Business24 ePaper (March 16, 2020)

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MONDAY MARCH 16, 2020

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Economy said to face multiple risks

New GIPC law to reflect AfCFTA commitments

By Eugene Davis

Yofi Grant – CEO of Ghana Investment Promotion Centre

By Patrick PAINTSIL

The Ghanaian economy is faced with multiple risks from plunging oil prices and the coronavirus pandemic that is ravaging many countries across the world, Prof. Godfred Alufar Bokpin, an economist at the University of Ghana Business School (UGBS), has said in a wide-ranging interview with Business24.

According to him, the government’s 2020 budget has been weakened barely three months into its implementation, resulting from happenings on the global front, and it will be difficult for the government to execute the budget as it is.

The budget’s targets have been thrown overboard to some extent, he said, as some of its core assumptions have been ren-

dered invalid.

“Looking at the 2020 budget which was presented in November last year, we were hoping to do oil transactions at around US$62 a barrel, and now we are talking about US$30, with projections that it might fall further.

This has implications for our budget outcomes,” he said in the interview.

Potential revenue losses from

The Ghana Investment Promotion Centre (GIPC) is reviewing its law to be in sync with the African Continental Free Trade Area (AfCFTA) protocols in order to maximise investment opportunities from the continent and beyond, CEO Yofi Grant has said.

The current GIPC law, which regulates investment activity, including foreign direct investment, in the economy, was passed in 2013, and Mr. Grant reckons it is time the law was amended to become “more aggressive”.

“We have been engaged in a long process of trying to reform and amend the law because we believe that it should be more aggressive in attracting foreign direct investments. [However], we have to slow down a bit because of the advent of the CFTA. We have

the oil price dip and the coronavirus pandemic, which traders say has restricted imports from China especially, are enormous and could worsen the 2020 budget deficit position, he added.

“If we look at the macro side, in terms of revenue losses to government, it will have implications for the delivery of services, especial-

MORE ON PAGE 2

1D1F: GH¢1.7bn disbursed to over 100 companies

By Eugene Davis

The Minister for Trade and Industry, Alan Kyerematen, says more than GH¢1.7 billion has been disbursed to 172 companies under the one district, one factory (1D1F) initiative since 2017.

He said the amount was raised and disbursed in collaboration with 13 participating financial institutions (PFIs). He did not, however, disclose the list of the beneficiary companies.

Mr. Kyerematen was responding to questions on the floor of parliament last Thursday.

“The total amount so far disbursed to the PFIs is GH¢191m. This amount has been used to leverage a total amount of GH¢2 billion from the PFIs to 1D1F companies, of which an amount of GH¢1.7 billion has already been disbursed by the PFIs,” he told Parliament.

According to the Minister, the

13 PFIs which provided support to the companies include Ghana Export and Import Bank (EXIM Bank), GCB Bank, Prudential Bank, Societe Generale Ghana, Universal Merchant Bank, ADB, Ecobank Ghana, Phoenix Africa Capital Management, Standard Chartered Bank Ghana, and Frontline Private Equity/

ECONOMIC INDICATORS

GOV’T BANS FLIGHTS FROM CORONAVIRUS HIT COUNTRIES MORE ON PAGE 3

*EXCHANGE RATE (INT. RATE) EXCHANGE RATE (BANK RATE) *POLICY RATE

Consolidated Bank Ghana.

Others are Absa Bank Ghana, Cal Bank, and Fidelity Bank.

The amount disbursed was channeled through PFIs as interest subsidies or counterpart financing for loan facilities provided to 1D1F companies.

The one-district oneMORE ON PAGE 2

INTERNATIONAL MARKET

USD$1 =GH¢5.4651

BRENT CRUDE $/BARREL

USD$1 =GH¢5.5000*

NATURAL GAS $/MILLION BTUS

16%*

GOLD $/TROY OUNCE

GHANA REFERENCE RATE

16.11%

CORN $/BUSHEL

*INFLATION RATE

7.8%*

COCOA $/METRIC TON

PRODUCER PRICE INFLATION:

13.3%

COFFEE ¢/POUND:

91 DAY TREASURY BILL INTEREST RATE

14.6898%

SUGAR ¢/POUND

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News/Editorial New GIPC law to reflect AfCFTA commitments

Editorial: Let’s see more action to contain COVID-19 We had time to prepare for the containment of the coronavirus when the outbreak in China was first reported in January.

COVID-19 is the official name for the recently discovered coronavirus. According to the World Health Organization, as of March 14, 2020, there were 142,538 confirmed cases of COVID-19 in 135 territories and countries In Ghana, commitments were made and funds allocated to deal with any reported case in the country. There are now two reported cases and they present a test case for our public health system.

continued from page 1 to engage on a different level and understand how the legal regimes are going to impact on our position as headquarters of the CFTA,” he told members of the business community at this year’s Economic Counsellors Dialogue in Accra.

The dialogue, an initiative of the GIPC to attract foreign direct investment, was on the theme: “Promoting a Stable Business and Investment Climate: The New Companies Code.”

Mr. Grant maintained that although every country tries to be attractive to investors, it must be done in consonance with existing protocols that the country has signed, like the ECOWAS and CFTA protocols.

“But I am happy to say that we have been working with IFC (International Finance Corporation) and the EU on the West African competitiveness project, which is trying to see how we can create an environment where we can regionalise our investments and also create a framework for investments in West Africa and bring quality to how we do our work.”

On developing a comprehensive legal framework, he said: “we want to ensure that we are not disadvantaged in any way, so our legal reforms will ensure that Ghana remains a very attractive investment destination and create the most vibrant [investment] climate in Africa.”

The GIPC is working with the Ministry of Trade and Industry, Ministry of Foreign Affairs, and Ministry of Finance to build a more robust institution with a stronger policy direction which will ensure it achieves the objectives of making Ghana the number one business destination in Africa.

Coronavirus to impact FDI According to Mr.Grant, the coronavirus scourge can impact foreign direct investment into Ghana, but the Centre is braced up for the impact and will keep at what it is doing to ensure critical investments come to Ghana.

“Yes, it could definitely impact the FDI target for the year because many countries have virtually banned large meetings, and conferences have been cancelled. We ourselves on this side, the President has issued a travel ban because of the scourge we face today. As an institution, we will keep doing what we are doing. The world has survived through many things and has grown, because institutions will remain.”

Media reports that the main facility for testing suspected cases, the Noguchi Memorial Institute for Medical Research (NMIMR), Ghana’s leading biomedical research institute at the University of Ghana, is appealing for procurement of more testing equipment to be able to handle the increasing requests for testing samples does not speak well of us.

Noguchi ought to be given adequate resources that it can rely on for at least three (3) months —the minimum number of months it takes to contain deadly infections of this scale according to medical experts.

Automatic alcohol- based sanitiser dispensers should be procured and mounted at all airports and places with heavy foot traffic,

just as other countries in Africa have done.

Additionally, government must not turn a blind eye on the sharp increases in the price of hand sanitisers, face mask and other items.

The price of some of the badly needed alcohol- based sanitisers have gone up by as much as 1000 percent.

In a typically capitalist country like the US, the government is encouraging the public to report any sharp increases by shops and supermarkets for action to be taken against those shops.

The fight against the COVID-19 is multifaceted and needs to be handled as such. Business24 believes that more needs to be done to contain this deadly disease.

1D1F: GH¢1.7bn disbursed to over 100 companies in manufacturing products that are in high demand both locally and internationally.

This will allow the country to reap the rewards of industrialisation, increase agricultural and manufacturing output, reduce reliance on imports, and increase food availability.

continued from page 1

factory (1D1F) secretariat, implementers of the government’s district industrialisation programme (DIP), seeks to establish at least 216 factories in the country by the close of 2020.

The programme is expected to facilitate the creation of between 7,000 and 15,000 jobs per district and between 1.5 million and 3.2 million jobs nationwide by the end of 2020.

The initiative was instituted by President Nana Akufo-Addo to address the challenge of slow economic growth at the district level and poor industrialisation at the national level.

The initiative aims to achieve this through a massive private sector-led nationwide industrialisation drive, which will equip and empower communities to utilise their local resources

Alan Kyerematen – Minister for Trade and Industry

Economy said to face multiple risks continued from page 1 ly to priority programmes like the Free SHS, which is funded from the oil revenue through the Annual Budgeting Funding Amount.”

The local currency, according to the economist, will also come under pressure as export earnings could fall on the back of lower oil prices.

Moreover, he explained, “assuming foreign investors, because of developments in the global financial market, decide to seek early redemption of their investments in government debt,

they will demand dollars when exiting, even though the investments are cedi-denominated.

This can cause some depreciation in the foreign exchange market, and the cedi could come under some cumulative pressure.”

Given that it is an election year, Prof. Bokpin observed that the current situation poses serious concerns for prudent management of the economy along the lines of ensuring strict compliance with the Fiscal Responsibility Act (FRA).

