Business24 Newspaper - Sept. 9, 2020 by Business24 Online

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NEWS FOR BUSINESS LEADERS

WEDNESDAY SEPTEMBER 9 2020

PAC upset over Lands Commission’s failure to collect GH¢1.6m outstanding ground rent Members of the Public Accounts Committee (PAC) of Parliament are unhappy over the failure of the Lands Commission to collect ground rents of over GH¢1.6m owed the commission. According to the 2017 report of the Auditor-General, 483 lessees/ assignees owed ground rents totalling GH¢1.6m for the period December 1975 to December 2015.

Vish Ashiagbor, Country Senior Partner of PwC says banks’ workers need skills upgrade more than ever

Bank bosses predict lay-offs over pandemic disruption By Nii Annerquaye Abbey

op bank executives say some workers in the sector face the imminent danger of losing their jobs following the COVID-19 induced digital transformation of banking, PwC Ghana’s 2020 Banking Survey has revealed. When asked by the audit firm about how the pandemic’s outbreak had transformed their operations, the bank chiefs responded that the immediate response was to enforce remote working while

realigning workers’ roles. While the majority, 69 percent, of respondents indicated that remote working will become a permanent option going forward, there was general consensus that the new norm will ultimately lead to the shedding of workers whose jobs have become automated. “Most banks intend to permanently incorporate remote working as an option available to staff based on their roles. 12.5% of banks confirmed that they have already begun and will continue to realign the

job roles and work team structures to the new way of working in order to maximise efficiencies of digital banking, and ensure less-paper operations and requirements for social distancing. In the long run, these measure may result in possible layoffs for some whose jobs become automated,” the report said. “Bank executives do not anticipate that travel policies and recruitment policies will be significantly different from what currently exists. For now, bank executives expect a reduction in staff

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Aids Commission to launch fund to support programmes By Eugene Davis ugendavis@gmail.com

The Ghana Aids Commission is planning on launching the National HIV and AIDS Fund aimed at ensuring sustainable domestic financing of the Aids response in the country, Director-General Kyeremeh Atuahene has said. Donor funding for the commission has dropped rapidly, and according to the DirectorGeneral, there is the need to explore

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NEWS/EDITORIAL

WEDNESDAY SEPTEMBER 7, 2020

EDITORIAL

Job cuts in the banking sector calls for action 1

Wash your hands 2

Cover your cough 3

The latest PwC survey on the impact of the current pandemic on the banking sector has revealed that most banks intend to permanently incorporate remote working as an option available to staff based on their roles. Indeed, 12.5% of banks confirmed that they have already begun and will continue to realign the job roles and work team structures to the new way of working in order to maximise efficiencies of digital banking, and ensure less-paper operations and requirements for social distancing. The survey reveals that in the long run, these measure may result in possible layoffs for some whose jobs become automated. “Bank executives do not anticipate that travel policies and recruitment policies will be significantly different from what currently exists. For now, bank executives expect a reduction in staff numbers while they realign staff skills by developing their digital competences to cope with

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different banks select different tracks in their pursuit to become ‘a digital bank’” PwC’s Country Senior Partner, Vish Ashiagbor noted. The Deputy Chief Executive of the Ghana Association of Bankers, John Awuah, in remarks captured in the report, commended banks for leveraging technology to meet the diverse needs of customers during the peak of the pandemic. “The initial investments made by banks in technology have enabled the industry to support customers during these uncertain times. The benefits of the ‘new normal’ will surely continue to change the way banking business is done going forward,” he added. These positives notwithstanding, policy makers ought to take cognizance of the expected shedding of jobs and act now to create alternative jobs for those that may be affected.

Bank bosses predict lay-offs over pandemic disruption CONTINUED FROM COVER

Wear a mask

the new way of working,” it added. Given the future outlook of the industry, employees that remain are expected to acquire new skills that make them aware of and therefore able to reduce exposure to the increased cybersecurity risks that remote working and digital service delivery present banks with,” he noted. “For instance, it is not likely that observers would see a bank in the immediate years that follow recovery from the pandemic and wonder, ‘is that really a bank?’ Still, from the responses given by bank executives, there are indications of remarkable progress along the digital journey. For now, it seems that focus is on service delivery channels and back office systems with an emphasis on creating – especially for the latter – an environment that supports remote working by staff. We expect that details of how this progress is achieved will evolve with time, as

numbers while they realign staff skills by developing their digital competences to cope with the new way of working,” it added. Commenting on the findings of the survey, which was on the theme “The new normal: banks’ response to COVID-19”, PwC’s Country Senior Partner, Vish Ashiagbor, cautioned that for workers that survive the digital progression, they have to upgrade their skills to remain relevant. “Employees that remain are expected to acquire new skills that make them aware of and therefore able to reduce exposure to the increased cybersecurity risks that remote working and digital service delivery present banks with,” he noted. Despite the widely envisaged digital disruption, Mr. Ashiagbor stated that the feedback PwC got from the respondents is not suggestive of a total transformation of Ghana’s banking sector. “For instance, it is not likely

that observers would see a bank in the immediate years that follow recovery from the pandemic and wonder, ‘is that really a bank?’ Still, from the responses given by bank executives, there are indications of remarkable progress along the digital journey. For now, it seems that focus is on service delivery channels and backoffice systems with an emphasis on creating – especially for the latter – an environment that supports remote working by staff. We expect that details of how this progress is achieved will evolve with time, as different banks select different tracks in their pursuit to

become ‘a digital bank’,” he added. The Deputy Chief Executive of the Ghana Association of Bankers, John Awuah, in remarks captured in the report, commended banks for leveraging technology to meet the diverse needs of customers during the peak of the pandemic. “The initial investments made by banks in technology have enabled the industry to support customers during these uncertain times. The benefits of the ‘new normal’ will surely continue to change the way banking business is done going forward,” he added.

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News

WEDNESDAY SEPTEMBER 7, 2020

PAC upset over Lands Commission’s failure to collect GH�1.6m outstanding ground rent By Eugene Davis

The report said lessees at East Legon owed GH¢251,344, while Airport residential assignees owed GH¢380,851. Assignees at South Legon also owed GH¢441,491. Lessees within the East Legon ambassadorial area owed GH¢212,608 and those within Osu owed GH¢369,546. The Auditor-General stated that his office’s interactions with head of the Ground Rent Management Unit of the commission indicate that the build-up in outstanding ground rent was due to the ignorance of the lessees/assignees of their obligations. During deliberations on Monday at the Public Accounts Committee sitting, chairman of the committee, James Kluste Avedzi, was in shock over the development and questioned why residents of prime areas such as East Legon and Osu owed the commission to that magnitude. Responding to the audit findings, the Executive Secretary of the Lands Commission, Sulemana Mahama, told the committee that the

commission is currently engaging the services of a consultant to assist with the collection of the debts. “We have a serious difficulty with collecting ground rents, and we have devised several strategies to try to improve upon that, but it is still difficult for us. What we have now decided to do is to get

paid consultants to try to retrieve as much as we can,” a frustrated Sulemana Mahama told members of the committee. Ranking Member on the committee Kofi Okyere-Agyekum urged the commission to privatise the collection of ground rents to generate the needed resources.

Responding to the issue, a Deputy Minister of Lands and Natural Resources, Benito Owusu Bio, who accompanied the commission’s officials, assured the committee that the digitisation agenda of the government will enhance the commission’s work to enable it easily identify debtors.

Aids Commission to launch fund to support programmes By Eugene Davis

other funding options to ensure it meets its responsibilities. “The commission is going to launch the National HIV and AIDS Fund that has been created to bring about sustainable domestic financing of the AIDS response, and very soon we are going to put out the necessary information for people to donate,” he told Business24 in an interview after appearing before the Public Accounts Committee in parliament. Mr. Atuahene said adolescent girls and young women between the ages of 15 and 24 account for one in five new HIV infections in the country. “We are going to launch a campaign very soon targeting these groups, and we need the funds to do all this. Currently, the commission is not able to do much because it is limited in terms of resources.

As donor funding falls, Kyeremeh Atuahene wants more domestic funding support for the Ghana Aids Commission.

“Just as we have demonstrably shown our commitment to fighting Covid, let’s marshal the same kind of effort to do it for HIV as well. If we do that we will be in a position

to eliminate AIDS and HIV within the shortest possible time in this country,” he added. As many as 142,000 Ghanaians are HIV-positive but do not know

their status, according to the commission. Last year, 20,068 new infections were recorded across Ghana, with 13,616 HIV/Aids-related deaths.

