Business24 Newspaper 12th May, 2021 by Business24 Online

WEDNESDAY MAY 12, 2021

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NO. B24 / 194 | NEWS FOR BUSINESS LEADERS

Air passenger traffic plunges 60% in 2020

MONDAY WEDNESDAY MAY 3,MAY 202112, 2021

Tax, fuel hikes seen increasing inflation modestly after April By Joshua Worlasi Amlanu macjosh1922@gmail.com

ecent tax and fuel price hikes could cause modest increases in inflation after April, but this is likely to be offset by lower food inflation in the August to September harvest season, Courage Kingsley Martey, Cont’d on page 3

Capping of DACF stifling growth at local level’ By Eugene Davis ugendavis@gmail.com

By Patrick Paintsil p_paintsil@hotmail.com

andemic-induced restrictions to international travel caused a sharp fall in the

number of passengers that moved through the Kotoka International Airport in 2020, with international traffic hitting its lowest level in almost two decades. International passenger traffic fell from 2.1m in 2019 to

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

POLICY RATE

14.5% 14.77%

OVERALL FISCAL DEFICIT

11.4% OF GDP

AVERAGE PETROL & DIESEL PRICE:

Cont’d on page 2 INTERNATIONAL MARKET

US$1 = GHC 5.7606

GHANA REFERENCE RATE PROJECTED GDP GROWTH RATE

702,651 in 2020, a reduction of 1.4m, or 66.7 percent, according to data from the Ghana Airports Company Limited (GACL), the nation’s airports operator.

4.2% GHC 5.13

ack of funds to undertake developmental projects is impeding growth at the district level, District Chief Executive (DCE) for Garu in the Upper East Region, Emmanuel Asore Avoka, has said. According to him, the capping of the District Assemblies Common Fund (DACF) has

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

CORN $/BUSHEL

$543.75

COCOA $/METRIC TON

$123.55

COFFEE $/POUND:

Cont’d on page 3

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Editorial / News

WEDNESDAY MAY 12, 2021

Editorial

Collective action needed to revive travel sector

ast year, when the first cases of the coronavirus made their way into the country, Ghana like many countries shut its borders to the entire world save a few emergency flights. When that decision was taken, the safety of the country’s citizens was paramount and the government was determined to do just that. However, the economic impact of the decision to close the country’s airspace, which lasted about six months, is beginning to show. A Business24 analysis of air passenger traffic for last year showed a gloomy picture

highlighting the severity of the harm of the coronavirus pandemic to the nation’s aviation business. Almost all the performance indicators showed a sharp fall with some seeing the heaviest decline in almost two decades. In fact, the virus crisis has had a deafening effect on the aviation industry globally, and the Ghana situation sits well within the current trends across the globe. In terms of the financial impact, the government lost more than 64 percent of its 2019 tax revenue to the crisis last year whilst the projected amount for this year is less than a quarter

of what was garnered two years ago. With travel restrictions easing across the globe, we anticipate that it would reflect in the rapid reversal of this alarming situation. This will only happen when industry players put their hands to the wheel to push the sector back to the path of growth. Airlines, hospitality services providers, travel and tour agencies, tourism services providers and allied players will have to deploy proactive and workable initiatives to drive up travel and tourism interests. We urge a more collaborative approach for this noble cause.

Air passenger traffic plunges 60% in 2020 Continued from cover

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On the domestic front, traffic was over 266,000 lower in 2020 compared with 2019, representing a decline of 39 percent from 690,314 to 423,718. This was however better than the passenger flow of 415,158 in 2018. Total passenger traffic for both domestic and foreign travels dropped by 1.7m, or almost 60 percent, from 2.8m to 1.1m within the period. As a result, government revenue from the sector dipped by 64 percent, from GH¢521.3m in 2019 to

