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WEDNESDAY FEBRUARY 10, 2021
BUSINESS24.COM.GH
WEDNESDAY FEBRUARY 10, 2021
NO. B24 / 157 | NEWS FOR BUSINESS LEADERS
Freight forwarders want gov’t action on ‘nuisance’ charges
Agric’s contribution to economy could further dwindle --- Gov’t Statistician By Joshua Worlasi Amlanu macjosh1922@gmail.com
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he contribution of agriculture to the Ghanaian economy could further dwindle, considering the current modes of operation and characteristics of the persons and institutions engaged in the sector, Cont’d on page 3
By Patrick Paintsil p_paintsil@hotmail.com
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he Ghana Institute of Freight Forwarders (GIFF) wants the Ministry of Transport to set up a committee to look into what it describes as arbitrary fees and charges in the shipping business that could stifle the
Dissolve Covid-19 technical advisory team, Minority asks gov’t
sector. The worrisome fees and charges include administrative or container release fee, container cleaning and detention fee, demurrage, and interest charges on delayed payment of duties. GIFF is also concerned about the mode of calculation of state warehouse
rent by Customs. “That’s one very sour point in our business right now, and one thing we are going to do this year is to push for these fees and charges to be regulated,” said Eddy Akrong, president of the institute.
Cont’d on page 2
By Eugene Davis
PIAC calls for review of PRMA, sends proposal to finance ministry By Benson AFFUL affulbenson@gmail.com
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he Public Interest and Accountability Committee (PIAC) says it has initiated proposals for the amendment of some provisions in the Petroleum Revenue Management Act (PRMA), the law that governs the country’s oil revenue usage,
ugendavis@gmail.com
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he Minority in Parliament says government should dissolve the Covid-19 Technical Advisory Team Cont’d on page 5
Cont’d on page 3 Follow us online: facebook.com/business24gh twitter.com/business24gh linkedin.com/pg/business24gh instagram.com/business24gh
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Editorial / News
WEDNESDAY FEBRUARY 10, 2021
Editorial
A failing backbone T here is no denying that Ghana’s economy heavily relies on the agriculture sector. The sector singlehandedly is acclaimed to be the country’s biggest employer – offering a means of livelihood to millions in the agri value chain. But despite its important role, not quite much has changed in terms of the structure of the sector. In recent years, several policies have been implemented to encourage some form of commercial farming in order to maximise the benefits inherent in the sector. The 2017/18 Ghana Census of Agriculture (GCA) revealed that agricultural activities in the country still remain rural and rudimentary with little
innovation and modernization which is even made worse by an aging farmer population. One telling effect of this is that the contribution of the sector to the economy would continue to shrink. Since 2013, the sector’s contribution to the economy has remained below 26 percent, with the latest being 23.3 percent in the third quarter of 2020. Indeed, to achieve any significant difference in terms of results, the current modes of operation and characteristics of the persons and institutions engaged in agriculture must see a complete overall. Just as the Government Statistician Prof. Samuel Annim when he disclosed the results
of the survey, there has to be a strategy to attract the youth, especially those with tertiarylevel education, among whom unemployment is high and who the census shows have low participation in agriculture. He recommended tackling some issues, such as the adoption of new technologies, low productivity in agriculture, lack of resources, among others, that have plagued the agricultural sector in order to attract more people and investments into agriculture. The country is endowed with arable lands that it must actively exploit if we are to feed ourselves and generate sizeable foreign exchange from the export of agriproducts.
Freight forwarders want gov’t action on ‘nuisance’ charges Continued from cover
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“If we are not careful, it’s going to go haywire and that’s not good for the business. We want to attract business to our ports and we don’t want these fees to pose a hindrance,” he added in an exclusive interview with Business24. Apart from the freight rate, which is the cost of transporting the cargo, there are other fees and charges associated with shipping. After paying the freight cost, an importer is charged an administrative fee or container release fee for the processes leading up to the release of the consignment by the shipping line. There is also a container cleaning fee, a container detention fee—which is a form of surety for the safe return of an empty container to the shipping line— and demurrage on containers that overstay at the port. Also, if an importer fails to clear his goods within one week, Customs charges interest on the
duties applicable. The GIFF boss argued that most of these costs, especially those charged by the shipping lines, are not commensurate with the service that is rendered, hence the call for some form of regulation by the transport ministry. “Weekends and public holidays are not counted as part of demurrage-free days even though they [shipping lines] do not work on those days. Also, why do I [an importer] have to pay about GH¢250 for cleaning an empty container or GH¢2,000 for my container to be released to me,” the GIFF boss said. “If you look at the Trade
Facilitation Agreement (TFA) that we are a signatory to, all fees and charges should be commensurate with the service provided,” Mr. Akrong further argued. On the interest charged on duties and calculation of warehouse rent, Mr. Akrong admitted that it was a matter of law and that his outfit intends to take it up with the Commissioner of Customs for subsequent action. “Mind you this [duty] is not a loan; it’s money that the importer is supposed to pay to government. We need to cut cost so that business can be attractive, and interest charge is one interesting area to look at.”