WEDNESDAY SEPTEMBER 7 2020

News

WEDNESDAY SEPTEMBER 7, 2020

Vodafone CEO joins African leaders to speak on Africa’s economic recovery after COVID-19 Chief Executive Officer (CEO) at Vodafone Ghana, Patricia Obo-Nai, has joined a host of African Leaders and international Community to share her thought of Africa’s Economic Recovery after COVID-19 at this year’s Bruegel Annual Meeting. Bringing the private sector perspective on the panel, Patricia Obo-Nai, disclosed that in March when the COVID-19 pandemic hit the country, her organisation partnered with the government and citizens to save lives. “Our six-point plan included increasing network capacity by 60 percent to ensure people stayed connected as more folks worked from home.” Ms. Obo-Nai added the network saw a 50 percent increase in data traffic. Aside putting devices in hands of health workers, Vodafone Ghana also set up a tele-centre which had 15 multilingual doctors helping citizens. With a good number of Ghanaian students based at home since March and the Ghanaian president’s declaration that schools will reopen in January, 2021, she noted that Vodafone Ghana is already operating online educational support for students, scaled up the programme offering both global and local content so more students can access the Instant Schools platform at no data charge. “Aggregated anonymized data, mobility insights and contact tracing apps all were deployed in the fight against COVID-19. In addition, the collaboration with the Ghana Statistical Services gave

insights of population challenges and dynamics,” she said. “We worked with the Central Banks to enhance financial inclusion. In many markets, we took the fees off when funds were transferred,” Ms. Obo-Nai added. Other interventions by the telco include extending the tier limit with the Vodafone CEO indicating “it started with Safaricom in Kenya and now there are 8 operations in African markets with about 40 million customers and we have about $14 billion yearly transactions.” Since the COVID-19 pandemic hit, about €100 million has been pumped in by the global telecommunication entity. Speaking on the theme for the discussions, Madam Patricia OboNai noted that governments and the private sector must work for economic recovery by looking at strengthening social resilience. “The pandemic has impacted livelihoods, trade and economic growth. 25 million people in SubSaharan Africa are being pushed into poverty so there’s need for a deliberate effort by the private sector and government to rescue such people,” she noted. According to Madam Obo-Nai, “this crisis is leading to rising unemployment and widening of the gap between the rich and poor as well as young and old.” “For Africa, we have done the basic on mobile money usage but more work is being done for more people to venture into digital wallet, merchant payment etc. A billion dollars is spent yearly by

Vodafone on network upgrades but infrastructure gaps with broadband require $80 to 100 billion which governments must do more to assist with,” she stated. She stressed that with the COVID-19 pandemic, governments are tightening their budgets and restructuring sectors to receive governmental stimulus but there’s need for governments to work with the private sector to better manage the health crisis, contain the sociopolitical impact and aid economic recovery. For her part, Former Liberian President, Ellen Johnson Sirleaf, observed that at the start of 2019, Africa was hailed as a rising continent and despite the Ebola outbreak in West Africa as well as acts of terrorism in the Sahel, the continent recorded growth. “Decades of economic and political transformations earned the continent its credentials of

a participant democracy,” she declared. The UN World Economic Situational Prospect for 2019 put the GDP rising from 3.2 in 2018 to 3.4 in 2019 to 3.7 in 2020 with four of the largest growth countries being African. Nonetheless 75 percent of 1.3 billion Africans face a bleak future because of rising population and limited resources which put great risk on sociopolitical stability of the states. It is in the face of these threats that Madam Sirleaf welcomes the African Continental Free Trade Area (AfCFTA) which seeks to accelerate intra-African trade while boosting Africa’s trading Earlier, Vice President Eastern & Southern Africa, World Bank Group, Hafez Ghanem, warned there was a decline regarding the GDP of most African states adding about 12.5 people of Africa fall in the poverty bracket where they face acute hunger. He said since COVID-19 hit, many African states are losing huge revenue on commodity export with “Nigeria’s revenue falling by 70 percent because of a fall in oil prices.” According to Mr. Ghanem, Island economies have also taken a hit such as Mauritius whose tourism sector has been greatly impacted by the pandemic. “In large economies like South Africa, industry has lost about 400,000 jobs,” he added.

First National Bank outdoors new package for SMEs First National Bank Ghana, a subsidiary of the FirstRand Group of South Africa, has announced the introduction of a tailored package for small and medium-scale enterprises in Ghana. The package is intended to help address some major challenges that hinder the growth of SMEs in the country. With this new package, small and medium corporates can start, run and grow their businesses with special transactional capabilities that give them 24/7 access to First National Bank’s awardwinning enterprise platform, automated deposit terminals, email statements, forex and trade services, customized credit facilities and a daily cash pick up service. Mark Achiampong, First National Bank’s Head of Commercial and Business Banking says the new SME offering is hinged on three

key pillars-Start, Run and Grow, is packed with a suite of business toolkits as well as advisory services for small and medium businesses. He said this is timely considering the challenges impacting the SME sector due to the Covid-19 pandemic. “Our new business Gold cheque account is versatile, with hassle-free options that allow you to perform your daily transactions and are suited to small medium enterprises (SME’s),” Mr. Achiampong said. “Interest is paid on all balance held in your Gold business account irrespective of the amount. You earn a free Gold card and access to all our merchant services at a flat monthly fee. There is also an added value to your business if you sign up as one of our Agency Plus partners-a convenient way of partnering FNB Ghana to use your shop to provide banking services in your

neighbourhood for a commission”. On the bank’s round-theclock online banking service, Mr. Achiampong explained that it is an innovative, web-based offering which gives customers secure, controlled, real-time access to accounts and online banking functionality. “We have automated deposit terminals in all our 11 branches giving you 24/7 access to all our banking services, including deposits,” he says. “Trade services like global payments can be carried out on our robust digital platform. You can monitor your business activity in real time and reduce internal fraud with FREE inContact Pro, and Email Statements. Details of your business transactions and email statements are all delivered to your inbox for free.”

Mr. Achiampong also pointed out that First National Bank’s SME package also allows SMEs to apply for an overdraft or business loan quickly and easily. Interested businesses can access this package by visiting any of the First National Bank Ghana branches in Accra, Tema, Kumasi and Takoradi or alternatively through www.firstnationalbank.com.gh for further assistance. First National Bank Ghana is a subsidiary of South Africa’s FirstRand Group which is the largest bank by market capitalisation listed on the Johannesburg Stock Exchange – Africa’s largest bourse. First National Bank is leveraging on the experience and financial muscle of its parent company to excel in Ghana.

WEDNESDAY SEPTEMBER 7 2020

Feature

WEDNESDAY SEPTEMBER 7, 2020

Ghana pushes ahead with efforts to reduce emissions from deforestation, forest degradation

hana is making significant progress towards the sustainable management of cocoa forest landscapes, boosting livelihoods and addressing the impacts of climate change The Government of Ghana has received an advance payment of US$1.3 million out of a US$50 million agreement with the World Bank’s Forest Carbon Partnership Facility for results-based payments for reducing emissions from deforestation and forest degradation (known as REDD+). The provision of this advance payment was included in the program contract, which was signed last year. The funds will be used for the Ghana Cocoa Forest REDD+ Program (GCFRP), focused on cocoa forest mosaic landscapes in seven regions[1] within the high forest zone. This emission reductions program is anchored in the country’s Nationally Determined Contributions (NDCs) to the UN Framework Convention on Climate Change (UNFCCC). As part of the program’s agreed plan, the advance payment will be received by the Forestry Commission, which houses the National REDD+ Secretariat, and will fund activities such as livelihood support, trainings, reforestation and enrichment planting in the program areas, multi-stakeholder, multi-sectoral engagement, and essential program coordination

costs. The financing is especially timely, given the current COVID-19 situation, for Ghana to maintain momentum with this initiative and to ‘build back greener.’ “This program is an important vehicle for the effective and successful implementation of both government and private sector commitments under the Cocoa & Forests Initiative, which together feed into the overall forest sector contributions for Ghana’s international climate targets. This advance payment is vital to catalyze the program’s implementation efforts,” said Hon. Kwaku AsomahCheremeh, Ghana’s Minister of Lands and Natural Resources. “This emission reductions program is a unique public-private partnership between cocoa companies, traditional authorities, farmers, community members, the Ghana Cocoa Board and the Forestry Commission amongst others. It represents a pilot model for sustainable sourcing of cocoa in rapidly growing economies, while reducing emissions from deforestation and forest degradation and creating alternative and additional livelihoods. The Forestry Commission is therefore rallying the support of all stakeholders and beneficiaries to achieve successful implementation,” said Mr. John M. Allotey, Chief Executive of the Forestry Commission. The program area, which spans

nearly 6 million hectares, is home to 12 million people and includes 1.2 million hectares of forest reserves and national parks. The program will promote several environmental benefits such as preventing soil erosion and protecting water resources through sustainable land management practices. It will reduce further deforestation of natural forests and improve carbon sequestration through shade cocoa rehabilitation, enrichment planting and intercropping. It will also support social benefits that provide farmers and community members with potential additional income on a sustainable basis, and plantation activities like nursery operations, planting, forest management and protection which will increase employment opportunities. During the six year lifetime of the GCFRP, as the results-based payments for verified emissions begin to flow to Ghana, they will serve as an ongoing incentive for the diverse stakeholders participating in this program and will be shared in accordance with the inclusive benefit sharing plan. Stakeholder engagement around implementation is critical for the success of the program. Building on the support provided by the advance funding, results-based payments for emission reductions will be made after rigorous thirdparty verification. Ghana has finalized the methodology for

monitoring deforestation and is in the process of preparing its monitoring report for the first independent verification, expected to take place in 2021. “The GCFRP positions Ghana to be amongst the first countries globally to demonstrate how improved governance, inclusive participation, collaborative forest resources management and sound agro-forestry practices in a commodity-driven landscape can work together to deliver real, verifiable and ambitious climate action whilst building ecosystem and livelihood resilience,” said Ms. Roselyn Fosuah Adjei, Director for Climate Change and REDD+ National Focal Point at the Forestry Commission. “The advance payment can serve as catalyst for Ghana’s further progress in conserving forests and reducing emissions,” said Ms. Agata Pawlowska, the World Bank’s Operations Manager in Ghana. “We are confident that Ghana will continue to liaise with stakeholders and the private sector in this unique program which will support more sustainable cocoa production, increased incomes for cocoa farmers and climate co-benefits through minimizing its deforestation and forest degradation footprint.”