GH¢185.3m in 2020, a bleak situation that informed a modest revenue projection of GH¢198.8m for this year. Government’s six-month shutdown of the international airport as part of efforts to control the importation of the Covid-19 virus into the country was the main contributor to the steep decline in traffic. The situation mirrored the global trend, as the number of scheduled passengers boarded by the global airline industry dropped by 61 percent last year to just over 1.7bn people. The crisis pushed many airlines to the brink of bankruptcy, with some

receiving government bailouts to stay afloat. According to leading market and consumer data provider Statista, the number of scheduled passengers handled by the global airline industry had increased in all but one of the last 15 years. The harsh impact of the pandemic on Ghana’s aviation industry was also felt in freight tonnage, which is the volume of cargo that is moved by air. Total freight tonnage was 43,428 tonnes last year, down by 12.8 percent from the 49,846 tonnes that was recorded in the previous year and the lowest since 2002.

WEDNESDAY MAY 12, 2021

Tax, fuel hikes seen increasing inflation modestly after April Continued from cover a senior analyst with Databank, the asset management company, has said. Following a decline in January to 9.9 percent, inflation rose to 10.3 percent in February and March, with April data set to be released today. “There are upside risks, no doubt. But I strongly feel that the favorable base effect exerts a significant downside risk that would outweigh the upside risks. On that count, I still expect April 2021 inflation to drop below 10 percent, probably towards the mid-9 percent levels,” said Mr. Martey in an interview with Business24. He added: “But beyond April, especially from June, I think the upside pressure will start to mount stronger and could cause some modest increases, before a slowdown occurs again in August and September.” The expected increases in inflation are based on anticipated price pressures from the recent tax increases, higher fuel costs, and higher transport fares. Mr. Martey said the food harvest in August and September

could bring down inflation for the period, but this is based on favourable weather conditions and a good harvest. “Against this backdrop, I expect the MPC to leave the policy

rate unchanged at 14.5 percent to observe the price dynamics between May and July 2021,” he predicted. The Bank of Ghana’s current forecast is for headline inflation to

return to the target band of 8–10 percent in the second quarter of 2021. However, this could soon be revised in view of recent tax and fuel cost increases.

Government Statistician, Samuel Kobina Annim

‘Capping of DACF stifling growth at local level’ Continued from cover affected development and left the district with little resources, as Garu’s share of the DACF is negligible. Mr. Avoka expressed the frustration when members of the Parliamentary Select Committee on Local Government and Rural Development paid a working visit to the district. The visit was to inspect projects funded by the DACF in the district and was part of a tour of similarly funded projects in districts within the Upper East, Savannah, North East, and Northern Regions. The DACF, a statutory fund, has been capped by the government in adherence to the Earmarked Funds Capping and Realignment Act, 2017 (Act 947), but the DCE said the central government needs to reconsider the decision, since it is affecting districts with high poverty levels. Mr. Avoka said the district’s magistrate court building, which the Committee inspected,

An ongoing assembly complex building at one of the districts

was put up with donor funds from the District Development Facility, adding that there was no allocation from the DACF for the project. At the Tempane district, the DCE, Paul Azuma Abugri, asked the Committee to factor district poverty into the formula for allocating the DACF to ensure an equitable distribution of the resources. The Committee members inspected the construction of a court complex building in the district which was funded by the DACF. The edifice, when

completed, will have 23 offices, an assembly hall, a client service area, drivers’ and workers’ lounges, a 150-seat conference room, and other facilities. The DCE said the assembly lacked accommodation for staff, causing a high attrition rate, in addition to other challenges. At the Bolgatanga East district, the committee praised the DCE, Rev. Emmanuel Abugri Abole, for showing leadership and seeing to the construction of the assembly’s office complex, which was 95 percent complete at the time of the visit.

The project, with a varied contract sum of GH¢2.94m, was commenced in November 2018 and is expected to be handed over to the assembly in June this year, the DCE said. Vice Chairman of the Local Government Committee, Suleman Sanid, observed that some of the districts had done well, while others appeared indifferent in seeing to the completion of the DACF projects. “At places like Tempane, we were not happy with the pace of work. There is a lot more to be done. We will sit down with the Common Fund Administrator and the Local Government Ministry to discuss the projects and the things needed to be done.” Mr. Sanid also expressed concern about how district assemblies are kept in the dark in the award of contracts for central government projects in their respective areas, saying that poor project execution and monitoring are the results of such actions.

