Business24 eNewspaper (February 14, 2020) by Business24 Online

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FRIDAY FEBRUARY 14, 2020

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1D1F steel factory ‘cries’ for power Eugene Davis

Steel and iron manufacturer, B5 Plus Limited—a company established under the One District, One Factory (1D1F) programme—has appealed to government to urgently step in and ensure that the company has enough power and water for its production. In a distress message, CEO of the company, Mukesh Thakwani, has called on government to step in to salvage the situation in order to sustain the company’s expansion agenda. “Under 1D1F we were told we will get electricity and water at our doorsteps but as of today we are not able to get our regular supply of electricity and water with a lot of fluctuations, it is becoming very difficult for us to work in this environment,” he told Parliament’s Government’s Assurance Committee on their tour of the facility. Mr. Thakwani also raised concerns about encroachment on its titled lands which is hindering its expansion efforts. “We ask our dear government to look into the land litigation cases, they are big concern to us. Once we have a clear land title, I think the investor should not be troubled. As of today, we still facing the same issue; if it is resolved, we can move into Phase 2 and Phase 3 of our project, which will enable us to em-

ploy more than 10,000 people. The company’s woes, should government fail to intervene, could place the livelihoods of hundreds of Ghanaian employees at risk. The tour of B5 Plus was to enable the parliamentarians to familiarize with the challenges of the company as presented to them by the Trade Ministry. “We needed to come and witness for ourselves the various challenges of the company based on the report we received

from the Trade Ministry and to observe the company’s performance as a 1D1F company. “It is a big company and they have made huge investments, so l will appeal to these institutions to quickly intervene and supply water and electricity respectively,” Chairman of the Government Assurances Committee, Collins Owusu Amankwah, said. He also asked utility service providers to, as a matter of urgency, sit with management of

the company to address their concerns. When the factory fully expands, it is expected to produce different types of steel products which were hitherto imported. The factory sits on 377 acres of land, with 15,000 production tonnage per month earmarked. Government, through the Ministry of Trade and Industry, aims at establishing at least one medium-to-large-scale factory in all 254 districts of the country under the ‘One District, One Factory’ programme. The programme is private sector-led, with government facilitation and support in terms of incentives and provision of infrastructure. It also seeks to achieve specific objectives which include the following: the creation of massive employment, particularly for the youth in rural and peri-urban communities, thereby improving income levels and standard of living as well as reducing rural-urban migration; adding value to the natural resources of each district; and exploiting the economic potential of each district based on its comparative advantage.

Fake marketers to face jail term ….as CIMG seeks regulatory powers By Eugene Davis

William Agyapong Quaittoo – Chairman of Parliament’s Education Committee

A new bill of the Chartered Institute of Marketing, Ghana Bill, 2019(CIMG) which is currently before Parliament and has been referred to the Education Committee for consideration and report, will give power to the institute to criminal charges against persons who parade themselves as marketers without the requisite qualification The memorandum accompanying the bill reads: “… under offences of the Institute, a person who wilfully and falsely uses a name title or addition implying a qualification to engage in the practice of marketing commits an offence and is liable on summary conviction to a fine of not MORE ON PAGE 2

Harmattan disrupts flights in West Africa By Dominick Andoh

The seasonal Harmattan in West Africa, associated with dry dusty winds and poor visibility, is causing significant flight disruptions in the sub-region, as flights are delayed or canceled due to visibility falling below the minimum required at most airports. Major international and regional carriers were unable to take-off or land at their

destinations as scheduled in the sub-region on Wednesday and Thursday. The Kotoka International Airport (KIA) has a minimum visibility 800meters, below which flights are advised accordingly. The decision to land or otherwise, however, depends on the minimum visibility set by the airline in question, experience of the pilot and the type of equipment operated among others. The worst hit is Nigeria and Abidjan among

others. Some flights from Accra--where visibility is fairly good and has a functioning Instrument Landing System (ILS)-could not be operated during the day to Lagos due to the poor visibility at Murtala Muhammed International Airport. The situation at Lagos Airport is peculiar, given that its Instrument Landing System (ILS) is faulty. Many international flights on Wednesday and Thursday had to be diverted from Lagos to Ac-

FEATURE

THE ECONOMIC CONSEQUENCES OF THE CORONAVIRUS

ARE TRADITIONAL MULTINATIONALS READY FOR EMERGING MARKETS?

Based on the value of its exports to mainland China and Hong Kong relative to GDP, Taiwan is likely to be the hardest hit. PAGE 5

cra. Delta, Qatar, BA, Emirates all could not land in Lagos and were forced to land at Accra’s Kotoka International Airport (KIA). Business24 sources say some disgruntled passengers who were travelling to Lagos on Delta but were flown into Accra as a precaution due to poor visibility and faulty ILS, refused to travel by road to Lagos and were being flown back to the US, as at press time on Thursday.

Since 2010, economic growth in low- and middle-income countries has been two to three times faster than in high-income countries. PAGE 17

GMA warning The Ghana Meteorological Agency in a statement issued on Wednesday, February 12, explained that the situation is expected to persist till the end of the week. “Therefore, the atmosphere would remain dry and hazy with drastic reduction in visibility values of less than 1km to a little above 3km will be observed. Relative humidity values will be less than MORE ON PAGE 2

INTERNATIONAL MARKET

GSE COMPOSITE INDEX (DAILY CHANGE %)

BRENT CRUDE $/BARREL: +0.80 ($55.76)

-0.02%((Gh¢ 2206.15)

NATURAL GAS $/MILLION BTUS: +0.05 ($1.84)

Market Capitalisation: Gh¢56.65Bn

GOLD $/TROY OUNCE: +4.80 ($1,576.40) SILVER $/TROY OUNCE: +0.00($17.58) CORN $/BUSHEL: -1.00 ($382.00)

SIC Insurance Ltd: +12.50% (Gh¢0.09) Ecobank Ghana: -2.44% (Gh¢1.60)

COCOA $/METRIC TON: -8.00 ($2,868.00) COFFEE ¢/POUND: +0.20 ($102.75) SUGAR ¢/POUND: +0.02 ($15.06)

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News/Editorial @business24ghana

Editorial: 1D1F must work

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Fake marketers to face jail term ….as CIMG seeks regulatory powers continued from page 1 more than five hundred penalty units or to a term of imprisonment of not more than two years or to both and in the case of a continuing offence to a further fine of ten penalty units for each day during which the offence continues after written notice has been served on the offender by the Institute.” It continues: “Other offences also includes a person without being registered under this Act, practices or professes to practice as a marketing professional, or receives payment for the practice of marketing, or wilfully destroys or damages a register kept under this Act, is also liable. Furthermore, where an offence under this Act is committed by a body corporate, each director or secretary of that body shall be guilty of the offence, or a partnership, each partner shall be guilty of the offence. The Bill is to primarily establish the CIMG as a regulatory body to set standards in the marketing profession and to provide for related purposes. The objects of the Institute are to operate as an independent autonomous body to set standards and regulate the marketing profession. Among the functions of the Institute is to achieve the objects, the Institute shall provide world class training and conduct examinations to improve the skills and competencies of all those working in and aspiring to work in marketing as well as set the marketing agenda for the country; It is also expected to champion the role and value of marketing as a critical tool for business development, influence government policy and regulation on marketing activities, advocate responsible and ethical marketing practice for marketers and businesses in general. Additionally, it is expected to develop constant marketing innovative research, best practice and thought leadership processes; and promote marketing as a leading career path and employment choice for future generation.

The initiative by government to establish a factory in every district under the One District, One Factory initiative (1D1F) though laudable, must be made to work by the provision on the onsite utilities that these companies require. Government, through the Ministry of Trade and Industry, aims at establishing at least one mediumto-large-scale factory in all districts of the country under the ‘One District, One Factory’ programme. The programme is private sec-

tor-led, with government facilitation and support in terms of incentives and provision of infrastructure. The news that a major steel and iron manufacturer, B5 Plus Limited, is without enough power and water for its production does not bode well for all concerned. The CEO noted that “under 1D1F we were told we will get electricity and water at our doorsteps but as of today we are not able to get our regular supply of electricity and water with a lot

of fluctuations, it is becoming very difficult for us to work in this environment,” he told Parliament’s Government’s Assurance Committee on their tour of the facility.” Another issue that he raised that requires serious attention is the issue of land acquisition. “We ask our dear government to look into the land litigation cases, they are big concern to us. Once we have a clear land title, I think the investor should not be troubled. As of

Stabilise economy to entice investors for oil and gas sector

today, we still facing the same issue; if it is resolved, we can move into Phase 2 and Phase 3 of our project, which will enable us to employ more than 10,000 people,” he noted. It is good that the Parliament has taken an interest in this and will lobby for the situation to be corrected going forward. We believe that the 1D1F Secretariat and the Trade Ministry must ensure that they work hand in hand to remedy this situation.

Harmattan disrupts flights in West Africa continued from page 1

A former Managing Director and Group CEO of GOIL, Mr. Patrick Akpe Kwame Akorli, has called for increased economic stability to attract direct foreign investment in the wake of Ghana’s ambitions to grow its oil and gas industry. “We need private investments to come and boost our oil and gas industry and that kind of investments would come when there is stability. Stability here in terms of macro-economy,” he stated. Mr. Akorli who is considered a giant in the Oil and Gas industry opined that, although Nigeria remains the dominant country in the oil and gas industry in the sub-region, they face some form of political insecurity. According to him, Ghana can take advantage to usurp Nigeria’s position to become the gateway to West Africa when it comes to oil and gas, if it tightens its political and economic security. “The oil and gas industry in the sub-region is controlled by Nigeria, so they have a very huge advantage but over there things are not too smooth so Ghana can take advantage of that and put in the financial measures into place and become more transparent,” he said. Speaking on Eye on Port

live on national television, to assess Ghana’s potential to be the oil and gas hub, the man referred by many as the Icon of GOIL, said Ghana needs to tap into all its available resources to grow the Oil and Gas sector, as a growth in this sector is positively correlated to a growth in national economy. “Energy is what wheels every economy. For example, at the beginning of every year if the government of Ghana sets target for the economy to grow by 8%, it is likely that the oil and gas industry also forecast that theirs will also grow by 8%. It shows that energy is so important in economic development,” he stated. He said the industry is such a dynamic one that keeps changing at a fast pace, hence, there is the need to always explore opportunities in that sector. According to him, that informed the decision by the management of GOIL to enter into a joint-venture with America’s ExxonMobil in off-shore exploration. The Former MD of GOIL said it is the vision that, such a partnership would enable Ghanaian engineers acquire the requisite skills to do modern-day off-shore exploration which will contribute greatly to Ghana’s development of local capacity. “That 5 % is a stepping stone as it will give us the opportunity to train our young engineers to get in-

volved in the upstream. We are already strong in the downstream so we must endeavour to make it to the top. If the economy is going to derive anything from the upstream business then a local Ghanaian oil and gas companies must be involved,” he articulated. He said the marine gas oil tanks installed at the Port of Takoradi was inspired by the belief in Ghana’s drive to develop the Takoradi Port as the dominant oil and gas services hub for the sub-region. “The government at that time had a masterplan of making the Port of Takoradi the oil and gas hub, so I made a presentation to the board of directors at GOIL that Takoradi is the real dealI believed in Takoradi Port. So we took advantage of that and make contact with Takoradi for the installation,” he disclosed. He revealed that the investment has yielded a lot for GOIL with multinational companies purchasing from GOIL. Mr. Patrick Akorli, stated that he would love for the Tema Port to make the necessary investments to follow suit. “I think the oil berth at the Tema Port should be enhanced so it will attract bigger vessels to make the oil and gas industry to grow,” he said.

