Investment Times Newspaper 2023 Edition | Issue 17

U.S. delegation attended

looking to play bigger role in Africa

Minority demands downsizing of gov’t to reflect austere times

The minority in Parliament have asked President Nana Akufo-Addo to downsize its ministerial portfolios to re ect the austere and economic crisis the country is facing.

According to the minority, given the state of a airs with hyperin ation, cedi depreciation and biting cost of living warrant that the president re-aligns and merges some of the ministries to make it more e ective and ensure cuts in expenditure.

Addressing the Parliamentary Press Corps at Parliament House on Monday, the minority leader, Dr. Ato Forson said Ghanaians had hoped that the seriousness of the economic situation would nally prompt a reduction in the size of government.

To this end, the minority is calling for the immediate reduction in the number of Ministers from 86 to 65, the merger of ministries [Information

Unlocking AfCFTA potential to boost agric industrialisation

By Kenneth Ashiagbor

The African Continental Free Trade Area (AfCFTA) o ers tremendous opportunity for unlocking business potential across the continent and the world

Historically, Africa’s foreign direct investment (FDI), as well as its regional and global value-chain par-

Trade Min. designate promises to boost SMEs to compete globally

By Eugene Davies

Minister-designate for Trade and Industry, Kwabena Tahiru Hammond, has resolved to revitalise small and medium enterprises (SMEs) to make them sustainable and competitive in the global value-chain.

He disclosed that a white paper already existed at the Ministry that deals with how to properly de ne and deal with the technical and economic aspects of these enterprises, and he plans to carry them out.

By Eugene Davies

and Communication, Transport and Railways, Chieftaincy and Tourism, Sanitation and Local government].

They also called for the immediate reduction in the number of political appointees at the O ce of the President as well as the immediate scrapping of all amorphous creations and waste-pipe, job-for-the-boys’ appointments since the assumption of o ce of President Akufo Addo in 2017.

2

Government announced six new ministerial nominees to replace the old ones who resigned and others reassigned respectively.

The National Democratic Congress (NDC) directed its Minority members in Parliament to reject the new ministers appointed by President Akufo-Addo.

“We must make sure that our businesses are properly placed to be able to engage in competitions, and government is prepared to grant other nancial incentives to our nationals, enterprises [SMEs] to be properly placed.

He added that the country “should look at a particular type of product we are best in producing to gain competitive advantage,” he said this when he appeared at the Appointments Committee of Parliament on Monday for his vetting.

On the need to ban second hand electricals, he maintained that he will wait

In a press release dated February 2

ticipation, has been consistently low, hampered by barriers to trade and competitiveness. The AfCFTA removes many of these barriers and unlocks opportunities for Africa to join regional and global value chains and integrate with international businesses.

Josephine Anan-Ankomah appointed as new MD for Ecobank Kenya

Ecobank Transnational Incorpo rated (ETI) has appointed Jose phine Anan-Ankomah, a Ghana ian Banker as the Managing Di rector of Ecobank Kenya.

President Nana Addo Dankwa Akufo-Addo has urged the international community to send a clear message to coup plotters that coups have never been, and will never be durable solutions to Africa’s political, economic and security challenges.

According to President Akufo-Addo, “Statements condemning coups alone without corresponding action will, however, achieve little or nothing, as witnessed in recent times. This problem requires collective agreement, e ective deterrence, bold action and, equally important, adequate preventive measures.”

Delivering the keynote address at a side-event organised by the United Nations Development Programme

(UNDP), on the sidelines of the Munich Security Conference, in Munich, Germany, on Friday, 17th February 2024, the President stated that “there are those who still hanker after authoritarian, personal rule, because they claim Africa is underdeveloped and democracy is cumbersome, and we need to get things done in a hurry.”

Quoting from the 2019 Annual Risk of Coup Report, he indicated that Africa has experienced more coup d’états than

any other continent, which, he said, is “an unsavoury statistic”.