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News

WEDNESDAY MAY 12, 2021

New software to enhance service quality to be outdoored in June By Eugene Davis ugendavis@gmail.com

first of its kind customer software application, Focas Software, designed for companies seeking to improve and offer good customer service to clients is expected to be launched in June. According to Dr. Kobby Mensah, the inventor of the software, the application measures service quality from the customer perspective by assessing a company and its staff performance in five areas, comprising reliability, responsiveness, assurance, empathy, and overall satisfaction. Using the Focas Software will help companies conduct a root cause analysis of service quality and deploy resources easily to address challenges, he said. “Companies can do reward schemes without subjectivity because this is pure data based on what customers say they are

Dr. Kobby Mensah

satisfied or not [with]. At the end of the day, you can say this is your best staff or they need training because the system has shown [that]. It helps in HR, resource allocation, customer quality; this is the innovation we have brought,” he told Business24 in an interview.

The Focas Software works by asking a customer to respond to questions on demographics, staff performance, among other features embedded in the application. It takes a customer a maximum of ten seconds to provide the responses. Explaining further how the

application works, Dr. Mensah indicated that as a customer you get to select the picture of the staff that attended to you, fill in your personal details, reason for visit and duration of stay, and then click on the submit button. From this, an organisation gets to see the customer ratings based on the usage daily score and monthly score. “All this information is crucial because you can sit back and evaluate each staff and their performance, and also evaluate your entire unit performance at the end of the month. [Also], every day you can see the service quality level.” It also helps companies to tailor their training to suit customers, and it will ensure companies’ customer service is “top-notch”, he added. The software, Dr. Mensah stated, can be used by all institutions, from banks, hospitals, to HR agencies.

PIAC wants oil revenue spending aligned with national dev’t plan By Benson Afful affulbenson@gmail.com

he Public Interest and Accountability Committee (PIAC), Ghana’s petroleum revenue watchdog, has reiterated the need for a long-term national development plan to guide the spending of petroleum revenues. The committee said the current practice allows for ministerial discretion in the selection of priority areas to spend petroleum revenues. For instance, it said the new priority areas selected for Annual Budget Funding Amount (ABFA) disbursement in 2020–2022 were not presented to Parliament for approval in the 2020 budget statement, as required by the Petroleum Revenue Management Act (PRMA). “The Ministry of Finance should ensure that priority areas selected are approved by Parliament before implementation, as required by Section 21 (5) of the PRMA,” PIAC said. The PRMA provides for

spending of petroleum revenues to be guided by a long-term development plan. However, the country is yet to develop such a plan, and the selection of ABFA priority spending areas has been insufficiently connected to a long-term strategy, the watchdog

stated. At the launch of the 2020 annual report of PIAC in April, its chairman, Prof. Kwame Adom-Frimpong, argued that successive ministers of finance have selected ABFA priority spending areas based on their

discretion. A strategic long-term national development plan, according to PIAC, will help make ABFA spending more transparent and ensure that projects funded by the ABFA are in line with national priorities.

WEDNESDAY MAY 12, 2021

International

WEDNESDAY MAY 12, 2021

South Africa warns of ‘vaccine apartheid’ if poor countries miss out on Covid-19 jabs

accines should be seen as a “global public good” during the Covid-19 crisis and intellectual property rights should be waived so developing countries can afford them, South Africa’s president has said. Cyril Ramaphosa warned that not doing so would be “tantamount to vaccine apartheid”, with citizens of poorer countries being left to die from the virus while the world’s richest are safe. South Africa has put a proposal to the World Trade Organization to temporarily waive certain aspects of intellectual property rights, meaning local production could scale up to produce more affordable vaccines. “This is an unprecedented situation,” said Ramaphosa in his weekly ‘From the Desk of the President’ message to South Africans. “It requires that all intellectual property, knowledge, technology and data related to Covid-19 health technologies be put at the disposal of all.