Editorial: Dominic Andoh: E ditor Eugene Kwabena Davis: Head of Parliamentary Business & Commodities Benson Afful : Head of Energy & Education Patrick Paintsil : Head of Maritime & Banking Eliezer Mensah: Head of Production Marketing: Alexander Lartey Agyemang: Business Development Manager

20% over the Northern Ghana, 20-40% over the middle sector and 25-55% over the coastal belt,” the statement said. Airline seeks passenger co-operation Accra-based Africa World Airlines, in a statement called on passengers to contact the airline to rebook their tickets, if bad weather forces a cancellation. “Due to extremely poor visibility conditions throughout the region, a large number of flights are experiencing significant disruptions, including delays, cancellations and diversions. “Passengers booked on any AWA operated flights for travel on or before Wednesday 19FEB20 will be permitted to rebook their travel without any change fees subject to availability of seats,” AWA said.

Gifty Mensah: Snr. Marketing Consultant Irene Mottey: Snr. Marketing Consultant Edna Eyram Swatson: Snr. Marketing Consultant Ruth Fosua Tetteh: Snr. Marketing Consultant Events: Evelyn Kanyoke Snr. Events Consultant Accounts Joseph Ackon Bissue: Accountant Operations: Ampomah Akoto: Director of Operations

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News

Committee’s Report on National pay System Review ready By Eugene K. Davis

The Advisory Committee to review the National Pay System and make recommendations to the Government is ready with its report. The Committee, chaired by Mr. Bright Wireko-Brobbey, a Deputy Minister of Employment and Labour Relations, was given three months to complete its work and present the recommendations. It was set up by the Employment and Labour Relations Ministry in October 2017 to inform government’s decision on minimum wages and base pay issues. It comprised representatives of Organised Labour, Ghana Employers Association, Fair Wages and Salaries Commission, Ministry of Finance and Ghana Statistical Service. Mr. Earl Ankrah, the Head of Public Affairs of the Fair Wages and Salaries Commission, told the Ghana News Agency on

Thursday that though the report was ready, it was awaiting an endorsement from the Sector Minister before it would be made public. The Committee was mandated to review and link the National Pay System to productivity and ensure workers are adequately rewarded for work done. Additionally, it was to review the Local Pay Structure to meet international best practices as well as review the Pension Schemes to address the purported inconsistencies and exemptions to the benefit of both government and labour. (GNA)

IFAD calls on Member States to increase investment in rural development Mr. Gilbert F. Houngbo, President of the International Fund for Agricultural Development (IFAD), has called on its 177 member states to help the Fund reach its goal of improving the lives of the world’s most marginalized people by 2030. “With extreme weather, conflict, fragility and migration threatening our food systems, we need to invest more in the rural people who grow our food,” Mr. Houngbo said. Mr. Houngbo made the call at the launch of IFAD’s 12th replenishment, a year-long consultative process during which IFAD’s Member States come together to agree strategic directions and mobilize funds for IFAD to provide as concessional loans and grants to developing countries. He said: “We have just 10 years to reach our global targets of eradicating extreme poverty and hunger. That means stepping up our investments where poverty and hunger is concentrated in rural areas.” With increased support from Member States, IFAD aims to raise the production of more than 200 million small-scale producers, improve the resilience of more than 100 million rural people, and increase the incomes of about 260 million rural women and men by at least 20 per cent by 2030. He said the evidence was increasingly clear that the road to achieving the Sustainable Development Goals (SDGs) runs through rural areas, where 80 per cent of the world’s poorest people live. Investing in agriculture and rural development is the most direct means of increasing their incomes and food security. Studies show that economic growth in agriculture is two to three times more effective at reducing poverty than growth in any other sector. “With more than 40 years’ experience on the ground, we know the last mile can be the hardest,” Mr. Houngbo added. He said they

could still help deliver on the SDGs and eradicate extreme poverty and hunger but not if “we continue on our current trajectory. We need more funding, new partnerships and financial instruments, and more inclusive approaches.” He said as the only multilateral institution exclusively focused on rural areas, IFAD works in remote places, where few other development projects reach. Over the next decade, IFAD will use its unique focus and expertise in designing and rolling-out rural investment projects targeting the world’s most vulnerable groups, including

rural women, youth and indigenous peoples. To dramatically step-up its impact and capacity to assist the countries most in need, IFAD is developing a new financial model that enables more resources to be channeled to the poorest countries and the poorest people. This, he noted, will ensure that IFAD can continue to offer a strong return on investment for its donors, and multiply the impact of their contributions. The Adaptation for Smallholder Agriculture Programme, IFAD’s flagship programme for channeling climate and environmental finance to small-

holder farmers, will expand to provide more funding to lower-income countries, especially those with high levels of malnutrition, and to fragile situations where climate adaptation investment is lacking. It will focus more on the interlinkages between climate change and its impact on women, young people and nutrition. In addition, the new Private Sector Financing Programme will aim to bring private sector investment and know-how to bear on the development of rural small and medium-sized enterprises and farmers’ organisations. IFAD also acts as

an assembler of finance and is valued as an honest broker by rural people and their organisations. By working with governments, civil society, the private sector, and other partners, IFAD increases investments that are transforming rural areas economically and socially. IFAD will continue to invest at community level in small and medium enterprises, smallscale producers, and in the rural non-farm economy, simultaneously expanding its work on climate change adaptation, environmental protection, gender and youth empowerment, and improved nutrition.

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Feature

The Economic Consequences of the Coronavirus By Akira Kawamoto

Since a new type of coronavirus was reported in Wuhan, China, last December, the number of people infected worldwide has soared to over 44,000, and the death toll now exceeds 1,100. The virus is spreading across Asia – including to Japan, South Korea, Singapore, Thailand, Vietnam, and Malaysia – and also to countries in Europe and North America, although only one death has been reported outside China so far. It remains to be seen how lethal this new virus ultimately will be. At the moment, it is certainly less severe than the 2002-03 SARS (severe acute respiratory syndrome) epidemic, caused by a different coronavirus. The new bug has killed more people, but SARS was deadlier, killing almost 10% of the 8,096 people worldwide known to have been infected. Nonetheless, on January 23, Chinese President Xi Jinping’s government announced a lockdown of Wuhan, a city of 11 million people. Since then, the number of Chinese cities under quarantine has risen to 16, and more may follow. The quarantines and other compulsory measures aimed

at containing the disease are severely handicapping the Chinese economy, with knock-on effects elsewhere in Asia. Wuhan, for example, is the capital of Hubei Province, one of China’s industrial centers. Leading Japanese carmakers Honda and Nissan have factories there, as do several of their European rivals. Producers of car parts, electronic components, and industrial equipment also have important manufacturing facilities in the region. Many of these factories have had to halt production, because their employees have been unable to return after the Chinese New Year holiday. These shutdowns constitute a major shock to global companies’ supply chains across Asia. Based on the value of its exports to mainland China and Hong Kong relative to GDP, Taiwan is likely to be the hardest hit, followed by Vietnam, Malaysia, and South Korea. Regional employers face a further supply shock because many Chinese working in Japan or other Asian countries will not or cannot return from China. Furthermore, the coronavirus outbreak will disrupt exports of Chinese products to Japan, in particular processed food and clothing. All these factors will cause supply shortages and

thus dampen economic growth among China’s trade partners. The coronavirus also will cause a large demand shock, not least because Chinese travelers have been a great boon to many countries’ tourism sectors. Chinese tourist numbers are now falling sharply as China bars its citizens from group tours abroad, and many countries refuse or restrict the entry of Chinese. Judging by the size of Chinese visitors’ expenditures relative to GDP, popular destinations such as Thailand, Vietnam, and Singapore will take the hardest hit. Japan will be especially concerned should the outbreak persist, because the Summer Olympic Games are scheduled to start in Tokyo on July 24. But even if the virus is a long way from reaching its peak, China can mitigate the negative aggregate-demand shock with stimulus measures such as the one announced by the People’s Bank of China on February 2. Other governments and central banks in the region can take similar steps if necessary. Companies can substitute disrupted supply chains with alternative sources of inputs, and consumption may shift further online. Some of these changes may turn out to be permanent. Although it is not clear how

By Akira Kawamoto

quickly an effective coronavirus vaccine can be developed, the duration of the current crisis will depend on two main factors. The first is whether and when the Chinese authorities can bring the situation under control. With the death toll still mounting, it is hard to tell, but if the government quarantines more cities, then the economic downturn will certainly steepen. The second question is whether other countries can contain the virus’s spread. Some Japanese medical experts say that a substantial number of Japanese must already be infected, given that people arrived freely in the country from China for a month after the outbreak began. Unlike in China, however, the virus has caused no deaths in Japan so far, which raises questions about to the nature of the disease and how best to

prevent and treat it. In order to determine the best public-health response as quickly as possible, China and other affected countries should share their current experiences immediately. In fact, medical experts recommend shifting preventive resources from countries’ borders to the interior, by giving people easy access to self-inspection kits. Those who are infected should then be ordered to stay home and avoid contact with others. As in the case of influenza, sharing information with the public may be much more effective in minimizing the spread of the coronavirus than draconian restrictions on freedom of movement, which are very costly to humans’ physical and psychological health, as well as to the economy. Other governments currently considering national responses to the new virus should bear this in mind. And the Chinese authorities should consider reviewing their approach to future outbreaks. Akira Kawamoto, a former deputy director general in Japan’s Ministry of Economy, Trade, and Industry and a former OECD principal administrator, is a professor at Keio University. Copyright: Project Syndicate, 2020. www.project-syndicate.org

