Jnr and Justice Richard Adjei-Frimpong. The court further awarded GH¢8,000 each against the operators (Eni Limited and Vitol Upstream Limited). In June this year, the Commercial Division of the High Court, presided over by Justice Mariama Sammo, upheld in part an application by Springfield
Ghana Limited, the plaintiff in the legal dispute, and further ordered the operators (Eni Limited and Vitol Upstream Limited) to preserve 30 per cent of their revenue into an account agreed by all the contesting parties. Dissatisfied with the trial court’s decision, the operators launched an appeal to contest the ruling. They further filed the application for stay of execution at the appellate court pending the determination of two separate appeals filed to contest the High Court’s decision. However, the Appellate court in its ruling said: “We are persuaded better by the arguments that lead to the position where the order of the trial court ought not for the time being, be disturbed
pending the determination of the substantive appeal.” The disputed Sankofa Oil Field is part of the Offshore Cape Three Points (OCTP), an area located off the coast of Western Ghana, with about 500 million barrels of oil reserves, and 40 billion cubic metres of gas. Eni, Italian multinational oil giant, is the lead operator. On the other hand, Springfield is the lead operator in the West Cape Three Points (WCTP) with the Afina Field. It is the case of Springfield that various analysis and tests had shown that the accumulation of petroleum in the Sankofa field extended to its contract area (Afina Field). In April 2020, the then Minister of Energy, Mr John Peter Amewu,
in accordance with Section 34(1) of the Petroleum (Exploration and Production) Act, 2016 (Act 919), directed ENI and Springfield to execute a unitisation with respect to the Sankofa field in the OCTP and Afina discoveries in the WCTP contract areas. Springfield argues that the defendants were dragging their feet and had failed to comply with the directives of the minister. In its substantive suit, Springfield is seeking an order from the court directed at the defendants to comply with the minister's directive, and enter into an agreement with it to make the Sankofa and Afina fields a single unit. It also wants the court to direct the defendants to cooperate with the plaintiff to develop the two fields into one. Springfield is further seeking an order from the court directed at the defendants to account for all the revenues accrued to them from the Sankofa Field since 2009 when exploration commenced. The plaintiff further wants the court to order the payments of all revenue it deserves from the Sankofa Field.