Business24 Newspaper - July 15, 2020 by Business24 Online

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WEDNESDAY JULY 15, 2020

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Fiscal deficit seen near 10% of GDP Gov’t seeks to amend Minerals Income Fund law BY EUGENE DAVIS

MORE ON PG 3

ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

USD$1 =GHC 5.6230*

*POLICY RATE

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

6.6 % OF GDP

PROJECTED GDP GROWTH RATE PRIMARY BALANCE.

1.5% -1.1% OF GDP

AVERAGE PETROL & DIESEL PRICE:

GHc 5.13*

INTERNATIONAL MARKET BRENT CRUDE $/BARREL

42.30

NATURAL GAS $/MILLION BTUS

1.78

GOLD $/TROY OUNCE

1,685.06

CORN $/BUSHEL

329.50

COCOA $/METRIC TON

2,384.00

COFFEE $/POUND:

+5.70 ($108.30)

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

editor@thebsuiness24online.net

17.07

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NEWS/EDITORIAL

WEDNESDAY JULY 15, 2020

EDITORIAL

Miners need support to survive COVID-19 Miners need COVID-19

Wash your hands 2

support to survive

The COVID-19 pandemic has affected the operations of many sectors. Many companies have had to lay off some staff to reduce their overhead costs and switch to survival gear. The mining industry is one of the sectors that has been heavily impacted by the current pandemic. Indeed, a survey by global law firm White & Case of senior mining and metals decision-makers has revealed that the fear of a global recession was the top concern in the post Covid-19 economy.

Cover your cough 3

The survey, which included responses from a record 67 senior decision-makers, also saw 39% of respondents citing global market weakness as the largest threat to the industry, in stark contrast to the

sentiment in January, where trade tensions were deemed the biggest risk. “After an encouraging start to the year, the global economy has been struck by the unprecedented force of the coronavirus pandemic. Given most mineral commodities’ dependence on global growth, combined with mine-level shutdowns and the sector’s reliance on functioning global supply chains to bring products to market, much of the mining and metals space was hard hit early on,” the report stated. In Ghana, some miners have advocated for tax holidays and extension of the deadline for permit renewals. These proposals are worth considering, given the importance of the sector to the country’s economy.

Meanwhile, precious metals were the standout performers in 2020 so far, but also the most likely to be the subject of mergers and acquisitions activity, while traditional metals were expected to show the strongest resilience. Post the pandemic, more than a quarter of the respondents stated that building resilience would be the main priority in the second half of the year, with efficiencies and productivity gains coming in second at 18% each. Furthermore, 80% of respondents were of the opinion that environmental, social and corporate governance would play a greater part in investors’ decision-making and lure more generalist investors, bringing a potential ‘green recovery’.

Fiscal deficit seen near 10% of GDP Wear a mask Brought to you by

LIMITED Copyright @ 2019 Business24 Limited. All Rights Reserved. Editorial Team Dominic Andoh: Editor Eugene Kwabena Davis (Head of Parliamentary Business & Commodities) Benson Afful (Head of Energy & Education) Patrick Paintsil (Head of Maritime & Banking) Nii Annerquaye Abbey (Online Editor) Marketing Alexander Lartey Agyemang (Business Development Manager) Ruth Fosua Tetteh (Dept. Business Development Manager) Gifty Mensah (Marketing Manager) Irene Mottey (Sales Manager) Edna Eyram Swatson (Special Projects Manager ) Events Evelyn Kanyoke (Snr. Events Consultant) Finance/Administration Joseph Ackon Bissue (Accountant)

(…CONTINUED FROM COVER )

are expecting a between 8 to 10 percent budget deficit,” he said. While the Fiscal Responsibility Act caps government’s budget deficit for a fiscal year at 5 percent of GDP, given the massive scale of the pandemic’s shock, Finance Minister Ken Ofori-Atta has already said that the ceiling would have to be set aside for at least this year. According to Dr. Acheampong, despite the act making provision for the cap to be aside in times like this, the legislation fails to indicate how the country would navigate its way out of the wider-thanexpected deficit. “In the law, there is a bit of room to trigger some of these emergency provisions, but there is no additional detail on how you actually go about doing this and how far you can go to spend your way out of the crisis,” he added. Rationalisation Dr. Acheampong argued that initiatives like the Nation Builders Corps (NABCO), which provides stopgap employment to about 100,000 graduates, need to be reassessed in order to create more value as well as make more savings to create more fiscal room.

“A programme like NABCO can and should be reviewed because it has been implemented for a number of months now, especially in a situation where you are facing significant budget gaps,” he said.

He mentioned that other costly initiatives like the Free Senior High School, however, may be difficult to rationalise regardless of the dwindling revenues, as the policy remains one of the flagship government programmes.

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Gov’t seeks to amend Minerals Income Fund law BY EUGENE DAVIS

A bill to amend the Minerals Income Investment Fund (MIIF) Act has been laid in parliament and referred to the Finance Committee for consideration and report. The aim of the amendment is to clarify the parameters for the operation of the fund, which was established in 2018. The fund was set up to manage the equity interests of the state in mining companies, to receive mineral royalties and other related income due the state from mining operations, and to provide for the management and investment of the assets of the fund. The ultimate objective is to maximise the value of the income due the state from the mineral wealth of the country for the benefit of citizens, by monetising the minerals

income accruing to the state in a beneficial, responsible, transparent, accountable and sustainable manner. In the existing act, the fund may create and hold equity interests in a Special Purpose Vehicle (SPV) in any jurisdiction in furtherance of its objects, and the SPV shall be free to operate as a regular, commercial company. The President, Nana AkufoAddo, in 2019 inaugurated a nine-member board to manage the fund. He urged the board to use the financial resources entrusted to them to raise indigenous players in the mining sector, which hitherto has been dominated by international corporations. He observed that after a century of mining in Ghana, the industry could not boast of a dominant local player and indicated that the situation was not good enough.

Dr. Mark Assibey-Yeboah chairs the Finance Committee of Parliament. His committee will submit a report on the bill to the plenary for debate.

Tax appeals board to cost gov’t GH¢2.5m in first year BY EUGENE DAVIS

The establishment of an independent tax appeals board, under the Revenue Administration (Amendment) Bill 2020, to hear and determine appeals against tax decisions made by the CommissionerGeneral of the Ghana Revenue Authority (GRA) is estimated to cost government GH¢2.5m for the first year, a parliamentary report has noted. In pursuit of measures that will improve revenue administration and tax compliance in Ghana, the government has proposed the introduction of an alternative dispute resolution mechanism to resolve tax disputes. Alternative dispute resolution is widely accepted as the best and most cost-effective approach to resolving tax disputes. The establishment of

the independent tax appeals board to hear tax matters prior to adjudication in the courts is expected to instill confidence in investors and reduce the time spent on litigation for both taxpayers and revenue administrators. Moving for the adoption of the report during the second reading of the bill, a deputy finance minister, Kwaku Kwarteng, said the bill also seeks to promote voluntary tax compliance and will introduce a voluntary disclosure programme, whereby taxpayers who voluntarily file their taxes, or voluntarily disclose errors or omissions on their filed tax returns, would not be made to pay any penalties that would otherwise have resulted. This is expected to lead to an increase in the number of corrected returns and of registered taxpayers, especially individuals.