New firms for a new era By Dani Rodrik

Firms are the cornerstone of the modern economy. The bulk of production, investment, innovation, and job creation takes place within them. Their decisions determine not only economic performance, but also the health and wellbeing of a society. But who should govern firms, and on whose behalf should those decisions be made? The conventional theory under which our contemporary economies operate is that firms are governed by – or on behalf of – investors. This theory posits a clear separation between owners and employers – between capital and labor. Investors own the firm and they must make all the relevant decisions. Even where this is impractical, as in larger firms with multiple investors, the presumption is that managers are “agents” of the investors – and of investors alone. This theory of the firm rests on two fictions. First, investors are the only ones “invested” in the firm, and hence the only ones taking risks. Second, markets are competitive and frictionless, so that workers (and others closely affected by firms’ decisions, such as suppliers) can leave and go elsewhere if they do not like how a particular firm treats them. In reality, a job is much more than a source of income. It is a crucial part of an adult’s personal and social identity. The relationships workers build and the community they acquire on the job give them purpose and help define who they are. Jobs provide workers with not just material utility, but also expressive utility. The terms of employment determine not

Dani Rodrik

just how much we can afford to buy, but our sense of ourselves and the extent to which our aspirations and potential are fulfilled. This is why losing a job often delivers a severe shock to our overall life satisfaction. If markets were hyper-competitive and frictionless, and if information were perfect, none of this would matter much. Workers would enter complete contracts with investors (or their agents), taking all these considerations into account. Workers would sort themselves among firms, choosing to work for firms that give them the best combination of material benefits and expressive value. But in the real world, such complete contracts are not possible and imperfect competition is the norm, giving firms inordinate power to shape the lives of their workers. In her fascinating book Firms as Political Entities, the legal scholar Isabelle Ferreras has taken these ideas one step further to challenge the traditional conception of investor-governed firms. The problem, she argues, arises from a failure to distinguish the “corporation” from the “firm.” The corpora-

tion is a state-sanctioned legal form that sets out the legal privileges and responsibilities of investors and the relationship among them. The firm is not a legal construct as such; it is a social organization. It embeds the corporation in a network of relationships with workers, suppliers, and other stakeholders. The question of how firms should be governed has no determinate answer, both in the law and as a matter of economic logic. Ferreras proposes an analogy with national governments. As national politics became more democratic, a second, more representative assembly was created to complement an upper chamber dominated by the aristocracy. Similarly, firms could be governed in a bicameral fashion, with a workers’ chamber having equal say to an investors’ chamber. The German system of codetermination comes close to Ferreras’ proposal, though still falls short insofar as workers’ representatives never have equal power on German corporate boards. Worker control is important to counterbalance investors’

incentives to disregard their employees’ wellbeing. But two other social externalities require further attention. First, contemporary innovation takes place within ecosystems where firms heavily depend on other firms and suppliers for standard setting, knowledge flows, and skills. There are many opportunities for coordination failure. For example, viable technologies may fail to take off in the absence of complementary upstream and downstream investments. Second, there are what Charles Sabel and I have called “good jobs” externalities. Communities where good, middle-class jobs become scarce develop a wide range of social and political ills – broken families, addiction, crime, decline in social capital, xenophobia, and growing attraction to authoritarian values. The “insiders” with good jobs cannot always be expected to have the interests of “outsiders” at heart. So even if workers are empowered within firms, we need mechanisms to ensure that the interests of the wider community are internalized. For both reasons, government

action remains indispensable. Governments have to provide the nudge needed to solve local coordination failures. And they need to provide the carrots and sticks needed for firms to internalize good jobs externalities. Firms should not regard such government interventions as restrictions on what they can do, but rather as an expansion of their technological and employment possibilities. In recent years, large corporations have become increasingly aware that they must be sensitive not only to the financial bottom line, but also to the social and environmental effects of their activities. Discussions about corporate governance nowadays are rife with talk about social responsibility, the stakeholder model, and environmental, social, and governance (ESG) criteria. A growing number of companies define themselves as “hybrid,” pursuing profit and social purpose at the same time. Some have figured out that treating workers better can be good for profits. All of these are welcome developments. But societies should not allow investors and their agents to drive the discussion about reforming corporate governance. If firms, as social and political actors, are to serve the public good, workers and local communities in particular should have a much bigger say in their decisions.

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.

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Special Report

The sea is no more smiling By Akira Kawamoto

In Ghana, fishing is a culture of the coastal communities; a tradition that is handed down from fathers to sons and to the next generations. But this feeling of tradition is gradually losing its grip as the reality of dwindling fortunes dawns on the fishers. Kobina Sam is an artisanal fisher at Moree in the Central Region of Ghana, who has been fishing for over three decades. “Fishing is not as rewarding as in time past”, he says. His wife, and other fishmongers, no longer get fishes in the quantities, or as frequently, as they previously did. He tells me “the sea is no more smiling”. It’s a Saturday morning and I am at Eniennhu, a fishing community in the Ahanta West District of the Western Region. Fishers have just returned from sea with minimal catch of what could possibly just feed a family of ten. To the community however, this is a moment of celebration as news of a catch spreads through the entire village. The elders of Eniennhu tell me the village was a very vibrant fishing community and the people primarily depended on the proceeds from the fishing business to support their entire livelihood. The village looks deserted now, with very little presence of life and energy. A tour through the community revealed abject poverty and lack of basic human needs such as food, clean water and healthcare. One by one, they chronicle their sufferings, as each day comes with dwindling hope and faith. The picture here is grim. The children look skinny, and have brownish hair. The majority of residents are without health insurance to access medical care. Here, the sense of poverty is palpable, and decades of stagnation seem to have left many traumatized. Naana is a 46-year-old fishmonger, and a single mother of 3 brilliant children who could not continue their education to the secondary level. She summarizes her years of struggle thus: “I depend on the sea for survival and the sea is no more yielding its fruits. I don’t want to push them to school and eventually abandon them or for them to be sacked from school because I couldn’t perform my obligations.” Maame Sofo, Naana’s eldest daughter, was admitted to Archbishop Potter Girls Senior High School in 2012 with aggregate score of 16 at the Basic Education Certificate Examination and had high hopes of becoming a nurse. But that was not to be; “I went to learn a trade instead. Anytime I needed to buy an item for my skill training, I had to go to chop bars to work for weeks to get money before I could buy what I needed”, she narrates. Maame Sofo now has a child, with no man to call a husband, she is still not done with her trade, and so the cycle of struggle continues. The negative impact of depleting stock is being felt in all fishing communities in Ghana stretching from Half Assini to

Keta. At the beach of Moree, the tide is rising and the waves raging, hitting hard against the rocks. Kweku Entsie is standing on one of the rocks, very much lost in thought. He says the operations of Saiko have rendered him and his family poor and powerless. Standing in the blazing sun on the shores in Elmina is 62-year-old Emma Takyi. He looks drained and exhausted, and the heat of the sun seems to scorch the strength out of him. He tells me the gods of fertility are possibly asleep. “We stay along the coast yet live like villagers far away from the sea; we don’t see fresh fish. Imagine you have 4 children as a man, if you have no source of livelihood, how do you take all these responsibilities? Emma Takyi calls for “a change to avert any social disaster upon posterity.” The narratives surrounding the fishing business in Ghana are a story and irony of two worlds; of poverty and wealth both flourishing on the same land. This is best explained in Elmina. Elmina is a famous and populous colonial fishing community in the Central Region of Ghana. The town is regarded as the headquarters of Saiko, deputised by Apam. Here, special vessels known as ‘retro-fitted canoes’ owned by business men, meet their partners, the industrial vessels, out at sea to buy Saiko catch. Industrial trawlers licensed to fish bottom-dwelling species target fish specifically reserved for the artisanal fishers. The fish bought are mainly the small pelagics, which are packaged and frozen at sea by the trawlers and sold back to local fishers. The vessels that operate this illegal business have been licensed with pseudonyms as Ghanaian companies but are actually owned by Chinese corporations. This business has affected the fabric of the artisanal fisheries and exacerbated poverty along the coast – leading to the story of Naana and many others. Fishery scientist at the University of Cape Coast Prof. Kobina Yankson reveals, “juvenile fish in the sea are found in inshore waters” so for these operators to be landing and selling them “means they are catching them from inshore waters. What that means is that they

are depriving the fishery from recruitment because they are not allowing them to grow and mature. It also means they are using unapproved nets sizes”. Elmina alone operates 76 of these huge vessels. At the local level, the body that facilitates this illegal business is the Bycatch Collectors Association. Texas, the president of the association, is of the view that the Saiko business will soon catch up with other fishing communities when government completes the construction of landing sites. He says “there are many fishers from other coastal communities in the country who come to Elmina to operate Saiko. As government completes more landing sites, this business will get out of Elmina”. As Texas and his colleagues promote this illegal business, the sector Minister, Madam Elizabeth Afoley Quaye says the business must be clamped down because “it is illegal. We can’t continue to go that way, our fish stocks are depleting, so we are taking actions to ensure that all these actions are curtailed.” In 2013, the EU issued a warning to Ghana that it could face a ban on fish entering the EU market if it failed to address illegal, unreported and unregulated (IUU) fishing in line with its obligations under international law. The yellow card warning had a major impact on Ghana’s tuna industry, which exports fish worth US$150 million annually to the EU market. The Minister fears history may repeat itself if Saiko does not stop. “The EU Ambassador has been in my office twice in a month and that gives us the signal that a lot is happening. In her own words, she said pressure is mounting and if we do not take action against these illegal fishing practices, it is likely we may go back there again”. Saiko or “transshipment” is illegal in Ghana’s fishery laws, attracting a minimum fine of US$1 million where catches involve juvenile fish or the use of prohibited fishing gears. Regulation 33(2) of the 2010 Fisheries Regulations, LI 1968 prohibits the transshipment of fish at sea from industrial vessels to canoes. However, this day light robbery is done at the door step of the fishery enforcement