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Agric’s contribution to economy could further dwindle Continued from cover the Government Statistician, Professor Samuel Kobina Annim, has said. Despite recent efforts by government to boost the sector, since 2013, the sector’s contribution to the economy has remained below 26 percent, with the latest being 23.3 percent in the third quarter of 2020. The 2017/18 Ghana Census of Agriculture (GCA) shows that in a typical agricultural household, those engaged are aging. At the same time, majority of the youth, between 15-35 years, do not seem to consider agricultural activities as a viable source of employment, as only few are working in the sector. Only about 29.7 percent of the 2.6 million agriculture households surveyed had youth from the ages of 15 to 35 years actively engaged in the sector. “It is not encouraging to see an aging population in a particular
sector. What that means is that the contribution of that sector to the economy is going to dwindle over time. As we are seeing, agriculture used to contribute a lot more to the economy, but now its contribution is about 20 percent. So, if you have an aged population, it means people are no more interested in the sector,” Prof. Annim said in an interview after a dissemination workshop on the Ghana Census of Agriculture. The 2017/18 Ghana Census of Agriculture (GCA) reveals that while agricultural activities in the country still remain rural and rudimentary with little innovation and modernisation, the sector is also characterised by an aging population. The Government Statistician indicated that the full potentials of agriculture in employment, food security, foreign exchange earnings, wealth and investment outcomes are not being realised given the current modes of
Prof. Samuel Kobina Annim, Government Statistician
operation and characteristics of the persons and institutions engaged in agriculture. To promote diversity, the Government Statistician said agriculture should attract the youth, especially those with tertiary-level education, among whom unemployment is high and who the census shows have low participation in agriculture. He recommended the tackling of some issues, such as adoption of new technologies, low
productivity in agriculture, lack of resources, among others, that have plagued the agricultural sector in order to attract more people and investments into agriculture. Currently, most agricultural holders use traditional tools and equipment for production, whereas the use of modern tools and equipment such as tractors, shellers, power tillers, meat processing equipment and milking equipment is negligible.
PIAC calls for review of PRMA, sends proposal to finance ministry Continued from cover by Parliament. Speaking in an exclusive interview with Business24, the Technical Director of PIAC, Mark Agyemang, said the proposal for the amendment is now at the ministerial level. He said, moving forward, PIAC needs to strengthen its assessment of how successive governments use the petroleum revenue received during their tenure as the country marks 10 years of oil production this year. According to him, the country has so far realised about US$6.2bn from oil production in the last 10 years. “In the next 10 years, we want to ensure the holding of US$600m in the heritage fund. So that the next generation who will not meet the oil will not feel disappointed in today’s generation,” he said. On whether PIAC has been receiving enough funds to
carry out its mandate, Mr. Agyemang told Business24 that the committee’s funding has improved since 2015, adding that government in 2018 secured
them a permanent office to operate from. He said Ghana has been transparent in its accountability for oil revenue since the country
started production some 10 years ago, a feat he said has not been achieved by many oil producing countries. “The knowledge that Parliament will summon you (the finance minister) to come and account alone makes it a good thing for accountability,” Mr. Agyemang said. The interview, which covered a wide range of questions about oil revenue management and the work of PIAC since its establishment in 2011, included questions about the role of GNPC in helping the country maximise the benefits of its hydrocarbon resources. Mr. Agyemang stated that PIAC wants Ghana National Petroleum Corporation (GNPC) listed on the stock exchange (GSE) to cede control and ownership of the national oil company to Ghanaians. The move, he added, will stop government interference in the affairs of the state-owned GNPC.
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News
WEDNESDAY FEBRUARY 10, 2021
Parliament suspends sitting following surge in covid cases By Eugene Davis
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arliament has suspended sitting after a number of covid-19 cases were recorded in the legislature. The Speaker of Parliament, Alban Sumana Bagbin, who announced the suspension said house is expected to resume on March 2. “Hon. Members, having regard to the upsurge of the coronavirus infection in the House now reading 17 MPs and 151 staff and ancillary workers in the precincts of Parliament, and the fact that the Appointments Committee is yet to commence consideration of His Excellency the President’s ministerial nominees, I have, in consultation with Leadership, decided that sitting of the house be adjourned for three (3) weeks. It is hoped that within this period of adjournment, the Appointments Committee would commence consideration and public hearing of the President’s nominees for Ministerial appointments. By the end of the
three weeks, the Appointments Committee would have submitted reports on the referral for the consideration of the House,” Mr. Bagbin said. He added that only the members
of the Appointments Committee, the Clerk to the Committee and other supporting staff who will be engaged in the task of considering the President’s nominees for ministerial appointments.