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GCB fixes July 30 for its Annual General Meeting GCB Bank Ltd has set Thursday, July 30, 2020 for the holding of its Annual General Meeting (AGM) virtually on at the GCB Head Office in Accra. This year’s meeting is highly anticipated by shareholders and industry players due to the ravaging effects of the Covid-19 virus and GCB Bank’s status as Ghana’s largest indigenous bank. The AGM is being held in compliance with Imposition of Restriction Act 2020 (Act 1012), the Registrar General’s Department and Securities and Exchange Commission directives and guidance on holding virtual Annual General meeting (AGM), and as such attendance and participation by members or their proxies in this year’s annual general meeting of the Bank, shall be strictly virtual. A notice published on Tuesday, July 7, 2020 the Bank explained that a unique token number will be sent to shareholders by email and/or SMS from July 13, 2020 to give them access to a unique portal created for the AGM; https://www.gcbbankagm. com where they can input their unique token number to join in

and vote electronically during the meeting. The Bank requested that shareholders who do not receive the token are to contact the GCB Bank Limited Share Registry on: shareregistry@gcb.com. gh or call 0302-668712/ 02443 3 8508/024 4 -35 85 14/024 4 318079. The notice also urged shareholders who intend to appoint proxies are to download a proxy form from the AGM web portal, fill and submit via: shareregistry@ gcb.com.gh not less than 48 hours before the meeting. The AGM Proceedings would be transmitted live on GTV at 10:00GMT and also streamed via https://gcbbankagm.com and across all GCB Bank’s social media platforms. Principal items on the agenda for this year’s AGM include the consideration and adoption of the Financial Statement of the Company for the year ended December 31, 2019, the declaration of a dividend and re-election of Directors among other important matters.

Ghana elected vice chair of UNCITRAL The Republic of Ghana has been elected as the Vice Chairman of the United Nations Commission on International Trade Law (UNCITRAL) for 2020-2021. The election took place during UNCITRAL’s 53rd Session held on July 6 in New York, USA. UNCITRAL is the core legal body of the United Nations system in the field of international trade law. A legal body with universal membership specialising in commercial law reform worldwide for over 50 years, UNCITRAL’s business is the modernisation and harmonisation of rules on international business. UNCITRAL has been active in negotiating and producing texts, including conventions, model laws and legislative guides in a range of subject areas. There are currently six Intergovernmental Working Groups within UNCITRAL negotiating texts in the following areas: micro, small and mediumsized enterprises; arbitration and conciliation; investor-state dispute

settlement reform; electronic commerce; insolvency law; and judicial sales. UNCITRAL seeks to create a harmonised and efficient system of international trade law as the necessary framework for the safe and stable development of trade and investment. Alan Kyerematen, the Minister for Trade and Industry, indicated that the government has been working with colleague member states within the trade and investment ecosystem across the world to promote international trade, particularly intra-Africa trade. Ghana will therefore use its oneyear mandate to boost productive capacity and promote intraAfrica trade and investments, as countries seek to implement post-COVID economic recovery programmes and interventions. Prof. Paul Kuruk, an international trade law expert and the Deputy Chairman of the Ghana International Trade Commission (GITC), will represent Ghana as the Vice Chair of UNCITRAL.

WEDNESDAY JULY 15, 2020

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Energy sector procurement processes sleazy

BY INSTITUTE FOR ENERGY SECURITY (IES)

he manner in which independent power producers (IPPs) were engaged to shore up Ghana’s installed power capacity particularly during the 2012-2016 power crises, remain an issue that would be discussed for a very long time. The structure of power purchase agreements (PPAs) signed during this period is still blamed as contributor to the power sector debts. Also, the process by which Ghana’s Energy Ministry sought to contract a third party to take over the operation of the AMERI power plant in July 2018 is known to have nearly caused the country over US$1 billion for needless work. The lack of due diligence characterizing the re-negotiated agreement would have overburden the Ghanaian with a high cost of electricity, had the takeover been allowed to pass. Talk of the botched PDS-ECG deal. It brought the country a lot of embarrassment, and huge financial costs. Even though the Millennium Development Authority (MiDA) is said to have undertaken a competitive procurement process to select Manila Electric Co. (Meralco) to manage, operate and invest in Electricity Company of Ghana’s (ECG’s) operations for 20 years through a Concessionaire agreement, the waiver of

substantial number of the conditions precedent, committing them as conditions subsequent, created a mess for the country. In the process, the PDS consortium took over the assets of the ECG, failing to carry out adequate “due diligence” to identify risks, and implement strategies to protect the assets of ECG before closing the contract. These are but few examples of questionable procurements that have taken place in the country’s energy sector. They are just a few of the many reasons why the procurement processes in the energy sector must be improved to identify and select suitable service and goods providers. It is important because the sector assumes more significance due to the vital role of oil, fuel, or power et cetera to the economy. These commodities are deemed as enablers to goods and services that spur growth, achieve macroeconomic stability, and reduces poverty levels. Because there would constantly be the need for investments in the power and petroleum sectors via varied projects to ensure sustainable and costeffective supply of these essential commodities, policy and decision makers must make it a point to improve on current processes to derive value for money at all times. As it stands now, the sector’s procurement process often gives way to non-transparency and political interventions. Most often the sector have turned to solesourcing/restrictive tendering,

and other doubtful methods, as against other transparent procurement models and methods to select vendors who are most fit to perform a given undertaking. Decision-makers within the energy space must appreciate the potential value of the procurement function, and shy from traditional methods of sourcing for contractors. Procurement must be seen as a strategic function, aimed at improving organizational profitability, minimizing costs, and identifying better supply sources. Transparency, objectivity, fairness, time and cost-effective decision making are essential ingredients in procurement procedures, for a proper economic system in which prices are determined by unrestricted competition. Once the conditions of the competitions are set, the one issuing the bid and the bidders are required by law to keep to the rules to deliver a fair and transparent rankings. Any opportunistic behaviour may only seek to “game the system”. These are some of the basis why procurement remain a significant source of risk for key sectors of the economy, including the energy sector. Contractors and public officials must not see the qualifying procedures they are obliged to follow as time consuming and wasteful. The qualification, together with the evaluation criteria, largely influences the end result of the tender process and the success of the project. Lack

of experience and expertise on the part of handlers may result in inappropriate handling of the procurement process. Also, the professional ability of the contractor chosen to execute a project may impact on the overall success of the project; that is keeping the schedule within the estimated costs, time and quality. Procurement handlers must therefore maintain a sufficiently competitive environment instead of resorting to restrictive tendering, because it can be assumed that the prices and capability achieved in the competitive tender will decrease with the increase of the number of bids submitted. Restrictive tender is known to promote corruption and cronyism, kills transparency, leads to the high cost of services arrangement, and ultimately does not does not yield “value for money”. It takes only sound procurement practices to augment respect for energy sector organizations, while at the same time, attracting additional investments into the country’s energy space. The Institute for Energy Security (IES) is a not-for-profit organization which focus on the nexus between energy demand and energy supply. It sets the platform for research and publication, debates, discussions, conferences, consultancy, policy advocacy, training ― as a conduit to reinforce the global energy systems. Contact: +233 50 987 5998 | +233 24 459 9591. Email: info@iesgh.org. www.iesgh.org