The FRA, passed in December 2018, bars the government from incurring a budget deficit exceeding 5 percent of GDP in any financial year. The 2019 deficit

stood at 4.8 percent of GDP, and the 2020 target has been set at 4.7 percent of GDP. To Prof. Bokpin, these are challenging times for the global economy, and Ghana as well, with policymakers increasingly spending quite a sizable portion of their time on measures to fight the coronavirus, all of which come with cost implications.

“Now the government is thinking of spending US$100 million on coronavirus. Where is the money going to come from? If it’s not coming from aid and we are not generating enough revenue, certainly we will have to borrow,” he said.

“Already, the predictions are

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very clear: a slowdown in the global economy, and if we are not careful, we may slide into a global economic recession.

Given that we are in an election year, we have to be seriously concerned because oil plays a key role in our economy, in terms of both imports and exports,” he warned.

Prof. Godfred Alufar Bokpin

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NEWS

DVLA to revoke and suspend licenses of reckless drivers

By Eugene Davis

The Deputy Director, Driver Training, Testing and Licensing at the Driver Vehicle and Licensing Authority (DVLA), Kafui Semevo, has revealed that the Authority has resolved to revoke or suspend the licences of reckless drivers who cause accidents on the roads.

The measure, he noted, will be carried out when there is compelling evidence which indicates that the cause of an accident was due to the driver’s carelessness.

“What we at the DVLA will be doing in collaboration with the MTTD and NRSA will include the revocation and suspension of drivers’ licences. Once accidents are recorded and there is enough evidence to establish that a driver was the cause of that accident, we will have a policy that will lead to the revocation or suspension of that driver’s licence,” he noted.

Mr. Semevo made this disclosure at a stakeholder engagement with players in the transport industry in Accra to discuss and deliberate on measures to curb road accidents on the country’s highways.

The stakeholder engagement was spurred by the recent car-

nage on the roads that have claimed several lives, the latest being the incident that occurred on the Kintampo-Tamale highway claiming over 30 lives.

In attendance were personnel from the Ghana Private Road Transport Union, Ghana Road Transport Coordinating Council, Triumphant King Consult, National Road Safety Authority (NRSA), Motor Traffic and Transport Department (MTTD), transport owners, and media professionals among others.

Fuel prices to go down by 15 percent

By Benson AFFUL

Fuel prices are expected to be reduced by 10 to 15 percent in the coming days due to the fall in the oil price on the international market by almost 30 percent, the Minister of Energy, John Peter Amewu, has said.

Speaking to the media in Accra, he said the reduction in oil prices will affect government revenue but favour consumers.

“Government is losing in revenue, but the consumer will be the one to enjoy the oil price fall, so we will be witnessing a reduction in oil revenue,” he said.

Currently, the nation’s oil company, Goil, sells petrol at 5.40 cedis and diesel at 5.41 cedis.

In the 2020 budget statement, government projected to get petroleum receipts of about US$1.2 billion, using a benchmark price of US$58.66 per barrel. This means if the price of oil stays in the region of US$30 per barrel till the end of the year, there’ll be a squeeze in the revenue of

the government.

Oil prices on Monday recorded their biggest plunge since the first Gulf War in 1991, tumbling as traders bet that a clash between oil giants Saudi Arabia and Russia could flood a world already hobbled by the coronavirus outbreak.

Brent crude has fallen by as much as US$14.25, or 31.5 percent, to US$31.02 a barrel, the lowest since February 12, 2016.

As a result of this, the Chamber of Petroleum Consumers (COPEC) has in the past days asked for a downward review of fuel prices at the pumps to reflect the decline in oil prices. COPEC believes consumers could enjoy between a 10-32 percent fall in pump prices.

“It is our expectation in the coming few days that the various Oil Marketing Companies and the Bulk Oil Distribution Companies will ensure the Ghanaian is given nothing but the full benefit of these sustained reductions in fuel prices on the international markets,” it said in a statement.

Commenting further, Mr. Semevo said the DVLA will soon initiate a new mechanism whereby they will re-train all categories of drivers starting with commercial drivers.

Further to that, he said the DVLA is also going to introduce speed limits in vehicles, especially commercial ones, in a bid to curb accidents on the highways.

Additionally, Mr. Semevo said the DVLA is going to establish more PDTS centres that will in-

spect roadworthiness of vehicles on behalf of the Authority.

“Currently, there are 23 centres across the country. The aim is to eliminate rickety vehicles and also take away the physical human inspection of roadworthiness in the country,” he posited.

He also revealed that the DVLA is currently embarking on measures to have an eye-test regime to streamline its eye-testing activities. Under this regime, he said the DVLA will engage the

services of an eye-test specialist to carry out its eye-testing activities and transmit the results to their offices electronically, so that “we don’t have people faking the results”.

Police personnel with the right attitude The Director of MTTD, COP Beatrice Zakpaa Vib-Sanziri, on her part, said one of the major concerns of the Police Administration is the deployment of personnel with the right attitude to curb carnage on the highways of the country.

According to her, the Police Administration is currently restructuring the MTTD to ensure that their numerical strength is increased by about 25% to enable them be more visible on the highways and other places.

She assured the gathering that her outfit will improve upon their monitoring exercise but appealed to all to give them their support.

“We are going to strengthen our traffic enforcement teams on the road so that when someone violates any traffic regulation, we should allow the law to deal with the person. If these people are dealt with according to the law, I believe that some of the things they do on the road will not happen,” she said.

Gov’t bans flights from coronavirus hit countries The Government of Ghana, as part of measures to contain the spread of the COVID-19 disease, has issued a new travel advisory that bans all travel by non-Ghanaians into Ghana from countries with at least 200 cases effective 1pm on Tuesday March 17, 2020.

Six cases of the COVID-19 pandemic has been recorded in Ghana as at March 15, 2020, prompting government to institute additional measures to contain the spread of the disease.

The travel advisory, issued in Accra on Sunday, March 15, 2020 also outlined measures to quarantine Ghanaians travelling into Accra from countries with recorded cases.

“Any traveler, except for Ghanaian citizens and persons with Ghana residence permits, who, within the last 14 days, has been to a country that has recorded at least 200 cases of Covid-19, will not be admitted into the Ghanaian jurisdiction. Airlines are instructed not to allow such persons into the jurisdiction.” The travel advisory signed by the Information Minister, Kojo Oppong Nkrumah, said.

For citizens and holders of residence permits, there will be a mandatory 14-day self-quarantine, according to the travel advisory. “There will be a mandatory 14-day self-quarantine for persons who are otherwise allowed to enter the Ghanaian jurisdiction,” the statement said.

University of Ghana suspends lectures

In a related development, the University of Ghana has suspended all lectures until further notice after one of the six confirmed cases was identified as a student of the university.

A statement signed by the registrar of the university said: “An imported case of COVID-19infection has been identified at the University of Ghana involving one of our non-resident students who returned to Ghana from an international trip.

“We wish to assure the University community that these measures are preventive and precautionary. The risk of COVID-19 infection to individuals in our community remains very low.

The measures outlined below will be periodically modified to keep up with evolving trends of the pandemic.

“Lectures on all University of Ghana campuses, including clinicals and practicals, are suspended with immediate effect.

In view of the suspension of lectures, students and staff who reside outside UG campuses and are currently off campus should keep away from the campuses until they are asked to return.

Staff providing essential services are excluded from this directive.

The University Basic Schools and the Baby Nest Creche on Legon Campus are to be closed down until further notice.”

The university, however, urged all resident students to stay on campus so all contact tracing can be effectively undertaken.

“The University will not be closed down until contact tracing has been effectively completed. Students and staff who reside on campuses of the University are therefore urged to remain on the campuses. Those who may have the infection and leave campus are likely to spread the virus.”

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F E ATU R E

When COVID-19 Comes to Africa

Arkebe Oqubay

By Arkebe Oqubay

The COVID-19 coronavirus – which has now spread to more than 100 countries – has pushed the world into “uncharted territory,” according to World Health Organization Director-General Tedros Adhanom. So far, Africa has recorded relatively few infections, but there is no reason to believe this won’t change.

When it does, the results could be catastrophic.

One need only recall the West African Ebola epidemic of 2014-2016 to comprehend the potential damage. The hardest-hit countries were Guinea (with 3,814 cases and 2,544 deaths), Liberia (10,678 cases and 4,810 deaths), and Sierra Leone (14,124 cases and 3,956 deaths). Moreover, since August 2018, the Democratic Republic of the Congo has faced its own large-scale Ebola epidemic, with more than 3,444 cases and 2,264 deaths (as of March 10, 2020).

While Ebola has a far higher mortality rate than COVID-19, the latter’s rapid spread shows that it, too, can quickly spin out of control, causing serious social and economic disruptions.

The infection rate in China, for example, began to decline only after weeks of consistent bold measures, active community mobilization, and “draconian” lockdown measures. Whether the virus is truly contained remains to be seen.

For Africa, the race to prepare is on. This means urgently applying the lessons of recent Ebola outbreaks – beginning by recognizing that weak national health systems make a bad problem worse. Many have too little money, infrastructure, and expertise. As the researchers Peter Piot and Julia Spencer, together with Liberian doctor Moses J. Soka, put it, “countries must strengthen their core capacities to prevent, detect, and respond to outbreaks, with commensurate domestic and, where needed, international investments.”