Citing the case of Ghana, President Akufo-Addo noted that political instability described much of the early decades of the nation’s life as an independent nation, and

Coups are not durable solutions to Africa’s problems –Akufo-Addo

Minority demands downsizing of gov’t to reflect austere times

By Eugene Davies

19, the party explained that this is to help push for the reduction in the size of the current government.

Greater scrutiny

However, their leader in parliament, Dr. Ato Forson stated that they remain committed to ensuring greater scrutiny and will spare no e ort to protect the public purse. “In line with this, we are taking part in the vetting process so that at the very minimum, we can scrutinize the President’s decision in bringing up those nominees.

The minority, however, will not subscribe to a consensus vote at the level of the Appointments Committee. This will ensure that the matter is brought before the

full House for a vote to be taken in secret.”

Gov’t expenditure The minority further alleges that in spite of mounting cost-of-living and economic crisis, government has added a whopping GHc82bn to its expenditure for 2023 com pared to 2022.

They also claim that the Akufo-Ad do/Bawumia government contin ues to engage in pro igate spend ing; between January and Septem ber of 2022 (9 months) the presidency saddled Ghanaians with the following: the president’s ‘operational enhancement expenditure’ cost the su ering Ghanaian taxpayer a mind-boggling GHc59.4m.

Fuel bills paid at the presidency

within the 9-month period under review cost the su ering Ghanaian taxpayer a colossal GHc51.1m.

Other allegations are that the President’s regional tours last cost the su ering Ghanaian taxpayer a

staggering Ghc16.9m, tyres and batteries for o cial vehicles cost the su ering Ghanaian taxpayer an unbelievable Ghc15m, among other allegations they raised.

Trade Min. designate promises to boost SMEs to compete globally

for the collective cabinet decision, saying “I have seen that it is on the list that government has clear decision to be made on.”

Mr Hammond also indicated that the country needs to harness the full potential of ECOWAS and the Africa Continental Free Trade Area(AfCFTA) by establishing areas of trade, competition, granting tax incentives to boost regional trade.

He pledged to seek funds to industrialise the raw materials in

Ghana.

"Industrialisation is the way to go. All countries who have made it, industrialised and we must do same. If we had industrialised long ago we would not be in this current situation we found ourselves now, so we must industrialise," he stated.

He also promised to curb the menace where Nigerians and Chinese have taken over the retail markets in the country.

By Eugene Davies

Coups are not durable solutions to Africa’s problems –Akufo-Addo

Ghana became notorious for sampling every and any type of political experiment.

“The one-party-state of the First Republic was overthrown in our rst military coup, and the Second and Third Republics, which were practicing democratic governance, were also overthrown by coup d’états. My father, President of the 2nd Republic, was overthrown some fty-one (51) years ago, on 13th January 1972. Kutu Acheampong’s coup brought his stay in o ce to an end,” he said.

The President continued, “the instability instigated the collapse of the economy, and led to the exodus from the country of many citizens and professionals. We have probably not still recovered from the tendency to want to leave the country as the answer to di cult situations.”

He noted, however, that for the past thirty (30) years of our 4th Republic, Ghana has enjoyed political stability under a multi-party consti-

tution, and the longest period of stable, constitutional governance in our hitherto tumultuous history.

The President told the gathering that the separation of powers is now a real phenomenon in Ghanaian life, promoting accountable governance. E cient public services are now within reach.

“We have, in this period, experienced, through the ballot box, the transfer of power from one ruling political party to another on three (3) occasions in conditions of peace and stability, without threatening the foundations of the state. The Ghanaian people have manifested in this era their deep attachment to the principles of democratic accountability, respect for individual liberties, human rights and the rule of law. It has also brought with it more or less systematic economic growth, and boosted immensely our self-con dence,” he added.

Condemn all Coups

The reappearance of coups in Africa, the President stated, in all its

forms and manifestations must be condemned by all, since it seriously undermines “our collective bid to rid the continent of the menace of instability and unconstitutional changes in government, as currently de ned by the frameworks enshrined in the Lomé Declaration, the African Charter on Democracy, Elections and Governance, and other important regional and continental instruments”.