WEDNESDAY JULY 15, 2020

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Strengthening CSO’s capacities for effective stakeholder engagement in biodiversity conservation in West Africa

BY LEANDRE BANON AND WHITNAY SEGNONNA

he Upper Guinean Forest of West Africa considered as one of the “global biodiversity hotspot” due to its exceptional concentrations of endemic flora and fauna species. This natural treasure has lost more than eightyfour per cent (84%) of its original forest extent within a half century. Côte d’Ivoire, a key global diversity hotspot of Upper Guinean Forest has lost 13.5 million hectares or 85 percent forest coverage since its independence in 1960. In 2017, environmental organisation Mighty Earth reported that “despite Ivorian laws prohibiting land clearing in national parks and other protected areas, as much as 90 percent of Côte d’Ivoire’s protected landmasses have been converted into cocoa plantations.” The degradation of West Africa’s biodiversity hotspot is due to subsistence and commercial agricultural expansions, urban, industry and infrastructure expansions, unsustainable logging and fishing, hunting and trade of bush meat, industrial and artisanal mining, climate change, and pollution. These threats have increased the destruction and extinction of the terrestrial, freshwater, and other ecological interactions across West Africa. This is linked either directly or indirectly to a high

incidence of poverty, political instability and/or civil conflict. It further exacerbates conflicts and undermines peace and stability in West Africa, a region that has only recently emerged from decades of violent conflict. Though civil society organisations (CSOs) have significantly contributed in addressing a wide array of rights-based topics in West Africa, they still have an essential role to play in complementing governments’ work and raising awareness on the protection of West Africa’s biodiversity hotspots. However, given the broad scope and rapid development of emerging conservation issues like climate change, CSOs, particularly those operating at grassroots and subnational levels, are often under-resourced and face critical capacity constraints to exert influence. Experiences have shown that major CSO’s capacity constraints include challenges with their governance systems and management practices, financial accountability, donor grants reporting and communication. Other operational challenges that plague civil society include poor documentation, policy advocacy and government engagement as well as the private sector. Therefore, there is a critical need to provide governance and technical support to key local CSOs to aptly promote biodiversity conservation in the hotspot and catalyse climate change mitigation and adaptation.

In response to this situation, the West Africa Civil Society Institute (WACSI) was selected by the Critical Ecosystem Partnership Fund (CEPF) to implement the programme “Strengthening CSO’s capacities for effective stakeholder engagement in biodiversity conservation project”. The project seeks to strengthen the institutional and operational capacities of 17 CSOs from Cote d’Ivoire, Guinea, and Sierra Leone. Through this programme, the organisations will be equipped to effectively engage and advocate for the development and implementation of national frameworks, policies and regulations for climate change mitigation and adaptation, that would meet national needs for development and environmental sustainability. “JVE Côte d’Ivoire welcomes with great pleasure and enthusiasm this training that will support the strategic restructuring of our organisation. After more than 10 years of existence, our organisation faces a challenge, but, with WACSI we wish to cross this bridge of the reinvention of our actions for the well-being of the environment in Côte d’Ivoire”, explains Ms. Larissa YAPO, Executive Director, JVE Côte d’Ivoire, one of the six organisations selected from Côte d’Ivoire. The project will offer a series of capacity strengthening activities to participating organisations, in four phases including (1) training;

(2) mentoring and coaching; (3) support to apply for small grant proposal; and (4) documentation of change stories and lesson learnt. It is envisaged that the project would lead to an improved organisational productivity and strengthen the resultsbased management skills of the participating organisations. Participating organisations would also enhance their capacity to develop and institutionalise appropriate financial management tools and policies. “We hope to strengthen our fundraising, financial and human resource management skills, and build an effective organisation to respond to both national and regional needs for better environmental, human and natural resources management,” notes Darius Barrolle, Executive Director, GREENLIFE West Africa, one of the five organisations from Sierra Leone. The project would also equip the participating organisations with relevant knowledge and skills to influence decision-making and policies at the local and national level and improve their capacities to effectively communicate impact and success stories. The Critical Ecosystem Partnership Fund (CEPF) is a joint initiative l’Agence Française de Développement, Conservation International, the European Union, the Global Environment Facility, the Government of Japan and the World Bank. A fundamental goal is to ensure civil society is engaged in biodiversity conservation. The West Africa Civil Society Institute (WACSI) was created in 2005 to strengthen the institutional and operational capacities of civil society across West Africa. The Institute seeks to promote and facilitate dialogue and collaboration between and among civil society, government and the private sector in the pursuit of good governance, democracy and development in the region. Since it became operational over twelve years ago, the Institute continues to operate a three-pronged strategy to bridge institutional and operational capacity gaps, including; 1) Capacity Development; 2) Knowledge Management; and 3) Policy Influencing and Advocacy. Thus, far WACSI’s programmes have benefitted 4,535 development practitioners from 3,798 civil society organisations across and beyond West Africa.

WEDNESDAY JULY 15, 2020

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Still No Care for Care Workers

BY JAYATI GHOSH

hose who thought that a pandemic would make everyone realize the crucial role of care workers should think again. With the coronavirus still spreading rapidly, frontline workers are more essential – and at greater risk – than ever, yet public attention has shifted elsewhere. Worse, as economies collapse and labor-market conditions deteriorate, employers in the private and public sector alike have grown more cynical in their treatment of essential workers. Far from instilling a deeper appreciation for their employees, the pandemic-induced surge in unemployment has enabled employers to exploit workers even more. Capitalism has always had an uneasy relationship with care work. Although capitalist production relies heavily on unpaid and underpaid labor performed by women, migrants, and other disadvantaged social groups, it has historically pushed that work off the books and underground, into informality. As a result, all the varied tasks associated with social reproduction are barely recognized, much less rewarded or remunerated. Because so much care work is performed for free by women and girls within families and communities, it is simply taken for granted and, because it is outside the market, not counted as economic activity.