But direct investment in health-

care infrastructure and services is only the first step. The fight against Ebola was often hampered by its social context, including community dynamics, local beliefs, political instability, economic fragilities, and lack of trust in government and institutions. Efforts to boost the public’s knowledge and confidence are thus critical to the effectiveness of any COVID-19 response strategy.

People need to know, for example, that basic behavioral changes – especially frequent and thorough hand washing, coughing into one’s elbow, and avoiding crowds – can make a big difference. They must recognize that medical masks offer little protection to the general public, and that attempts to hoard them have led to price gouging and shortages for health-care professionals. And they must understand that a fully vetted vaccine is still a long way off.

Consistent, credible messaging – coordinated among influential community elders, religious leaders, media, and local government officials – is thus vitally important. And health officials must share information about the progress of the virus, and the measures being taken to contain it, in a timely and transparent manner.

But the imperative extends beyond keeping the public informed. As Piot, Spencer, and Soka acknowledge, communities must be “engaged and empowered” as primary partners in preparedness and response activities. This approach will help to advance another priority: adapting measures to local conditions, including cultural norms, community structures, prevalent occupations, mobility, the political environment, and the capacity of health systems.

All of this will require decisive leadership. Rather than leave the response to health ministries, African heads of government should establish high-level committees or task forces to streamline decision-making and resource mobilization, includ-

ing by facilitating coordination among government bodies. My country, Ethiopia, has already established such a high-level task force, and organized national diagnostic and laboratory facilities, despite having no confirmed cases.

If managed well, the COVID-19 response will result in stronger health-care systems that are far better equipped to keep populations healthy in normal times – and to respond to inevitable future crises. But, to be successful, African governments will need outside support.

The WHO has provided guidance on how to fight COVID-19.

By coordinating with the African Union Commission and regional organizations, it will be better able to mobilize resources from its international partners.

More experienced governments (especially China’s) and better-resourced agencies (such as the United States Centers for Disease Control and Prevention) should also offer advice and support. To facilitate effective decision-making, African health

ministries must keep all relevant agencies fully informed about the situation on the ground.

A comprehensive COVID-19 response must also account for the pandemic’s economic consequences. Already, oil prices are plummeting – bad news for Africa’s producers. Moreover, supply-chain disruptions augur declining exports. The damage to the travel and tourism sectors is just beginning to show.

Many African airlines have already suspended flights to China, contrary to the advice of the WHO and the International Air Transport Association. But others have not. Notably, Ethiopian Airlines, Africa’s largest carrier (and the biggest in terms of passenger transport between China and Africa), has introduced new health-inspection protocols and preventative procedures, including at departure points – a process that has required close collaboration with the Chinese authorities. Pilots and cabin crew have received training on protecting themselves and their passengers. The company’s top

management has established task forces whose work is reviewed daily, and its board reviews the situation weekly.

This aligns with Ethiopian Airlines’ policy during the Ebola epidemic, when it also decided not to suspend flights. But as the COVID-19 situation evolves, the carrier may have to change its approach – to curb potentially incurring large losses. Many companies may face similar decisions in the coming weeks. To safeguard their economies, African governments must act now, working with think tanks and regional organizations to design effective solutions.

There is no telling how long it will take to bring COVID-19 under control, or how many people will be affected. But African governments, in cooperation with communities and international actors, can take steps now to limit the damage – and lay the foundations for a healthier, more resilient future.

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MARKETS STRUCTURE

USDCAD

•

Harmonic Shark pattern

•

PREVIOUS/FORECAST

•

USDCAD, exceeded buy expectations as forcasted last week. Forming a harmonic shark pattern as it reached yearly resistance at around 1.39000 price region

•

Expecting sell off to around 1.35429 price region

** Current price @ time of analysis: 1.38270

EURUSD

STRUCTURE •

Inverse Head and Shoulder Pattern, abc Corrective wave

PREVIOUS/FORECAST •

The Euro pushed further up, breaching earlier resistance to reach yearly resistance at around 1.15000 price region

•

Expecting price to buy from around 1.09917 price region

**current price @ time of analysis: 1.11943

STRUCTURE • Impulsive wave

GBPUSD

PREVIOUS/FORECAST • GBPUSD completed a maket cycle on a lower degree with correction ending at around 1.25034 price region •

Expecting buy in a 5 wave impulsive manner from 1.25034 demand zone

**current price @ time of analysis: 1.25958

ADVICE TO BE PROFITABLE IN TRADING Why do people fail in the forex market?

You would be demotivated when you hear the fact that the failure rate in the forex market is more than 95%. Yes. Most of the people who try their hand in the forex market, get out of it even before completing one full year.

It doesn’t mean that it is really tough to make it in the forex market. And also, there is no need to crack thousands of hard puzzles to open the door of treasures.

If you go through the analysis by experts, it reveals that there is a pattern in the way people approach, and do execute in the forex market. And get the same results!

At the instance you realize it, you would also be the one who accepts the realities. Eventually, you will move ahead and do the needful to be in the earning club.

“Not Following The Market” You’ve learned forex trading.

Well. Beware! It’s not like driving your new car, and it doesn’t have steadfast results. With the top gear and the right acceleration, there is no guarantee to get the right speed.

While trading, you should listen to the market and adapt yourself to it instead of being stubborn with your ideas. That’s the right way to surf the tides in the forex sea.

“Not Having The Passion” Forex market is not available in common places to fall in love at first sight. But to be successful and prosper as a trader, one has to develop a real interest in it during learning and executing the

knowledge. Otherwise studying the market and analyzing the factors to place your trades would become a tough job. Then quitting in midway is a SURE thing to happen.

“Not Seeing The Reality”

Moreover, it further helps you to sustain in the market, and you could make winning trades subsequently.

Market Watch;

By Agyei Samuel Ofosu

Happy Trading!

In the forex market, success means no 100% win. It’s a combination of ‘WINS’ and ‘LOSSES’, and keeping your losses at a minimum is the key. All successful traders still incur losses, and (it’s part of the game). Without realizing it many “newbie traders” set unrealistic expectations and burn their energy down. Be informed, and you should not let a streak of failures to let you down and you should devise your strategies to face the failures.

“Overtrading” Aiming unrealistic high profits, trading addiction, and trading beyond the investment potential led the traders to indulge in overtrading. When you form your trading strategy, you have to take your capital into consideration. Relying on leverage, with the aim of making a big profit, is not advisable as it would eventually lead to the closure of your trading account.

Trade addiction is doing forex trade just for the sake of trading without realizing the need for it.

This overtrading, which is incompatible with the capital you have also causes failure.

“Not Having A Proper Forex Plan” Doing forex trade, without a plan is like gambling and incurring a loss is an event to occur, sooner or later. Then, you should trade with the proper risk-reward ratio, which helps you to approach each trade with the right portion of your capital as an acceptable loss.

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F E AT U R E

The Pandemic Stress Test

By Raghuram G. Rajan The coronavirus pandemic has taken the world by surprise and will now expose underlying economic weaknesses wherever they lie. But the crisis also reminds us that we live in a deeply interconnected world.

If the pandemic has any silver lining, it is the possibility of a much-needed reset in public dialogue that focuses attention on the most vulnerable in society, on the need for global cooperation, and on the importance of professional leadership and expertise.

Apart from the direct impact on public health, a crisis of this magnitude can trigger at least two direct kinds of economic shock. The first is a shock to production, owing to disrupted global supply chains. Suspending the production of basic pharmaceutical chemicals in China disrupts the production of generic drugs in India, which in turn reduces drug shipments to the United States. The second shock is to demand: as people and governments take steps to slow the spread of the coronavirus, spending in restaurants, shopping malls, and tourist destinations collapses.

But there is also the potential for indirect aftershocks, such as the recent plunge in oil prices following Russia and Saudi Arabia’s failure to agree on coordinated output cuts. As these and other shocks propagate, already stressed small- and medium-size businesses could be forced to shut down, leading to layoffs, lost consumer confidence, and further reductions in consumption and aggregate demand.

Moreover, downgrades to, or defaults by, highly leveraged entities (shale-energy producers in the US; commodity-dependent developing countries) could lead to wider losses in the global financial system. That would curtail liquidity and credit, and trigger a dramatic tightening of the financial conditions that have hitherto been so supportive of growth.

The parade of horrible possibilities could go on. The more fundamental point to remember is that the world economy never fully recovered from the 2008 global financial crisis, nor were the underlying problems that produced that disaster ever fully addressed. On the contrary, governments, businesses, and households around the world have piled on more debt, and policymakers have undermined trust in the global trading and investment system.

But even though the world started with a weak hand, our response to the COVID-19 crisis could be far better than it has been. The immediate task is to limit the spread of the virus through widespread testing, rigorous quarantines, and social distancing. Most developed countries should be well-positioned to implement such measures; yet, Italy has been overwhelmed by the epidemic, and the US response has not exactly inspired confidence.