Legislators and staff are to re-submit themselves to the Parliament Medical Centre for re-testing after two weeks to ascertain their status before the resumption of the House.
Dissolve Covid-19 technical advisory team, Minority asks gov’t Continued from cover formed in 2020 and recompose a new team that is multidisciplinary, non-partisan and competent enough to direct the management of the virus in the country. Kwabena Mintah Akandoh, the immediate past ranking member on Parliament’s health committee, said at a press conference on Tuesday that President Nana Akufo-Addo and his technical team of advisors
have not demonstrated enough competence in handling the pandemic, “contrary to all they have been trumpeting”. He said rates of infection are increasing, technical guidelines on prevention and management are not being enforced, and contact tracing has been abandoned. As at February 8, Ghana’s confirmed Covid-19 cases stood at 71,533, with an active case count of 6,411 and 472 deaths recorded.
Mr. Akandoh said about 137, or 29 percent, of the deaths occurred only this year. “The trend of infections and deaths is worrying, and if nothing is done immediately to arrest the situation, our outturn with Covid would be a complete disaster.” Mr. Akandoh alleged that “in spite of the urgent need for contact tracing, it is currently at its barest minimum, with government not willing to engage contact tracers after suspending their services in
April of last year.” He further claimed that government has reneged on its promise to pay some frontline healthcare professionals their 50 percent allowances and also reneged on providing insurance packages for those who get infected or die in the line of duty. He called for increased routine surveillance and more contact tracing before the situation gets out of hand. He further urged the government to release enough funds to the Regional and District Health Teams to enhance contact tracing and case testing, and to pay all the monies promised health workers. Government should expand management facilities and build capacity to handle the many severe cases that are likely to be confirmed, he added, while schools should be adequately resourced and supported to make their environments safe from Covid-19. He also advised that the media be considered by the government and given enough financial and other resources to carry out public education on Covid-19.
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News
WEDNESDAY FEBRUARY 10, 2021
First National Bank offers fee-free banking to businesses
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irst National Bank has added to its growing list of innovative products with the introduction of free monthly service charge offer for all new business accounts. With this offer, the monthly charges on account maintenance and cheque instruments on all new business cheque accounts will be waived for three months. The offer enables small-to medium-size businesses or mid to large commercial businesses to enjoy three months of no service fee on the bank’s business cheque accounts in addition to a bouquet of digital business banking products and services. This is one of First National Bank’s strategies to help grow profitable and scalable businesses to stimulate economic growth amidst Covid-19 pandemic. Mark Achiampong, Head of Commercial and Business Banking at First National Bank explained that the offer is a timely proposition to help businesses to stabilise their cashflows for unexpected costs, especially for those who have been adversely impacted by the pandemic. “This is another industry first delivered by us at a very uncertain time for businesses, whether
small or big. We are waiving the monthly charges applicable to any business account for three whole months,” Mr. Achiampong says. “All you need to do is speak to us about the type of business you are running or want to start, and we will give you a range of packages to choose from, with the applicable terms and conditions. You enjoy all the benefits at no costs for the first three months. No bank has ever done this. Indeed, we are delivering the impossible and without a doubt, First National Bank is the partner you need to drive a successful business.” Mr. Achiampong added that existing clients will continue to enjoy First National Bank’s market-leading offers designed to enable businesses grow. “We have automated deposit terminals in all our 11 branches giving you 24/7 access to all our banking services, including deposits,” he says. “Trade services like global payments can be carried out on our robust digital platform. You can monitor your business activity in real time and reduce internal fraud with FREE inContact Pro, and Email Statements. Details of your
business transactions and email statements are all delivered to your inbox for free.” First National Bank’s innovative online banking enterprise platform provides business customers with secure, controlled, real-time access
to their accounts. Interested businesses can access this package by visiting any of the First National Bank Ghana branches in Accra, Tema, Kumasi and Takoradi or alternatively through firstnationalbank.com. gh for further assistance.