Unpaid work performed by women who have no other choice thus creates a vicious cycle of devaluation. When women do enter labor markets, their wages tend to be lower than those of men, not only because they are willing to work for less, but also because so much of their work is available for free. Hence, occupations dominated by women – such as in the care sector – tend to be lower paid; even men doing similar work suffer a wage penalty. In the case of health care, there are additional occupational hierarchies to navigate, from highly paid “professionals” like specialist physicians down to nurses, ward attendants, and cleaners. Unsurprisingly, the gender balance within each occupation changes as one goes down the pecking order, with women concentrated in the lowerstatus, worst-paid positions. Globally, women hold 70% of all health-care jobs. But they are more likely to be nurses, midwives, and community health workers, while men comprise a disproportionate share of better-paid occupations like surgeons, physicians, dentists, and pharmacists. Community health workers are perhaps the most exploited of all health workers, especially in developing countries. Often, they are not recognized as workers at all, but rather as “volunteers” (as is true in India). As such, they rarely benefit from formal contracts that provide job security and a fair wage, let alone protections like health care. Women health-care workers are also more at risk in the current

pandemic, because they are more likely to be involved in activities that require close physical contact with patients. For a brief period after the pandemic first erupted, these workers were widely recognized for their critical contributions to society. Around the world, political leaders and members of the public applauded essential workers, singing their praises from balconies and leaving flower bouquets outside hospitals. But while health-care workers at all levels were rightly described as “heroes,” that seems to have represented the extent of their reward. The public acclaim has not translated into better working conditions or higher wages, and certainly not systematic efforts to ensure their physical safety during the pandemic. For example, in the United States, a brief period during which some companies offered their frontline workers slightly higher wages was soon followed by reversion to the norm: wages returned to their previous lows – and sometimes went lower. Similarly, in the United Kingdom, Prime Minister Boris Johnson thanked the immigrant nurses – “Jenny from New Zealand,” “Luis from Portugal” – who saved his life when he was hospitalized with COVID-19. But then he had no problem trying to slap a surcharge on immigration fees (ironically for the purpose of funding the National Health Service). The situation in developing countries is even worse. Governments faced with falling tax revenues are practicing

austerity in the midst of a health emergency and recession, slashing non-COVID-19 health spending, forcing pay cuts and longer hours on health workers, and avoiding the expense of procuring personal protective equipment. So blatant is the official disregard for essential workers that doctors and nurses in India have threatened to resign, while health workers in the Democratic Republic of the Congo have gone on strike after months of working without pay. Likewise, the needs of underpaid and vulnerable sanitation workers have been systematically ignored. Decades of public neglect and underspending have brought us to the point that even an unprecedented global health emergency and economic collapse are not enough to make mistreatment of low-paid essential workers socially and politically unacceptable. If our societies are to survive at all, something will have to shake us from our complacency. Essential care workers deserve real pay and protections, not more lip service. Our applause is no longer enough to keep them keeping us safe.

Jayati Ghosh is Professor of Economics at Jawaharlal Nehru University in New Delhi, Executive Secretary of International Development Economics Associates, and a member of the Independent Commission for the Reform of International Corporate Taxation. Copyright: Project Syndicate, 2020. www.project-syndicate.org

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Saving Generation COVID BY ABIY AHMED & GORDON BROWN

During the COVID-19 crisis, lockdowns and other socialdistancing rules have forced schools worldwide to shut their doors, locking out a peak of 1.6 billion children. Unless the international community acts now, the consequences for this generation – especially its poorest members – will be severe and long-lasting. The oft-repeated idea that COVID-19 is “the great equalizer” is a myth. There is no equality of suffering or equality of sacrifice during a pandemic that is disproportionately hurting the poorest and most vulnerable. And while the health emergency has disproportionately harmed the elderly poor, the unprecedented education crisis caused by the pandemic is now hurting the poorest children hardest and creating a generation that will lose out on learning. Lockdowns and other social-distancing rules have forced schools all over the world to shut their doors, affecting a peak of nearly 1.6 billion children. But while wealthier children have had access to alternatives, such as online learning, the poorest do not. The world’s least-advantaged children – for whom education offers the only escape route from poverty – have thus fallen further behind, placing the Sustainable Development Goal 4 (SDG 4) of ensuring inclusive and equitable quality education for all by 2030 even further out of reach. Even before the pandemic, the world was falling short of this goal. Globally, nearly 260 million children were out of school, and 400 million dropped out after the age of 11. In some regions, such as rural Sub-Saharan Africa, few girls were completing secondary school, not least because of widespread child marriage. Nearly 50 countries have no laws banning child marriage, and many more fail to enforce their bans. As a result, about 12 million school-age girls are forcibly married off each year. When schools reopen, there is a good chance that many poor children will never return. Poverty is the biggest reason why children don’t attend school, and the economic repercussions of the COVID-19 crisis will far outlast lockdowns, especially for the poorest people. The likely result is that more children will be pushed into the ranks of the 152 million schoolage children forced to work, as 14 countries still have not ratified the International Labor Organization’s minimum-age convention. And even more girls will be forced into early marriage. When the West African Ebola epidemic that started in 2014 closed schools in Sierra Leone, the number of 15-19-year-old-girls who were pregnant or already mothers nearly doubled, rising from 30% to 65%. Most of these girls never

returned to school. With the right policies in place, economies will start to recover, jobs will slowly be restored, and social-protection policies will ease the poverty of the unemployed. But there is little protection against the effects of a foregone education, which can last a lifetime. As it stands, more than half the world’s children – nearly 900 million boys and girls – are unable to read a simple text by age 10. That is 900 million children who do not receive the knowledge and skills needed to improve their economic lot as adults. If we do nothing to help “Generation COVID” make up for lost time, that figure could easily approach one billion or more. When schools in Kashmir closed for 14 weeks in the aftermath of the devastating 2005 earthquake, the most affected children lost the equivalent of 1.5 years of learning. As the recently published UNESCO Global Education Monitoring Report advises us, children who have fallen behind need the kind of catch-up programs that in Latin America have increased educational attainment by up to 18 months since the 1990s. But the needed support will cost money. Unless we bridge the gap in education funding, SDG4 will remain out of reach. UNESCO estimates that before the COVID-19 crisis, 50 countries were failing to spend the recommended minimum of 4% of national income, or 15% of the public budget, on education. Inadequate funding from governments and donors has meant that many of the 30 million refugee and forcibly displaced children age out of education without ever setting foot in a classroom, despite the efforts of Education Cannot Wait and other groups. Now, the pandemic is set to squeeze education budgets even further. As slower or negative growth undermines tax revenues, less money will be available for public services. When allocating limited funds, urgent lifesaving expenditure on health and social safety nets will