Looking ahead, unless the coronavirus is eradicated globally, it could always return, or even become a seasonal disruption. If an effective treatment is not discovered soon (Gilead’s antiviral drug remdesivir currently shows some promise), all countries will face a choice

between walling themselves off entirely and pushing for a global effort to eradicate the virus. Given that the former is an impossibility, the latter seems the natural choice. But it would require a degree of global leadership and cooperation that is sorely lacking. The presidency of the G20 is currently held by Saudi Arabia, which is mired in internal and external disputes; and US President Donald Trump’s administration has repudiated multilateral action from the outset.

Still, some key countries could accomplish much if they stepped up to lead a global response, including by persuading more countries of the value of cooperation. For example, countries that have been relatively successful in managing the epidemic, such as China and South Korea, could share best practices. And as individual countries bring the coronavirus under control within their own borders, they could dispatch spare resources to countries that need more experienced medical personnel, respirators, testing kits, masks, and the like.

Moreover, China and the US might finally be cajoled into reversing recent tariff increases and dispensing with threats of new ones (such as on cars).

While a temporary reduction in tariffs would do little to enhance cross-border investment, it would at least offer a slight boost to trade. Moreover, an accord could enhance business sentiment about the post-pandemic recovery.

Within countries, the immediate task – after implementing measures to contain the virus – is to support those in the in-

formal or gig economy whose livelihoods will be disrupted by quarantines and social distancing. Those who are most vulnerable economically also tend to be those who lack access to medical care. Hence, at a minimum, governments should offer cash transfers to these individuals – or to everyone, if vulnerable populations are hard to identify – as well as coverage for virus-related medical expenses. Similarly, a moratorium on some tax payments may be necessary to help small- and medium-sized businesses, as would partial loan guarantees and other measures to keep credit flowing.

In developed countries, in particular, the pandemic will soon reveal just how many people have joined the ranks of the precariat in recent years. This cohort skews young and includes many of those living in “left-behind” places. By definition, the precariat’s members lack the skills or education needed to secure stable jobs with benefits, and thus have little stake in “the system.” Cash transfers would send a message that the system still cares. But, of course, far more will need to be done to expand the social safety net and extend new opportunities to the economically marginalized.

Populist parties and leaders have capitalized politically on the plight of the precariat, but they have failed to live up to their promises – even where they actually hold power. The pandemic may have a silver lining here, too. Governments that have undermined established disaster-preparedness agencies and early-warning protocols are

now finding that they need the professionals and experts after all. COVID-19 has been quick to expose amateurism and incompetence. If the professionals are allowed to do their jobs, they can restore some of the public’s lost trust in the establishment.

In the political arena, a more credible professional establishment will have an opportunity to advance sensible policies that address the problems facing the precariat without ushering in class warfare. But these openings won’t last forever. If the professionals fail to capitalize on them, the pandemic will offer no silver linings – only more dread, division, chaos, and misery.

Raghuram G. Rajan, former Governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business and the author, most recently, of The Third Pillar: How Markets and the State Leave the Community Behind.

Copyright: Project Syndicate, 2020. www.project-syndicate.org

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UMB awards full scholarship to 2019 overall best WASSCE student The Universal Merchant Bank (UMB) has for the sixth consecutive year, presented a full scholarship to the 2019 overall best West Africa Senior School Certificate Examination (WASSCE) candidate, Ms. Melisa Abena Okyerewaa Amoah.

A statement issued by the UMB Bank said the event took place in Accra during the West African Examination Council (WAEC) Distinction Awards ceremony.

The awards ceremony was to recognize and reward the best performing candidates in the 2019 WASSCE organized by the WAEC. The statement said with this full educational scholarship, UMB would provide funding to cater for Ms. Amoah’s tuition, accommodation and books for the entire duration of her course at the University of Ghana, Legon. It said she also received a cash amount of One Thousand Ghana cedis (GHC1,000) on her UMB SpeedApp account, a brand new laptop and some branded gift items from UMB. It said the second and third overall best candidates: Nana Adwoa

Sereboo Agyemang and Ewurabena Esiboaba Cudjoe were each presented with brand new laptops, cash and UMB branded gift items.

Mr. Benjamin Amenumey, UMB Chief Executive Officer in his remark, said: “This scholarship programme is much more than a corporate social respon-

Port business picks up in China

Chinese ports are getting back to normal after the coronavirus (COVID-19) outbreak and last week saw 9.1% jump in container volumes, however, bulk shipments were down.

The last week has seen a continued positive trend for container volumes at China’s largest container ports.

According to China Ports & Harbours Association, for the week of 2 – 8 March, the container throughput of the eight major container ports increased 9.1%.

Among them, the growth rate of Dalian, Tianjin, Qingdao and Guangzhou increased 10%. The overall growth rate of Bohai-rim ports is faster than other coastal ports.

While container volumes were up crude oil and iron ore volumes at major loading and unloading ports dropped last

week.

Apart from ports in Hubei, the epicentre of the virus outbreak, other ports along Yangtze river have returned to normal operation. The cargo throughput of three major ports at Yangtze river, Nanjing, Wuhan (in Hubei) and Chongqing increased 7.7%, while the container throughput increased 16.1%.

Currently, the ports in Hubei are recovering slowly and face a lack of staff and workers. Staff are mainly involved in services related to epidemic prevention and medical appliance supplies, and providing logistics services for manufacturing companies.

However, the recovery of Chinese container volumes now faces the impact on demand from the growing spread of the pandemic to Europe and the US.

sibility initiative for us at UMB. It is in fact a civic responsibility of helping build a great nation through education, which is the passport to a great future.”

He said as an indigenous bank, UMB would continue to empower the youth by encouraging them through such financial interventions, as he believes

this would encourage parents to motivate their wards to excel in their respective courses in school for a better, brighter future. Ms Amoah and her family expressed their gratitude to UMB for this kind gesture and entreated current second-cycle students, especially the final year students, to be diligent in

their pursuit of excellence even beyond the classroom.

The statement said UMB officials led by the CEO; Professor Kwasi Opoku-Amankwa, the Director-General of the Ghana Education Service; country and regional WAEC officials; Professor Kwesi Yankah, Minister of State in-charge of Tertiary Education, and many other dignitaries attended the event.

UMB Bank (UMB) is a full-service financial institution specializing in customized banking products and services. It opened on March 15, 1972 and is a leading Ghanaian indigenous bank with considerable financial expertise.

UMB is recognized for its entrepreneurial approach, innovative use of technology, and distinctive banking solutions.

UMB currently has 36 branches, three UMB Centres for Businesses, 1 UMB Public Private Partnership (PPP) Incubator Centre, a vast network of ATMs and a convenient and innovative mobile banking application, the UMB SpeedApp. GNA

Huawei FreeBuds3: Four reasons you should own a pair Huawei recently launched the HUAWEI FreeBuds 3, the brand’s flagship Bluetooth earphones.

Boasting the title of the world’s first Openfit active noise cancelling Bluetooth earphones, the HUAWEI FreeBuds 3 was launched in line with Huawei’s commitment towards providing a more connected and seamless world.

With its premium features, solid build quality and capable of delivering stunning sound, these earphones are designed for a variety of users ranging from the gamers to music or movie lovers and even the everyday user. Here are four reasons you must own a pair: 1. Intelligent Noise Cancellation The HUAWEI FreeBuds 3 is capable of cancelling out any and all ambient noise in the background with its active noise cancelling technology. With the help of innovative features and advanced technologies, the HUAWEI FreeBuds 3 can easily cancel out external noise for a more immersive audio experience.

This also extends to phone calls, where the earphones are able to identify vibrations in the user’s head from the background noise, improving phone quality. The patented aerodynamic design also ensures that strong wind noises are cancelled out, further enhancing the noise cancellation. This technology comes in great use when in crowded areas like malls, metros, cafés and many more. By allowing the user to zone out from the surrounding noise, they are able to enjoy their music and phone calls in noisy environments. Additionally, the earphones are also perfect while running or during a windy day, something many other

earphones struggle with.

2. Open-fit design – stylish and comfortable for long use The HUAWEI FreeBuds 3 boasts a stylish open-fit design that not only looks trendy while in-ear but also serves functional purposes. Being the world’s first earphone to have an open-fit design with active noise cancellation, the HUAWEI FreeBuds 3,has an advantage of being comfortable to wear for long and extended periods of use, without having to face the risk of falling out. The earphones are also the result of Huawei’s engineering prowess, as the innovative custom parts balance treble, bass and middle for a more refined audio experience.

3. Powered by the Kirin A1 chip The Kirin A1, Huawei’s first dedicated chip for wearables and hearables, adds the extra power to the HUAWEI FreeBuds 3. Not only does it enhance the audio quality by reducing lag and latency during videos or gaming, it also ensures quick and seamless connections. The chipset also ensures that the earphones are optimized for power consumption, thus saving battery for longer use.