agencies. Saiko is flourishing in Ghana’s waters for reasons of great concern. Executives of the By-catch Collectors Association say both government representatives and the Elmina traditional Council are benefitting from the operation. They pull out huge files and receipts as evidence of monthly levies by the Komenda-Edina-Eguafo-Abirem Assembly. “Because KEEA makes a lot of money from us, the Assembly has volunteered to put up sheds for us and they are there. In January 2018 alone, the Association paid 7,000 cedis into the Assembly’s coffers”. Records obtained from the Association indicate that thousands of Ghana cedis are generated from the business daily, with proceeds going into individual pockets. For instance, a total of 917,576 slabs of fish were landed between January to July 2019, a period of seven months. According to the Association, a slab of fish sells between GHc40 and GHc50. Taking GHc40 per slab, the total cost of fish landed within this period is GHc36, 703, 040, its US dollar equivalent is $7, 340, 608 at an exchange rate of GHc5 to a dollar. This amount is hugely significant to Ghana’s economy. Although Ghana’s laws rule out any form of joint ownership between foreigners and Ghanaians, it is believed the Chinese own most of the industrial trawl vessels operating in the country. In this regard, the sector Minister says; “When you look into their books, they have hire purchase agreements with the Chinese and that is allowed within the business sector and so if a Ghanaian has an agreement with a foreigner, we can’t stop the Ghanaian from doing his genuine business”. Yet it is unclear whether these hire purchase agreements are indeed genuine or have been set up solely to circumvent the nationality requirements in the law. Indeed, the Chinese retain a major stake in the day-today operation of these vessels, providing captains and senior crew, inspecting landings at port and arranging the export of fish overseas. Moreover, these vessels engage in the Saiko business, which is illegal and has impov-

erished coastal communities in Ghana. While the majority of fishers, who are artisanal, are experiencing worse conditions, Saiko operators are celebrating their fortunes. A number of them are richer than most middle class Ghanaian civil servants. Mr. Sarpong, Secretary to the By-catch Collectors Association testifies that “there is no Saiko operator who has not built his own house or bought a car. All four of my children have graduated from the university. I got the money from Saiko”. The driving forces behind the decline of Ghana’s artisanal sector are the open access to the fisheries; the difficulties stakeholders and government have in managing and monitoring the use of the natural asset; destructive fishing practices; and Saiko. Fishing effort in the country’s sea has increased over the years. A 2015-2019 Fisheries Management Plan by the government put a cap on the number of fishing vessels that should ply the sea and the type of gear to be used for fishing, however, the document hasn’t been implemented holistically. As a result, Ghana’s waters are inundated with foreign vessels that fish within the area assigned to fishers, depriving them of their livelihood. Huge quantities of fish are captured, and sold to Saiko canoes at sea. These vessels earn significant amounts of money in this illegal business on the sea that does not attract the necessary tax from the state. Hence the state is losing enormously in terms of revenue. Obviously, the nation is haemorrhaging copiously in the fishing sector, losing huge financial resources that could change the socioeconomic status of fisher folks who are wallowing in abject poverty. However, the lack of political will, and the connivance of state apparatuses assigned to enforce fishery laws have betrayed these fisher folks and the country. All well-meaning citizens, the media and civil society organizations must bring together their influences to ensure that the laws governing transshipment are implemented for the benefit of the majority of the Ghanaian populace. This can be done; and must be done now.

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Energy

Chamber of Petroleum Consumers statement on rising LPG Prices The Price of Liquefied Petroleum Gas (LPG) has seen some sustained increases at the various retail outlets across the country over the past few months. These increases admittedly pose a huge financial burden on consumers in the usage of LPG by both households and automobile users. The national LPG promotion programme aimed at increasing LPG penetration and usage to about 50% coverage by 2030 is and will not be met if these sustained increases are not reversed and prices stabilized, the tendency for consumers to resort to cheaper alternative fuel sources could also become a reality as a section of domestic and commercial users complain of the drag in pump prices of LPG across the country. Below is a trend analyses based on the window prices of the ex-pump prices and depot

prices of LPG from the second window in September to the very current or first window of February, 2020. In addition to the trend analyses is also a comparative analysis of the effect of percentage changes in depot prices on the ex-pump prices. Prices of Ex-pump and Depot are computed on averages since the prices are in ranges and from different sources. Ex-pump prices of LPG per kg over the period has seen an increase of about Gh¢ 1.03/kg since the second window of September, 2019 to February, 2020 representing a 21% of change. The maximum increment in ex-pump prices of LPG per kg happened in the third window of January with a percentage increment of 8.16%.The only decrease in the pump price within the period was in the second window of January where prices fell by 2.53% though world mar-

ket prices of crude and other petroleum products have seen some reductions within the period. Depot prices of LPG per kg did not change in the second window of November, 2019 but ex-pump prices increased by 0.19%. Between September, 2019 and February, 2020, depot prices of LPG per kg changed by Ghp 0.46 while Ex-pump prices of LPG per kg changed by Gh¢ 1.03. Ex-pump prices have increased higher than the depot prices over the same period, what this implies is that a smaller increase in depot prices leads to a comparable higher increase in ex-pump prices. The current average prices of LPG per kg is at Ghc5.93 which is a lot higher than the average prices of Gasoil and Gasoline. Below is the Tabular representation of the results. In conclusion, the astronomical increase in the prices when not checked would impact negatively on the targeted LPG penetration rate.

Senegal makes energy a priority in 2020 launches official national event

Senegal will launch key projects and encourage new momentum in 2020, representing the vision of President Macky Sall and the government to make energy a foundation for growth. Africa Oil & Power is organizing the nation’s official energy event, Senegal Oil & Power 2020, with the support of the Ministry of Petroleum and Energy. The government and the organizers will invite global investors to Dakar to participate on the event which is slated for May 27-28 to meet with key players and explore new projects. Senegal is offering oil and gas blocks to global explorers in its 2020 licensing round, open its first utility-scale wind farm and make progress on key oil and gas projects in 2020. The government and the organizer of Africa Oil & Power will also invite local, regional and international investors to the first annual Senegal Oil & Power event.Supported by the Ministry of Petroleum and Energy, Senegal, the Oil & Power 2020 will unite the energy sector at Senegal’s official oil, gas and power event. The conference is accompanied by the second edition of an investor guide titled Africa Energy Series: Senegal 2020 which is set to be

released later in the year. “Senegal Oil & Power and the Africa Energy Series report are the national platform to promote Senegal’s voice in the international energy sector. These initiatives show how important energy is in the nation’s economic emergence,” said James Chester, Acting CEO of Africa Oil & Power. He said “Senegal is no longer an exploration hotspot; it is at the center of a proven and prolific oil and gas province. There are few places in Africa that offer such a stable and secure investment environment, with long term government vision and support for a wide range of energy activities.” Senegal Oil & Power is the sole event in Senegal with full government support that opens up national and regional opportunities across the entire value chain – not just in oil and gas. The 2020 program presents leaders and projects representing the full spectrum of energy activities, from oil and gas exploration to local goods and service provision, infrastructure, finance and power production and distribution. The theme of the conference is “A New Wave of Investment”, reflecting the invest-

ment-led vision of President Macky Sall and Senegal’s agenda to develop the economy on a foundation of a diversified energy sector. Eight oil and gas discoveries have been made since 2014 and in 2022, first oil will be produced from the Sangomar oilfield and first gas from BP’s Greater Tortue Ahmeyim (GTA) LNG project. 2020 is due to be a big year in Senegal’s energy sector as the government will present oil and gas licenses in a global roadshow as part of the 2020 licensing round. Lekela Power’s PETN wind farm will provide 2 million people with power from next year; key progress will be made on the GTA project with McDermott completing fabrication of the subsea production system as well as Halliburton which will also begin drilling and completion services at the close of 2020 for production at Sangomar, which received FID in January. Senegal Oil & Power 2020 brings the spotlight to the next wave of investment decisions and projects in 2020 and beyond, including gas to power initiatives, and also looking at Senegal’s neighbors Mauritania, Gambia, Guinea-Bissau and Guinea.

WINDOWS

Ex-Pump Price Range (GH¢)

Average Pump Price (GH¢)

Nominal Pump price (GH¢)

Percentage increase in Price

Depot Prices Range (GHC)

Average Supply Price

Depot Price Percentage

16TH SEPT30TH SEPT

4.8 - 5.00

4.9

2.662.84

2.76

1ST OCT -15TH OCT

4.92 5.10

5.01

0.11

2.30%

2.67-2.95

2.81

1.81%

16TH OCT31ST OCT

4.96 5.12

5.04

0.03

0.61%

2.70 2.97

2.85

1.42%

1ST NOV -15TH NOV

5.17 5.40

5.26

0.22

4.37%

2.81 – 3.13

2.97

4.21%

16TH NOV 30TH NOV

5.19 5.37

5.27

0.01

0.19%

2.82 -3.12

2.97

1ST DEC -15TH DEC

5.22 5.40

5.31

0.04

0.76%

2.84 -3.13

2.99

0.67%

16TH - 31ST DEC

5.36 5.55

5.46

0.15

2.83%

2.92 – 3.22

3.07

2.68%

1ST JAN - 3RD JAN

5.43 5.62

5.53

0.07

1.28%

2.95 3.26

3.11

1.30%

4TH - 15TH JAN

5.29 5.48

5.39

0.14

-2.53%

2.88 3.18

3.03

-2.57%

16TH JAN 31ST JAN

5.73 5.92

5.83

0.44

8.16%

3.12 -3.43

3.28

8.25%

1ST FEB - 15TH FEB

5.84 6.02

5.93

0.10

1.72%

3.17 -3.49

3.33

1.52%

Investors losing interest in the energy sector – Minority

The Minority in Parliament has said the government’s mismanagement of the energy sector has resulted in waned investor interest in Ghana’s oil sector, diminishing local participation in the upstream sector and has reduced confidence in the country’s upstream regulatory institutions. Addressing the media in Accra on the State of Energy in Ghana, the minority spokesperson on energy, John Abdulai Jinapor, said this is evident by the disastrous maiden bidding rounds for blocks under the NPP-led government. “All these are happening at a time that Ghana has successfully won the maritime boundary dispute,” he said. He said during the National Democratic Congress’ (NDC) administration, the party-led government adopted policies and programmes to ensure the nation consistently increased its share in most petroleum agreements that were negotiated. He said Ghana’s share in the three oil producing fields kept increasing from 13.6% to 20%. “This incremental sequence in the growth of Ghana’s shares under the NDC government clearly demonstrates a conscious and consistent effort to increase Ghana’s stake in petroleum agreements; especially after it became clear that the nation had the potential of additional oil resource. The result was that all thirteen (13) petroleum agreements that came to force under the NDC had enhanced fiscal terms and increased national stake,” he added. He said the previous government, which he was the deputy minister of energy, adopted best practices from other oil producing countries as a guide in

the management of the oil and gas resources. These initiatives provided transparency in the sector, attracted key industry players and boosted investor confidence. “We pioneered the passage of the Petroleum Revenue Management Act, 2011 (Act 815) with the main objective of regulating and managing the utilisation of petroleum resources in the upstream sector.” According to him, the then government took a bold step and established the Public Interest and Accountability Committee (PIAC) as an independent statutory body mandated to promote transparency and accountability in the management of petroleum resources in Ghana. To anchor the gains made and ensure that Ghana becomes one of the leading oil producers in Africa, he said his party in government (NDC) then passed the the Petroleum (Exploration and Production) Act 919, 2016 to provide an enabling environment for increased private participation and investment in the sector. “We were also determined to ensure Ghana did not lose out to the private sector. To this end, the NDC adopted a long-term vision of positioning GNPC as a major operator in the oil sector. To attain this objective, we created an Exploration and Production subsidiary – “Explorco” – in 2012 to pursue commercial stakes in strategically selected exploration and production projects,” he added. According to John Jinapor, who is also the Member of Parliament for Yapei Kusawgu, the current NPP administration has rolled back the clock of progress through underhand dealings and general mismanagement of the sector.