In as much as drivers of unconstitutional changes are largely domestic, President Akufo-Addo noted that the international dimension cannot be overlooked.

“Foreign involvement in fomenting unconstitutional changes, often in favour of repressive governments, foreign economic interests and other would-be geo-political benets, are contributory factors. Some foreign entities regard coups in African countries as a means of enhancing their regional ambitions,” he said.

He continued, “As such, they

engage in all sorts of disinformation campaigns in a bid to disparage the authority of democratically elected governments and instigate opposition protests against incumbents.”

coup-makers are sanctioned.

Andrew Takyi-Appiah, Co-Founder and Managing Director of Zeepay

In implementing existing continental and regional instruments and protocols, the President noted that defaulting Member States are condemned and suspended from the activities of continental and regional bodies, and individual

“However, the reality is, these sanctions have not been applied uniformly. Whilst we are quick to sanction military coup leaders, civilians, who achieve similar ends via the manipulation of constitutions to remain in power, for example, go without sanctions, although their actions are clearly prohibited in our legal instruments. This means that the existing frameworks need to be strengthened to capture such infractions,”

Unlocking AfCFTA potential to boost agric industrialisation

Speci cally, the AfCFTA private-sector engagement strategy, through multi-stakeholder consultations, has identi ed four key sectors that have high potential for local and global business: automotive; agriculture and agro-processing; pharmaceuticals; and transport and logistics.

All of these sectors add value in di erent ways, including through job creation, inclusivity, contribution to GDP and potential for local value addition.

Bene ts of AfCFTA

The adoption of the AfCFTA will accelerate intra-African trade and develop regional and local value chains, creating new business dynamics that o er investors access to a population of 1.7 billion people with combined business and consumer spending reaching $6.7 billion by 2030.

To better understand the opportunities available, four high-potential sec-

tors were initially selected by the AfCFTA to analyse in its private-sector engagement strategy as sectors representing opportunities for companies looking to invest in Africa: automotive; agriculture and agro-processing; pharmaceuticals; and transport and logistics.

These four sectors are expected to see rapid acceleration in production and trade volumes under the AfCFTA, given that they have a high potential to meet local demand with local production.

Agricultural industrialisation

Agro-processing has important implications for economic growth, food security, job creation and poverty reduction.

While African countries have accelerated their focus on agro-processing as a result of food insecurity caused by trade disruptions from global shocks,

By Kenneth Ashiagbor

it will also be important as a way to transform economies from the current export of raw materials, which has much less bene t for a country’s economy. As much as 80 per cent of food production on the continent is from smallholder farmers with historically low yields.

Agriculture and agro-processing have high potential for economic growth, employment and inclusivity, and could spur an increase in intra- African trade.

Currently, the continent imports about $50 billion of agricultural products per year but, by 2030, intra-African agricultural trade is projected to increase by 574 per cent if import tari s are eliminated compared to a scenario without the AfCFTA. Strategies Agro-processing is a way to add value

to an already competitive agriculture sector.

Africa’s wide range of climates, high percentage of arable land and counter-seasonality to the northern hemisphere all contribute to the competitiveness of the sector.

Agro-processing speci cally has unique strengths for investors and African countries alike. It is described as the most important sub-sector of manufacturing because of the greater stability of world prices for processed agricultural products compared to raw products.

It is also signi cant for its e ect on the generation of new companies, its diversi cation of rural economies and its creation of new job opportunities.

Scaling agro-processing has important inclusivity e ects as well, given that women make up 70 per cent of employment in the overall agricultur-

al sector and the majority of the domestic agro-processing workforce is female. The common market can use regional di erences in the strengths and competitiveness of African countries in food value chains. Increased intra-African trade through the AfCFTA will help reduce dependency on foreign agricultural inputs with positive effects for continental food resilience.