“If we as the international community are truly committed to human rights and the values of equality and non-discrimination, vaccines should be viewed as a global public good.” Ramaphosa said vaccines should be available to all countries, “not just to the highest bidders”. Currently, 55% of existing vaccine manufacturing capacity is in East Asia, 40% is in Europe and North America, and less than

5% is in Africa and South America, he said. South Africa is one of just five countries on the continent with the capacity to produce vaccines, and Ramaphosa said that capacity is currently under-used. The president drew a parallel with a lawsuit 20 years ago, when pharmaceutical companies sued South Africa for attempting to import and manufacture generic treatments for people with HIV. Following huge opposition from

governments and civil society, the case was dropped in 2001. “As a country, we stood on principle, arguing that access to life-saving medication was fundamentally a matter of human rights,” said Ramaphosa. “Years later, the world is in the grip of another deadly pandemic in the form of Covid-19, and once again South Africa is waging a struggle that puts global solidarity to the test.” Vaccine rollout delays are seen as one of the main risks to the recovery in developing countries. Ratings agency Fitch on Tuesday released a report into Sub-Saharan Africa’s recovery, finding “the slow pace of Covid-19 vaccination programmes means that risks related to the pandemic… remain high”. “Many [countries in the region] will achieve herd immunity only in late 2022 at the earliest, raising the risk of new and potentially more severe infection waves,” the agency said. Publicfinancefocus.org

Egyptian budget targets continued debt reduction

gypt’s draft budget for 202122 will continue to drive financial and economic reforms, which are “critical” to reducing its high debt burden over the medium term, according to rating’s agency Fitch. The East-African nation’s budget outlined plans to reduce the central government deficit by 1.2 percentage points to 6.7% of GDP this year, down from the forecast 7.9% last year. Overall government debt will drop to around 86.5% of GDP by the end of 2021-22, although this is still 15 percentage points higher

than other B-rated nations, Fitch said in a report. The report said: “We believe Egypt’s budgetary targets are broadly credible. “The budget outperformed government projections in 2019, and underperformance in 202021 has been modest given the scale of the Covid-19 shock. The pandemic interrupted progress on debt reduction, and public finances remain a core weakness of the rating.” Sustained progress on fiscal reforms, leading to a further substantial reduction in debt over

the medium-term, would be a positive for future credit ratings, Fitch said. The draft budget also focuses on increased capital spending, up to 5% of GDP this year compared with 3.6% last year, which the agency said could support longterm growth. Tax revenues are forecast to rise to 13.9% of GDP in 2021-22, from 13% in 2020-21, and is in line with Egypt’s intention to raise receipts by two percentage points by 2023-24 through reforms and improved administration. Fitch said that the government

has struggled to raise tax revenues in recent years, but last year’s revenue estimates pointed to progress being made. Egypt’s funding requirement will rise 7.1% this year to $68bn, with the majority covered by domestic funding – equivalent to around $63bn. The agency said the additional requirement could be “hard to absorb” without increases in nonresident participation in Egypt’s bond market. Fitch said that foreign investment in Egypt’s bond market is a growing point of potential external vulnerability, despite bond sales recovering to $28bn in February following a Covid-19-related slump to $10bn in June. The rebound could quickly reverse in response to shocks affecting investor confidence, putting pressure on Egypt’s foreign-exchange liquidity, interest rates and the exchange rate, Fitch said. In August, Egypt agreed a $5.2bn support package with the IMF to help manage the nation through the pandemic, and keep reforms on track. Publicfinancefocus.org

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News

WEDNESDAY MAY 12, 2021

Asharami Energy’s graduate program targets future upstream experts

sharami Energy, a Sahara Group upstream company, has commenced its 2021 Graduate Trainee Program that is geared towards enhancing the sustainability and future of the sector through training of exceptional young talent. Henry Menkiti, Chief Operating Officer, Asharami Energy, said the widely sought-after program has been instrumental to the transformation of young engineers and others professionals into top talent across the value chain at Sahara Group. “At the heart of our operations lies unrivaled engineering expertise that is driven by innovation, responsible engineering, and an unwavering commitment to improvements aligned with global environmental, social and Corporate governance standards. The Graduate Trainee Program is for enthusiastic and future thinking individuals desirous of becoming future leaders in the oil and gas sector, “he said. Ivie Imasogie-Adigun, Group Head, Human Resources at Sahara Group said the program resonates with Sahara’s human