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Africa Business

Universal Healthcare Achievement In Cameroon Is Likely Despite Political Instability-Fitch Cameroon’s healthcare market will experience robust growth. This will be driven by efforts to roll-out universal healthcare in the country which will result in an increase in the government’s contribution to the total health expenditure. We expect Cameroon’s health spending to increase with a 10year compound annual growth rate (CAGR) of 6.0% in local currency terms, growing from XAF978bn (USD1.76bn) in 2019 to XAF1.82trn (USD3.2bn) in 2029. Despite the government’s universal healthcare ambitions however, the majority of health spending for Cameroonians will continue to be out-of-pocket. More specifically, in 2019, private healthcare expenditure stood at XAF834bn (USD1.41bn) accounting for 81.8% of the total health expenditure. By 2029 we expect this number to rise to XAF1.28trn (USD2.27bn), still accounting for the majority of total health spending (70.4%). Cameroon is on track to achieve universal healthcare, but risks remain. A recent study examining the prospects and feasibility of universal healthcare achievement in Cameroon, noted that ‘If the

current pace and high level of political engagement is sustained, Cameroon stands a chance of developing a universal healthcare scheme for its population by 2035’. However, it is the view of Fitch Solutions, that this scheme is unlikely to include advanced tertiary care, such as patented specialty pharmaceuticals. We note that our Country Risk team at Fitch Solutions expects a positive economic outlook for Cameroon with real GDP growth of 5.0% in 2020 and 5.1% in 2021. This will go some way to mitigate risks of underfunding of universal healthcare which have traditionally presented the biggest impediments to its implementation in sub-Saharan countries. Political risks will pose the biggest threat. We expect rising political instability in the country as the dispute between Cameroon’s government and Anglophone separatists will persist in 2020, despite recent government concessions. This frequently translates into violent attacks to civilians and infrastructure, including doctors, nurses and hospitals. Indicative of the level of violence

against medical personnel, there were three deadly attacks on hospitals in 2019. Sustained pharmaceutical spending. The robust positive growth seen in the country’s pharmaceutical market in the past three years is expected to be sustained in the coming years, mainly driven by universal healthcare implementation efforts which the government has revealed will focus on people suffering from chronic diseases as well pregnant women and children. We expect the pharmaceutical market in Cameroon to grow with a 9.9% 10-year CAGR in local currency terms, rising from XAF272.0bn (USD460mn) in

OPEC says coronavirus to trim 2020 oil demand, weighs output cut OPEC has cut its forecast for global growth in oil demand this year due to the coronavirus outbreak and said its output fell sharply in January as producers implemented a new supply-limiting pact. In a report, OPEC said 2020 demand for its crude will average 29.30 million barrels per day (bpd), 200,000 bpd less than previously thought. OPEC pumped below that rate in January, suggesting a 2020 supply deficit. The report could bolster the case for even more supply curbs by the Organization of the Petroleum Exporting Countries, which is considering whether to curb output further to offset slower demand. Oil has fallen 15% this year to $55 a barrel, alarming producers. “The impact of the coronavirus outbreak on China’s economy has added to the uncertainties surrounding global economic growth in 2020, and by extension global oil demand growth,” OPEC said in the report. “Clearly, the ongoing developments in China require continuous monitoring and assessment.” In the report, OPEC said world oil demand will rise by 990,000 bpd this year, down 230,000 bpd from the previous forecast. That is less than the reduction made by the U.S. government’s Energy Information Administration in its report on Tuesday. Oil rose after the report’s release, trading near $56 a barrel. Some analysts are beginning to say the market may have bottomed out on hopes the virus impact will peak this month. OPEC, Russia and other producers, a group known as OPEC+, have since Jan. 1 implemented a deal to cut output by 1.7 million bpd to support the

market. A technical panel that advises OPEC+ proposed last week a new cut of around 600,000 bpd. The producers are also considering bringing forward their next policy meeting to February from March 5-6. OPEC has yet to make any announcement on an early meeting and Iran’s oil minister said on Saturday the pressure to reschedule the gathering had eased. OPEC CUTS, RUSSIA PUMPS MORE OPEC and its partners have been limiting supply since 2017, helping revive prices by clearing a glut that built up in 20142016 when producers pumped at will. But higher prices have also boosted U.S. shale and other rival supplies. OPEC in the report trimmed its 2020 forecast for growth in non-OPEC supply to 2.25 million bpd, 100,000 bpd less than the previous forecast.

The slowdown in non-OPEC supply will help OPEC’s effort to manage the market. But nonOPEC output is still expected to grow at over twice the rate of world oil demand in 2020, presenting OPEC and its allies with a continuing challenge. In January, OPEC over-delivered on its cuts, lowering supply by 509,000 bpd to 28.86 million bpd, according to secondary sources cited in the report, due to involuntary losses in Libya as well as deliberate cuts led by Saudi Arabia. Russian output, however, increased. Preliminary data for liquids production in January showed slightly higher crude production of 20,000 bpd to average 11.49 million bpd, OPEC said. The report suggests there would be a 2020 supply deficit of 440,000 bpd, if OPEC kept pumping at January’s rate and other factors remained unchanged, larger than the deficit suggested in January’s report. (Reuters)

2019 XAF700.0bn (USD1.24bn) in 2029. The illegal drug market is likely to remain prominent. Like many other countries in Sub-Saharan Africa, Cameroon is facing a serious risk to public health by the high percentage of counterfeit medicines on the market. Due to the low purchasing power of the population, the price of drugs in pharmacies is a deterrent, and therefore street vendors of drugs have remained entrenched, despite being a likely channel for counterfeit and substandard products. Patients choose to supply medicines from street vendors due to the lower price and the lack of need for a prescription. For

example, Cytotec (misoprostol), a medicine that treats stomach ulcers, is often purchased illegally in order to terminate unwanted pregnancies. In July 2019, the Minister of Health, Malachie Manaouda, created a brigade with the task of seizing and destroying medical products sold on the streets and initiated an awareness campaign under the name ‘Street Medicine Kills’. However, we remain cautious about the tangible effects of these measures, especially if the underlying reasons of patients resorting to street vendors remain unaddressed.

Ethiopia passes law imposing jail terms for internet posts that stir unrest

(Reuters) - Ethiopia’s parliament passed a law on Thursday imposing jail terms for people whose internet posts stir unrest, a move the government says is needed to prevent violence ahead of elections but which the United Nations says will stifle free speech. Ethiopia, for decades one of the most tightly controlled states in Africa, has undergone huge political change since reformist Prime Minister Abiy Ahmed took office two years ago. But even as Abiy has freed political prisoners and journalists and lifted a ban on opposition parties, the authorities have struggled to contain a surge in ethnic violence. An election this year is seen as the biggest test yet of whether his ambitious political reforms can stick. The new law permits fines of up to 100,000 Ethiopian birr ($3,000) and imprisonment for up to five years for anyone who shares or creates social media posts that are deemed to result in violence or disturbance of public order. Some 297 lawmakers who were present in the chamber voted in favor of the bill while just 23 were opposed. “Ethiopia has become a victim of disinformation,” lawmaker Abebe Godebo

said. “The country is a land of diversity and this bill will help to balance those diversities.” Several of the lawmakers who opposed the bill said it violates a constitutional guarantee of free speech. Abiy, who won the Nobel Peace Prize last year for his reconciliation with Ethiopia’s neighbor and longtime foe Eritrea, has pledged that this year’s election will be free and fair. The nation of 108 million people has regularly held elections since 1995, but only one, in 2005, was competitive. The law was first endorsed by Abiy’s cabinet in November. At the time, the U.N.’s special rapporteur on freedom of expression urged authorities to reconsider it, warning it would worsen already high ethnic tensions and possibly fuel further violence. International rights groups say it creates a legal means for the government to muzzle opponents. “Politicians or activists or others will be forced to be cautious, afraid that their speech might fall into the definition of hate speech or can be considered as false information,” said Amnesty International’s Ethiopia researcher Fisseha Tekle. (Reuters)

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Tourism

Celebration of Black History Month can boost Beyond the Year of Return agenda (Part 2) By Philip Gebu