Each region has natural advantages that, if better coordinated to bene t African partners, can help create full regional value chains. For example, South Africa’s integrated value chain, from inputs, equipment, packaging and specialised logistics to marketing and retail, is an example for other African countries, and showcases the

great potential for investment in this sector in conjunction with the AfCFTA.

There is also a great opportunity for new businesses to meet the input and infrastructure needs of the agriculture sector.

Barriers

Some major barriers to scaling agro-processing include the need for more local production of inputs. For example, a major barrier to scaling sh production is the high costs and high dependency on for-

eign trade for sh feed.

Regional hubs can help increase intra-African trade of sh feed and allow for scaling up within what is now a highly fragmented market made up of small producers.

For agriculture more broadly, there is also a signi cant need for inputs and infrastructure to sustain higher levels of exports.

Recommendations

Participation in bilateral and multilateral free trade agreements such as the AfCFTA, standards regimes

and related frameworks can help rms better mitigate their operating costs, barriers to market entry, compliance with non-harmonised standards and regulations across borders. It will also enable them to grow their industries more e ectively in support of local and regional economic development and transformation.

The writer is the Registrar, Chartered Institute of Agriculture Ghana

Josephine Anan-Ankomah appointed as new MD for Ecobank Kenya

The announcement of her appointment follows the approval from the Central Bank of Kenya. She replaces Cheikh Travaly who retired at the end of 2022 after attaining the mandatory retirement age of 60 years in accordance with Ecobank Group policy. By the appointment, Mrs Anan-Ankomah would also serve as the Regional Executive, Central, Eastern and Southern African (CESA). She will be responsible for leading and growing the Bank’s business in Kenya and the wider CESA region constituting 18 out of 33 Ecobank a liates and one representative o ce.

Pro le Josephine Anan-Ankomah is a Fellow of the Association of Chartered Certi ed Accountants and holds an MBA in Finance and a Bachelor of Arts in Economics and Sociology, both from the University of Ghana. She has served the Bank for the past 30 years in various capacities until this appointment. Her career in Ecobank began at Ecobank Ghana in 1992 following her appointment as a Treasury O cer. She has also held other senior positions within the bank, such as Managing Director for Eco-

bank Gambia, Regional Treasurer – (Ghana, Liberia, Sierra Leone, Guinea and The Gambia), Chief Operating O cer – (Ecobank West African Monetary Zone/East & Southern Africa), Head of Corporate Strategy and Business Development (Ecobank Ghana) and Head – Investment Banking Group (Ecobank Ghana).

Josephine wields a wealth of experience in treasury management, commercial banking, investment banking and possesses a sharp business acumen that will immensely bene t the Bank.

U.S. delegation attended AU summit looking to play bigger role in Africa

Reports from the United States indicated that Biden administration and the White House have dispatched a high-powered delegation to the annual African Union (AU) summit scheduled for Feb. 18-19 in Addis Ababa, Ethiopia. The annual traditional summit brings together African leaders and representatives from regional and international organizations to primarily deliberate on signi cant questions a ecting the continent's progress and development.

As expected, the gathering indeed reviewed progress and development during the past year, and further examined pertinent issues relating to good governance, rising ethnic conicts, emerging military takeovers, poverty alleviation and other related economic and social questions.

United States delegation interacted with AU o cials, as a follow-up to the African agenda drawn during their mid-December meeting with African leaders in Washington. During that summit, President Joe Biden administration pledged $55 billion for various development projects across Africa.

It has, however, been noted that potential American investors are already exploring the possibility of taking the advantage of opportunities o ered by the African Continental Free Trade Area (AfCFTA), and therefore the desire to encourage further business dialogue and to assist in nding peacefully resolutions for persistent con ict in Africa.

According to reports, the African Continental Free Trade Area (AfCFTA), a policy signed by African countries to make the continent a single market. The high-level U.S. o cials have already established dialogue, thus setting the scene for reviewing the business opportunities for the United States and African public and private sector leaders, particularly how

to strengthen the economic partnership between the United States and Africa, those relating to investments in key sectors and if possible to push for new bilateral trade agreements within the African Growth and Opportunity Act (AGOA).