4. All-day Battery HUAWEI FreeBuds 3 comes with a 2W

HUAWEI SuperCharge feature along with support for both wired USB Type-C and wireless charging. In just 30 minutes of wired charging, users can enjoy up to 14 hours of playback or 6 hours if they opt for wireless charging. On a full charge, the HUAWEI FreeBuds 3 by itself are able to provide four hours of playback, and a total of 20 hours when used alongside the charging case. Additionally, users can also charge the HUAWEI FreeBuds 3 with Wireless Reverse Charging feature found on Huawei smartphones. It is important to note that data about battery life and charging time are based on the test results of HUAWEI lab. By default: (Active Noise Reduction is not enabled), 50% volume, AAC mode, actual battery life is affected by volume, source, environmental interference, product features and usage habits. These are the top four features that we loved on the HUAWEI FreeBuds 3.

Designed for all users, this Bluetooth is the perfect companion for both entertainment as well as a daily driver, especially due to its comfortable open-fit design and active noise cancellation features.

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AV I AT I O N

AFRAA advocates for a more sustainable air transport industry in Africa The African Airlines Association (AFRAA), the trade association of African airlines has urged stakeholders to work together to support African airlines achieve profitability and sustainable operations for development of air travel on the continent.

In a session convened to discuss the aviation industry in Africa, key insights were provided on a number of industry matters including the financial position of airlines, connectivity, growth prospects for the sector and the impact of the Coronavirus on air travel.

Africa is projected to be one of the fastest-growing markets - accounting for 334 million passengers by 2037.Globally, the aviation industry is recording profits while Africa is still considered the weakest region as losses have been registered yearly since 2010.

Explaining the situation, AFRAA’s Secretary General Mr. Abdérahmane Berthé noted: “African airlines are facing many

challenges such as high cost of operations due to high taxes and charges imposed by governments, poor market access, blocked funds and overpriced jet fuel just to name a few. These conditions mean most airlines are unable to grow and offer competitive fares for more peo-

ple to travel.”

Another issue highlighted in the presentation is the shrinking of African airlines’ intercontinental market shares pointing to the marginalization of African airlines in the international scene. From 40% in the nineties, African Operators’ market

share has now dropped to 20% on average of which the top 5 African Airlines account for more than 50%.

Commenting on these issues, Berthé said: “To achieve better skies for African airlines and citizens, regulators need to closely engage with aviation

stakeholders in order to establish and maintain a conducive environment for air transport growth; airlines on their side need to cooperate more so the industry can advance and contribute significantly to national economies.”

AFRAA’s membership comprises all the major intercontinental African operators, representing over 85% of total international traffic. It was indicated that the continental association has set up Task Forces and Steering Committees to address key areas of interest to African airlines such as resource sharing among airlines on the use of training centres and experienced trainers in the continent, maintenance and pooling of resources, the enhancement of intra-African connectivity, among others. These forums among others serve as strategic vehicles to address members’ common interests, collectively tackle challenges and adopt industry best practices.

Kotoka International Airport named Best Airport in Africa for 2-5m Pax

The demand for private jets is skyrocketing due to coronavirus—Lunajets

Ghana’s main international airport, the Kotoka International Airport (KIA), has been named the Best Airport In Africa--by Size and Region that handles 2-5million passenger annually— by the Airports Council International (ACI).

KIA is the only airport in West, East and Central Africa to win the coveted world-renowned Airport Service Quality (ASQ) Awards. KIA was also named as the Most Improved Airport by the ACI. The awards recognize those airports around the world that deliver the best customer experience in the opinion of their own passengers. This year, 140 awards have been won by 84 individual airports which is the largest ever number of recipients.

Consistent winners Indianapolis International Airport, Beijing Capital International Airport, Singapore Changi Airport, and Toronto Pearson, Aeroporto di Roma-Fiumicino, Mumbai’s Chhatrapati Shivaji International Airport, Delhi’s Indira Gandhi International Airport, Shanghai Pudong International Airport, and Sheremetyevo International Airport have this year been joined by first time recipients

The effects of Coronavirus are being felt across the travel industry—but as commercial aviation is hit hard, the private jet industry is booming with inquiries. As Coronavirus causes drops in flight bookings, many commercial airlines announced cuts in their flight schedule. Besides, clients are looking to avoid crowded airports, packed cabins of commercial flights or to evacuate affected areas. Today, passengers want to travel as quickly as possible, avoid immigration restrictions, imposed by countries one after another.

“We noticed a sharp rise in demands for business jet charter services. Over the last days, inquiries increased by 45% YoY,” says Alain Leboursier, Head of Sales and Development at LunaJets, Europe’s leading private jet charter.

It concerns regular private jet charter flights, emergency flight for evacuation and even cargo charter.

Private aviation is perceived as a way to decrease the risk to contract Coronavirus. Passengers avoid crowds, in the airports, as they use separated private airport terminals, and on-board. Indeed, security

from all regions.

First time recipients include Kotoka International Airport (Accra, Ghana), Mangalore Airport (Mangalore, India), Supadio Airport (Pontianak, Indonesia), Aalesund Airport (Alesund, Norway), Aeropuerto de El Hierro (Valverde, Spain), Aeropuerto de Melilla (Melilla, Spain), Aeropuerto de San Sebastián (San Sebastián, Spain), Bodo Airport (Bodo, Norway), Izmir Adnan Menderes International Airport (İzmir, Turkey), Copenhagen Airport (Copenhagen, Denmark), Aeropuertos Ecologicos de Galapagos S.A. Ecogal (Galapagos, Ecuador), Capital Region International Airport (Lansing, United States), Stockholm-Bromma Airport (Stockholm, Sweden), and St. John’s International Airport (St. John’s, Canada).

“The Airport Service Quality Awards represent the highest possible recognition for airport operators around the world and recognize excellence in customer experience,” ACI World Director General Angela Gittens said. “The awards this year have been won by a diverse group of winning airports from around the world which illustrates the industry-wide commitment to delivering exceptional customer

experience.

“Delivering a better customer experience is an important business strategy in an increasingly competitive airport industry.

ACI’s global ASQ programme is the only one that not only recognises excellence but also provides airports with objective measurement and benchmarking to help drive their performance.

“We are pleased to note that the five winning airports in the category of ‘Best airport by size and region (under two million passenger per year in Europe)’, are all first-time winners of an ASQ award.”

The winning airports will come together at the ASQ Awards Ceremony to be held during the third ACI Customer Experience Global Summit, taking place in Krakow, Poland in September.

The Airport Service Quality programme is the world’s leading airport customer experience measurement and benchmarking programme. The ASQ Departures programme measures passengers’ satisfaction across 34 key performance indicators.

In 2019, more than half of the world’s 8.8 billion travellers passed through an ASQ airport.

controls at private jet terminals are faster than in commercial terminal and there are no queues.

“Flying private, clients will have limited contacts during their journey, limited to airport agents, mandatory security staff and crew. Therefore, you avoid Coronavirus potential exposure,” comments Alain Leboursier.

Aside from extra sanitary measures applied to the aircraft and crew, flights are operating normally for private jet companies.

Eymeric Segard, LunaJets’ CEO, highlights: “LunaJets only works with certified private jet operators following the European Union Aviation Safety Agency’s recommendations to protect passengers and crew. Our client’s safety is our top concern.”

Yet, the seriousness of the situation adds numerous challenges to fly in and out of affected regions. “The situation results in added complexity and longer lead times” says Leboursier. At LunaJets, the Operations team had to be reinforced to follow the situation and changes in regulations continuously. (50skyshades)

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Africa’s largest economy braces for big hit as oil prices plummet With oil prices plunging amid concerns over a price war between Russia and Saudi Arabia, and the coronavirus outbreak obliterating stock markets, Africa’s largest economy is in a precarious position.

The International Monetary Fund (IMF) on Thursday said it will be working closely with the Nigerian authorities in the coming days to assess any vulnerabilities which may be exposed by the sharp decline in crude prices, as Nigerian and Angolan dollar bonds sank to record lows.

Nigerian stocks on Thursday headed for their fifth straight day of losses to a new four-year low, and a fall in oil prices to just over $30 per barrel, rising external debt and a depreciating currency pose a threat to economic stability in the country of more than 190 million people. Nigeria is Africa’s largest economy in terms of GDP (gross domestic product).

While markedly lower oil prices will undoubtedly have broad adverse consequences for the Nigerian economy, the country is not quite as dependent on oil exports as the likes of Angola, which analysts expect to suffer a substantial blow this year.

Currency concerns However, a prime concern for economists is Nigeria’s managed naira exchange rate, since even prior to the fallout from OPEC’s failure to reach an agreement with Russia on oil production cuts, the country’s foreign ex-

change reserves were in steady decline.

After the official exchange rate was devalued in 2016, foreign exchange reserves were approaching $25 billion, and the move failed to stop the slide of the parallel market exchange rate, which meant the Central Bank of Nigeria (CBN) was forced to act again the following year when the Nafex (Nigerian Autonomous Foreign Exchange Rate) was implemented. Reserves held just below $30 billion during this period.

“Extrapolating the trajectory observed thus far this year (the foreign exchange buffer shrunk by $2.3 billion during the first two months of 2020) suggests reserves could fall below the

$30 billion mark by Q3 (the third quarter) and end the year just above $25 billion,” NKC African Economics Chief West Africa Economist Cobus de Hart said in a note earlier this week.