WEDNESDAY SEPTEMBER 7 2020

News

WEDNESDAY SEPTEMBER 7, 2020

Emirates refunds US$ 1.4 billion to customers Emirates reveals that is has returned over AED 5 billion (US$ 1.4 billion) in COVID-19 related travel refunds to date, making strong and steady progress on its commitment to customers to complete pending refunds. More than 1.4 million refunds requests have been completed since March, representing 90% of the airline’s backlog. This includes all requests received from customers around the world up until the end of June, save for a few cases which require further manual review. Since the pandemic hit, Emirates has invested additional resources to ramp up its processing capability. The airline also continues to work with industry partners to facilitate refunds for those who have booked their Emirates flights through travel agents, this includes enabling direct refunds processing via global booking systems (GDS). Sir Tim Clark, President Emirates Airline said: “We understand that from our customers’ standpoint, each pending refund request is one too many. We are committed to honouring refunds and are trying our utmost to clear the massive and unprecedented backlog that was

caused by the pandemic. Most cases are straightforward, and these we will process quickly. But there are cases which will take a bit more time for our customer teams to manually review and complete. We are grateful to our customers for their patience and understanding.” As global travel markets slowly re-open, Emirates has gradually restarted its passenger operations around the world, always ensuring that it provides customers with a safe and smooth travel experience. The airline has introduced a series of industry-leading initiatives to provide customers with additional reassurance and confidence when they travel – from bio-safety measures at every step of their journey, to free COVID-19 medical cover, and flexible booking policies. Emirates currently offers flights to over 80 cities. Customers can stop over or travel to Dubai as the city has re-opened for international business and leisure visitors. Ensuring the safety of travellers, visitors, and the community, COVID-19 PCR tests are mandatory for all inbound and transit passengers arriving to Dubai (and the UAE), including UAE citizens, residents and tourists, irrespective of

the country they are coming from. Destination Dubai: From sunsoaked beaches and heritage activities to world class hospitality and leisure facilities, Dubai is one of the most popular global destinations. In 2019, the city welcomed 16.7 million visitors and hosted over hundreds of global meetings and exhibitions, as well as sports and entertainment events. Dubai was one of the world’s first cities to obtain the Safe Travels stamp from the World Travel and Tourism Council (WTTC) – which endorses Dubai’s comprehensive and effective measures to ensure guest health and safety. Flexibility and assurance: Emirates’ booking policies offer customers flexibility and confidence to plan their travel. Customers who purchase an Emirates ticket by 30 September 2020 for travel on or before 30 November 2020, can enjoy generous rebooking terms and options, if they have to change their travel plans due to unexpected flight or travel restrictions relating to COVID-19, or when they book a Flex or Flex plus fare. More information here. Free, global cover for COVID-19 related costs: Customers can now travel with confidence, as Emirates

has committed to cover COVID-19 related medical expenses, free of cost, should they be diagnosed with COVID-19 during their travel while they are away from home. This cover is immediately effective for customers flying on Emirates until 31 October 2020 (first flight to be completed on or before 31 October 2020), and is valid for 31 days from the moment they fly the first sector of their journey. This means Emirates customers can continue to benefit from the added assurance of this cover, even if they travel onwards to another city after arriving at their Emirates destination. For more details: www.emirates. com/COVID19assistance. Health and safety: Emirates has implemented a comprehensive set of measures at every step of the customer journey to ensure the safety of its customers and employees on the ground and in the air, including the distribution of complimentary hygiene kits containing masks, gloves, hand sanitiser and antibacterial wipes to all customers. For more information on these measures and the services available on each flight, visit: www.emirates.com/yoursafety.

Future of aviation: Rolls-Royce reveals two new breakthrough in AI ethics R o l l s - R o y c e has announced two breakthroughs in artificial intelligence ethics, which could help gain society’s trust of the technology and accelerate the next generation of industrialisation, known as industry 5.0. The first breakthrough is an AI ethics framework, which is a method that any organisation can use to ensure the decisions it takes to use AI in critical and non-critical applications are ethical. This is the first time AI ethics for industrial contexts has moved beyond theory and into practical application. Secondly, within that framework, is the first step-bystep process for ensuring the outcomes of AI algorithms can be trusted. This five-layer checking system focuses on the outputs of algorithms, not the algorithms themselves, which are constantly changing. The checking system prevents biases from developing in algorithms undetected and with results being constantly monitored, it ensures they are trustworthy. The ethics framework and its trust process have been peer reviewed by subject matter experts in several big tech firms, as well as experts in the

automotive, pharmaceutical, academic and government sectors. Both will be published in full under Creative Commons licence later this year on the RollsRoyce.com website. In a keynote speech at London Tech Week’s AI Summit, RollsRoyce Chief Executive Officer, Warren East, said: “By publishing our findings we want to move the AI ethics conversation forwards from discussing concepts and guidelines, to accelerating the process of applying it ethically. “There is no practical reason why trust in AI cannot be created now. And it’s only with the acceptance and permission of our society – based on that trust – that the full benefits of AI can be realised, and it can take its place as a partner in our lives and work.  “As a business we are open to collaborative innovation and we will continue to talk to key stakeholders, customers, counterparts and technology leaders to share our work in detail to see how we can help each other progress for the greater growth, wealth and health of our world.” Rolls-Royce is one of the world’s leading industrial technology

companies and we have been applying advanced analytics for more than 30 years, and using artificial intelligence to disrupt the market with our real-time engine health monitoring service since 1999. These latest breakthroughs have been achieved as a part of our work to apply AI throughout our business, including the use of robotic inspections on critical components. The AI development work is spearheaded by our data innovation business, R2 Data Labs. Caroline Gorski, Global Director of R2 Data Labs, said: “Rolls-Royce’s AI capabilities are embedded deeply into other companies’ products and services and so aren’t widely known. Rolls-Royce’s  AI doesn’t often feature in a consumers’ understanding of how the digital world is changing their lives. “The current debate about the use of AI is focused on the consumer and the treatment of consumer and personal data. But we believe that what we have created – by dealing with a challenge rooted squarely in  the industrial application of AI – will help not only with the

application of AI in other industries but far more widely.” The two breakthroughs were made during work around an internal assurance challenge where robotic inspections were proposed for the inspections of critical components. During the peer review process, it became apparent that both the ethical framework around that decision making, as well as the trustworthiness process, were new and had the potential to be applied across all uses of artificial intelligence. Caroline Gorski, said: “There is much more still to do. We haven’t solved all of AI’s  challenges  but we hope that when we make this work freely available, it can help organisations large and small around the world grow using AI for good, ethical outcomes.”