Ivie Imasogie-Adigun, Group Head, HR, Sahara Group

capital transformation strategy aimed at building a leading, nimble and agile organisation for optimal performance. Imasogie-Adigun said the program gives graduate trainees exposure to top-level responsibility early in their careers, with ample opportunity to hone their potential across the

Upstream value chain. “Sahara’s Graduate Trainee Programs are deliberately innovative and disruptive as we are always ahead on the curve of making a difference. The program has over the years produced outstanding business leaders at Sahara and I enjoin graduates to apply for an

opportunity to commence their journey towards excellence in the Upstream sector. “ Application for the program kicks off on Friday, 7th May 2021 and closes on Monday, 17th May 2021. It is open to candidates with a Bachelor’s Degree in Engineering, Applied and Social Sciences with a minimum of Second-Class Honors (Upper Division) and NYSC discharge certificate. Applicants can follow Sahara Group on twitter and Instagram @iamsaharagroup for more information on the Graduate Trainee Programs. Asharami Energy is one Africa’s leading independent Exploration and Production (E&P) Companies with a diverse portfolio of 8 (eight) oil and gas assets in prolific basins across Africa. Asharami Energy Limited and Sahara Energy Fields Holdings UK Limited are the entities at the forefront of Sahara’s upstream operations. These assets are at various stages of development ranging from exploratory fields to mature producing fields with huge potential for positive returns.

Allianz completes acquisition of East Africa’s Jubilee Insurance

llianz has completed an acquisition of 66 percent stake in Jubilee Holdings Limited ( JHL), East Africa’s largest insurance group. The announcement means that JHL retains a 46 percent shareholding in the company. The acquisition follows the execution of an agreement signed on September 29, 2020, in which Allianz agreed to acquire about 1,522,622 ordinary shares -- the majority shareholding in the short-term general (property and casualty) insurance business operations of JHL in five countries in Africa. These are Kenya, Uganda, Tanzania, Burundi and Mauritius. Thus, Jubilee General Insurance Limited in Kenya becomes a member of the Allianz Group and upon completion of corporate filings, will operate under the name: Jubilee Allianz General Insurance Limited. The transaction is Allianz’s second direct investment in the country, after establishing Allianz Insurance Company of Kenya Limited as a greenfield operation in 2014. “Alone and together with

Allianz’s recent acquisitions in leading African markets of Nigeria and Morocco, this transaction is a reflection of Allianz’s longterm commitment to Africa and fits with our ambition to gain leadership positions in key markets in the continent,” said Coenraad Vrolijk, Allianz Africa Regional CEO. The two Allianz companies in Kenya, Allianz Insurance Company of Kenya Limited and Jubilee Allianz Insurance Limited are expected to operate separately, until their operations are consolidated into Jubilee Allianz General Insurance Limited, which is subject to regulatory approval. “All contracts issued by the two companies remain valid and we will continue to honour our commitments and deliver the quality of service that Allianz is known for globally,” said Nandini Wilcke, Regional Head of Mergers and Acquisitions for Allianz Africa. The transaction gives Allianz a bigger platform to offer its wide range of insurance products, from simple digital products to flexible corporate solutions,

L-R: Allianz Regional CEO Coenraad Vrolijk, German Ambassador to Kenya, Annett Gunther and Jubilee Holdings Limited Chairman, Nizar Juma

Vrolijk added. Nizar Juma, Chairman of JHL said: “We are pleased to embark on the first step of our strategic partnership with Allianz, which will support Jubilee’s ambition to increase insurance awareness and accessibility across East Africa by providing innovative, affordable and technically advanced property and casualty insurance products to consumers across the region.” CEO of Allianz Life Ghana,

Gideon Ataraire welcomed the news of the acquisition. He said: “Allianz recent strategic acquisitions within the African region are proof of the Allianz Group’s confidence in the burgeoning regional market.” Allianz and JHL will continue to work together to finalize the acquisitions for the businesses in Tanzania, Uganda, Burundi and Mauritius, the firms said in a statement to newsrooms.