Our research shows that there are armed con ict from West Africa's Sahel to the Horn of Africa in the east and the impacts of droughts and oods have driven ever more Africans from their homes, with the number of displaced people south of the Sahara Desert rising more than 15% over the past year, according to United Nations gures.

The U.N. estimated 44 million people were displaced in 2022 up from 38.3 million people at the end of 2021.

In an o cial statement relating to the AU event in Addis Ababa, the State Department for African

A airs has also emphasized shared priorities, including implementation of commitments made during the December 2022 U.S.-Africa Leaders Summit. As already known, the US government said the Biden-Harris Administration was prioritizing economic relationships with Africa.

The Special Presidential Representative for U.S.-Africa Leaders Summit Implementation, Ambassador Johnnie Carson, was among the group that headed to Africa along with U.S. Department of State Assistant Secretary for Africa Mary Catherine Phee and U.S. Department of State Special Envoy for Global Food Security Dr. Cary Fowler. Ambassador Carson's main responsibility is to seek greater collaboration between the U.S. and African public cum private sector. He has to deepen entire U.S.-Africa economic engagement and business ties.

Carson has tremendous organizational skills and his professional reputation well-known both in the United States and in Africa. His 37-year career in the foreign

service includes ambassadorships to the Republics of Kenya, Zimbabwe and Uganda. Among other posts, he has also served as Assistant Secretary of State for the Bureau of African A airs.

While there in Addis Ababa, the delegation held separate meetings with government o cials on the sidelines of the African Union (AU) summit. These include USAID Assistant Administrator in the Bureau for Africa Monde Muyangwa, acting USAID Assistant to the Administrator for the Bureau of Resilience and Food Security Dina Esposito, and U.S. Global AIDS Coordinator and Special Representative for Health Diplomacy John Nkengasong.

The U.S. delegation had discussions with stakeholders on the global food security crisis, and its disproportionate impact on Africa, as well as to follow up on U.S. commitments made at the U.S.-Africa Leaders Summit.

In addition to leaders from the AU members states, U.N. Secretary-General Antonio Guterres and European Council President Charles Michel attended the summit. African leaders advocated for permanent seats for the continent on the U.N. Security Council and among the G20 group of large economies, according to a draft of the summit's conclusions.

The summit adopted a series of protocols aimed at accelerating full implementation of Africa's new free trade area, under which trading o cially began in 2021. The adopted protocols related to the Agenda 2063 which is Africa's development blueprint to achieve inclusive and sustainable socio-economic development over a 50-year period.

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African Union Renews Commitment Towards Strengthening Africa's Health Systems

By Kestér Kenn Klomegâh

By Kestér Kenn Klomegâh

During a special session of the African Union Assembly in Addis Ababa, the Department of Health, Humanitarian A airs and Social Development in partnership with the World Health Organisation (WHO) seeks to work towards the reduction of communicable diseases including HIV/AIDS in Africa. It was noted that the pandemic was raging worldwide but had an acute impact across Africa. The spread of the disease a ected every dimension of African society, and AIDS had lowered the life expectancy of adults on average by 20 years.

In 2001, the Heads of State of Africa met in a special summit in Abuja explicitly devoted to addressing the unprecedented challenges of HIV-related disease, TB, and other related infectious diseases. This session, which came soon after the rst UN Security Council Resolution in 2000, acknowledged the tremendous impact the spread of HIV was having on the continent not only as a health risk but also acknowledged the economic and security implications across the continent.

In 2013, African Heads of State and Government (HoSG) reafrmed their commitment to the AIDS, TB and Malaria response at the Abuja+12 Special Summit. The declaration of the summit of the African Union on AIDS, Tuberculosis and Malaria committed to accelerating the mobilization of domestic resources to strengthen health systems; ensure strategies were in place for diversi ed, balanced and sustainable nancing for health, in particular for AIDS, TB and Malaria and targeted poverty elimination strategies and social protection programmes that integrate HIV-related diseases, TB and Malaria for all; particularly for vulnerable populations.