Subsistence farming still dominates the agriculture sector -- Agric Survey
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armers who cultivate crops and forest tree production on two acres and below still dominate the agriculture sector, the Ghana Census of Agriculture (GCA) 2017/2018, has revealed. The study said in the year 1970 the percentage of these proportion of farmers stood at 35 per cent but however increased to 56 per cent in the 2017/2018 census. Professor Samuel K. Annim, Government Statistician, who disclosed this during the opening of a dissemination workshop of GCA, said more than half of people actives in the sector were old. The study, according to him showed that agricultural activities in the country still remained rural and rudimentary with little innovation and modernisation. “Most agricultural holders use traditional tools and equipment for production whereas the use of modern tools and equipment such as tractors, shellers, power tillers, hatchery/incubator, meat processing equipment and milking equipment are negligible,” he said. “While fertilizer is not used by most holders, the use of
pesticides is highly prevalent among holders. Crop cultivation is predominantly dependent on rain and mortality in livestock is high,” he said. He noted that the study showed the educational level of people engaged in the agriculture sector was either up to basic education or no education with only 13 per cent of holders attaining secondary or higher levels of education. “With these low education among farmers, it will not fuel the growth of the sector because there is the need to adopt and apply modern technology. We are still engaged in rain-fed but need to move to go beyond that,” he said. The study, he said revealed that
many people owned farmlands in the year 1970 than in 2018. Prof Annim said there was a need for the financial sector to develop special long-term loan schemes to meet the needs of different categories of farmers and agriculture activities. “Currently most financial institution does not take into consideration the gestation period of different activities. Going forward our financial institutions need to design packages for cassava, cocoa, rice, maize…” he said. Such a credit package, he explained would attract the youth to engage in agriculture and grow the sector to reflect the phrase of “making the sector the backbone of the economy”.
Prof. Annim noted that the mangers of the country’s education needed to develop programmes in agriculture that would be practically based and linked to employment after completion. He said study served as a baseline to access policies including Planting for Food and Jobs, Building of Wear Housing, how it integrates with the onedistrict-one-factory and in the next National Census of Agriculture in the year 2024. Mr. Kingsley Agyei Boahene, the Central Regional Coordinating Director, said the findings of the GCA were critical for policymakers to better identify, prepare, implement and evaluate development projects aimed at enhancing agriculture in Ghana. He said the sector now had upto-date and reliable agriculture statistics for programming and monitoring food security and livelihood programmes, among others. Mr Boahen said the provision of data on the structure of agriculture in the country, was vital to the rebasing of Ghana’s Gross Domestic Product (GDP).
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Companies
WEDNESDAY FEBRUARY 10, 2021
Shell introduces Dynaflex Technology for enhanced engine efficiency
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ivo Energy Ghana, the Shell Licensee, has announced the biggest fuel portfolio launch ever in Ghana. The entire new Shell fuels portfolio, (Shell V-Power, Shell FuelSave Unleaded and Shell FuelSave Diesel) is now designed to enhance engine efficiency with its exclusive DYNAFLEX Technology. This new formulation helps clean and protect key components in vehicle engines, leading to better engine efficiency and performance. The fuels are designed to work with both modern as well as older vehicles. Shell is constantly evolving its fuel products in line with modern vehicle engine innovations and customer needs. The reformulation of all fuels across the entire portfolio is Shell’s biggest change in formulation. Shell’s new and advanced fuels are the result of extensive testing – over 3 million kilometres and more than 170 cars. Speaking at the launch of the new range of fuels, the Managing Director of Vivo Energy Ghana, Mr. Ben Hassan Ouattara,
Managing Director of Vivo Energy Ghana Ben Hassan Ouattara speaking at the launch of the new Shell fuels with Dynaflex Technology
emphasized the drive that the organisation has to constantly offer its customers the very best at Shell service stations. “We place customers at the heart of everything we do, and we aim to make their life’s journeys better. Our new Shell fuels help to clean and protect car engines, making them more efficient. These advanced Shell fuels are available all over Ghana and are also available to our commercial customers. We believe it is not just where you go, but also how you go that matters.” “The launch of these fuels is
under the platform GO WELL, which champions a positive and energised attitude to journeys and reminds customers that Shell supports them to keep exploring and living lives rich with experience. Our customers will have the opportunity to engage with our teams at Shell service stations countrywide and learn more about the efficiency that DYNAFLEX Technology is bringing to their vehicles.” Mr. Ouattara added: “We invite motorists to experience the benefits of our new fuels,
enhanced with our latest DYNAFLEX Technology, so that they can enjoy better journeys on the road. Whenever our customers visit our stations and walk into our convenience retail outlets; whether they need assistance, or are looking for a place to relax, refresh, and rejuvenate, we aim to be there for them. Whatever car you drive, wherever you are going, visit a Shell station to get the new fuels designed for efficiency and Go Well.” Special Guest of Honour, Rev. Dr. Joyce Rosalind Aryee in her speech, commended Vivo Energy for being the benchmark for innovation, quality and safety within the oil marketing industry and urged the company to continue to drive innovation, the industry to meet the changing needs of consumers. Shell FuelSave Unleaded and Diesel fuels are available at Shell service stations nationwide, and also available to industrial customers and commercial fleet owners through Vivo Energy Ghana Commercial Sales team. The new Shell V-Power fuel is available in selected Shell service stations in Ghana.