WEDNESDAY MAY 12, 2021

Feature

WEDNESDAY MAY 12, 2021

How to accelerate your business on the back of e-commerce trends

020 was a year of unprecedented consumer demand when it came to e-commerce popularity. The Covid-19 pandemic and global lockdowns led to an acceleration in buyers switching to online purchasing platforms. From groceries to wine to clothing and furniture, everything was suddenly available at the touch of a button, purchased from the comfort and safety of your own home. “With the raging COVID-19 pandemic, more and more people are relying on e-commerce as a means to meet their need so they can practice social distancing. Businesses across West Africa are also seeing a boost in their online sales, though as experts say due to the digital divide, not everyone is gaining the needed access,” says Mark Achiampong, Head of Commercial and Business Banking. Going into 2021, there are several e-commerce trends that have been identified.

Mark discusses the top four trends and how you can leverage them to grow your business: 1. Change in shopping habits. Although the massive shift to online shopping was spurred on by the pandemic, many are likely to continue with the convenience of online shopping now that they have first-hand experience. What you can do: Set up a company website if you don’t already have one. You can easily set up a site geared for online purchasing through platforms such as Shopify. 2. Comparison tools. Consumers have never been more empowered to rate goods based on reviews or compare prices across different suppliers at the touch of a button. Price comparison websites have made it simple to determine which brands are better at customer service and where to get the best possible value for money. What you can do: Conduct market research regularly to

ensure that your products are competitively priced. Interact with consumers online to ensure that your brand is recognised for positive engagement. 3. Social media. The increasing popularity of social media has led to the advent of new e-commerce platforms via media such as TikTok and Instagram. What you can do: In addition to photos of your product and competitions, you can run videos of your top performing products to boost sales and direct consumers to your website. Your account could include unboxing videos, tutorials and even photos of top products in a slideshow format. 4. Customer data. In an age where the consumer has become the product, consumer data has never been more vital to a company’s success. Your consumer data gives you insights into your customers’ demographics, which advertising channels are most popular; and

which content is achieving the desired targets. What you can do: If you do have customer databases, you must be able to show where that data was obtained, for example a competition, website or trade show and you must be able to show proof of customer’s consent to receive marketing information. With consumers likely to continue shopping online even beyond the pandemic, these trends are worth noting to ensure your business’ success going forward,” Mark concludes.

Mark Achiampong

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Companies

WEDNESDAY MAY 12, 2021

Nutriday celebrates Mother’s Day with mothers at 37 Military Hospital

utriDay, Ghana’s innovative zinc fortified yoghurt produced by FanMilk has celebrated Mother’s Day with mothers at the 37 Military Hospital in Accra. Regarded as a product that cares about keeping families strong, producers of NutriDay were at the hospital to put smiles on the faces of mothers on a day devoted to appreciate and show mothers how much they are loved. Apart from Zinc, NutriDay contains Vitamin B2 or Riboflavin which is crucial for energy, Vitamin A which contributes to good eyesight, and Calcium, which is essential for healthy muscles and strong bones. Leading the delegation, the Brands Manager at FanMilk, Eric Kumah underscored the challenges mothers face in adopting healthy nutrition at home or on the go, saying “At FanMilk, we see these challenges, and as leaders, we have introduced NutriDay Zinc fortified yoghurt to

help partner Ghanaian families on their journey to a healthy nutrition.” Present with the team was Mrs Naana Akua Anane Adjei, General Secretary of the Interim