WEDNESDAY SEPTEMBER 7 2020

Feature

WEDNESDAY SEPTEMBER 7, 2020

The coming global technology fracture BY DANI RODRIK

he international trade regime we now have, expressed in the rules of the World Trade Organization and other agreements, is not of this world. It was designed for a world of cars, steel, and textiles, not one of data, software, and artificial intelligence. Already under severe pressure from China’s rise and the backlash against hyper-globalization, it is utterly inadequate to face the three main challenges these new technologies pose. First, there is geopolitics and national security. Digital technologies allow foreign powers to hack industrial networks, conduct cyber-espionage, and manipulate social media. Russia has been accused of interfering in elections in the United States and other Western countries through fake news sites and the manipulation of social media. The US government has cracked down on the Chinese giant Huawei because of fears that the company’s links to the Chinese government make its telecoms equipment a security threat. Second, there are concerns about individual privacy. Internet platforms are able to collect huge amounts of data on what people do online and off, and some countries have stricter rules than others to regulate what they can do with it. The European Union, for example, has enacted fines for companies that fail to protect the EU residents’ data. Third, there is economics. New technologies give a competitive edge to large companies that can accumulate enormous global market power. Economies of scale and scope and network effects produce winner-take-all outcomes, and mercantilist policies and other government practices can result in some firms having what looks like an unfair advantage. For example, state surveillance has allowed Chinese firms to accumulate huge amounts of data, which in turn has enabled them to corner the global facial recognition market. A common response to these challenges is to call for greater international coordination and global rules. Transnational regulatory cooperation and antitrust policies could produce new standards and enforcement mechanisms. Even where a truly global approach is not possible – because authoritarian and democratic countries have deep disagreements about privacy, for example – it is still possible for democracies to cooperate among themselves and develop joint rules. The benefits of common rules

are clear. In their absence, practices such as data localization, local cloud requirements, and discrimination in favor of national champions create economic inefficiencies insofar as they segment national markets. They reduce the gains from trade and prevent companies from reaping the benefits of scale. And governments face the constant threat that their regulations will be undermined by companies operating from jurisdictions with laxer rules. But in a world where countries have different preferences, global rules – even when they are feasible – are inefficient in a broader sense. Any global order must balance the gains from trade (maximized when regulations are harmonized) against the gains from regulatory diversity (maximized when each national government is entirely free to do what it wants). If hyperglobalization has already proved brittle, it is in part because policymakers prioritized the gains from trade over the benefits of regulatory diversity. This mistake should not be repeated with new technologies. In fact, the principles that should guide our thinking on new technologies are no different from those for traditional domains. Countries may devise their own regulatory standards and define their own national security requirements. They may do what is required to defend these standards and their national security, including through trade and investment restrictions. But they have no right to internationalize their standards

and try to impose their regulations on other countries. Consider how these principles would apply to Huawei. The US government has prevented Huawei from acquiring American companies, restricted its operations in the US, launched legal proceedings against its senior management, pressured foreign governments not to work with it, and, most recently, banned US companies from selling chips to Huawei’s supply chain anywhere in the world. There is little evidence that Huawei has engaged in spying on behalf of the Chinese government. But that does not mean that it will not do so in the future. Western technical experts who have examined Huawei’s code have been unable to rule out the possibility. The opacity of corporate practices in China could well obscure Huawei’s links to the Chinese government. Under these circumstances, there is a plausible national security argument for the US – or any other country – to restrict Huawei’s operations within its own borders. Other countries, including China, are not in a position to secondguess this decision. The export ban on US companies, however, is harder to justify on national security grounds than the ban on Huawei’s US-based operations. If Huawei’s operations in third countries pose a security risk to those countries, their governments are in the best position to assess the risks and

decide whether a shutdown is appropriate. Moreover, the US ban confronts other countries with severe economic repercussions. It creates significant adverse effects for national telecoms companies like BT, Deutsche Telekom, Swisscom, and others in no fewer than 170 countries that rely on Huawei’s kits and hardware. Perhaps worst hit are poor countries in Africa that are overwhelmingly dependent on the company’s cheaper equipment. In short, the US is free to close its market to Huawei. But US efforts to internationalize its domestic crackdown lack legitimacy. The Huawei case is a harbinger of a world in which national security, privacy, and economics will interact in complicated ways. Global governance and multilateralism will often fail, for both good and bad reasons. The best we can expect is a regulatory patchwork, based on clear ground rules that help empower countries to pursue their core national interests without exporting their problems to others. Either we design this patchwork ourselves, or we will end up, willynilly, with a messy, less efficient, and more dangerous version.

Dani Rodrik, Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government, is the author of Straight Talk on Trade: Ideas for a Sane World Economy. Copyright: Project Syndicate, 2020. www.project-syndicate.org

WEDNESDAY SEPTEMBER 7 2020

Feature

BUSINESS OUTLOOK SERIES

WEDNESDAY SEPTEMBER 7, 2020

Strategic business planning and implementation (Making a Case for Developing a Strategic Business Plan)

BY CDC CONSULT LIMITED

n the corporate world, one major problem we have noticed, from our many years in advisory service is that, executives are overwhelmed with demands to make daily routine decisions that are largely operational and administrative in nature. The strategic decisions that are crucial to the long term survival of the business receive no or very little attention. Unfortunately for these executives, neglecting these strategic decisions do not invalidate their importance and the critical role they play in achieving the entity’s mission. If anything at all, executives are forced to take, sometimes expensive and not well thought-through corrective measures, to avert disaster when the business is taken to its tipping point of ruin. The lamentation of executives then becomes ‘why didn’t we see this coming?’ or ‘if only we had planned sooner, rather than later’. However, management does not need to get to this point as strategic business plans can be easily developed and implemented. Having discussed the business model improvement and innovation process, the next four articles in the series will cover strategic business planning and implementation. The four articles in the series shall be as follows: Part 1: Making a case for developing a strategic business plan; Part 2: Making your strategic business planning process effective; Part 3: What your strategic business plan should include - what stories it should be telling; Part 4: How to effectively implement your strategic business plan. Though this is business focused, the principles are equally applicable to every organisation, profit or notfor- profit organizations. Making a case for developing a strategic business plan Strategic business planning is primarily the responsibility of the Board or Advisory Committee of the business. However, this responsibility is practically executed through senior management. Therefore, where this activity fails, though owners of the business will hold the Board accountable, so will the Board hold management accountable. It is therefore important that management initiate the process by making a case to the Board for strategic business planning to be sanctioned. The following are key elements for making a case for a strategic business plan.

Understand the Concept of Strategy Every organization or business must make decisions on what products to offer, who to serve, how to serve, and where to serve. These decisions are considered as strategic decisions and are driven by the mission of the business. Understanding the different ways of thinking about strategy is the first step in understanding its importance and why every organisation or businesses, must have a strategic business plan. A strategy may be viewed as the broad priorities adopted by an organization in recognition of its operating environment and in pursuit of its mission - where broad priorities mean the overall directional areas the organization will pursue to achieve its mission. The above definition implies a business strategy involves: • The creation of a unique and valuable position, by executing different sets of activities; • Broad organizational priorities identified in the process of decision making; • Defining the organization’s distinctive approach to competing and the competitive advantage on which it will be based; and • Those specific choices the organisation makes in order to deliver ‘value’ to customers. Professor Henry Mintzberg, articulated what he labeled as “the 5 Ps of strategy to emphasize the place of strategy in the management of an organisation. Plan - A strategy is a carefully crafted set of steps that a business intends to follow to be successful. Ploy - A strategy is a specific move designed to outwit or trick competitors and often involves using creativity to enhance success. Pattern - A strategy is the extent or degree of focus and consistency in a business’ actions over time. Position- A strategy is a business’ place in the industry relative to its competitors. Perspective - Strategy is how executives interpret competitive landscape around them. Executives who adopt unique and positive perspectives can lead firms to find and exploit opportunities that others simply miss. Michael Porter describes the foundation of strategy as the activities in which an organisation elects to excel and that the essence of a strategy is choosing to perform activities differently from competitors so as to provide a unique value proposition.

Why Business Executives Should Bother About a Strategic Business Plan As a management advisory firm that facilitates strategy development, we at CDC Consult have come across some business executives who argue strongly against businesses developing a strategic business plan. For those executives, they consider it as a waste of time and resources and their arguments are summarized as follows: The market is too dynamic to still have a strategic business plan with strategies that will become redundant and may never be implemented; A business’s objectives and competitiveness that comes from strategy are transient – these can be copied so quickly there is no place for strategy. Indeed, the current business environment, especially amidst COVID-19 is fast changing for businesses. Most businesses are faced with the challenges of strategic direction: some from a desire to grasp new opportunities, others to overcome significant problems. It is therefore dangerous to subscribe to this dogma as rapid changes make planning even more essential to navigate the everchanging environment. The plan is a starting point of a long journey in the life of the business. It charts a route to the destination. A plan well developed, helps to identify the major hazards that have to be watched along the way and provides alternatives for dealing with such hazards should they occur. A plan therefore better equips management for the rapid changing environment and serves as a basis for determining alternative courses of action in the face of changes in the business environment. A plan gives executives landmarks to confirm progress made over a period of time. It provides clarity on where you started from, where you are going, what changes to make and above all, how to get to your intended destination. It must therefore be noted that a plan that is not subjected to constant reference, review and re-focusing is but a document.

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Understand the mission and objectives of the company; • Understand the current business model (kindly refer to our previous articles for business model improvement and innovation); • Evaluate how well or otherwise the current business model facilitates the achievement of the business’ mission and objectives; • Evaluate the results of current performance (financial performance, employee satisfaction, market position, customer satisfaction etc.); • Determine the gap between desired outcomes and current results; • Determine the impact of various functions on the achievement of the business mission and objectives; • Situate the need for a strategic plan for coordination of interrelated functions that leads to the achievement of the objectives, mission and eventually the vision of the business. Strategy remains an important tool for establishing a difference that can be preserved by a business to remain sustainable and or outperform competition. Strategy answers critical questions which are drivers of successful and sustainable businesses including: How do we meet clients’ needs; How do we cultivate client loyalty and achieve impact; What products do we offer and what delivery channels do we use; How do we meet regulatory provisions; and How do we remain in business? In the next edition, our focus will be on how to make the strategic business planning process effective.