The massive impacts of twin pandemics of COVID-19 and HIV-related diseases have highlighted what remains the largest threat to the Africa Union Agenda 2063Africa We Want. Africa's experience attempting to control

COVID-19 and HIV-related diseases (and the previous experience with the West African Ebola outbreak) exempli es how huge gaps remain in the underlying strength of its health systems. The AIDS epidemic is still not over, nor is the continent on track to achieve an AIDS-free Africa by 2030.

The key objectives now are:

1. Sustaining political commitments – requiring every African Head of State to commit to setting quantitative targets for HIV control (and tracking progress), developing a roadmap to strengthening health systems for pandemic prevention in their country, and reforming policies that prevent vulnerable populations from receiving treatment;

2. Secure new nancial commitments – engaging international donors (bilateral, multilateral, philanthropies) to identify new pools of capital and fund existing pledges while setting a GDP target for national health spending on HIV-related diseases and pandemic preparedness;

3. Acknowledge the role of the African private sector and strengthen the public-private partnership –outlining major regional initiatives on (a) health nancing (for example low-interest loans), (b) health infrastructure (for example supply chains, facilities, data/digital tools), and (c) health manufacturing (for example diagnostics, treatments, vaccines) and by aligning national and international companies, investors, and governments to those areas to accelerate progress;

4. Elevate community, young people and civil society voices –raising the pro le of advocates, PLHIV, community organizations, faith leaders and the youth who have been champions for the HIV/AIDS response and social and behavioural change (SBC) in their country.

Earlier the Africa CDC encouraged African Union (AU) Member States

to actively participate in the Pandemic Fund activities and submit their  Expressions of Interest (EOIs) by the set date of 24 February 2023. The Africa CDC has made itself available to support AU Member States and other regional entities as they develop and submit their EOIs and proposals.

The Africa CDC is an observer at the Board of the Pandemic Fund. The Africa CDC is also an autono-

mous institution of the AU charged with the mandate for coordinating Africa's disease prevention and control. Africa CDC is the convening platform for AU Member States on health security matters. Africa CDC is convinced that the New Public Health Order brings the changes necessary for improved global preparedness and response to disease threats and health emergencies. One key aspect is regional strategies and

action, based on mandates of regional institutions like Africa CDC.

As an integral part of the African approach to pandemic prevention, preparedness and response, the African Union and Africa CDC initiated Africa's New Public Health Order, which aims to set the course for how Africa deals with its public health realities. The New Public Health Order is built on ve pillars, four of which all relate to the

high-impact priorities set out in the rst round call of the Pandemic Fund, namely surveillance and early warning, laboratory systems and health workforce.

Expected outcome: The consideration and adoption of the Declaration on Health Financing and Sustaining Action to End AIDS and related Communicable and Non-communicable Diseases.

In addition to leaders from the AU

members states, there are regional and international organizations in attendance. The summit will adopt a series of protocols aimed at accelerating full implementation of health-related questions in Africa. The adopted protocols relate to the Agenda 2063 which is Africa's development blueprint to achieve inclusive and sustainable socio-economic development over a 50-year period (2013 t0 2063).

Banks must balance risks, rewards of investments -CDS Africa

Independent think tank, Africa Center for Democracy and Socio-economic Development (CDS Africa) have asked banks to carefully balance the risks and rewards of their investment and lending strategies, considering the speci c economic and market conditions in which they operate.

According to a Senior Research and Policy Analyst at CDS Africa, Dr. Frank Bannor, while government securities may o er some degree of safety, it is important for banks to also consider that they may not be entirely insulated against risk as had been the case over the past years.

He added that it is important for banks to have a diversi ed portfolio of assets and investments, rather than relying too heavily on any one type of investment. It is also important for regulators to ensure that banks are adequately capitalized and have effective risk management practices in place to mitigate the risks associated with their investments.