Governing board of the Ghana Academy of Nutrition and Dietetics (GAND) who took the opportunity to educate the mothers on the need to have a strong immune system to fight

against diseases by incorporating products like NutriDay, which is zinc fortified, in planning meals for children and even grown-ups to build a strong immune system. ‘’It is important that you feed your children well, especially now that some of them have been admitted here at the hospital. NutriDay is a product that can be enjoyed by everyone and I encourage you all to get it for your children and even yourselves, to have a strong immune system’’, she said to the mothers at the Nkrumah Pediatric Ward of the 37 Military Hospital. The team also made a stopover at the Christ The King soup kitchen where they put smiles on the faces of the beneficiaries in that community by giving them packs of NutriDay. The team was accompanied by Naa Ashorkor, a celebrated media icon, who has constantly praised the product for its innovativeness. NutriDay zinc fortified yoghurt has one mandate; keeping families strong every day.

MTN Ghana celebrates mothers on Mother’s Day

TN Ghana has surprised over 400 women across the country as part of activities to mark this year’s Mothers’ Day celebrations. The selected mothers received gifts items such as digital shopping vouchers from Melcom, Jumia, and Vlisco, fuel coupons, electronic gadgets among others. The gesture is to re-affirm MTN’s commitment to recognizing and rewarding its cherished customers. Commenting on the presentation, the Senior Manager for Consumer Marketing at MTN Ghana, Mrs. Nana Asantewaa Amegashie said, “the celebration of this year’s Mother’s Day served as another opportunity for MTN Ghana to show deep appreciation to our customers for their loyalty to the brand. We all know how Mothers have worked hard and defiled all odds in nurturing the human capital which has contributed to making society a better place for all of us.” “It has been 25 years of brightening lives and customer satisfaction is our number one priority therefore we remain resolute in ensuring our customers feel appreciated especially on this day as the World celebrates

mothers. We use this occasion to thank all mothers for being a solid rock behind the brand over the years”, she added. Madam Joyce Dongotey-Padi Akumaa, (known in public life as Akumaa Mama Zimbi) a beneficiary of the MTN Mothers’ day presentation expressed her immense gratitude to MTN. She was thrilled and said she is proud to be on the MTN network. She

used the occasion to wish all mothers a happy celebration and also admonished everyone to ‘mask up’ because COVID-19 is real. Celebration of Mothers’ Day is one of the many ways MTN Ghana celebrates its cherished customers. The month of June will present a fine opportunity for Fathers to be celebrated on Fathers’ Day.

Mother’s Day is a day set aside globally to celebrate and honor mothers, motherhood and maternal bonds. In our part of the world, it is celebrated in various ways, characterized mainly by family reunions, sharing of gifts and renewing of bonds. It is but one of many occasions MTN Ghana uses to reward and brighten the lives of its customers.

WEDNESDAY MAY 12, 2021

Feature

WEDNESDAY MAY 12, 2021

A global accord for sustainable finance

By Fabio Panetta

he COVID-19 pandemic has caused the largest decrease in global economic activity on record. But the drop in carbon dioxide emissions has been only temporary. Although global CO2 emissions fell by 6.4% overall in 2020, they had already begun to increase in the second half of the year and have now returned to pre-crisis levels. The fact that last year’s extraordinary circumstances still did not bring global emissions into line with the targets set by the 2015 Paris climate agreement is a stark reminder of the scale of the challenge we face. As the Nobel laureate economist William Nordhaus reminds us, climate change is the quintessential global externality. Its effects are spread around the world and no country has sufficient incentives or capacity to solve the problem on its own. International coordination is therefore essential. Fortunately, a return to multilateral cooperation through the G7, the G20, and the Financial Stability Board offers a unique window of opportunity. Following US President Joe Biden’s decision to rejoin the Paris agreement, the European Union’s commitment to reach carbon neutrality by 2050, and China’s pledge to do the same by 2060, we may now be at a turning point for global climate action. Three priorities stand out on the international agenda. The first is the need to increase global carbon prices. Putting a higher price on carbon is the most costeffective way to reduce emissions at the necessary scale and speed. By internalizing the social cost of emissions – making emitters pay – carbon pricing leverages the power of markets to steer economic activities away from carbon-intensive activities. Currently, carbon prices are far too low. The International