Capital Economics Senior Emerging Markets Economist John Ashbourne on Wednesday echoed this projection, suggesting that reserves will soon fall below the $30 billion mark, which Nigerian policymakers had identified as a key benchmark.

Ashbourne predicted that the naira will end the year down 8% to 400 NGN against the U.S. dollar. He added that in Nigeria’s case, a weaker currency will not provide a boost to competitiveness, since the country does not

have significant non-oil exports or the “domestic manufacturing base needed to substitute for imported goods.”

Reuters reported Thursday afternoon that the naira was being quoted at 370 to the dollar on the over-the-counter spot market.

‘Severe adverse consequences’ Parliament recently green lighted President Muhammadu Buhari’s request for $22.7 billion in foreign borrowing, but while external debt accumulation would usually be expected to support reserves, de Hart suggested that the sharp fall in global oil prices could potentially “more than offset” the boost.

“Firstly, should Brent crude oil prices average roughly $40pb

(per barrel) for the remainder of the year, it would reduce Nigeria’s goods export receipts by roughly $14 billion (as opposed to our February baseline for oil prices to average $62.4 billion in 2020) — this may also be a conservative estimate, as it does not take into account any adverse impact on non-oil exports,” he said in the note Monday.

What’s more, Nigeria may have difficulty accumulating external debt following the fall in oil prices and its impact on the macroeconomic outlook, while the jittery investment environment raises the risk of a capital flight, de Hart highlighted.

Having previously backed the authorities to ride out the storm and maintain its foreign exchange rate at current levels in the immediate future, NKC analysts now believe that the naira’s prospects have “deteriorated markedly” and remains set for a “sharp fall” this year if current conditions persist.

The CBN will again be faced with the choice of whether to let the Nafex buckle or continue to artificially prop it up.

“We believe the CBN will continue to provide support in the near term, with a more drastic adjustment more likely in Q3,” de Hart projected.

“If the Nafex is not permitted to buckle, then the black-market rate should, and this might hold more severe adverse consequences for an economy that is now facing a gloomier outlook on multiple fronts.” CNBC

India could be a ‘major winner’ as oil prices plummet Oil prices crashed this week, sparking a sharp global sell-off in capital markets — but experts say low energy prices could be a silver lining for India, one of the world’s closely-watched economies.

U.S. crude and international benchmark Brent prices plunged to multi-year lows after OPEC failed last week to strike a deal on production cuts with its allies, including include Russia. That led Saudi Arabia, the world’s largest oil exporter and the de facto leader of the energy cartel, to slash oil prices and threaten to ramp up production.

A supply glut has kept oil prices relatively low in recent years, as OPEC+ — made up of the Organization of the Petroleum Exporting Countries and its non-OPEC allies such as Russia — coordinated production cuts to support energy prices. The current agreement expires at the end of March, which means that starting Apr. 1, countries can pump as much oil as they want unless the producers can reach an agreement before that.

“The Indian economy is a major winner from lower world oil prices,” Rajiv Biswas, Asia Pacific chief economist at IHS Markit, told CNBC, pointing out that more than 80% of India’s total energy consumption in the 2018-2019 financial year was imported. He explained that falling energy prices could reduce India’s inflation and lower the cost of its import bill — that could, in turn, help narrow the country’s trade and current account deficits.

India lost its crown as one of

the fastest-growing major economies in recent quarters, owing to a number of internal and external factors that dragged GDP expansion to below 5%. In the three months that ended in December, India expanded at 4.7%, in line with market expectations.

“A prolonged spell of low oil prices will support discretionary purchasing power,” Radhika Rao, an economist at Singapore’s DBS Group, told CNBC. Discretionary purchasing power refers to the amount of cash a person has available to spend after discounting their tax, debt

obligation, and other expenses.

She explained that domestic oil prices could potentially become cheaper and declining margin pressures on non-oil businesses may translate into some relief for the low demand weighing on the economy.

“If accompanied by an improvement in sentiments and better confidence over income prospects, this would spell good news for growth,” Rao said. “We are hopeful that an increase in government spending, positive net exports position and base effects could push up (fiscal 2021) growth.”

India’s fiscal year 2021 begins on Apr. 1 of this year.

Biswas added that sharply lower oil and gas costs would also help boost profitability for sectors that are intensive users of petroleum — such as petrochemicals, power generation, and transportation.

Softening of inflationary pressure on the economy could also give the Reserve Bank of India more room to cut interest rates further in an attempt to help stimulate growth and improve the flow of money in India’s financial markets, he said.

Data from India’s commerce

ministry showed between April and December — the current fiscal year ends on Mar. 2020 — the country’s import bill for oil was $95.69 billion, almost 12% lower than a year ago. It accounted for an estimated 21% of India’s total imports during that period when oil prices remained above $50 a barrel.

India’s Petroleum Minister Dharmendra Pradhan told CNBC last month he would be happy if crude prices were at levels between $50 and $60 a barrel.

As of Thursday afternoon, in Asia, both U.S. crude and Brent prices traded under $35 a barrel.

For every dollar the price of oil drops, India saves approximately $1.5 billion, according to Akhil Bery, an analyst at political risk consultancy Eurasia Group.

“However, that is offset by the weaker rupee, so the benefits may not be as much as originally anticipated,” he told CNBC. In the last 12 months, the rupee weakened against the greenback from levels near 70 to around 74 and oil prices are usually measured in U.S. dollars.

“It will help alleviate some of the fiscal pressures that the government has been under,” Bery added.

Experts pointed that whatever benefits India may potentially get from lower oil prices could be wiped out if there is a sudden, rapid coronavirus outbreak within the country, similar to what happened in places like Italy, Iran and South Korea.

As of Mar. 11, India said it has 60 confirmed cases of the COVID-19 disease.

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Trump’s Global Recession

By Anders Åslund

WASHINGTON, DC – On Monday, February 24, with stock markets close to all-time highs, the world was suddenly thrown into a financial crisis as a result of the COVID-19 pandemic. And ever since, international leaders have been making the worst of a bad situation. On March 6, Russia and Saudi Arabia started an oil-price war, which shook global markets further. And US President Donald Trump’s televised address on March 11, in which he announced a suspension of most travel from Europe to the United States, brought the crisis to an entirely new height and plunged financial markets into unmitigated panic.

The combination of a coronavirus-induced growth slowdown and worldwide financial panic means that a global recession this year is virtually certain.

But recession might soon be the least of our worries.

Financial crashes follow a clear logic in both their evolution and resolution, as Charles Kindleberger taught us in his seminal book Manias, Panics, and Crashes: A History of Financial Crises.

Argentina and Lebanon have already defaulted on their foreign debts since the COVID-19 outbreak. Major corporate bankruptcies will likely come next.

Travel companies and airlines are natural candidates, but failures often come in surprising areas.

After a few big bankruptcies

and sovereign defaults, the world is likely to face a liquidity freeze, as it did in September 2008, following Lehman Brothers’ bankruptcy. A liquidity freeze typically hits periphery countries that have their own currencies, which will collapse – prompting a flight to the dollar and the euro.

Although it is very difficult to restore confidence once financial panic has erupted, the resolution of the 2008 crisis offers important lessons for policymakers today. True, that crisis originated in the financial sector, which now appears to be much better capitalized, and policymakers back then had no pandemic to contend with.

Nonetheless, the fundamental lessons remain the same.

Stemming a global financial panic requires two things: international political cooperation and vast amounts of government liquidity (because the private sector will hoard cash).

Although the resolution of the 2008 crisis looked like a mess at the time, in hindsight it appears almost ideal.

Back in 2008, US political leaders had the stature to help rally the world. In mid-November that year, President George W. Bush convened the G20 Washington Summit on Financial Markets and the World Economy, which marked the start of a coordinated global effort to resolve the crisis. Crucially, the unanimously adopted summit declaration stated that, “We

are determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems.”

Apart from promising various forms of financial support, G20 leaders committed themselves to maintaining an open global economy.

In parallel, the US Department of the Treasury and the Federal Reserve swiftly bailed out one major financial institution after another. Although policymakers’ ad hoc approach and lack of clear guiding principles generated much public criticism, these institutions were stabilized very quickly. In addition, congressional Republicans and Democrats agreed on a large fiscal-stimulus package. Even so, the financial-market havoc continued until markets finally hit bottom on March 9, 2009, a half-year after the Lehman collapse.

Unfortunately, however, the world currently seems illequipped to repeat the successful policy response of 2008. For starters, the political preconditions are absent – not least because the US administration has no economic policymaker with significant domestic or international stature. Trump himself lacks credibility, and he has severely undermined market confidence in Fed Chairman Jerome Powell. Treasury Secretary Steven Mnuchin, meanwhile, keeps a very low profile.

The dearth of international clout extends beyond the US.

The leaders of the European Union, the European Central Bank, and the International Monetary Fund are all new in their jobs. German Chancellor Angela Merkel is a politically weakened lame-duck leader, French President Emmanuel Macron’s international standing has slipped, and the United Kingdom’s prime minister, Boris Johnson, is preoccupied with Brexit.