The theme for Black History Month for the year 2019 was “Black Migrations”. It emphasized the movement of people of African descent to new destinations and subsequently to new social realities. While inclusive of earlier centuries, this theme focused especially on the twentieth century through today. Beginning in the early decades of the twentieth century and otherwise known as the Great Migration, African American migration patterns included relocation from southern farms to southern cities; from the South to the Northeast, Midwest, and West; from the Caribbean to US cities as well as to migrant labor farms; and the emigration of noted African Americans to Africa and to European cities, such as Paris and London, after the end of World War I and World War II. One of such notable migrants is W.E.B Dubois. The President of Ghana at the time Dr. Kwame Nkrumah invited Du Bois to Ghana to participate in our independence celebration in 1957, but he was unable to attend because the U.S. government had confiscated his passport in 1951. By 1960 – the “Year of Africa” – Du Bois had recovered his passport, and was able to come to Ghana for the celebration. While in Ghana in 1960, Du Bois spoke with President Nkrumah about the creation of a new encyclopedia of the African diaspora, the Encyclopedia Africana. In early 1961, the then government alerted Du Bois that they had appropriated funds to support the encyclopedia project, and they invited Du Bois to come and manage the project here. In October 1961, at the age of 93, Du Bois and his wife traveled to Ghana to take up residence and commence work on the encyclopedia. In early 1963, the United States refused to renew his passport, so he made the symbolic gesture of becoming a citizen of Ghana. While it is sometimes stated that Du Bois renounced his U.S. citizenship at that time, and he stated his intention to do so, Du Bois never actually did. Two years after his arrival he died. Du Bois was given a state funeral on August 29–30, 1963, at Nkrumah’s request, and buried beside the western wall of Christiansborg Castle (now Osu Castle). In 1985, another state ceremony honored Du Bois. With the ashes of his wife Shirley Graham Du Bois, who had died in 1977, his body was re-interred at their former home in Accra, which was dedicated the W. E. B. Du Bois Memorial Centre for Pan African Culture in his memory. Such migrations resulted in a more diverse and stratified interracial and intra-racial urban population amid a changing social milieu, such as the rise of the Garvey movement in New York, Detroit, and New Orleans; the emergence of both black industrial workers and black entrepreneurs; the growing number and variety of urban churches and new

religions; new music forms like ragtime, blues, and jazz; white backlash as in the Red Summer of 1919; the blossoming of visual and literary arts, as in New York, Washington, D.C., Chicago, and Paris in the 1910s and 1920s. The theme Black Migrations equally lends itself to the exploration of the century’s later decades from spatial and social perspectives, with attention to “new” African Americans because of the burgeoning African and Caribbean population in the US; Northern African Americans’ return to the South; racial suburbanization; inner-city hyperghettoization; health and environment; civil rights and protest activism; electoral politics; mass incarceration; and dynamic cultural production. Migration accompanies tourism and the dynamics of both are similar. From an individual’s perspective, their principal vector is the desire to change the usual social and physical environment, for a brief period at least, for some time or forever, but psychological, family, cultural or economic links with the place of origin will always be there. While travel for tourism essentially seeks new experience elsewhere by means of consumption of goods and services from the income already earned, migration seeks another livelihood, i.e. establishing another household combined with a work opportunity or a new professional experience and career development, or reaching the life ideals which the individuals concerned do not perceive to be achievable in the place of origin, and which also will need an economic base in the country of chosen destination. Black Migration which is very rampant on the African continent has been attributed to many reasons top among the list is poverty. I spoke to a gentleman who operates an NGO in the Brong Ahafo region of Ghana and he try to dissuade young men especially who try to embark on the perilous journey across the Sahara Desert. He tells me these young men will sell all they’ve worked for and use the money for the journey with the hope of reaching Europe. The UN Development Programme (UNDP) report, Scaling Fences: Voices of Irregular African Migrants to Europe, sets out to find out why those who put themselves in the hands of people smugglers, and put themselves in other vulnerable positions to cross borders, make the decision to leave home avoiding formal immigration procedures, in the first place The report, which interviewed 1,970 migrants from 39 African countries in 13 European nations, all of whom declared that they had arrived in Europe through irregular means and not for asylum or protection-related reasons, reaches some counter-intuitive conclusions. Migrants often hold steady jobs, better educated. It finds that getting a job was not the only

motivation to move; that not all irregular migrants were ‘poor’ in Africa, nor had lower education levels. Around 58 per cent were either employed or in school at the time of their departure, with the majority of those working, earning competitive wages. But around half of those working said they were not earning enough. In fact, for two-thirds of those interviewed, earning, or the prospect of earning in their home countries, did not hold them back from travelling. The respondents also spent at least three years more in education than their peers. “Scaling Fences highlights that migration is a reverberation of development progress across Africa, albeit progress that is uneven and not fast enough to meet people’s aspirations. Barriers to opportunity, or ‘choice-lessness’, emerge from this study as critical factors informing the calculation of these young people,” said Achim Steiner, UNDP Administrator. “By shining a light on why people move through irregular channels and what they experience when they do, Scaling Fences contributes to a critical debate on the role of human mobility in fostering progress towards the Sustainable Development Goals and the best approaches to governing it,” he said. Migrants, in their own words Here’s what some of the migrants interviewed told UNDP researchers – their last names were not given to help protect their identities. • “If you have a family, you have to ensure they have food, shelter, medicine, and education. I have a young daughter. People may ask what kind of father I am, to leave behind my wife and infant daughter. But what kind of a father would I be, if I stayed and couldn’t provide them a decent life?” - Yerima • “The idea to try and

reduce the weight of migration is to look at the causes. It is… the governing policies that entrench people in poverty, that don’t develop anything. Schools that don’t exist, failing health and corruption, repression. That pushes people to emigrate.” – Serge • “In five years’ time, I see myself in my home country. For a good five years, (my family) haven’t seen each other. So one day will come when we will see each other. And when I go back to my home country, I don’t think I will come back” – Mahamadou • “It was all to earn money. Thinking of my mom and my dad. My big sister. My little sister. To help them. That was my pressure. That’s why Europe.” – Drissa ‘Shame’ of not providing, keeps African migrants in Europe The apparent shame of failing in their “mission” to send sufficient funds back home, emerged as a major factor keeping migrants working in Europe, according to UNDP. Around 53 per cent had received support from family and friends, in order to make the journey, and once in Europe, around 78 per cent, were sending money back. The report also found key differences between men and women in terms of the migrant experience. A gender pay gap which favours men in Africa, “resoundingly reverses in Europe, with women earning 11 per cent more, contrasting with previously earning 26 per cent less, in Africa”, said UNDP. A higher proportion of women were sending money back – even among those not earning. But when it comes to crime, women are suffering more, with a higher proportion falling victim to a crime in the six months prior to being interviewed, than men, and significantly higher instances of sexual assault. Opportunity and choice must

expand at home UNDP describes Calling Fences as “a clarion call to continue to expand opportunity and choice in Africa while enhancing opportunities to move from ‘ungoverned’ to ‘governed’ migration, in line with the Global Compact for Safe, Orderly and Regular Migration.” As we celebrate Black History month in February, the focus must be to celebrate black people’s achievements however, challenges associated with black people must also be highlighted as a means to curb the menace of black migration and eventually eradicate it. This can only be achieved through education and all must be involved in this course most especially media. I want to repeat that when I listen to radio, its sad the focus seems to be on Val’s day and business as usual. I challenge media to take up the fight in helping eradicate the menace of black migrants who are continually risking their lives just to cross the Sahara Desert and the Mediterranean Sea with the hope of a better life in Europe.

Philip Gebu Philip Gebu is a Tourism Lecturer. He is the C.E.O of FoReal Destinations Ltd, a Tourism Destinations Management and Marketing Company based in Ghana and with partners in many other countries. Please contact Philip with your comments and suggestions. Write to forealdestinations@gmail.com / info@forealdestinations.com. Visit our website at www.forealdestinations.com or call or WhatsApp +233(0)244295901/0264295901.Visist our social media sites Facebook, Twitter and Instagram: FoReal Destinations

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Commodities

Gold Fields’ FY’19 earnings improve on higher production, revenue - S&P

Gold Fields Ltd. said Feb. 12 that it booked a jump in fullyear 2019 profit, as the South African mining company benefited from increased gold production and higher revenue. The company reported attributable headline earnings of US$163 million, or 20 cents per share, for the year, increasing from US$61 million, or 7 cents per share, in 2018, in line with the company’s expectations. Basic earnings per share swung to 20 cents, on an attributable net profit of US$162 million, from a loss per share of 42 cents, on an attributable net loss of US$348 million, in 2018. Fourth-quarter 2019 revenue was US$1,482 per ounce, up year over year from US$1,212/

oz, while full-year 2019 revenue was US$1,388/oz, improving from US$1,252/oz in 2018. Gold Fields reported attributable fourth-quarter production of 590,000 ounces, improving from 509,000 ounces in the same quarter of 2018, while full-year 2019 production increased to 2.20 million ounces at all-in sustaining costs of US$897/oz, as expected. For full-year 2020, Gold Fields expects attributable equivalent gold production of between 2.28 Moz and 2.32 Moz, with all-in sustaining costs of between US$920/ oz and US$940/oz. The company declared a final dividend of 100 South African cents per share, bring-

ing the total dividend for full-year 2019 to 160 cents, compared with a total of 40 cents per share in the previous year. Separately, Gold Fields completed a placement of 41,431,635 new ordinary shares, raising US$252 million, to help develop its new Salares Norte gold-silver project in Chile. Salares Norte is expected to have an 11.5-year life-of-mine, with an average annual production of 450,000 ounces of gold equivalent over the first seven years. Construction is scheduled to start in the fourth quarter, with first production expected in the first quarter of 2023.Swww. goldfields.com

Copper edges lower after jump in coronavirus death toll

Copper prices edged lower on Thursday as China’s Hubei province, the epicentre of a coronavirus outbreak, reported a record rise in deaths and thousands more cases. The virus and efforts to control its spread have hammered economic activity in China, the world’s largest industrial centre, driving down metals prices. Using a new method of diagnosis, Hubei province said 14,840 cases were reported on Thursday and 242 people had died on Wednesday, taking to-

tal deaths in China from the virus to 1,367. The number of new cases had appeared to be falling and the country’s senior medical adviser said on Monday that the epidemic could end by April. Benchmark copper on the London Metal Exchange (LME) did not trade in official rings but was bid 0.4% lower at $5,739 a tonne. Prices are down nearly 10% from four weeks ago but have recovered somewhat from a low of $5,523 on Feb. 3.