take precedence, leaving education underfunded. Likewise, intensifying fiscal pressure in developed countries will result in reductions in international development aid, including for education, which is already losing out to other priorities in the allocation of bilateral and multilateral aid. The World Bank now estimates that, over the next year, overall education spending in low- and middle-income countries could be $100-150 billion lower than previously planned. This funding crisis will not resolve itself. The quickest way to free up resources for education is through debt relief. The 76 poorest countries must pay $106 billion in debt-service costs over the next two years. Creditors should forgive these payments, with a requirement that the money is reallocated to education, as well as health. At the same time, multilateral financial institutions and regional development banks must increase their resources. The International Monetary Fund should issue $1.2 trillion in Special Drawing Rights (its global reserve asset), and channel these resources toward the countries that need them most. The World Bank, for its part, should unlock more support by replenishing the International Development Association (or borrowing on the strength of it) for low-income countries, and by using guarantees and grants from willing aid donors, such as the Netherlands and the United Kingdom, which stand ready to unlock billions in extra finance for education in lowermiddle-income countries through the International Finance Facility for Education. In the next few days, both NGOs and all international education organizations will begin “back to school” campaigns. Save Our Future, a new campaign launching in late July, advocates building back better, rather than restoring the pre-pandemic status quo. That means updating classrooms and transforming

curricula, implementing effective technologies, and helping teachers offer personalized instruction. Making schools safer (over 620 million children lack basic sanitation services at their schools, which particularly affects girls) and ensuring school meals (a lifeline for 370 million boys and girls) would also ease the effects of poverty and improve educational outcomes. Save the Children will add to this pressure with its own grassroots campaign focused on debt relief to pay for education. But investing in schools is only part of the solution. In Sierra Leone, support networks for girls halved the dropout rate during the Ebola crisis. In Latin American, African, and Asian countries, conditional cash transfers have boosted school attendance. The latest Global Education Monitoring Report advocates implementing similar programs today. Generation COVID has already suffered immensely. It is time for the international community to give children the opportunities they deserve. Even when faced with momentous challenges, we remain committed to making ours the first generation in history in which every child is in school and learning. Both national governments and the international community must now step up collective efforts to achieve that goal.

Abiy Ahmed, Prime Minister of Ethiopia, was awarded the Nobel Peace Prize in 2019. Gordon Brown, former Prime Minister and Chancellor of the Exchequer of the United Kingdom, is United Nations Special Envoy for Global Education and Chair of the International Commission on Financing Global Education Opportunity. He chairs the Advisory Board of the Catalyst Foundation.

WEDNESDAY JULY 15, 2020

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COVID-19: working remotely in an environment of IT and energy constraints BY SAMSON ADDO

What of Working Remotely? Work from home (WFH), Work at Home (WAT) and work remotely (WR) are phrases being used often these days by most corporations and companies thanks to COVID-19. These words though not the same have very thin lines of difference that are hard to identify and hence some are tempted to use them interchangeably. They all carry in their shelves an understanding of a shift away from exclusively executing work responsibilities from traditional corporate offices. In this article we use the words work from home and work remotely interchangeably to describe the use of telecommunication and online resources to perform ones roles outside the company office. WR is not a new concept. Forward looking and agile companies have long harnessed the opportunities that are shrouded in the WR approach and have developed policies to guide employee actions and behavoiur within the WR environment. Global Companies such as Apple, Google, Amazon, Facebook and Twitter, which are largely IT driven, have experimented with WR in the past and have entrenched such systems in the wake of COVID-19. In response to social distancing protocols which have been birthed by COVID-19, companies in Ghana are busily finding ways to remain resilient by the application of nimble processes that help them continue to deliver to customer expectation. WR helps companies to circumvent the bottlenecks that COVID-19 erects within the traditional workfrom-office system. Whilst WR is a good way of ensuring that social distancing protocols are observed within a corporate setting, key conditions such as good telecom/ IT infrastructure and adequate energy solutions are necessary for smooth process/operational maintenance and service delivery that WR is intended to offer. My Experience working from Home For example on 19th of June 2020 I decided to work from home because my to-do-list for that day required me to convene and lead a short training session, participate in a key business meeting and complete a report. All these activities hitherto would require physical meeting in our corporate office. With the advent of corona virus I thought that the activities could be done seamlessly through a virtual platform. Just one hour into my first activity for the day, power was siphoned from my electrical cables by Electricity Company of Ghana, the largest electricity retailer in

Ghana. And then I also realized that my telecommunication network was not very stable. Now reality dawned on me because I did know when power would be restored. Whilst I completed the first activity, I could not fully participate in the second meeting nor complete my report for the day, all because the power in my devises i.e. laptop and phones had all drained. I did not have a generator or any solar installation in spite of the abundance of sunlight in Ghana. This experience clearly reveals that if the adequate level of telecom/IT and energy service efficiency is not guaranteed in Ghana, the attempt by companies to adopt a WR system in Ghana will be fraught with serious challenges. Benefits and Demerits of WR As estimated by Global Workplace Analytics nearly 25% to 30% of world employees will be working remotely and therefore WR systems should be cautiously promoted by companies because not only does it provide flexibility in work schedules for employees, but they also help companies to reduce some operational costs (e.g. electricity, water, etc), help employees to have time for their families and facilitates reduction in greenhouse gas emission because of reduced use of vehicles. WR has its disadvantages though and these include lack of social interaction which is present in the physical corporate office, loneliness, certain distractions in the house and community as well as fluctuations in power and network connectivity. Other challenges include the tendency to put in disarray corporate culture and values due to distance and sometimes the urge by employees to over-work whilst home. Enabling Platforms In Ghana most organisations have resorted to using technologies such as Teams by Microsoft, Zoom by Zoom Video Communications Inc and Google Meet (formerly Hangout Meet) by Google to conduct virtual meetings and others are permitted to connect to their company systems remotely by way of an encrypted connection via the Internet called Virtual Private Network (VPN). VPN however comes with data security concerns which every company must address in line with its level of risk appetite and data security management policy. Key Policy Issue - Internet WR can be facilitated with the right policy framework both at the national and corporate levels. As indicated earlier WR is mainly facilitated when a country has a stable high speed internet. Ghana has high speed internet in some parts of the country and more is required to be done to improve quality and extend coverage to other parts of

the country to promote widespread WR. As a matter of fact Ghana has signed on to the Sustainable Development Goals and Goal 9 requires especially developing countries like Ghana to work ‘to significantly increase access to ICT and strive to provide universal and affordable access to internet’. This requires that there must adequate telecommunication infrastructure that provides quality high-speed internet service to enhance seamlessly system of WR. At the moment in spite of keen competition among telcos and internet service providers most consumers complained of poor internet service which is characterized by connection shudder. Secondly the high cost of internet service limits widespread access and this impedes WR efforts. Even though Ghana signed on to “1 for 2” internet affordability target adopted by UN in 2017, cost of internet access is relatively high. Holding virtual meeting using video and picture contents consume a lot of data and this may be seen as additional cost to organizations and individuals. Key Policy Issue - Energy The second critical pillar for smooth implementation of WR, is presence of efficient and sustainable energy. When power is predictably available and affordable companies and employees are more willing to adopt WR policy. We were happy when Ghana was saved from the severe energy crisis between 2015 and 2016. We were however ushered into a period power glut four years after 2015 due to presence of thermal plants to complement hydro sources plus scanty renewable sources of energy. Our power sector can be improved to ensure that affordable electricity is provided at all times. The Energy commission in its 2020 Energy outlook indicated that the current installed capacity of Ghana is ‘capable of generating over 25,000 GWh, which is enough to meet the country’s electricity requirement including suppressed demand’. This capacity is derived from three main hydro facilities, 14 thermal power plants (including embedded ones) and four renewable energy supply facilities. So the question then is why do we continue to experience unstable power supply? USAID found out that the issue emanates