Making the Case To make a case to the Board, colleague management and employees for a strategic business plan, the manager must appreciate the need for a strategic business plan and understand how strategic plans are developed. The following are key considerations for making a good case for a strategic business plan:

For more information and targeted services in financial management and investment advisory services, training and recruitment, market solutions and organizational development, and research, kindly contact CDC Consult Limited through info@cdcconsult.org, babilo@cdcconsult.org. You can also call 055332030/0244683042

WEDNESDAY SEPTEMBER 7 2020

Feature

WEDNESDAY SEPTEMBER 7, 2020

The Great Services Illusion BY CÉLESTIN MONGA

s the world prepares for the post-pandemic era, the quest for sustainable economic growth is becoming ever more intense – especially for developing countries. It is tempting to call for these countries – the main engine of global growth in recent decades – to shift their development strategies from industrialization to services. As new technologies increasingly allow services to be produced and traded just like goods, some economists even suggest that low-income economies should skip the manufacturing stage of development altogether and go directly from traditional agriculture to the new “growth escalator” of services. The belief that services represent the new holy grail for developing countries stems in part from empirical studies showing that trade in services has increased faster than trade in manufactured goods since 2000, and in particular since 2011. The disruption of global value chains caused by COVID-19 has only reinforced this belief. Moreover, new technologies such as 5G networks and cloud computing are fragmenting service processes and opening up new possibilities to outsource highwage and costly activities. These trends are driving a so-called “third unbundling,” whereby some previously non-tradable services become tradable. With the world’s largest economies engaged in tariff wars and global trade declining sharply, many regard services as the most appropriate growth and employment engine, because they can be digitized and are less susceptible to customs and other logistical barriers. But this blind faith in servicesled growth is a dangerous illusion, and the arguments supporting it are deeply flawed. For starters, the downward trend in the global trade-to-GDP ratio over the past decade should be put in perspective: a study by Giovanni Federico and Antonio Tena-Junguito shows that although world trade since 1800 has often suffered temporary retreats, the fundamental and consistent trend is upward. Trade and globalization have on balance made the world much wealthier, and will remain the most reliable routes to global prosperity and peace. Second, manufacturing – not services – remains the primary driver of global growth. True, hightech innovation is blurring the lines between physical and new digital production systems, and also changing the conventional

boundaries between agriculture, industry, and services. For example, new developments in information and communications technology (ICT) are allowing traditional farmers around the world to connect to global value chains in agro-industrial production and services. But these changes do not alter the fact that industrialization is still paramount in the quest for economic prosperity. The digital revolution is mainly opening up new opportunities to accelerate innovation and boost the valueadded content of manufacturing output. A recent report by the United Nations Industrial Development Organization shows that value added in world manufacturing averaged 3.1% annual growth between 1991 and 2018, slightly higher than the average GDP growth rate of 2.8%. As a result, manufacturing’s contribution to world GDP growth increased from 15.2% in 1990 to 16.4% in 2018. Third, the current value of global trade in services is only one-third that of manufactured goods, even though services account for 75% of GDP and 80% of employment in OECD countries. Advanced economies’ greater share of employment in tradeable services is simply a logical step in the process of industrial upgrading and structural transformation, and also reflects their comparative advantage in being near the technological frontier and relying mainly on relatively high-skilled labor and financial capital. By contrast, developing countries’ comparative advantage is low-cost labor, and they should not seek to mimic the services-led growth strategy in vogue in advanced economies without having the skills base to sustain it. Policymakers from Bolivia to Burundi to Bhutan would be ill-advised to try to emulate Switzerland’s services-led growth simply because they also

are landlocked countries. Moreover, the claim that industrialization will create fewer job opportunities than in the past because robots are increasingly replacing human labor remains conjectural. Although automation will eliminate a large number of jobs, it will also likely create new industries and jobs in more skilled activities. Once we consider indirect effects along the value chain, the increase in the stock of robots used in global manufacturing is actually creating employment, not destroying it. Moreover, in situations where technological progress and the proliferation of artificial intelligence (AI) lead to unemployment and worsen inequality, sound public policies (such as non-distortionary taxation levied to compensate those who otherwise lose their jobs) can counter these negative effects. Fourth, services’ status as the main source of growth in many developing countries (at least according to official national accounting statistics) mainly reflects the failures of industrialization strategies that were not aligned with these economies’ comparative advantages, as well as excessive informalization in traditional agriculture and relatively unproductive activities. Low-skilled services may help many people to escape extreme poverty, but they are not reliable engines of growth and sustainable economic development. To be sure, tradeable business services (including ICT services, financial intermediation, insurance, and professional, scientific, technical, and medical services) can provide opportunities for servicebased global integration because of the large wage differences across countries. But, again, this will happen only when developing countries improve their humancapital base – a long-term and costly process.

Similarly, the emergence of advanced digital production technologies (including robotics, AI, additive manufacturing, and data analytics) opens up new possibilities in services such as telemedicine and telerobotics. But these activities also require highly skilled workers, and most developing countries’ education systems and outcomes unfortunately prevent much of the labor force from competing successfully. Given these constraints, advocating that economies with weak human capital leapfrog industrialization is a recipe for further informalization and poverty. For poorer countries, industrialization remains the main avenue for successful development. It yields higher productivity growth, and it builds and strengthens the skills and capabilities that countries need to secure a competitive niche in the global economy. New technologies also allow latecomers to build environmentally sustainable manufacturing firms. In short, developing countries should dismiss reports of the demise of manufacturing as the key to future prosperity. High-end services can and must wait.

Célestin Monga, a former managing director at the United Nations Industrial Development Organization and former senior economic adviser at the World Bank, is Visiting Professor of Public Policy at Harvard University’s John F. Kennedy School of Government. He is the author, most recently, of The Oxford Handbook of Structural Transformation and the co-author (with Justin Yifu Lin) of Beating the Odds: Jump-Starting Developing Countries. Copyright: Project Syndicate, 2020. www.projectsyndicate.org

WEDNESDAY SEPTEMBER 7 2020

News

WEDNESDAY SEPTEMBER 7, 2020

Rotary Club of Tema Community 25 supports COVID-19 fight at Old Ningo BY BAPTISTA S. GEBU The Rotary Club of Tema Community 25 has embarked on an operation Stop COVID-19 which included donation of over 600 pieces of Rotary branded nose masks, Stop COVID-19 flyers and other Rotary educational materials. The project began from Kpone barrier through to old Ningo market square and ended at Ningo Prampram. The Rotary branded nose masks were sponsored by the Rotary District 9102. Rotarians and Rotaractors from Tema and other Rotary Clubs from Accra, engaged with commuters highlighting the importance of adhering to all COVID-19 protocols which includes but not limited to the wearing of face masks, proper washing of hands with soap under running water, observing at least one meter social distancing, avoiding handshake amongst others. The emphasis was customarily on the usage of the nose masks and the need to build a strong immune system by staying healthy. The Rotary Club of TemaCommunity 25 was chartered on

July 3, 2020 with its charter ball celebration scheduled to be held on September 12, 2020 at the Tema Rotary Center located at Tema Community 5. The club has adopted Sunday 5:30 pm at the Tema Community 25 Meeting Center as its meeting day, time and venue respectively. Since its formation, this marks the maiden project of the club. The club’s project director stated that, the club has earmarked other project for this Rotary year. The Club’s flagship project will be unveiled at its scheduled charter night. Rotary is a global network of 1.2 million neighbors, friends, leaders, and problem-solvers who see a world where people unite and take action to create lasting change – across the globe, in our communities, and in ourselves. Solving real problems takes real commitment and vision. For more than 110 years, Rotary’s people of action have used their passion, energy, and intelligence to take action on sustainable projects. From literacy and peace to water and health, we are always working to better our world, and we stay committed to the end.

Rotary members believe that we have a shared responsibility to take action on our world’s most persistent issues. Our 35,000+ clubs work together to promote peace, fight disease, provide clean water, sanitation, and hygiene, save mothers and children, support education and grow local economies. Rotary’ mission is to provide service to others, promote integrity, and advance world understanding, goodwill, and peace through our fellowship of business, professional, and community leaders. Rotary is made up of three parts: our clubs, Rotary International, and The Rotary Foundation. Together, we

work to make lasting change in our communities and around the world. The heart of Rotary is the members, dedicated people who share a passion for community service and friendship. Rotary members share ideas, make plans, hear from the community, and catch up with friends during club programs that fuel the impact we make. Rotaract clubs bring together people ages 18-30 to exchange ideas with leaders in the community, develop leadership and professional skills, and have fun through service. In communities worldwide, Rotary and Rotaract members work side by side to take action through service.