The higher Hubei numbers seem to be a result of a change in how the figures are counted rather than an acceleration of the virus’s spread, said Capital Economics analyst Kieran Clancy. “That’s why we’ve seen a muted reaction,” he added. Clancy also said that the focus was now moving from the effect of coronavirus on metals demand to the risk that measures to control its spread would disrupt supply - something that could support prices. Source : Reuters

Alcoholic beverages, tobacco others record highest inflation

Alcoholic Beverages, Tobacco and Narcotics (11.1 per cent), Transport (10.5 per cent) and Recreation (9 per cent) recorded the highest rates of inflation in the commodities division According to the Government Statistician, Profession Samuel Kobina Anim, “the national year-on-year rate was 7.8 per cent in January 2019, 1.9 percentage points lower than the 7.9 per cent recorded in December 2019.” he said. He also explained that Alcoholic Beverages, Tobacco and Narcotics (11.1 per cent), Transport (10.5 per cent) and Recreation (9 per cent) were the divisions with the highest

rates of inflation. The food and non-alcoholic beverages recorded a yearon-year inflation rate of 7.8 per cent, representing a 0.5 percentage points higher than what was recorded in December 2019 (7.3 per cent). At the regional level, the year-on-year inflation ranged from 5.6 per cent in the Ashanti Region to 10 per cent in the Central Region. The development should mean that even though inflation was increasing last month, the rate of increase in January was a little slower, compared to December 2019. Inflation rate for the month of January declined marginally. It dropped to 7.8 per cent.

Global Cannabis Testing Market to be worth around USD 2,012 Million By 2024 - report

The global cannabis testing market is expected to generate a revenue of around USD 2,012 million by the end of 2024, growing at a CAGR of around 12.0% between 2018 and 2024. According to a report by Zion Market research, it was valued at approximately USD 910 million in 2017. Cannabis testing detects active ingredients like terpene and cannabinoids by using chromatographic or analytical testing. The increase in the legalization of cannabis in various countries, growing awareness through various conferences and seminars and an increase in the technological advancements related to cannabis testing are fueling the expansion of the global cannabis testing market. The global cannabis testing market can be divided based on product and software, a method of testing,

and end-users. Based on product and software, the cannabis testing market can be classified into products and software. The product segment is further divided into analytical instruments, which includes spectroscopy instruments, chromatography instruments, and others, and consumable includes standards and CRMS, chromatography columns, sample preparation products, and supplies and accessories. In 2017, the product segment acquired the highest market share. The rise in the demand for testing methods, such as pesticides screen and potency testing, which mainly requires the use of analytical instruments, is fueling the demand for this product segment. Additionally, the recurring need for consumables to conduct testing techniques and the introduction of technologically advanced devices are also driving the growth of this segment.

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World Business

JPMorgan picked as adviser for sale of stake in $7.3 billion Turkish motorway: sources JPMorgan ( JPM.N) has been picked as an adviser for the sale of a stake in a $7.3 billion motorway in Turkey, four sources familiar with the matter said. Billed as a landmark project in the financing of infrastructure schemes involving the government and the private sector in Turkey, the final section of the 426 km-long Gebze-Orhangazi-Izmir motorway was inaugurated last year to link Istanbul in the northwest to the western port city of Izmir. Construction consortium Otoyol AS said in late January last year that it had started seeking international advisers to value the project ahead of a possible stake sale. One of the sources, who had direct knowledge of the matter, said the total value of the sale depended on interest from potential buyers. JPMorgan declined to comment, while Otoyol did not immediately respond to a request for comment. Italian contractor Astaldi (AST.MI), which has a stake of just under 19% in the project, has been hard hit by a downturn in Italy’s construction industry and is under a creditor protection scheme. It has already agreed to sell its 33% stake in the third Bosphorus Bridge to its Turkish partner, a move aimed to help the Italian builder complete a rescue plan. Turkish firms Nurol Insaat, Özaltin and Makyol each hold a 26.98% stake in the consortium while Göçay, another Turkish company, has a 0.2% share in the consortium, according to their filings. The joint venture

was awarded a 22-year and four month build, operate, transfer contract in 2009, a model used to finance large-scale infrastructure schemes where the government grants a concession to private firms to finance, build and operate a project. Total investment in the project was $7.3 billion, including $5 billion from debt, $1.5 billion from equity and $800 million from operational revenues, according to the consortium’s website. (Reuters).

U.S. Stocks Hit by Renewed Coronavirus Jitters: Markets Wrap U.S. equities declined on Thursday alongside European stocks as officials in China deployed a revised methodology to diagnose the coronavirus, sending the number of confirmed cases soaring. The S&P 500 Index opened lower, a day after hitting fresh records, as the jump in infections undercut optimism the spread of the virus was slowing. Treasuries trimmed an earlier gain after a mixed reading of American consumer prices. “The sudden sharp re-acceleration in new coronavirus infections in China has investors reassessing risk,” said Alec Young, managing director of global markets research at FTSE Russell. “Given the inherent uncertainty of this macro risk, we believe a focus on the bottom line can be helpful. While China and travel-focused companies are obviously most vulnerable, as long as the economic impact on the U.S. economy remains modest, expect U.S. equities to maintain their relative immunity to the virus.” The Stoxx Europe 600 Index was on pace for its biggest drop this month. The euro traded near the lowest since 2017, while the U.K. pound gained and gilts retreated after Sajid Javid quit

as Chancellor of the Exchequer. The FTSE 100 Index also declined. Investor sentiment had improved in recent sessions amid speculation the impact from the coronavirus outbreak on global growth would be shortlived. That assumption was thrown into doubt when Hubei, the province at the center of the epidemic, reported al-

most 15,000 new cases after it revised its data to include “clinically diagnosed” cases in its daily disclosure. In company news, Tesla Inc. shares fell after the carmaker announced plans to offer about $2 billion of common stock. Alibaba Group Holding Ltd. fell after warning that its revenue growth will be negatively impacted in the March quarter.

Barclays Plc slipped as the bank revealed British regulators are probing Chief Executive Officer Jes Staley’s relationship with financier Jeffrey Epstein. Elsewhere, stock gauges in Japan, Shanghai, Hong Kong and South Korea all declined, though shares in Australia edged higher. Oil continued Wednesday’s surge even as the International Energy Agency

said the coronavirus means global demand will drop this quarter for the first time in over a decade. Here are some key events coming up: • China and the U.S. on Friday are scheduled to lower tariffs on billions of dollars of respective imports as part of the trade deal signed last month. (Bloomberg)

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Features

Are Traditional Multinationals Ready for Emerging Markets? By Aubrey Hruby

Since 2010, economic growth in low- and middle-income countries has been two to three times faster than in high-income countries. The ten economies with the highest projected growth rates for the next four years are all in Africa or Southeast Asia. In the coming years, emerging markets in Africa, Asia, and Latin America will also account for the lion’s share of global population growth, as well as an unprecedented expansion of the middle class. Because of their younger, increasingly prosperous populations, emerging markets will drive an explosion in consumer spending. Real (inflation-adjusted) expenditure will grow at triple the rate in developed countries, owing to the continued expansion of Internet and mobile connectivity. Companies that ignore these opportunities risk missing out on decades of future returns. Yet emerging markets pose significant structural challenges to developed-economy multinational companies. Four issues stand out: a lack of physical infrastructure; a data deficit and reliance on interpersonal networks; policy uncertainty; and informality. While investment in transportation infrastructure is accelerating across emerging markets, significant gaps are likely to persist. Driven by population growth and urbanization, demand is outstripping supply. In Africa, where the

infrastructure-investment gap totals $68-108 billion per year, firms pay more to do business. In Nigeria, over three-quarters of firms experience electrical outages, costing them over 15% of annual sales, on average. Similarly, while all companies need data for investment and operational decision-making, official statistics in emerging markets are not always reliable, and are often skewed by political agendas. For example, in Pakistan, a census scheduled for 2008 was delayed by nine years, and beset by problems when it was finally conducted. More broadly, all developing countries undergoing rapid population growth struggle to provide regular and reliable census data. Ethiopia recently delayed a census originally scheduled for 2017 for a second time, citing ethnic conflict ahead of the upcoming elections, scheduled for May 2020. In Nigeria, where the last census was conducted in 2006, past counts have consistently led to accusations of fraud. In the absence of data, relationships are key; reliable contacts with intimate knowledge of the local markets are critical for successful business operations. Rapid economic growth is neither linear nor smooth and multinationals must navigate uncertain policy environments. There is remarkable overlap between the countries with the highest economic growth rates and those with the highest levels of political risk. In countries with underdeveloped policy processes, regular cabinet shuffles, endemic corruption, commodity dependency, and

Aubrey Hruby

the potential for mass protests against discredited governments, uncertainty comes with the territory. Finally, multinationals must navigate the informal sector that still dominates emerging markets, accounting for over 60% of GDP in some regions. More than 85% of employment in Africa, and over 65% in Asia and the Middle East, is in the informal sector. Mobilizing the labor and spending power in a given market is key to a multinational’s success, but navigating an environment where most economic activity is hidden from regulatory and institutional oversight requires creativity and deep local knowledge. Although these four challenges each place different demands on firms, they all point to the need for flexibility and strategic redundancy. Smart companies will invest in local subsidiaries instead of trying to maintain strong central control, and they will embrace mo-

bile technology to connect with consumers and build bridges to the informal sector. Examples of success are found in new companies focused on large emerging markets sales. Young companies such as the Frontier Car Group (FCG) showcase the skills and structure needed to be successful in markets as diverse as Nigeria, Chile, Mexico, Pakistan, and Indonesia. FCG recognized that despite rapidly growing demand for used automobiles in emerging markets, there was no efficient way to sell one’s car, so it launched a multi-platform application that connects sellers to pre-vetted dealers. To counter the under-regulated, largely informal nature of the used-auto market, FCG has established a network of inspection centers (usually a gas station or other preexisting business) where vehicles undergo an app-supervised inspection before being listed on a live bidding site. Users get a fair market price for their car in under 45 minutes, and dealers can confidently purchase vehicles sight unseen. Moreover, FCG has created a corporate structure that is uniquely suited for rapid expansion across emerging markets with radically different business environments. Although core technology, operations, financing, marketing, and product operations are run out of the company’s Berlin headquarters, FCG enters each new market as a start-up, giving its subsidiaries the autonomy they need to adapt to each market’s unique demands. This strategy works because FCG has been successful in

identifying visionary entrepreneurs with proven track records in their home markets. For example, Etop Ikpe, the CEO of FCG’s Nigerian company, Cars45, had already worked on multiple successful e-commerce companies, and thus had a strong reputation in the business community. Just as FCG’s model avoids costly investments in physical capital in settings with poor infrastructure, its use of mobile technology makes it ideally suited for markets where most Internet users gain access through their phones. The company is well positioned to benefit from rapid cell-phone penetration across emerging markets, as well as from existing informal businesses. The company’s decentralized approach insulates it from political shocks, while its use of local executives allows it to navigate uncertain markets. Outside investors have taken note: the three-year-old FCG raised nearly $90 million in its third funding round last year. There is no one-size-fits-all formula for succeeding in emerging markets. But clearly, traditional multinationals’ hub-and-spoke structure leaves them ill-equipped fully to seize opportunities in emerging markets. Innovative companies like FCG are creating a new blueprint that developed-market multinationals should study.