Monetary Fund calculates that the average global carbon price is only $2 per ton. And, according to the World Bank, only 5% of global greenhouse-gas emissions are priced within the range required to achieve the Paris agreement’s goals. Here, advanced economies can lead by example and use the current policy window to commit to carbon-price paths consistent with the Paris accord. Although smaller advanced economies account for only a limited share of global emissions, their adoption of decisive decarbonization measures could encourage developing countries to follow suit. The second priority is to use the recovery from the COVID-19 pandemic to “build back better.” Decisions made now will shape the climate trajectory for decades to come. Policymakers should seize this opportunity to set the global economy on a sustainable growth path. The EU recovery package – Next Generation EU – lives up to that ambition. The third priority goes to the heart of the financial system and central banking: financing the green transition. Phasing out fossil fuels implies the need for massive investment, even if estimates of the precise figure are subject to significant uncertainty. Looking beyond emissions reductions to the broader sustainability agenda, the United Nations estimates that implementing the 2030 Sustainable Development Agenda will require global investments of $5-7 trillion per year. To fill this gap, it will be crucial to mobilize the resources of financial intermediaries, including banks. Sustainable-finance products – such as green lending, green and sustainable bonds, and funds with environmental, social, and governance (ESG) characteristics – have grown dramatically in recent years. Unfortunately, the field suffers from information asymmetries and insufficient

transparency. To foster the growth of sustainable finance, many countries have started developing regulatory frameworks to combat “greenwashing,” and the EU is at the forefront of these efforts. Yet in the absence of global coordination, different jurisdictions have developed different approaches, and industry-based initiatives have proliferated. The resulting edifice of inconsistent and incomparable standards, definitions, and metrics has fragmented sustainablefinance markets, reducing their efficiency and limiting the crossborder availability of capital for green investment. As jurisdictions compete to attract finance, the risk of regulatory arbitrage and a race to the bottom has grown. If left unaddressed, this trend could result in lower standards globally, increasing the likelihood of greenwashing. But we now have an opportunity to start devising a common global approach. Sustainable finance is a top priority for both the G20 under its Italian presidency and the G7 under its British presidency. Moreover, in a public letter shortly after her confirmation, US Secretary of the Treasury Janet Yellen called for an upgrade to the G20’s sustainablefinance working group to “reflect its importance.” A key first step is to agree on minimum standards for corporate disclosures. If a company’s sustainability performance is unclear or unknown, ascertaining the sustainability of the related financial assets is impossible. We must replace the current alphabet soup of reporting frameworks with a common standard. To that end, the EU’s approach – including the ongoing revision of the Corporate Sustainability Financial Reporting Directive – represents an advanced benchmark toward which any international standard should

aim. For a common standard to launch a race to the top, it must not fall short of the best international practices. It should cover all ESG aspects of sustainability. And it should require companies to disclose not just issues that influence enterprise value, but also information on the company’s broader environmental and social impact (known as “double materiality”). A second and even greater challenge is to ensure that countries develop consistent classifications of what counts as sustainable investment. If an activity or asset is considered sustainable in one country but unsustainable in another, there cannot be a truly global sustainable-finance market. To ensure a global level playing field, today’s leaders should aim for an agreement on common principles for wellfunctioning and globally coherent taxonomies. Just as governments need to be mindful of the risk of carbon leakage, they must account for the risk of carbon financing leakage. Finally, we need to ensure that all segments of financial activity remain aligned with broader climate objectives. The enormous energy consumption and associated CO2 emissions of crypto-asset mining could undermine global sustainability efforts. Bitcoin alone is already consuming more electricity than the Netherlands. Controlling and limiting the environmental impact of crypto assets, including through regulation and taxation, should be part of the global discussion. Climate change and sustainability are global challenges that require global solutions – and nowhere more so than in the financial sector. The current political environment offers us a rare opportunity to make substantial progress. We must not waste it.

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