from ‘costly supply of electric power’ and the ‘significant financial deficit’ that stares the sector in the face. WR will be greatly enhanced if power is constantly available for workers to work with their devices anywhere. This therefore requires that the energy sector should be enhanced through a concerted effort to significantly reduce its constraints. A key constraint is the increasing debt burden arising from increasing fuel cost to run the thermal plants (currently majority of Ghana’s power is generated from thermal source which depends on gas and liquid fuel). It is estimated that the energy sector debt is increasing at $300.00 million per quarter. Other challenges are the costly contracting regime i.e. takeor-pay arrangement, which has become albatross on the neck of policy makers, pre-disposition to gas supply volatility, increasing transmission and distribution loses (for example transmission loses increased from 3.7% in 2010 to 4.7% in 2019) and as 2020 Energy outlook report puts it, inadequate ‘regulatory precedent to drive competition’. Way Forward WR is a key response to COVID-19 and companies should prepare to assimilate it into their processes. By deploying the right technologies and supporting it with sound but flexible policy, business continuity and workplace safety will be guaranteed. Nevertheless government must ensure that adequate policy and the enabling environment is created to deploy and safeguard critical IT infrastructures like the fibre-optic cables which provide high speed internet service. The cost of internet access should be made affordable to enhance productivity and national development through IT. Efficiency should be instilled in the energy space through appropriate and cost effective energy contracts, developing innovative means to reduce energy sector debts to make the sector more attractive and enhancing the efficiency of public utility providers without unnecessary government/political interventions.

SAMSON ADDO, MSc Energy Economics, Contact: 2010risk@gmail. com

WEDNESDAY JULY 15, 2020

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A new dawn for women entrepreneurship in Africa’s future

n a daily basis, chances are a woman is striving for excellence by joining the strong surge of women entrepreneurs with the vigor and determination to succeed. While Africa has the highest growth of female-run entrepreneurs according to World Bank, it is also very likely that her entrepreneurial journey will not be easy simply because of her gender. Women in the business industry have varied and unique social and financial challenges. The global economy surges towards an inevitable recession with the World Bank predicting a shrink of 5.2% by the end of 2020, culminating in economic and humanitarian crisis with slower economic growth, ongoing signs of lower investment, erosion of human capital through lost work and schooling and the fragmentation of regional and global trade. In spite of this, many African countries are showing signs of resilience with emerging opportunities. Growth of the female economy The female economy is the world’s largest emerging economy. According to Global Entrepreneurship Monitor, subSaharan Africa has the highest rate of female entrepreneurship with 26% of female adults engaged in entrepreneurial activity. In Ghana, approximately 46% of businesses are owned by women which is more than any other country in the region (MIWE (In full), 2018). The paradox is that the rise of women entrepreneurs is not necessarily in tangent with the grinding pace of the country’s economic development and so worth paying attention to the reasons. In addition to the already complex environment, the natural order of work is now severely disrupted with what is normal due process becoming constant improvisation. Sectors run prevalently by women include wholesale and retail trade especially in fastmoving consumer goods, food and beverage, hospitality, education, event management, fashion and arts, and wellbeing. Thus, it helps to better identify and understand the factors and conditions that are most conducive to women business owners in the country and address the challenges that limit women from opening or expanding their businesses.

Challenges and bridging the gap Access to knowledge: There is the need for education and training, upskilling and re-skilling – especially in the technology space which is currently maledominated. The rapid technological and digital transformations affecting jobs means women have to keep up with the pace through training to be tech-savvy and among others take advantage of online presence. Thus, relevant education programmes and funded training opportunities should be created to eliminate the confinements to traditional sectors to enable market access to new sectors in science, technology and the circular economy. Access to funding: There is a requirement for financial inclusion - lack of appropriate financial and business strategy advice and access to credit to women entrepreneurs due to little or no collateral security puts them at a disadvantage. Why are women not given more control over family assets such as joint property rights, thus eliminating the need for collateral? So, despite the immense opportunity for economic growth and social impact by investing in women, the limited access to and lack of funding means that their businesses continue to suffer especially at this time when keeping employees is an expensive venture. Toyin Dania, Women’s Entrepreneurship Day Ghana Ambassador said, “My female clients have been concerned

about their businesses but especially their staff and what the new normal will look during these uncertain times. Their businesses are more than just economics – it’s about their staff who have the intellectual value of their training and understanding of their business, and their families. One of the solutions is to reduce working hours which is effective but only in the short-term.” Social norms, cultural and gender biases: The socio-cultural structures in the society generally favour men in terms of inequalities in social norms, resources distribution, and supportive business networks. The unspoken, ugly reality of physical and emotional violence against women, especially during this crisis period, holds back family, individual and professional progress. Therefore, could there be a business case for essential social welfare services provided for women by women to cater to issues such as domestic abuse? Additionally, there is the misconception of technology being a man’s world, leading to the digital divide where women are marginalised in getting educated about the significance of the digital economy on entrepreneurship. These business networks act as platforms for knowledge exchange, mentorship, as well as bridge the gap between women entrepreneurs and their support system such as the government, non-government organisations, financial institutions and investors, and so forth, creating initiatives, pro-activeness to decision-making including choice of new business sectors and innovative commercial

practices. The saying, “when women work, the economy grows” becomes factual when women on the African continent are empowered with the said solutions – thus, contributing to the achievement of the agenda for Sustainable Development Goal (SDG) 5 (bridging the gender equality gap) and SDG 8 (promote full, productive employment and decent work for all). Whilst the current global health situation continues to linger and influence business decisions, the tremendous impact will be more obvious as we emerge from the epicenter of the crisis. There is still optimism for women start-up business growth with ongoing pots of funding from Pan-African financial institutions and also access to new markets with the upcoming delayed implementation of the African Continental Free Trade Area (AfCFTA), which is expected to come into effect in early 2021. The goal of this agreement between 54 African countries is to establish a single market to streamline trade, free movement of business travelers and attract long-term investment. This is a good time for higher education institutions, government and non-government organisations in Ghana and across African borders to work in partnership to co-develop and implement enabling targeted policies and national frameworks, support development programmes, and create and strengthen favourable commercial infrastructures to promote high growth women-owned businesses. GNA