Twenty out of 24 banks in Ghana paid GRA GHS1.6 billion as corporate tax in 2019 By Joshua Bosoka

joshuabosoka@gmail.com Tel: +233 024 4488 449

Twenty (20) out of the twenty (24) banks licenced in Ghana by Bank of Ghana in 2019 paid a total direct tax of GHS1.6 billion which also include the five per cent national fiscal stabilization levy to Ghana Revenue Authority (GRA) the agency mandated by law to assess collect and account for tax revenue on behalf of the Ghana of government. This GHS1.6 billion represent a growth of twenty-four per cent (24%) from 2018 direct tax of GHS1.3 billion paid to the same agency. These tax figures were stated in the published audited financial report of the banks. The other four banks namely First Atlantic Bank Limited, GHL Bank Limited, National Investment Bank Limited, OmniBSIC Bank Ghana Limited had not published their 2019 audited reports therefore were excluded from the analysis. In 2019, the Ghana Revenue Authority (GRA) collected a total tax revenue of GHS43.9 billion

as compare to GHS37.7 billion collected in 2018 representing an increase or growth of 16.6 per cent. Domestic tax which include taxes such as corporate tax and national stabilisation levy which were the taxes these 20 banks paid contributed GHS31.9 billion and GHS24.5 billion respectively in 2019 and 2018 to the total tax revenue collected representing a growth of 30.4 per cent. The GHS1.6 billion paid in 2019 by these 20 banks represent 3.7 per cent of the total tax revenue collected in 2019 by Ghana Revenue Authority and 4.3 per cent of the total domestic tax revenue collected in the same year while the GHS1.3 billion paid in 2018 by these same 20 banks represent 4.1 and 5.3 per cent of the total tax revenue and the total domestic tax revenue respectively. The 24 per cent increase in the tax paid by these 20 banks in 2019 was as a result of the over 40 percent increase in their profit which will be discussed in another article written by the same author. Five out of the twenty banks in both 2018 and 2019 contributed 56 per cent of the total GHS1.3

billion and GHS1.6 billion tax paid to GRA respectively with (Standard Chartered bank, Absa bank, Ecobank, Stanbic bank and GCB bank) taking the top five spot in 2018 while in 2019, (Ecobank, Absa bank, GCB bank, Zenith bank and Standard Chartered bank in the top five)

Joshua Bosoka is a results-driven finance and accounting expert offering over ten (10) years of success in leading financial, accounting and auditing management activities at different industries and organisations both local and international. He is a certified chartered accountant and a member of ACCA and ICAG. MSc in Professional Accountancy from University of London and member of other professional organisations.

WEDNESDAY SEPTEMBER 7 2020

Mining

Mining deal value falls by over US$18bn in H1, 2020 Global mining deal value, suffering from an unanticipated shock from the COVID-19 pandemic, fell by more than US$18 billion yearon-year in the first half of 2020 to $46.6 billion. An expected slump in the global economy, steered by a series of challenges, has kept investors away from long-term financial instruments, resulting in a 12.7% y-o-y fall in the capital raised by mining companies, according to data and analytics company GlobalData. Mining mergers and acquisitions (M&As), despite a decent first quarter owing to deals involving gold, fell by 51.6% during the first half of 2020. Overall, the majority of the impact was evident on the completion rate, as there was a 41.7% y-o-y fall in the completed deal value. Seven of the top ten asset transactions deals involved gold. Topping the list was Mudrick Capital Acquisition Corporation (MUDS), which acquired an equity interest and assets from Hycroft Mining Corporation for a consideration of $537 million to form Hycroft Mining Holding Corporation. The remaining three involved cobalt, coal and copper. “The largest of the completed deals was the acquisition of Detour Gold by Kirkland Lake Gold for $3.79 billion,” says GlobalData senior mining analyst Vinneth Bajaj. “By including the Detour Lake mine to its production assets, the company aims to produce up to

1.5 Moz of gold in 2020. With this acquisition, Kirkland also added $173.9 million in cash and repaid Detour’s debt of around $98.6 million. Furthermore, with strong liquidity, the company is wellpositioned to cope with COVID-19 challenges. Kirkland also raised $1 million in a private placement of shares primarily to complete phase two permitting of its Hasbrouck project in the US.” Alongside that, PT Indonesia Asahan Aluminium’s raised $2.5 billion by offering three sets of bonds at 4.75% (due in 2025), 5.45% (due in 2030) and 5.8% (due in 2050). Of the total, 60% will be used to pay debts and to acquire 20% of PT Vale Indonesia, while the remaining 40% will be used to refinance the company’s older bonds. Moreover, Freeport-McMoRan raised a collective $1.3 billion, which will be used to fund its purchase of certain outstanding senior notes due in 2021 and 2022. Bajaj adds: “The total volume of deals increased from 1 811 in H1 2019 to 2 271 in H1 2020 owing to a 79.7% increase in the total number of announced capital raising deals in that period. This was accompanied by a 28.4% increase in the volume of completed M&A deals. “Canada, US, Australia, China and India accounted for nearly 87% of the total deal volume and over 72% of the total deal value,” he concludes. Source:miningreview

Ghana wants to invest gold royalty IPO proceeds in similar funds Ghana plans to use part of the proceeds from an initial public offering (IPO) in a gold royalty fund to invest in similar entities. Africa’s biggest gold producer wants to use about 20% of the $500 million it seeks to raise through the IPO later this year to buy stakes in other royalty companies, Finance Minister Ken Ofori-Atta said in an interview. Ghana is “now the continent’s biggest bullion producer,” he said. “We seek just to leverage that and have some of the world’s top gold producers as part of our portfolio.” The country hopes to benefit from a high gold price that’s boosted the stocks of producers such as Barrick Gold and Newmont to multi-year highs. The fund will be structured to pay dividends from income earned from the

government’s gold operations and will be listed in London and on the local bourse. The rest of the proceeds will be used to develop the gold value chain including a refinery, jewelery tourism market and infrastructure projects, Ofori-Atta said. Ghana plans to keep a 51% stake in the fund, he said. Ofori-Atta brushed off a threat by Ghana’s main opposition party that it will reverse the share sale transaction should it win elections that are scheduled for December. “Similar comments were made in the past but after the politics is done, everyone knows what is good for Ghana,” he said. “We are a country that has a high respect for the rule of law and successive governments respect the nation’s contractual obligations.”

WEDNESDAY SEPTEMBER 7, 2020

Low-priced platinum outperforming gold as investor sentiment turns positive – WPIC

Gold grabs the headlines and platinum less so but it is interesting to note that the platinum price has surged by a far bigger percentage than gold. Increased global risk owing to the Covid-19 pandemic has driven strong investor demand for gold as a risk hedge, with gold ETF holdings up over 20%, or $50-billion, already in 2020. Although the price of gold is up 28% in 2020, rising to a new record high of $2 067 on August 6, and outperforming almost all other asset classes this year, what may have gone unnoticed is that, since the platinum price low of $599/oz on March 19 and the gold price low of $1 474/ oz, platinum has significantly outperformed gold, rising 55% versus gold’s rise of 33% by the end of August. Investor sentiment towards platinum is turning positive, the World Platinum Investment Council (WPIC) research director Trevor Raymond told Mining Weekly in a telephone interview. WPIC’s members are Anglo American Platinum, Impala Platinum, Northam Platinum and Royal Bafokeng Platinum. Platinum’s price outperformance of gold is no anomaly. Over the two years from the price lows of the Global Financial Crisis in late 2008, platinum’s weekly returns outperformed gold’s by between 30% and 65%. Platinum’s performance was not solely owing to growing investment demand; exceptionally strong platinum jewellery demand and limited supply growth maintained positive investor sentiment despite very weak automotive demand. During 2020, platinum market fundamentals have improved appreciably, with strong buying in China on the Shanghai Gold Exchange and direct platinum imports. Platinum’s longstanding strong correlation with gold has rebounded to over 0.7 since Covid unfolded. Consequently,

many more gold investors could consider platinum as a proxy for gold on that correlation alone, with the added potential outperformance of platinum a further enticement. While Covid negatively impacted the world economy on an unparalleled scale, investment demand for platinum strengthened in Q2 2020 - as the combination of increased global risk and monetary and fiscal policy responses to the crisis boosted the appeal of precious metals, including platinum. Platinum Quarterly reports a revised 2020 forecast that has moved the platinum market into an annual deficit of -336 000 oz compared to the prior estimate of a +247 000 oz surplus. Total platinum supply in 2020 is now forecast to fall by 14% to 7 102 000 oz and reflects a 15% (-910 000 oz) decline in refined production and a 12% (-250 000 oz) decline in recycling supply. Supply in the second quarter of 2020 fell by 35% year-on-year (-748 000 oz) to 1 408 000 oz. The second quarter bore the full supply impacts of a major smelting process outage and Covid-driven mining lockdowns in South Africa. Platinum recycling in Q2 2020 was also severely impacted by Covidrelated logistics disruptions. Second-quarter demand fell by only 19% year-on-year (-387 000 oz) to 1 599 000 oz, and was also only 2% (-36 000 oz) down on first quarter levels. The positive trend in exchange traded fund demand growth in the second quarter is expected to continue over the remainder of the year, during which period continued year-on-year gains in bar and coin demand is expected. Positive platinum market fundamentals, including a forecast deficit, demand growth potential and price discounts to gold and palladium, are expected to provide added attraction to platinum from an investor perspective. Industrial demand remains least affected by the pandemic owing to capacity growth in the glass sector, plus resilience in platinum’s pandemic-related uses in the medical sector.