But it is the absence of US leadership that is the most striking difference between now and 2008. Trump’s nationalism, protectionism, and refusal to heed expert advice make it difficult to imagine any credible international summitry and cooperation as long as he is in office.

That means the world will have to wait until January 2021 at the earliest for any coordinated attempt to resolve the current crisis.

Financially, too, the world might be less well-equipped to handle a crisis than it was in 2008. Although the global financial sector seems to be in much better shape than it was 12 years ago global indebtedness (relative to GDP) has never been higher. In particular, US public debt is at its highest level (as a share of GDP) since World War II. And although most EU member states fortunately have ample fiscal space, they need to use it with great skill.

Needless to say, the COVID-19 pandemic is the greatest challenge facing the global economy

since 2008. And, so far, world leaders have shown that, this time, they are not up to the task of meeting it. Unless that changes very quickly, there is every reason to expect a long and severe global recession, with profound implications for developed and developing countries alike.

Anders Åslund

Raghuram G. Rajan, former Governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business and the author, most recently, of The Third Pillar: How Markets and the State Leave the Community Behind.

Copyright: Project Syndicate, 2020. www.project-syndicate.org

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Why what does not kill us makes us panic

By Gerd Gigerenzer This year’s COVID-19 coronavirus will not be the last. As a first step toward confronting the outbreaks to come, we must improve risk literacy and learn to live with uncertainty, rather than allowing ourselves to be held captive by it.

No one knows where or how fast a new virus will spread. We cannot calculate the risks with confidence, and we will know only in hindsight whether we overreacted or underreacted.

Given this uncertainty, how we respond to a viral outbreak is as crucial as the nature of the pathogen. And how we respond to the COVID-19 coronavirus should be guided by what we have learned from past viral epidemics.

Don’t bet on it. The 2009 swine flu epidemic killed hundreds of thousands, mostly in Africa and Southeast Asia. But in Europe, where the threat was comparatively small, the media updated the death toll and the number of suspected cases on a daily basis. In the United Kingdom, the government predicted that as many as 65,000 citizens might die from the disease. In the end, fewer than 500 died.

Predictably, such daily accounting triggered fear and led politicians to make hasty, ill-advised decisions – such as stockpiling medication – without examining the evidence.

All eyes were focused on the new, unknown virus, and not on protecting people from more lethal threats, such as seasonal influenza, which in 2009 killed orders of magnitude more peoplethan swine flu. It still does – as would be clear if the media bombarded us with hourly updates of the flu-related death toll.

Similarly, millions of people, particularly in developing countries, die from malaria and tuberculosis each year. And in

the United States alone, hospital-acquired infections kill some 99,000 patients annually. Yet, these unlucky people get next to no attention.

Why are we more scared of what is less likely to kill us?

The psychological principle that makes us fear swine flu, avian flu, or COVID-19, but not the common flu is called fear of dread risks. It is easy to elicit fear of episodes in which many people die within a short interval, such as plane crashes or epidemics. But when just as many or more people die over a longer period – as with car accidents or the seasonal flu – it is difficult to scare the public into wearing seatbelts or getting vaccinated.

Consider the paradigmatic millennial “virus”: terrorism. After the traumatic events of September 11, 2001, many Americans stopped flying and drove instead. It has been estimated that in the 12 months following the attacks, an additional 1,500 people lost their lives on the road while trying to avoid the risk of flying – far more than the total number of passengers who died on the four planes.

Terrorists strike first with physical force, which captures all the attention. Their second strike occurs with the help of our brains – our fear of dread risk that makes us jump from the frying pan into the fire. This second strike can be costly. Within two years of the 9/11 attacks, the US economy had lost over $100 billion, owing to reduced travel, business interruption, and event cancellation, the federal government had spent half a trillion dollars on security measures, and the American people accepted more intrusive state surveillance as a condition of their safety. But an American today is more likely to be shot by a child than blown up by an Islamist terrorist.

It is not only terrorists whom we disproportionately fear.

Back in 2009, the Egyptian gov-

ernment ordered all pigs in the country to be slaughtered, even though no cases of swine flu had yet been reported there. The government simply exploited fear of dread risk to persecute Egypt’s small Christian minority.

Today, Asian minorities in the US and Europe are paying the price for COVID-19. Citizens of Asian descent are viewed with suspicion, and Chinese restaurants from Berlin to San Francisco are reporting a drop in business of 50% or more as customers shun them. And, of course, the media have a stake in ringing alarm bells and keeping us glued to their pages, platforms, programs, and podcasts.

Fortunately, disproportionate fear of things that are unlikely to kill us is not hardwired into our brains. That is why risk literacy is so important. We need to be taught the mathematics of uncertainty, meaning statistical thinking. Just as being able to

read enables people to understand texts, so statistical thinking enables us to understand and manage the risks we face.

Part of risk literacy is learning why we fear what we fear. In fact, understanding uncertainty and understanding psychology go together. That can help the public ask the right questions – and politicians to make the right decisions.

For example, when swine flu spread, many governments followed the World Health Organization’s advice and stockpiled Tamiflu, a medication that was marketed to protect against the severe consequences of flu.

Yet, many expert advisers to the WHO had financial ties to drug manufacturers, and there is still no evidence that Tamiflu is effective. The US wasted over $1 billion, and the UK over £400,000 ($522,000), on this medication – money that instead could have been invested in improving health care.

Even with greater risk literacy, most politicians would need considerable courage to act on the basis of evidence rather than out of fear. But these are precisely the kind of leaders we need and would respect.

Achieving global risk literacy would give everyone a chance to approach situations such as the COVID-19 epidemic with a cooler head. This year’s novel virus will not be the last. As a first step toward confronting the outbreaks to come, we must learn to live with uncertainty, rather than allowing ourselves to be held captive by it.

Gerd Gigerenzer is Director of the Harding Center for Risk Literacy at the Max Planck Institute for Human Development in Berlin. © Project Syndicate 1995–2020

BUSINESS24 | MONDAY MARCH 16, 2020

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INNOVATIONS FOR POVERTY ACTION (IPA)

REQUEST FOR QUOTATION (RFQ) Innovations for Poverty Action (IPA) is a research and policy nonprofit that discovers and promotes effective solutions to global poverty problems. IPA Ghana is requesting for quotes with reference to the supply of 8-inch tablets and accessories as specified in the table below:

LOT

• • •

• • •

TECHNICAL REQUIREMENT

QUANTITY

1

Samsung Galaxy (SM-T295) Tab A 8.0" or equivalent with (Wi-Fi + Cellular), 32GB Internal Memory, 2GB RAM, 5100mAh Battery, 4G LTE, Expansion Card slot micro SD

140

2

Glass Screen Protectors for Samsung Galaxy Tab A 8" or equivalent

140

3

Samsung Galaxy Tab A 8" or equivalent Leather protective Case Any color

140

IPA Ghana now invite suppliers to submit, free of charge and without obligation on the part of IPA Ghana, a quote based on the following terms and conditions.

Quotes should be valid for a period of three (3) month after the deadline of quote submission.

All interested suppliers must submit the following in addition to the quote: an introductory letter, company profile with quotes (according to the specification above), Warranty document, Business Registration certificate, Copy of current Tax and SSNIT Clearance.

Delivery period must be indicated and should not exceed four weeks after award of contract.

All documents with quotes must be sealed and marked: Tablet (IPAFOG2020) Sealed envelopes with quotes plus other documents should be addressed to the address below or mail at GH_proposals@poverty-action.org no later than 5:00 PM, Tuesday March 24, 2020.

The Procurement Associate, Innovations for Poverty Action – Ghana, 8 Saflo Street, Abelemkpe – Accra, PMB 57, Osu – Accra - Ghan

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AU TO M O B I L E

Outspoken Tesla chief Elon Musk faces $1 billion trial, test of temperament Elon Musk is expected to defend a $2.2 billion deal in court next week criticized by shareholders as benefiting Musk at the expense of Tesla Inc, and the outcome may depend as much on the chief executive’s temperament as on the facts of the case.

The electric vehicle maker’s unconventional CEO has shown two sides in recent court proceedings — one polite and respectful, the other evasive and taunting.

It remains to be seen which Musk will show up on Monday at a Delaware court, the nation’s leader on corporate issues, when he squares off against union pension funds and asset managers who claim they were misled about the benefits of Tesla buying SolarCity in 2016 for $2.2 billion.

Getting it wrong could cost Musk more than $1 billion.

“If you seem arrogant in court, you may be signing your own economic death warrant,” said John Coffee, a securities professor at Columbia Law School.

This may be particularly true in Delaware’s Court of Chancery, with roots in medieval England and known for its decorum.

Musk and his lawyers did not respond to a request for comment.

Smashing corporate norms has come to define Musk, who has a cult-like following for his ambitious vision, battles with

short-sellers and disdain for “boring bonehead questions” from analysts.

In the Delaware case, shareholders claim SolarCity, a rooftop solar energy company, was secretly on the brink of bankruptcy when Tesla purchased it. They argue the deal benefited Musk, SolarCity’s largest shareholder, his cousins who co-founded the firm, and Tesla directors who owned stakes in SolarCity.