WEDNESDAY JULY 15, 2020

Mining

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Large-scale gold output up by 6percent in 2019 –report The production of gold attributable to the large-scale sector expanded by 6 per cent from 2.808 million ounces in 2018 to 2.989 million ounces in 2019, an industry statistics and data for last year from the Ghana Chamber of Mines has revealed. According to the report, in 2019, gold accounted for 93.28 per cent of gross mineral revenue while the respective share of manganese, bauxite and diamond were 6.17 per cent, 0.54 per cent and 0.01 per cent. The report further reveals that the quantum of gold assayed by the Precious Minerals Marketing Company (PMMC) on behalf of Licensed Gold Exporting Companies (LGECs), which is used as a proxy for production by small-scale mines, dwindled by 20 per cent from 1.984 million ounces in 2018 to 1.588 million ounces in 2019. In view of the contrasting performance of the large and small-scale sectors, Ghana’s total gold production declined from 4.792 million ounces in 2018 to 4.577 million ounces in 2019. In spite of the fall in output, the

outturn in 2019 was the third highest level of production in more than three decades. The report also noted that shipment of manganese by the Ghana Manganese Company, increased by 18 per cent from 4.551 million tonnes in 2018 to 5.383 million tonnes in 2019. In the same vein, shipments of bauxite by Ghana Bauxite Company improved by 10 per cent from 1.011 million tonnes in 2018 to 1.116 million tonnes in 2019. On the downside, purchases of diamond by PMMC fell by 41 per cent from 0.057 million carats in 2018 to 0.033 million carats in 2019. Data from the Ghana Revenue Authority (GRA) shows that total direct domestic fiscal receipts attributable to the mining and quarrying sector improved from GH¢ 2.36 bn in 2018 to GH¢4.02 bn in 2019. The 70 per cent increase in fiscal payments by firms in the sector was occasioned by the simultaneous increase in production and price, particularly, gold. Specifically, corporate tax receipts from the minerals sector increased by 89 per cent to GH¢2.27 bn in 2019 from GH¢1.20 bn in 2018. Ghana’s geological landscape

14 mining agreements laid before Parliament Government’s quest to promote local participation in the mining sector has been given a boost with a total of fourteen mining agreements laid before Parliament. The move is under the auspices of the Minerals Income Fund Act,2018 (Act 978) which establish the Asaase Royalties Limited special purpose vehicle associated with the Royalty Monetisation provision. The Asaase Royalties was created under the Minerals Income Fund Act,2018 (Act 978) to raise cash up to half a billion dollars, by selling up to 49 per cent stake of Asaase Royalties through an Initial Public Offering (IPO), which was to be listed on the London Stock Exchange and the Ghana Stock Exchange Among the listed entities include AGA Miradani Lease granted to Ashanti Goldfields Company Limited, Lima South Lease granted to Abosso Goldfields Limited. Abirem Lease granted to Asanko Gold (Gh)Limited, whereas Julie Lease granted to Phoenix Resources Limited. Kunche/Bepkong Lease granted to Azumah Resources (Ghana) Limited, while Datoko Lease granted to Cardinal Namdini Mining Limited. Mampon Lease on the other hand has been granted to Golden Star(Bogoso)Limited, whereas Akanko Lease granted to Adamus

Emmanuel Akwasi Gyamfi chairs the Mines and Energy Committee of Parliament

Resources Limited. Opon Lease granted to Golden Star (Bogoso/Prestea)Limited,while Akoti Lease granted to Chirano Gold Mines Limited. Others are Ajopa Lease granted to AngloGold Ashanti Ghana Limited, Ajopa South Lease granted to Ghanaian Australia Goldfields Limited. Adubea Lease has been granted to Asanko Gold(Gh)Limited and Abore Lease granted to Asanko Gold(Gh)Limited . The Minerals and Income Investment Fund Act, 218, (Act 978) seeks to establish a fund to manage the equity interests of the Republic of Ghana in mining companies, to receive mineral royalties and other related income due the republic from mining operations, to provide for the management and investment of the assets of the fund and for related matters.

teems with a variety of minerals with the commercially exploited ones being gold, diamond, manganese and bauxite. The main methods of mining in the country are underground and open pit mining. Alluvial mining is also popular in the small-scale sector. Following a period of general economic decline, Ghana’s mining industry recovered on the back of market-based adjustment policies recommended by the International Monetary Fund and World Bank. The Structural Adjustment Programme (SAP) amongst

others abolished restrictions in foreign exchange transactions and imports. As well, the SAP diluted the dominance of the state in general economic activities. On account of these reforms, the investor community renewed its interest in the economy, particularly, in the mining sector. The mining sector therefore became the pith of government’s effort to revive the ailing economy through the attraction of foreign direct investments (FDI) with its proven associated benefits such as generation of badly needed foreign exchange, employment creation and transfer of technology and knowledge.

Miners fear recession post Covid-19 - survey A survey by global law firm White & Case of senior mining and metals decision-makers has revealed that the fear of a global recession was the top concern in the post Covid-19 economy. The survey, which included responses from a record 67 senior decision-makers, also saw 39% of respondents citing global market weakness as the largest threat to the industry, in stark contrast to the sentiment in January, where trade tensions were deemed the biggest risk. “After an encouraging start to the year, the global economy has been struck by the unprecedented force of the coronavirus pandemic. Given most mineral commodities’ dependence on global growth, combined with mine-level shutdowns and the sector’s reliance on functioning global supply chains to bring products to market, much of the mining and metals space was hard hit early on,” the report stated. “Responses to our survey illustrate the sheer scale of the shock to the market, and how Covid-19 has impacted investor expectations. While 39% cite global market weakness as their biggest concern, trade tensions, which had been deemed the biggest risk in January, have dropped from 26% to just 5%.

“While the US and Chinese governments have signed a preliminary deal, much of this was widely anticipated toward the end of 2019, with our respondents expecting tensions to drag as the two countries worked their way through a ‘phase two’ deal in an election year,” the report read. The report also found that China’s control of the coronavirus and its appetite for significant spending measures has put much of the mining and metals sector at ease. Meanwhile, precious metals were the standout performers in 2020 so far, but also the most likely to be the subject of mergers and acquisitions activity, while traditional metals were expected to show the strongest resilience. Post the pandemic, more than a quarter of the respondents stated that building resilience would be the main priority in the second half of the year, with efficiencies and productivity gains coming in second at 18% each. Furthermore, 80% of respondents were of the opinion that environmental, social and corporate governance would play a greater part in investors’ decisionmaking and lure more generalist investors, bringing a potential ‘green recovery’.