Covid-19: Sahara Group urges global action with #Reachoutthisvalentine campaign
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he 2021 Valentine’s Day celebration calls for collective action from all citizens of the world to reach out and make life better for others as we combat the Covid-19 pandemic, Andrew Laven, Chief Operating Officer, Sahara Energy Resources DMCC Dubai has said.
Sahara Energy is an affiliate of Sahara Group a multinational energy conglomerate with operations in Africa, Asia, Europe and the Middle East. Sahara recently initiated several activities to mark its 25th anniversary this year. Speaking while unveiling
Andrew Laven, Chief Operating Officer, Sahara Energy Resources DMCC Dubai
‘#Reachoutthisvalentine’ as Sahara Group’s focus for the 2021 Valentine celebration, Laven said cushioning the impact of the pandemic and ultimately defeating the virus required intervention by a “global coalition of responders”. “What we are witnessing across the globe is unprecedented in terms of the scale of grief and loss on account of the pandemic. When you add to this the fact that simultaneously, the world also must combat hunger, other diseases, and huge human development index gaps, it becomes clear that we must all support of one another. At Sahara Group, we believe that this year’s Valentine celebration presents the perfect platform for us to reach out and give others a reason to smile,” he stated. Laven said the ‘#Reachoutthisvalentine’ campaign will be celebrated across Sahara Group’s locations in Africa, Asia, Europe, and the Middle East. This will include
employee volunteer activities in the areas of education, health, environment, capacity building, and sundry donations to reinforce the fight against the pandemic. “Sahara Group is delighted to promote this campaign and we urge global participation, ultimately hoping that reaching out to others will be a way of life for individuals, businesses and nations across the globe.” “In Dubai, we will be supporting the local communities and organisations who are focused on those in greatest need,” Laven noted,” he added. The #Reachoutthisvalentine campaign will be coordinated by Sahara Foundation, the corporate responsibility vehicle for Sahara Group. The Sahara Foundation has over the years implemented and supported many projects with over 2,000,000 beneficiaries and operates as a global promoter of the Sustainable Development Goals. Global updates show that cobvid-19 cases currently stand at over 106,000,000 while more than 2,000,000 people have lost their lives tonthe pandemic.
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Report
WEDNESDAY FEBRUARY 10, 2021
Allianz Risk Barometer 2021: Covid-19 trio tops Ghana and global business risks
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trio of Covid-19 related risks heads up the 10th Allianz Risk Barometer 2021, reflecting potential disruption and loss scenarios companies are facing in the wake of the coronavirus pandemic.
2021, it’s the number one risk in 16 countries and among the three biggest risks across all continents and in 35 out of the 38 countries which qualify for a top 10 risks analysis. Japan, South Korea and Ghana are the only exceptions.
Business interruption (#1 with 41% responses) and Pandemic outbreak (#2 with 40%) are this year’s top business risks with Cyber incidents (#3 with 40%) ranking a close third. The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,769 experts in 92 countries and territories, including CEOs, risk managers, brokers and insurance experts. “The Allianz Risk Barometer 2021 is clearly dominated by the Covid-19 trio of risks. Business interruption, pandemic and cyber are strongly interlinked, demonstrating the growing vulnerabilities of our highly globalized and connected world,” says Joachim Müller, CEO of AGCS. “The coronavirus pandemic is a reminder that risk management and business continuity management need to further evolve in order to help businesses prepare for, and survive, extreme events. While the pandemic continues to have a firm grip on countries around the world, we also have to ready ourselves for more frequent extreme scenarios, such as a global-scale cloud outage or cyber-attack, natural disasters driven by climate change or even another disease outbreak.” The Covid-19 crisis continues to represent an immediate threat to both individual safety and businesses, reflecting why pandemic outbreak has rocketed 15 positions up to #2 in the rankings at the expense of other risks. Prior to 2021, it had never finished higher than #16 in 10 years of the Allianz Risk Barometer, a clearly underestimated risk. However, in
Market developments (#4 with 19%) also climbs up the Allianz Risk Barometer 2021, reflecting the risk of rising insolvency rates following the pandemic. According to Euler Hermes, the bulk of insolvencies will come in 2021. The trade credit insurer’s global insolvency index is expected to hit a record high for bankruptcies, up 35% by the end of 2021, with top increases expected in the US, Brazil, China and core European countries. Further, Covid-19 will likely spark a period of innovation and market disruption, accelerating the adoption of technology, hastening the demise of incumbents and traditional sectors and giving rise to new competitors. Other risers include Macroeconomic developments (#8 with 13%) and Political risks and violence (#10 with 11%) which are, in large part, a consequence of the coronavirus outbreak, too. Fallers in this year’s survey include Changes in legislation and regulation (#5 with 19%), Natural catastrophes (#6 with 17%), Fire/explosion (#7 with 16%), and Climate change (#9 with 13%), all clearly superseded by pandemic concerns. Ghana The top risks which concern businesses the most in Ghana are Macroeconomic developments as well as Fire, explosion are joint first with 40% of responses followed by Business interruption at #3 with 37% and Pandemic outbreak at #4 with 37#. Theft, fraud and corruption is a new entrant at #5 joint with Cyber incidents after going one level down from #4 last year. Pandemic drives disruption –