Further, he stated that the Bank of Ghana must pursue a deliberate policy of encouraging banks to increase their lending to the private sector, particularly to SMEs. In doing so the Bank of Ghana will be supporting the growth and development of the private sector, which is essential for long-term economic growth and job creation.

CDS Africa, in a press statement also called on the Bank of Ghana to ensure a balanced approach that supports both the growth of the private sector and the stability of the banking architecture. Such a measure is essential for sustainable economic development.

Background

The statement also revealed that

banks facilitate the ow of funds throughout the economy. Through the issuance of loans and credit, banks can help businesses and individuals access the capital they need to invest in new projects, purchase goods and services, and grow their businesses.

Banks also act as intermediaries between savers and borrowers, allowing savers to earn interest on their deposits while providing borrowers with access to the funds they need. Banks also play a crucial role in providing nancial services to individuals and households.

Through checking and savings accounts, credit and debit cards, and other nancial products, banks provide individuals with a safe and convenient way to manage their money. This can help individuals save for the future, access credit when needed, and make purchases and transactions with ease, the statement noted.

Further, CDS Africa acknowledged that banks play a critical role in providing nancial services that support economic growth and development, including providing loans and credit facilities to individuals and businesses. However, they reckon, it also important for banks to operate in a safe and sound manner, subject to e ective regulatory oversight, to ensure they do not take on excessive risks that could jeopardize their nancial stability and the wider economy.

“The situation in Ghana highlights some of the challenges that banks face in balancing their role as providers of credit with the need to manage risk e ectively. Many banks in Ghana have a signi cant portion of their investments in government securities and instruments, which may be seen as a relatively safe and stable invest-

ment compared to lending to private businesses. The government's debt restructuring exercise has highlighted the risks associated with such a strategy. If banks are too heavily exposed to government debt, they may be vulnerable to shocks or changes in government policy that could have a signi cant impact on their balance sheets. In the case of Ghana, the debt restructuring exercise may require banks to take haircuts, which could lead to losses and potentially impact their ability to lend to private businesses.” the statement captured.

The statistics from the Bank of Ghana shows that the banking sector's holdings of government securities have increased signi cantly. In December 2019, the sum of the banks' bills and securities investments climbed by 27% to GH48.45 billion. Similarly, bank investments in government instruments increased by 33.6% in 2018.

Additionally, banks in Ghana held 30.6% of the total outstanding government bonds in 2020, compared to 17.2% in 2019. The data suggests that at the end of December 2019, commercial banks in Ghana had a largely skewed investment portfolio towards long-term debt instruments, with securities making up 68.2% of their investments.

This is an increase from 66.5% in December 2018. Conversely, the proportion of short-term bills in total investments declined from 32.4% in December 2018 to 30.9% in December 2019. The trend is more worrying when compared to 2016 and 2017 gures. In 2016, banks’ investment in securities was 19.1% with 79% investment in bills. By 2017, banks’ investment in securities had climbed to 41.2% with investment in bills decreasing to 57.3%.

By Eugene Davies

This shift towards long-term debt instruments is consistent with the trend of banks investing more heavily in government securities, as these tend to be longer-term instruments that provide a steady stream of income over time.

The increase in investment in government bonds by commercial banks, other things being equal, means a decline in lending to the private sector.

This preference for investing in government bonds over lending to private businesses leaves much to worry about as a nation. It has the tendency of hindering the growth of the private sector and has a negative impact on economic growth and job creation, particularly in the small and medium sized enterprise (SME) sector.

This is because SMEs often have limited access to credit, and the reduction in lending by banks to the private sector may exacerbate this problem. Furthermore, the increased investment in government securities by banks may lead to a crowding-out e ect, where the government bor-

rows more from the domestic market, reducing the availability of credit to the private sector. This could hinder private sector growth and job creation, which are essential for economic development.