WEDNESDAY SEPTEMBER 7 2020

News

WEDNESDAY SEPTEMBER 7, 2020

Media General Group CEO urges graduates to be proactive and solution-oriented The Group Chief Executive Officer of Media General, Ghana’s leading Media Company, Beatrice Agyemang Abbey, has urged graduates to be proactive and solution oriented as they make their entry into the job market. A celebrated media personality, she made the call during her speech as the Guest Speaker at the fourth session of the twelfth congregation of the University of Professional Studies (UPSA) in Accra on Saturday 5th September 2020. She said “you must be in control and cause the unthinkable positives to happen, rather than just adjusting to situations that retard the progress of the organization and firm. Such a mindset will help you minimize challenges by blocking all avenues available to competition to create dynamic strategies that will enable you to take command of your space and be that sought-after industry genius”. According to her, it is important to learn to defuse potential challenges before they evolve to

become internal and external threats and problems for the business. She stressed on the need to take ownership of your problems and have the inclination that you are the only antidote to them. “Avoid the victim’s mentality and blame game which will prevent you from being proactive and productive. At the workplace, never feel victimized. Most frequently, you might be under the spotlight because your manager or supervisor might be challenging you to get the best out of you. Stand up to the task”, she added. The University of Professional Studies is a progressive public institution which has over the last five decades produced some of the best professionals who currently hold key positions in Ghana and around the world.

Dettol, Traders, Partner to Roll-out Hand washing Facilities in Accra Markets Dettol rolls out handwashing units at popular markets across Accra to combat COVID-19 Accra, 8th september,2020: Global consumer goods company Reckitt Benckiser provided market traders with handwashing units as well as Dettol soap to promote hygiene and curb the spread of corona virus. A total of 15 hand washing units have been handed to market associations in 3 high-traffic markets across the capital, Accra. The beneficiary markets are Kaneshie, Madina and Okaishie market. These handwashing units, each with a capacity of 100 litres of water, will be stocked with Dettol soap and will be managed by the Market leaders who run the respective markets. The units have a foot pump, and piping leading into a drainage bucket. The foot pump is a convenient mechanism that allows for users to wash their hands without having to twist a tap, thereby helping to maintain a higher standard of hygiene. “By partnering with market traders, who have been mostly hit by the pandemic, we will be helping these traders to remain in business by making their working areas hygienic during

these unprecedented time,” said Cassandra Atibila the Brands Manager, during the handing over of the hand washing units at Okaishie. “These handwashing units help deliver the right to hygiene and sanitation for both traders and consumers.” A significant number of the informal sector workers, such as Kayayei, small-scale farmers and traders, are confronted with a major challenge of accessing proper hygiene during this coronavirus pandemic. To address this gap and safeguard income security to this sector, we are partnering with market Leaders to ensure that markets remain safe and hygienic to continue trading. The company will also be carrying out sensitization and habit education campaigns within the markets to improve knowledge on hand hygiene and drive positive habit change, said Jamel Amoako the Country Manger. Notes for editors Reckitt Benckiser is driven by its purpose to protect, heal and nurture in a relentless pursuit of a cleaner, healthier world. We fight to make access to the highest-quality

hygiene, wellness and nourishment a right, not a privilege, for everyone. An Access Fund has been launched by Reckitt Benckiser to improve access to health, hygiene and nutrition for all, the Fund is, and will, be a demonstration of our Purpose and Fight in action

- to protect, heal and nurture in the relentless pursuit of a cleaner, healthier world. For more information visit www. rb.com *RB is the trading name of the Reckitt Benckiser group of companies

WEDNESDAY SEPTEMBER 7 2020

News

WEDNESDAY SEPTEMBER 7, 2020

Registrar-General’s Department introduces sweeping reforms in Business Registration under the new Companies Act, 2019 (ACT 992)

he Registrar-General, Jemima Oware, has announced new changes to the processes and procedures of registering companies in Ghana to promote Government’s efforts at improving the ease of doing business in Ghana. She stated that the E- Registrar software application has finally been upgraded in accordance with the new Companies Act, 2019, (Act 992). Commencing from the 28th of September 2020, members of the business community who wish to register new companies would have to visit the Department’s website www.rgd.gov.gh and download the new prescribed Forms and complete them appropriately for the six types of Company registration. “There would be no need to fill a Form 4 and the Regulations for the incorporation of a company.. The new Prescribed Forms uploaded on the website encompasses every detail that would have been filled in the previous Forms for the six types of Companies, ” the Registrar-General hinted. According to her, another change that has been introduced with the implementation of the Act 992, is that persons who are registering any of the six (6) types of companies (Private Companies Limited by shares, Private Companies unlimited by shares, a Public Company Limited by shares, a Public Company unlimited by shares, a Private Company limited by Guarantee and a Public Company Limited by Guarantee would have had to fill Regulations for all these types of companies. “Now we have made it easier, we have Constitutions to replace Regulations for all Companies. One can just adopt Schedules 2, 3 or 4 of Act 992 which represents the Constitution for a Private Company Limited by Shares, a Public Company Limited by Shares and a Private Company Limited by Guarantee respectively. All of these Schedules are available on the website as your Constitutions to be adopted together with the different Prescribed Forms for the different types of Companies. ” Jemima Oware stated. The Department has also designed Constitutions for Private Companies Unlimited by Shares, Public Companies Unlimited by Shares and a Public Company Unlimited by Guarantee that can be adopted at the point of registration together with the Prescribed Forms for the different types of Companies. All such Promoters who choose to adopt the prescribed Constitutions would not be mandated to provide objects but would be required to disclose which sectors the Company

would be operating in through the ISIC codes provided on our electronic eRegistrar software. Promoters of Companies could also download the Prescribed Forms for the different types of Companies and attach their own Registered Constitution which should necessarily have objects. She advised that all other companies that are not regulated by the RGD, but by a different Regulators would have to register their Companies with their own Registered Constitutions and disclose the specific objects in these Registered Constitutions. Examples of Companies regulated by other institutions are for example Banks, Microfinance and Microcredit Companies regulated by Bank of Ghana, Companies with Foreign participation regulated by GIPC, Companies in Academia regulated by the Accreditation Board, Security Firms regulated by the Ministry of Interior, Companies in the Securities Industry and Capital Markets regulated by the Securities And Exchange Commission and the Ghana Stock Exchange, the Extractive Industry regulated by the Minerals Commission, Petroleum Commission, Companies operating in the Free Zones Enclave, Companies engaged in betting regulated by the Gaming Commission, Legal Firms, Architectural Firms and such like,.. She further emphasized that the Act also does away with the Certificate to Commence Business or the need to swear before a Commissioner of Oath since the Act does away with the Form 4 entirely. Strengthening Corporate Governance under ACT 992 The Registrar-General indicated that one key benefit of the new business law is its inherent strict requirements that would improve corporate governance going forward in the implementation of the Act. “The time where Companies only existed on paper is over” Jemima Oware warned. According to Jemima Oware, under Act 992, a person shall not be appointed as a Director of a company unless the person has before the appointment submitted to the Company a Statutory Declaration to the effect that the Director has not within the preceding five years before the application been charged or convicted of a criminal offence involving fraud or dishonesty, or Been charged with or convicted of a criminal offence relating to the promotion, incorporation or management of a company ; or has been a director or senior manager of a company that has become insolvent. The Act further states that if even

the director has done any of the above, he/she must state the date of the insolvency and the particular company. For the first time, the Director must also consent to be a director and must file the consent within 28 days with the Registrar at incorporation to show that they have expressly given permission for their data to be put into the system as directors of the said company. Again, Act 992 also specifies who qualifies to be a Secretary of a company which was not the case previously. The Company Secretary for any Company under Act 992 must have obtained a professional qualification or a Tertiary level qualification that enables this Company Secretary to have the requisite knowledge and experience to perform the functions of a Company Secretary; or must have held office before the appointment as a Company Secretary trainee or been articled under the supervision of a qualified Company Secretary for a period of at least three years,; or is a member in good standing of the Institute of Chartered Secretaries and Administrators; or the Institute of Chartered Accountants; or a barrister or Solicitor in good standing, or by virtue of an academic qualification, or as a member of a professional body, appears to the directors as capable of performing the functions as the secretary of the company. “It is also no longer going to be business as usual where people pick already prepared Auditors Letters of Consent placed at vantage points in the Department. Under Act 992, a company must have an Auditor who is qualified and licensed in accordance with the Chartered Accountants Act, 1963(Act 170); and not disqualified for being an officer of the company or of an associated company. A novel provision in this Act 992 is that an Auditor shall now hold office for a term of not more than six years and be eligible for re-appointment after a cooling period of not less than six years, the Registrar-General noted. These Officers of the Company must swear on their own oath that they are indeed qualified to be Directors, Secretaries or Auditors of the Company. All officers must also be 18 years and above , another novelty in Act 992 since the age of majority is no more 21 years, but 18 years. Jemima Oware further explained that the current system would accept a mandatory digital address downloaded from the Ghana Post