now and in future Prior to the Covid-19 outbreak, Business interruption (BI) had already finished at the top of the Allianz Risk Barometer seven times and it returns to the top spot after being replaced by cyber incidents in 2020. The pandemic shows that extreme global-scale BI events are not just theoretical, but a real possibility, causing loss of revenues and disruption to production, operations and supply chains. 59% of respondents highlight the pandemic as the main cause of BI in 2021, followed by Cyber incidents (46%) and Natural catastrophes and Fire and explosion (around 30% each). The pandemic is adding to the growing list of non-physical damage BI scenarios such as cyber or power blackouts. “The consequences of the pandemic – wider digitalization, more remote working and the growing reliance on technology of businesses and societies – will likely heighten BI risks in coming years,” explains Philip Beblo, expert in AGCS’s global Property underwriting team. “However, traditional physical risks will not disappear and must remain on the risk management agenda. Natural catastrophes, extreme weather or fire remain the main causes of BI for many industries and we continue to see a trend for larger losses over time.” In response to heightened BI vulnerabilities, many companies are aiming to build more resilient operations and to de-risk their supply chains. According to Allianz Risk Barometer respondents, improving business continuity management is the main action companies are taking (62%), followed by developing alternative or multiple suppliers (45%), investing in digital supply chains (32%) and improved supplier selection and auditing (31%). According to AGCS experts, many companies found their plans where quickly overwhelmed by the pace of the
pandemic. Business continuity planning needs to become more holistic, cross-functional, and dynamic, monitor and measure emerging or extreme loss scenarios, be constantly updated and tested and embedded into an organization’s strategy. Cyber perils intensify Cyber incidents may have slipped to #3 but it remains a key peril with more respondents than in 2020 and still ranking as a top three risk in many countries, including Brazil, France, Germany, India, Italy, Japan, South Africa, Spain, UK and the US. The acceleration towards greater digitalization and remote working driven by the pandemic is also further intensifying IT vulnerabilities. At the peak of the first wave of lockdowns in April 2020, the FBI reported a 300% increase in incidents alone, while cyber crime is now estimated to cost the global economy over $1trn, up 50% from two years ago. Already high in frequency, ransomware incidents are becoming more damaging, increasingly targeting large companies with sophisticated attacks and hefty extortion demands, as highlighted in the recent AGCS cyber risk trends report. “Covid-19 has shown how quickly cybercriminals are able to adapt and the digitalization surge driven by the pandemic has created opportunities for intrusions with new cyber loss scenarios constantly emerging,” says Catharina Richter, Global Head of the Allianz Cyber Center of Competence at AGCS. “Attackers are innovating using automated scanning to identify security gaps, attacking poorly secured routers or even using ‘deepfakes’ – realistic media content modified or falsified by artificial intelligence. At the same time, data protection and privacy regulation and fines for data breaches continue their upward trend.”
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Feature
WEDNESDAY FEBRUARY 10, 2021
Poor countries’ technology dilemma
By Dani Rodrik
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conomic development relies on the creation of more productive jobs for an ever-rising share of the workforce. Traditionally, it was industrialization that enabled poor countries to embark on this transformation. Factory work may not have been glorious, but it enabled farmers to become bluecollar workers, transforming the economy and society as a result. Many low-income countries in Africa and elsewhere hope to travel a similar path in the future. While none necessarily expects success on the scale of China and the East Asian tigers before it, industrialization and integration into global value chains are viewed as essential for achieving rapid economic growth – or restoring it after the COVID-19 pandemic – and creating a large number of jobs for Africa’s young population. Prior to the pandemic, African countries had already achieved some success in industrialization. Ethiopia has established an export-oriented garment and footwear sector, with help from Chinese and European investors. Tanzania has built a more resource-intensive manufacturing sector focused on serving domestic and regional markets. Recent research suggests that the premature de-industrialization to which the continent had been subject may have been halted or even reversed after the early 2000s. There’s a rub, however, in Africa’s manufacturing renaissance. Even where industrialization is putting down deeper roots, few good jobs have been created in the more