WEDNESDAY JULY 15, 2020

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Toward an Integrated Policy Framework for Open Economies BY TOBIAS ADRIAN AND GITA GOPINATH

hile capital mobility provides many benefits, capital flows to emerging market and developing economies are often volatile and depend critically on global financial conditions. The risks posed by volatile capital flows to macroeconomic and financial stability are often difficult to address with conventional monetary policy tools. Hence, policymakers have complemented interest rate policy with additional tools—including foreign exchange intervention, capital flow measures, and macroprudential actions—to achieve their objectives. A significant shortcoming of this more eclectic approach is the lack of clear frameworks to guide how these tools should be used in concert to achieve central bank objectives. Accordingly, IMF staff have been engaged in a major push to use conceptual and quantitative models to guide how these tools should be used in an integrated way. Our research on an Integrated Policy Framework considers policy tradeoffs associated with using these tools in an open economy macroeconomic setting that explicitly takes account of key frictions—such as, dominant currency pricing, currency mismatch on balance sheets, foreign investors limited appetite for emerging markets’ local currency debt, poorly anchored inflation expectations—as well as both domestic and external shocks (as managing director Kristalina Georgieva pointed out recently). In this blog, we provide a brief overview of two recently released working papers that provide frameworks for an integrated use of the tools. The paper “Conceptual Model for the Integrated Policy Framework” analytically derives optimal policies as a function of country specific frictions and shocks. Some of the insights are as follows: First, if an additional policy instrument becomes available, it should not necessarily be deployed because it may not be the right tool to address the imperfection at hand. For example, while pricing in dominant currencies, most often the dollar, in international goods markets reduces the benefits of exchange rate flexibility and can give rise to more volatile exchange rates, in the absence of

other frictions, flexible exchange rates are still optimal. In this case, deploying unconventional tools such as foreign exchange intervention and capital flow measures can worsen outcomes because they do not address the specific pricing friction. However, and this is a second insight, if there are additional frictions such as imperfections in capital markets, often associated with over-borrowing, then dominant currency pricing can enhance the need for tools such as exchange interventions and capital flows and macroprudential measures. Private agents in an open economy have a tendency to overborrow in foreign currency because they do not internalize the impact of their decisions on future market stress that can arise when foreign lending conditions tighten, currencies depreciate, and balance sheets weaken. To prevent excessive volatility over time, prudential capital inflow controls can mitigate overborrowing in good times and excessive deleveraging in bad times. There is a greater need for such prudential inflow controls in countries with dominant currency pricing because the exchange rate is less effective in stabilizing demand in those countries. Third, unlike the classic trilemma in international economics, flexible exchange rates do not necessarily preserve monetary policy independence. Episodes such as the taper tantrum in 2013 can sharply raise premia demanded by foreign investors to hold local currency debt. To counter the adverse impact of this external shock, monetary policy comes under pressure to raise policy rates at the expense of tightening domestic financial conditions. In such circumstances,

the analysis suggests that it can be beneficial to use exchange intervention and prudential policies to address the external shock freeing the domestic policy rate to focus on domestic price pressures. A second working paper, “A Quantitative Model for the Integrated Policy Framework” proposes a more empiricallyoriented approach to the integrated use of policies. The starting point is an open economy New Keynesian model as is commonly used in central banks. The model embeds complex, nonlinear balance sheet channels and a range of frictions that help capture key empirical features of financial stress episodes, including that domestic credit conditions tend to tighten when the exchange rate depreciates. The model highlights another form of loss of monetary policy independence that arises when inflation expectations are poorly anchored, as is the case in some emerging and developing economies. In this case, their central banks often face a difficult tradeoff in responding to external shocks that cause sharp exchange rate depreciations and capital outflow pressures. If inflation expectations are poorly anchored, and tend to drift away from target, the central bank is forced to choose between sharp raising interest rates to keep inflation stable—at the cost of a steep output decline— and pursuing a more passive policy that risks allowing inflation to become unmoored. In this case, the model suggests that foreign exchange intervention and capital controls can improve policy tradeoffs considerably under certain conditions, especially for economies with less well-anchored inflation

expectations, a high sensitivity of domestic borrowing conditions to the exchange rate, and that are more vulnerable to shocks that cause capital outflow and exchange rate pressures. Notably, the use of integrated policies may reduce downside risks to output associated with shocks that resemble a sudden stop. In sum, research on the Integrated Policy Framework is in full swing at the IMF. The COVID-19 crisis has made stark the volatile nature of capital flows and limits to conventional monetary policies. Our newly released working papers shed light on the macroeconomic policy tradeoffs that many emerging markets and small open economies face. Our contributions provide both conceptual and quantitative approaches that aim at a fully integrated macroeconomic framework to assess policy tradeoffs. The work on model frameworks is also being complemented by extensive empirical work and country case studies at the IMF. These other streams test empirically the impact of various tools and their trade-offs, explores the unintentional consequences of deploying unconventional tools on foreign currency exposure and financial market developments, the communication challenges when multiple instruments are used, among others. The combined work, which will be discussed by the IMF’s Executive Board in the fall, should provide useful insights to policy makers on how to deploy multiple tools with special attention to the form of the shock, the specific frictions, the pre-existing conditions, alongside practical considerations. (IMF.org)

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WEDNESDAY JULY 15, 2020

Grundfos partners Sanitation Ministry to provide turnkey water solutions BY TOBIAS ADRIAN AND GITA GOPINATH

Danish water technology powerhouse Grundfos Pumps Ghana Limited has signed an MoU with the Ministry of Sanitation and Water Resources (MSWR) that will see the company offering its topnotch expertise and efficient water solutions to the country, working with the Ghana Water Company Limited (GWCL) and other key actors in the water and sanitation value chain. As part of the agreement, which spans over three years, the company will also transfer knowledge and build the capacity of its Ghanaian counterparts through regular interactive sessions. “Grundfos is bringing its turnkey solutions for water problems and to promote efficient and quality use of water,” Okay Barutcu, Group Vice President of Grundfos, said at the virtual signing ceremony yesterday. The signing of the MoU is also expected to be a launchpad for Grundfos’ provision of big-ticket and deeper investments into the country’s water resources

sector looking into the future, Mr. Barutcu added. He said Grundfos was guided by the core purpose of making a difference in the lives of the people it touches, both internally and externally, highlighting the provision of some sustainable water solutions to deprived Ghanaian communities through semi-commercial and charitable projects. “We expect this partnership to be a fruitful collaboration that will help to improve access to quality water and improved sanitation for the people of Ghana,” Claus Villekjaer Nielsen, Grundfos’ General Manager for West Africa, indicated. Chief Director of the Ministry of Sanitation and Water Resources, Noah Tumfo, said the Ministry’s partnership with Grundfos had been highly beneficial and the Ministry was ready to keep to its part of the extended agreement. “The Ministry is confident about the company we are dealing with; we fully understand our obligations and they are within our power to deliver. We are intune and lend our fullest support to the partnership that we are sealing today,” he indicated.

Ambassador of Denmark to Ghana, Ms. Tove Degnbol, indicated in her remarks that the pandemic has highlighted the need to prioritise investments in the infrastructure that is required to provide access to water to all Ghanaians, and commended Grundfos for investing in an area that the embassy has promoted for many years.

“As an Embassy, we strongly support the activities of Danish companies that have embedded the sustainable development goals (SDGs) in their operations. Luckily, the SDGs are good business, too. And Grundfos is a prime example of a company that is walking the talk and showcasing how to build up your business around the SDGs.”

WEDNESDAY JULY 15, 2020

Weekly Investment Update

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WEDNESDAY JULY 15, 2020