Aubrey Hruby is a co-founder of the Africa Expert Network and a senior fellow at the Atlantic Council’s Africa Center. Copyright: Project Syndicate, 2019. www.project-syndicate.org

China’s Economic Fight Against the Coronavirus By Yu Yongding The coronavirus outbreak that began in the Chinese city of Wuhan has spread across the country and beyond its borders, leaving governments at all levels in China scrambling to limit further person-to-person transmission of the virus, now known as COVID-19. Wuhan, with a population of 11 million, is under lockdown. Many provinces have postponed the resumption of work at non-essential enterprises following the Chinese New Year holiday, with residents instead staying indoors in barricaded neighborhoods. Much inter-city and inter-provincial transportation has been halted. And some local governments have even established illegal checkpoints to prevent vehicles carrying industrial products and materials from entering areas under their jurisdiction that contain factories. Clearly, the outbreak and the extraordinary official measures to contain it have hit China’s economy hard. No one yet knows when the authorities will manage to overcome the epidemic, and what the eventual cost to the economy will be. But the Chinese people have, once again, shown courage and solidarity in the face of a national emergency. There is no doubt that China will win the battle against COVID-19. When the severe acute respi-

ratory syndrome (SARS) virus hit the Chinese economy in the spring of 2003, everyone initially was pessimistic about the outbreak’s likely economic impact. But as soon as the epidemic was contained, the economy rebounded strongly, and ultimately grew by 10% that year. China is unlikely to be that lucky this time, given unfavorable domestic and external economic conditions. So, with the deadly coronavirus still on the rampage, the Chinese authorities must prepare for the worst. Policymakers should respond to the current crisis in three ways. Their first priority must be to rein in the epidemic no matter what the cost. Because markets cannot function properly in emergencies, the state must play the decisive role. Fortunately, China’s administrative machinery is functioning effectively. At the moment, one of the most serious economic obstacles is the interruption to transport caused by fearful local governments. While recognizing local officials’ legitimate concerns about preventing the further spread of the virus, the central government must now intervene to facilitate smooth flows of people and materials, thus minimizing supply-chain disruptions. Second, the government should devise ways to help businesses survive the crisis, focusing in particular on small

and medium-size services firms. While being careful not to create undue moral hazard, the government should cut taxes, reduce charges, and compensate hard-hit enterprises generously. It also should consider establishing pandemic insurance funds so that society as a whole can bear businesses’ virus-related losses. Moreover, commercial banks should strive to ensure that there is no shortage of liquidity, including by rolling over loans to troubled enterprises and allowing them to postpone repayment. In addition, policymakers may need to resort to market-unfriendly measures such as targeted lending and moral suasion to steer the allocation of financial resources, as well as possibly loosening some financial regulations. Third, the authorities should pursue more expansionary fiscal and monetary policies, even if such measures per se are not aimed at offsetting the negative impacts of supply-side shocks. The People’s Bank of China should continue to lower interest rates as much as possible and inject enough liquidity into the money market. Although inflation has risen as a result of supply-chain disruptions and may yet climb further, tightening macroeconomic policy at this point would be counterproductive. Likewise, although the government is unlikely to launch large-scale infrastructure

investment projects before COVID-19 has been contained, the general budget deficit may nonetheless grow, owing to the epidemic-related increase in spending and decrease in tax revenues. In its fight to control the virus’s spread, the government should not worry too much about whether the budget deficit exceeds 3% of GDP. The battle against the coronavirus undoubtedly will be very costly, and will reverse some of the Chinese authorities’ recent achievements in reining in financial risks. For now, however, any potential problems related to debt, inflation, or asset bubbles are secondary. Policymakers can worry about them once the situation has calmed down. Late last year, I sparked a heated debate among Chinese economists by arguing that the country’s policymakers should not allow annual GDP growth to slip below 6%, because expectations of a slowdown are self-fulfilling. In the light of the coronavirus outbreak, I concede that the 6% growth target must be reconsidered. But even if the epidemic lowers growth in 2020 by, say, one percentage point, this probably would not negatively affect people’s expectations, because the slowdown would be the result of an external shock rather than some inherent weakness in the economy. Chinese policymakers’ most urgent challenge is no longer how to stimulate aggre-

Yu Yongding

gate demand, but rather how to ensure that the economy functions as normally as possible without compromising the fight against COVID-19. Sooner or later, however, the epidemic will be conquered, and the Chinese economy will return to a normal growth path. When that happens, the question of whether China needs more expansionary fiscal and monetary policies to achieve an adequate level of growth will return to the agenda. And the rationale for a looser stance will still apply. In fact, to compensate for the losses arising from the COVID-19 outbreak, the Chinese authorities may have to adopt even more expansionary policies than I (and others) had previously suggested. Yu Yongding, a former president of the China Society of World Economics and director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, served on the Monetary Policy Committee of the People’s Bank of China from 2004 to 2006

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News

British Airways puts some love in the air with Valentine’s specials This Valentine’s Day British Airways is making it easier to experience the romance of Paris, spring a surprise getaway to the Eternal City or hold hands watching a special screening of Pretty Woman at the Rivoli Ballroom in London. From 12 until 16 February the airline is offering Valentine’s fares starting from US$579 return from Accra to London and Europe. For those who want to make their Valentine’s getaway a little more remarkable, the specials extend to the premium cabins, with Club World fares starting from US$2829. “From sipping champagne in Paris, throwing a coin in the Trevi Fountain in Rome tochoosing the perfect romantic gift at Harrods in London, there are endless opportunities to make this an unforgettable Valentine’s Day, but book soon as these fares are likely to sell out quickly,” says Kola Olayin-

ka, British Airways’ commercial manager for West Africa. British Airways is a full-service airline and provides complimentary food and drinks, free seat selection 24 hours before departure and a selection of inflight entertainment. It has just unveiled freshly designed soft blankets and cushions and a new headrest for customers in its World Traveller cabin. The fares include all government taxes, fees and surcharges, but may fluctuate due to exchange rates.

Noble Wadzah officially takes over chairmanship of PIAC

The representative of the Civil Society and Community-Based Organisations on the Public Interest and Accountability Committee (PIAC), Mr. Noble Wadzah, has assumed the Chairmanship of PIAC, from Dr. Steve Manteaw whose mandate has elapsed. At a short but colorful handing over ceremony, which coincided with an orientation workshop for incoming members of the Committee, Mr. Wadzah lauded his predecessor and his team for the good work done in upscaling PIAC’s effectiveness. According to him, PIAC is at a crossroad because the previous leadership bequeathed to the current Committee a solid foundation. He stated that the current leadership has the onerous responsibility to extend the frontiers of transparency and accountability in the management Ghana’s petroleum revenue The Chairman urged all the members of the newly constituted Committee to endeavor to contribute their quota in delivering the mandate entrusted to them. The new leadership has a one-year mandate. The immediate past Chairman, Dr. Steve Manteaw, en-

couraged incoming Mr. Wadzah to keep focus whiles motivating his members to deliver. PIAC is an independent statutory body mandated to promote transparency and accountability in the management of petroleum revenues in Ghana. It was established under Section 51 of the Petroleum Revenue Management Act (Act 815) to among others, monitor and evaluate compliance with the Act. Some of the new members on the Committee now took over from some immediate past members of the Committee whose tenure has ended. They include the President of the Institute of Chartered Accountants Ghana (ICAG), Professor Adom-Frimpong, who stepped in to replace Mr. Joseph Winful, a renowned Business Consultant and past Senior Partner of KPMG who represented the Association of Chartered Accountants on the Committee. Mr. Osei Kwadwo Addo replaces Mr. Roland Affail Monney as representative of the Ghana Journalists Association (GJA) on the Committee while Mr. Nasir Alfa Mohammed took over from the former Vice Chairman, Dr. Thomas Kojo Stephens, representing

Ghana Bar Association (GBA). The immediate past chairman of PIAC, Dr. Steve Manteaw, who represented the Ghana Extractive Industries Transparency Initiative (GHEITI) was replaced by Mr. Bashir Mohammed Abdul-Razak. The old members of the Committee whose tenure are not yet over include Prof. Albert Fiadjoe, representing Ghana Academy of Arts and Sciences (GAAS), Alhaji Alhassan Abdulai, representing Muslim Groups, and Mr. Noble Wadzah, Member, representing Civil Society & Community-Based Organisations. The others are Prof. Akosua Keseboa Darkwah, representing Independent Policy Think Tanks, Nana Agyenim Boateng, representing the Association of Ghana Industries (AGI) and Ghana Chamber of Commerce, Ogyeahoho Yaw Gyebi II, representing the National House of Chiefs, Kansawurche Hajia Bukari, representing Queen-mothers Association, Rev. Dr. Kwabena Opuni-Frimpong, representing the Christian Groups, and Mrs. Mary Karimu, representing the Trades Union Congress (TUC).

No evacuation on the cards for Ghanaians in China

Dr. Patrick Kuma Aboagye

Dr. Patrick Kuma Aboagye, Director-General of the Ghana Health Service (GHS), on Thursday said Ghanaian nationals in Wuhan city and Hubei Province in China, where the there is an outbreak of Coronavirus (COVID-19), will not be evacuated. The decision, he said, was in line with an advise from the World Health Organization. “Evacuation is not on the table for now,” Ghanaians outside are safe and we in constant touch with the Chinese Embassy who are taking care of them. We will do so if the need arises”, he added. Updating some journalists in Accra today on the virus, Dr Aboagye explained the structures and systems put in place in China were “protective,” describing evacuation as a national decision.

He noted that the Ministry of Health and the GHS would continue to observe the situation in China and if there is the need for evacuation, GHS will advise accordingly. China has reportedly recorded over 60,000 cases of the virus, with the death toll above 1,350 since the outbreak early this year. Dr. Badu Sarkodie, Director of Public Health said systems have been put in place to ensure that Ghanaians were safe as well as ensuring that persons coming into the country were thoroughly screened. He noted that as part of awareness creation, there were a number of stakeholder engagements being held nationwide and GHS was also partnering hoteliers, traditional leaders, schools, churches and mosques in creating awareness. He advised that Ghanaians should adhere to the all preventive precautionary measures.