modern, formal, and productive manufacturing branches. In fact, the number of formal jobs has been stagnant, with the bulk of the increase in manufacturing employment coming from small, informal enterprises. This experience stands in stark contrast with that of the rapid industrializers of East Asia, such as Taiwan (during the 1960s and 1970s) or Vietnam (more recently), where the growth of manufacturing employment was concentrated in formal enterprises. The paradox is deepened when we look behind the aggregate numbers. In new research, Margaret McMillan of Tufts University, Xinshen Diao and Mia Ellis of the International Food Policy Research Institute and I have found a striking dichotomy in the performance of large versus smaller firms. In both Ethiopia and Tanzania, larger firms exhibit superior productivity performance but do not expand employment much, while small firms absorb labor but do not experience much productivity growth. The result is that these economies create few good jobs, while the benefits of productivity enhancements remain limited to a very small segment of manufacturing. Conventional explanations cannot account for this dichotomy. A poor business environment might explain low job creation but not the rapid productivity growth within the same firms. African wages are often thought to be high relative to productivity, but we find that payrolls’ share in total value added is exceedingly low in both Tanzania and Ethiopia, suggesting that labor costs are unlikely to
be a constraint. Moreover, low business dynamism is belied by the very high rates of entry and exit we observe in manufacturing. One important feature of larger manufacturing firms that may help account for the paradox is that they are excessively capital-intensive. In low-income countries such as Ethiopia and Tanzania, workers are plentiful and capital (machinery and equipment) is scarce and hence expensive. Standard economic theory predicts that production in such circumstances would be tilted toward more laborintensive techniques. Yet we find large firms in the manufacturing sectors of Tanzania and Ethiopia to be significantly more capital-intensive than these countries’ income levels or factor endowments would suggest. In fact, these firms are as capitalintensive as firms in the Czech Republic, even though the latter is roughly ten times as capitalrich as Tanzania and Ethiopia. It might seem irrational for businesses to use so much capital (along with complementary inputs such as skilled labor) in countries where the underlying comparative advantage is an abundance of less-skilled workers. But it is not clear they have much choice. Manufacturing technologies have become progressively more capitaland skill-intensive over time, responding to the factor prices in the major advanced economies. Technologies from the 1950s or 1960s may have been more laborintensive, but they will not help African firms compete in world markets today. And technologies used in global value chains appear to be particularly biased against unskilled labor.
This leaves African economies in a bind. Their manufacturing firms can either become more productive and competitive, or they can generate more jobs. Doing both at the same time seems very difficult, if not impossible. This dilemma is reminiscent of an old concern in the development literature on inappropriate technologies. Authors such as E.F. Schumacher worried in the 1970s that Western technologies favored large-scale, capital-intensive plants ill-suited to conditions in low-income countries. Such worries were swept away by the phenomenal expansion of manufacturing employment in export-oriented industrializing countries in subsequent decades. We may need to bring the idea back. Recent patterns of technological change in the advanced economies appear to have made it more difficult for low-income countries to develop and converge with income levels in the rest of the world. These changes have contributed to deepening economic and technological dualism even within the more advanced segments of developing countries’ economies. This is yet another reason for a public debate on the direction of technological change and the tools that governments have to reorient it. About the author Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy.
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WEDNESDAY FEBRUARY 10, 2021
Moving beyond Paris, India steps up its climate ambitions
By Harsh V. Shringla
F
ive years after the Paris Agreement, India is among the few developing countries that are not only meeting their “green” targets but are aspiring to more ambitious climate goals. At the recent Climate Ambition Summit, Prime Minister Narendra Modi articulated the Indian approach. He said that we must set our sights “even higher”, even as we do not lose sight of the past. He added that India would not only achieve its Paris Agreement targets, but would exceed them. At the U.N. Climate Action Summit in 2019, Modi said that an ounce of practice is worth more than a ton of preaching. We are taking practical steps across all areas, including energy, industry, transport, agriculture and protection of green spaces, in our whole-of-society journey to become a leader in climate action and climate ambition. India recognizes that climate change cannot be fought in silos. It requires an integrated, comprehensive and holistic approach. It requires innovation and adoption of new and sustainable technologies. Conscious of these imperatives, India has mainstreamed climate in its national developmental and industrial strategies. Energy is at the center of all
climate strategies. We believe India has become a clean energy powerhouse and is a leader in energy transition from carbon dioxide-producing sources to renewables and non-fossil-fuel sources. We intend to keep harnessing India’s renewable energy potential. Our renewable energy capacity is the fourth largest in the world and the capacity expansion being undertaken is also one of the largest in the world. The bulk of this will come from the cleanest energy source, the sun. We are seeing progress already. We initially committed to 175 GW of renewable energy capacity by 2022. We have gone further and expect to cross 220 GW in the next two years. We have an even more ambitious target of 450 GW by 2030. We are working to ensure that 40% of electric power in India is from non-fossil fuel sources by 2030. This clean energy push goes hand-in-hand with a parallel effort to reduce the emissions intensity of our economy by 3335% (from 2005 levels) by 2030. The Ujala scheme – a national drive to use LED lamps – is reducing CO2 emissions by 38.5 million tonnes every year. The Ujjwala scheme, under which over 80 million households have been provided access to clean cooking gas, is one of of the largest clean energy initiatives in