App for the stated Principal place of business and Registered Place of Business as well as a valid email address otherwise the address would be rejected and the application not processed. ACT 992 and Beneficial Ownership disclosure The Register-General Jemima Oware, further stated that under Act 992, the RGD is deploying a new Central Beneficial Ownership Register for all companies operating in the country. “We will start with requesting for BO Data from the Extractive Industry and other high risk sectors like Banks and other Financial Institutions, she noted. According to her, a lack of information about who owns and controls businesses incorporated in Ghana is creating a “dangerous and widening gap” in the country’s fight against corruption, money laundering terrorism financing and other forms of financial crimes. Beneficial ownership is a term in domestic and international commercial law that refers to the natural persons who exercise significant influence over and receive profits from a company who are not its legal owners. “Some people can assign a “nominee” in relation to their shareholding or directorship position at the board and they would be at the back end controlling affairs, they would have a legal arrangement with such persons that we would not be privy to…but things have changed now, she disclosed. Jemima Oware explained that from the 28th of September 2020, whoever wishes to register a company to operate in the Extractives industry should visit www.rgd.gov.gh, download the Beneficial Ownership Form and provide the data on who the beneficial owners of the company are. Change of company names and suffixes The Registrar-General announced that every company in Ghana would now have suffixes ending the names of their Companies that would immediately indicate which kind of entity the company name fell under. For example, the suffixes ending the different types of companies would be as follows: Private Company Limited by Shares would end with Limited Company or LTD Private Unlimited Liability Company would now end with PRUC. Public Limited Company would now end with PLC. Public Unlimited Liability Company would now end with PUC;

WEDNESDAY SEPTEMBER 7 2020

WEDNESDAY SEPTEMBER 7, 2020

Start Up Business and Tax Issues BY FELIX EKOW

hen forming and operating a business, start up owners obviously will be prone to some critical tax issues. This is because most start up owners have either some basic knowledge or no knowledge at all when it comes to the issue of tax. By paying attention to these issues, startups can position themselves well to take advantage of some meaningful tax benefits and avoid tax problems. It is also notable to note that although it might seem expensive at the beginning of a business to engage the services of professionals such as Chartered Accountants, Lawyers and Tax professionals. However, it is the best decision to consider before the business suffers in the future as a result of lack of knowledge in the area of taxation. Young business owners can also make it a point to visit the offices of the various revenue agencies to acquaint themselves with some knowledge in taxation, i.e. when they find it difficult to procure the services of tax professionals. Nonetheless, the question that arises is how well must we plan with respect to taxation for Startups? While it is perfectly fine to have some better understanding of taxation as a Startup owner, utilizing proper methods for tax planning would be a better move in the long run. One best way is to have some appreciable level of insights in relation to taxation for future planning. It is extremely important to understand your tax obligations when starting a small business including effective record keeping. A new business owner should be prepared and understand the kinds of taxes relating to the business. The following are the tax system which operates in Ghana under our tax legislations: Direct and Indirect Taxes: a. Direct Taxes Direct taxes affect the income of the recipient visibly. The income is reduced by the imposition of tax and the difference between the gross and the net is clear and obvious. The burden falls on the income earner 1. Income Tax: Income tax is imposed on all sources of income as stated in section 7,8 and 9 of the Internal Revenue Act, 2000 Act 529. Examples of such incomes are from: i. Business, which includes trade, profession and vocation ii. Employment

iii. Investment from sources such as interest, rents and royalties. 2. Capital Grains This is levied on the realization of chargeable assets such as land and buildings, where the gains from the realization exceeding GH¢ 50.00 3. Gift Tax This is levied on specific gifts either in cash or in kind with a value exceeding GH¢ 50.00 b. Indirect Taxes Indirect Taxes on the other hand are not so visible. They are taxes on goods and services and are normally passed on to the customer of the product or service. The seller or service provider may not bear the tax. The tax is sometimes treated as part of his operational expenses and are added to the cost of the product or service. The examples of indirect taxes are: i. Customs Duty ii. Excise Duty iii. Value Added Tax All the stated taxes are used primarily as a source of revenue for governments all over the world. The revenue is used to help governments in administration of areas under their jurisdiction. It is used also to provide social infrastructures such as roads, hospitals, schools and public services. It is also important to get things right and the following are points to consider to avoid tax problems that many start-up Companies experience: 1. Form a proper structure from the beginning your form of business determines which income tax returns you will have to file: a. Sole Proprietorship: A sole proprietorship is an unincorporated business that is owned by one individual. It is the simplest form of business organization to start and maintain. The business has no existence apart from you, the owner. Its liabilities are your personal liabilities. You undertake risks of the business for all assets owned, whether or not used in the business. You include the income and expenses of the business on your personal tax returns partnership. b. partnership business is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labour or skill and expects to share in the profit and losses of the business. A partnership must file an annual returns and accounts to report the income, deductions, gains, losses etc. on its operations but it does not pay income tax. Instead it passes through any profits or losses to its partners.

Each partner includes his or her share of the partnership’s items on his or her tax return. Partnership income for a basis period of a resident or nonresident partnership is accessible income under section 6 of Act 592 (the accessible income) in which chargeable income is based. This means that all remitted foreign income will be included in the income of the partnership irrespective of the residence of the partnership. c. Limited Liability Companies: A limited Liability Company is an entity formed under the state law (the Companies Act) it must be understood that none of the members of a Limited Liability Company are personally liable for its debts which means that a company is liable for tax on its chargeable income in accordance with sections 5 and 6 of Act 592. a dividend paid to a resident Company by another resident Company is exempt from tax where the Company receiving the dividend controls directly or indirectly 25% or more of the voting power in the company paying the dividend. The above exemption does not apply to dividend paid to a company by virtue of its ownership of redeemable shares in the paying company (subscription for redeemable share may be structured in such a way that they are a substitute for a loan). What to do when starting business 1. Inform the Ghana Revenue Authority 2. Have clear and accurate records of • Earnings • Day to day expenses • All capital expenditure • Staff wages • Submit accounts and other tax returns at the end of the basic period Record keeping One of the key factors in the startup business is the culture of good record keeping, especially records that will come in handy when it is time to think about taxes on the business. Good records can help your business in a variety of ways, from monitoring your business financial growth to the preparations of your business financial report and tax returns Suggestions to help you keep better records for tax purposes include the following: a. Monitor the progress of your business You need good records to monitor the progress of your business. Records can show whether your business is improving, which

items are selling, or what changes you need to make. Being on top of this information by keeping good records can increase the like hood of your business success. b. Prepare your financial statements Good records are a must in order to prepare detailed and accurate financial statements. This statement can help you not only in filling your tax returns but also help to manage your business in any efficient manner. c. Identify the source of receipts You will receive money and or property from many sources during the course of business and your records can identify the source of these receipts. This information is valuable due to couple of reasons. Firstly, it will separate your business receipts from your non business receipts. Secondly, it will separate your taxable income from your non taxable income. This business records can also be helpful in the event that your business is audited by the tax authorities d. Keep track of deductible expenses Valid business expenses are deductible and the best way to lower the amount of taxes your business will be obliged to pay is to keep good records. Generally, an expense is deductible if it is “ordinary and necessary” in running your business. It is a good idea to keep track of business expenses by recording them as they occur, otherwise you may forget them when the preparation of your tax returns are due. Support items reported on tax returns There is always a chance that your business may be audited, so it’s a must that you keep business records and make them available at all times for inspection by either the Ghana Revenue Authority or your own reporting Accountants.

Felix Ekow ESHUN is a Banker and Supply Chain Professional . He is also member of the Young African Leaders Initiative (YALI) and an entrepreneur. Email : felixekoweshun@gmail.com Richmond DADZIE has worked extensively in Accounting firms and Banking Institutions. He has successfully dealt with cases in tax and audit issues for Companies and Institutions. He is a chartered Tax Accountant and a Certified Forensic Auditor. You can contact him on richmond.audit@gmail.com.

WEDNESDAY SEPTEMBER 7 2020

WEDNESDAY SEPTEMBER 7, 2020