Investors want Musk to surrender the 2.2 million shares of Tesla he received in the deal, which on Thursday were worth about $1.2 billion.

Musk has countered that Tesla’s stock has tripled since the deal, demonstrating its value.

Bill to check over 10 years accident cars passed by Parliament

Parliament has passed the Customs (Amendment) Bill, 2020 after it was read on the floor of the House for the third time.

The Bill seeks to amend the Customs Act, 2015 (Act 891)to provide incentives for automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development Programme(GAMDP), prohibit the importation of salvaged motor vehicles and specified motor vehicles over ten years of age into the country, increase the import duty on specific motor vehicles and provide import duty exemptions for the security agencies and officers of the security agencies.

The Committee observed that Cabinet has already approved the Ghana Automotive Devel-

opment Policy (GADP) in which various incentives have been provided for automobile manufacturers and assemblers registered under the Ghana Automotive Development Programme.

The Committee observed that Cabinet has already approved the Ghana Automotive Development Policy (GADP) in which various incentives have been provided for automobile manufacturers and assemblers registered under the Ghana Automotive Development Programme.

It would be recalled that the government in August 2019 launched the Ghana Automotive Manufacturing Development Programme to promote the manufacture of automobiles for both the domestic market and the West African Sub-region.

SolarCity has withered because its staff were redirected toward launching the Model 3 sedan, a make-or-break product for Tesla, not because the solar business lacked value, according to Musk.

The Tesla directors who approved the deal settled allegations against themselves in January for $60 million, which was paid from insurance. They denied wrongdoing.

Musk has dug in his heels.

During a June deposition, Musk clashed with shareholder lawyer Randy Baron, calling him “reprehensible,” doubting his emotional well-being and avoiding many questions.

He went on tangents about Tesla’s solar potential, lamented

both the decline of U.S. manufacturing and the large size of the legal industry and asked Baron if he was only motivated by money. Baron declined to comment.

In contrast, at a defamation trial in December, Musk donned a dark suit, spoke softly on the witness stand, and apologized to the cave rescuer who sued Musk for calling him a “pedo guy” on Twitter.

Musk portrayed himself as overworked, hounded by critics and earnest in his desire to help in the rescue of 12 boys and their soccer coach from a flooded cave in Thailand.

The strategy appeared to pay off when a jury ruled in Musk’s favor and rejected the $190 mil-

lion claim against him.

The SolarCity case will be decided by Vice Chancellor Joseph Slights.

The court has its own cultlike following for its scholarly opinions that often run more than 100 pages and which have shaped Corporate America.

“The big question is when you get an institution like him and an institution like the Court of Chancery, is it oil and water or is it mutual respect?” said Larry Hamermesh, a professor at Delaware Law School.

Executives often struggle with testimony because they think of themselves as the smartest in the room, according to University of Pennsylvania Law School Professor Jill Fisch.

“That works against them in depositions and is even worse in court. It tends to piss off a judge,” said Fisch.

David Murdock, the CEO of Dole Food Co Inc, went to Delaware to defend his 2013 buyout of the fruit company, and sunk himself with bizarre, rambling and combative testimony.

He was ordered to pay former shareholders $148 million.

“By dint of his prodigious wealth and power, he has grown accustomed to deference,” wrote the judge, Vice Chancellor Travis Laster, of Murdock.

“That habit serves a witness poorly when he faces a skilled cross-examiner.”

Reuters

Toyota to resume normal operations at Guangzhou plant next week Toyota Motor Corp. said on Friday that production at its plant in Guangzhou, China, would return to normal on Monday, after a month-long output suspension due to the coronavirus outbreak.

The Japanese automaker’s plant in southeast China will resume its second shift, returning to production levels from before the outbreak accelerated last month. The plant, which produces the Camry sedan and the Yaris compact hatchback models, resumed its first shift earlier

this month.

Operations at two other Toyota plants, in Changchun, Jilin Province, and Chengdu, Sichuan Province, have also returned to normal, while its plant in Tianjin is only operating a single shift, compared with double shifts at the start of the year.

Global automakers continue to grapple with production in China due to logistical delays and limited workforces as the country’s manufacturing sector slowly recovers from coronavirus-related stoppages, which have disrupted the global sup-

ply chain.

Chinese vice industry minister Xin Guobin said on Friday that auto parts makers in Hubei province are resuming production in an orderly manner, as the region struck hardest by the epidemic seeks to restart economic activity.

Xin told reporters at a press briefing that China’s industry ministry will monitor the situation for the auto parts suppliers in Hubei and ensure that the global supply chain is stable.

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F E AT U R E

Technology for All

Prof. Dani Rodrik

We live in a world with an ever-widening chasm between the skills of the “average” worker and the capabilities demanded by frontier technologies.

Robots, software, and artificial intelligence have increased corporate profits and raised demand for skilled professionals.

But they replace factory, sales, and clerical workers – hollowing out the traditional middle class.

This “skills gap” contributes to deepening economic inequality and insecurity and ultimately to political polarization – the signal problems of our time.

The conventional response is more and better education. If ordinary people are not to be left behind in this age-old “race between education and technology,” to use the evocative phrase of Harvard economists Claudia Goldin and Lawrence Katz, societies need to do a much better job in training and retraining their workforce for new technologies. Truck drivers need to become computer programmers.

This is an oddly one-sided remedy. As a matter of logic, the gap between skills and technology can be closed in one of two ways: either by increasing education to match the demands of new technologies, or by redirecting innovation to match the skills of the current (and prospective) labor force. The second strategy barely gets lip service in policy discussions.

Yet it is the more obvious, and possibly more effective strategy.

As my Harvard colleague Ricardo Hausmann points out, we need to create jobs for the workers we have, not the workers we wish we had.

The blind spot is the product of a certain kind of technological fetishism that views innovation as an exogenous force behaving according to its own rules. We tend to think we have little control over innovation. It is society that must adjust to technological change, instead of vice versa.

This perspective overlooks the degree to which innovation is driven by values – often unstated – and incentives. For one thing, governments play a ubiquitous role in shaping the technological landscape. Advanced economies commonly rely on subsidies for research and development, funding of basic scientific research, patent rules, loan guarantees, cluster development policies, and direct government support for frontier technologies. All of these policies tilt the playing field to determine what kind of innovations take place.

Consider the technology behind autonomous vehicles. In the United States, the Defense Advanced Research Projects Agency (DARPA), an arm of the US Department of Defense, gave innovation in this area a boost by launching competitions for innovators in the 2000s. The objective was a military one: reducing battlefield casualties.

But, as DARPA states on its website, “these challenges helped to create a mindset and research community that a decade later would render fleets of auton-

omous cars and other ground vehicles a near certainty for the first quarter of the 21st century.” A government agency more concerned about jobs might have pushed for different technologies instead.

Other policies may have inadvertent effects on the direction of technological change.

As MIT’s Daron Acemoglu has argued, tax policies typically distort innovation incentives against labor by encouraging automation. Firms receive tax breaks when they employ robots, but not when they create an extra good job. In fact, jobs are taxed, whereas machines are subsidized.

Instead of replacing semiskilled or unskilled labor with machines, societies can push innovations that specifically increase the tasks that ordinary workers are able to perform.

This could be achieved through new technologies that either allow workers to do the work that was previously performed by more skilled people, or enable the provision of more specialized, customized services by the existing workforce.

Examples of the first type of technology are artificial intelligence systems that enable nurses to perform physicians’ procedures or craftsmen to undertake engineers’ tasks. An example of the latter type would be technology that enables teachers to provide education customized to different students’ abilities and needs.

A fundamental reason why society under-invests in innovations that benefit ordinary

people has to do with the distribution of power. Science and technology are designed to provide answers and solve problems. But which questions are asked and whose problems are solved depends on whose voice gets the upper hand. For example, some of the limitations on the use of medical technologies along the lines suggested above derive from the power physicians have to exclude less-credentialed medical workers from advanced tasks.

How a given technology is deployed in the workplace is intimately linked to who gets to make the decisions. Sophisticated technologies can allow managers to monitor their workers’ every movement and measure their efficiency, enabling companies to set ever more demanding productivity standards, at considerable cost to workers’ physical and mental health. Alternatively, very similar technologies can empower workers to increase their autonomy and control their work environment. It is easy to guess which use predominates in practice.

Ethical considerations also play a role – explicitly or implicitly – in shaping the direction of innovation. Here, too, power matters. When some Google employees began to complain and organize against developing AI systems that they considered unethical – destined for use in immigration control or for spying – the company clamped down and some of the leaders of the in-house effort were fired.

In other domains, we take it

for granted that values should be reflected in how we pursue innovation. For example, domestic regulations typically circumscribe experimentation on animals and humans. Why not extend this to the labor-market implications of technology?

Through regulation or other means, our innovation system must account for the effects of new technologies on the quality and quantity of jobs.

Technological change does not follow its own direction. It is shaped by moral frames, incentives, and power. If we think more about how innovation can be directed to serve society, we can afford to worry less about how we should adjust to it.

“We tend to think we have little control over innovation. It is society that must adjust to technological change, instead of vice versa.”

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. © Project Syndicate 1995– 2020

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