the world. Climate action and sustainability is being brought into government schemes across multiple sectors. Our Smart Cities Mission is working with 100 cities to help them become more sustainable and adaptable to the challenges of climate change. The National Clean Air Programme aims to reduce air pollution (PM2.5 and PM10) by 20-30% in the next four years. The Jal Jeevan Mission, which aims to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in rural India, has a strong sustainability focus. More trees are being planted and degraded land is being reclaimed to create a carbon “sink” that can absorb 2.5-3 billion tonnes of CO2. We are also working rapidly to create a green transport network, to offset a sector known for its polluting emissions particularly in our big cities. India is building nextgeneration infrastructure such as mass transit systems, green highways and waterways. A national electric mobility plan is creating an e-mobility ecosystem with the aim to have over 30% of all vehicles on India’s roads to be electric. These initiatives are for our own good as India is among the countries most vulnerable to the
impact of climate change. We recognise there is still a long way to go but these efforts are already paying dividends. India’s emission intensity has reduced by 21% over the period 2005-2014. Over the next decade, we are expecting even greater reductions. India intends to be a responsible global citizen in the climate space. We are not only going beyond our Paris Agreement commitments. We are adopting innovative instruments to further international cooperation in climate action. We have created international organisations like the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure that are working on creating global lowcarbon pathways. More than 80 countries have joined the International Solar Alliance, making it one of the fastestgrowing international bodies. This combination of national action and responsible international citizenship makes India unique amongst developing countries and is placing it on the path to realise its ambitions to be a leader in thought and action on climate. About the author Harsh V. Shringla Foreign Secretary.
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India’s
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WEDNESDAY FEBRUARY 10, 2021
e-Crime Bureau reconstitutes and inaugurates new board e-Crime Bureau, Ghana’s leading cybersecurity and digital forensics firm, has reconstituted and officially inaugurated its Board of Directors to steer the vision and achieve the strategic targets set for the organisation for the next five (5) years. The 7-member Board will be chaired by Ing. (Dr.) Kenneth Ashigbey, who is currently the Chief Executive Officer of the Ghana Telecommunications Chamber. He was the former Managing Director of Graphic Communications Group Ltd and also a former Chief Technology Officer of the Multimedia Group Limited. The brief ceremony which took place at the City Escape Hotel located at the Airport Residential Area, Accra was organised as a closed event in full compliance with Covid-19 protocols. The formal swearingin of the Chairman and members of the Board was administered by Her Ladyship Justice Rebecca Naa Shormeh Sittie, a High Court Judge. Other individuals appointed by the shareholders to serve on the Board include Dr. Kwame Antwi-Boasiako, Director of Audit, Judicial Service of Ghana; Bishop (Dr.) Suzanne Nti, Chief
Operations Officer (COO) of Action Chapel International; COP/ Mr. Ken Isaac Yeboah, DirectorGeneral, Criminal Investigation Department (CID), representing the CID as part of the institutional arrangements of the Board since 2015, Mr. Mark Badu-Aboagye, CEO, Ghana National Chamber of Commerce and Industry (GNCCI) and Major-General Francis Ofori, Commandant, representing the Kofi Annan International Peacekeeping Training Centre (KAIPTC) as part of the Bureau’s collaboration with the KAIPTC; Mr. Philemon Hini, the Ag.
Principal Consultant of e-Crime Bureau is another member on the Board. The new Board recognised the immense contributions of the immediate past Board which was chaired by the late Mr. D.K. Mensah (former CEO of the Ghana Association of Bankers) who together with other members brought significant success to the performance and growth of the Bureau. In his remarks after the official swearing-in, the new Board Chair, Ing. (Dr.) Kenneth Ashigbey appreciated the strides
made by e-Crime Bureau as the company celebrates its 10th year of existence this year and tasked members to be challenged by the successes chalked over the years to bring onboard their rich professional experience and network to support the Bureau to implement the strategic initiatives to achieve target results set for the next five years. e-Crime Bureau was established in 2011 and has since inception contributed immensely to the delivery of cybersecurity, digital forensics and allied services to its clients and stakeholders. This has culminated in receiving Cyber Security Company of the Year Awards for three consecutive years - 2018, 2019 and 2020. In the year of its 10th anniversary, the Bureau seeks to enhance its corporate governance structures, introduce innovation and customized cybersecurity solutions to support businesses and institutions. The Bureau will particularly dedicate strong focus to support SMEs to achieve the desired cybersecurity goals. The Bureau provides services including cyber security, cyber forensics, intelligence & investigations, financials/AML and technology solutions to its clients.
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