It is also true that the Covid-19 pandemic has had a signi cant impact on the global economy, including in Ghana. The uncertainty and increased risk associated with default have made it more di cult for banks to make lending decisions.

As a result, some banks have turned to investing in Government of Ghana securities, which are relatively safe and o er high interest rates. However, this strategy carries its own risks. As mentioned, any restructuring of the government's debt through bond swaps or zero-coupon bonds could pose liquidity problems for banks that depended on coupon payments. Additionally, by investing heavily in government securities, banks may have missed out on lending opportunities to individuals and businesses, which could have generated higher returns but also carried lower default risk.

Ghana’s coastlines must be transformed into economic ventures – Dr Mbiah

Dr Emmanuel Ko Mbiah, a Maritime Consultant and Legal Practitioner, has called on the Government to develop Ghana’s coastline into economic ventures to spur growth. He expressed disgust at the current state of the Greater Accra coastal stretch between Korle Gonno, especially the Korle Lagoon, through to Jamestown, which were prime areas and when developed would be good for tourism.

“This will be worth more than gold, if strategically transformed,” he said. Dr Mbiah made the call at the

Ghana Ports and Harbours Authority (GPHA) forum in Tema, when he spoke on the potential of the blue economy to sustaining the country’s development. He stated that government could take a cue from the Clarke Quay area in Singapore, which had been transformed into a holiday spot for tourists.

The Korle Lagoon could be dredged, cleaned, and rehabilitated to serve as alternative transportation for the citizenry and tourists.

Dr Mbiah, a former CEO of the Ghana Shippers Authority, noted that such a transformation would come with the ancillary industries such as boat repair, hospitality, and

real estate.

Government’s tourism drive could receive a boost through the strategic transformation of the city’s coastline, he said.

A public-private partnership could be considered for that agenda, he said, and that whilst government provided the environment, the private sector could provide the capital, which it could recoup through the operations.

Proper costing could be done for the marine drive, for example, to know its value, and also analyse the synergies for holistic results.

Source: GNA

Rashid Pelpuo Appointed African Climate Envoy

Member of Parliament for Wa

Central, Dr Hassan Abdul-Rashid Pelpuo has been appointed the Climate Envoy for Africa by the Clover Climate Alliance.

Clover Climate Alliance is a social movement, a Citizens Assembly of 100 million Gen-Z and Millennials well-positioned to make a measurable di erence in climate and sustainability challenges.

Dr Abdul-Rashid who is also the Ranking Member on Parliament’s Lands and Forestry Committee of Parliament, by this appointment has thus become part of the core team of the Alliance in executing its mission of mobilization, incentivizing and empowering 100 million young people globally

on several climate oriented initiatives as the world prepares for the 28th Conference of Parties (COP 28) to be held in Dubai.

Speaking to journalists on his new appointment, Dr Pelpuo expressed readiness to mobilise and work with young people and other identi able groups including parliamentarians and governments across Africa to help minimise the negative impact of climate change on the continent by 2030.

Clover Climate Alliance at a press conference in COP27 held at Egypt in November 2022, announced the launch of the pilot of US$100 million Clover Climate Fund; a climate invest-

ment fund to be domiciled in the Abu Dhabi Global Markets (ADGM).

Dr Pelpuo explained that, the Clover Climate Alliance will work in partnership with the various African countries in synergy to achieve their climate policy objectives. He identi ed sustainable agricultural practice as one potential focus to ensure the environment is protected against the devastating e ects of climate change.

The new Africa climate envoy said climate change is real and urged the public to accept the reality and help e orts to mininise the impact on livelihoods.

The Wa Central representative was recently appointed President of the African Parliamentarians forum on Population and Development.

Hon Abdul-Rashid Pelpuo has

been a lawmaker since 2005 and served as Minister for Youth and Sports, Deputy Majority Leader, member of the Pan African Parliament in South Africa, Minister of State responsible for Public Private Partnership and served as a Member of the Economic Management Team.

Poland’s Ukrainian rehabilitation

By So ň a Muzikárová

Russia’s war against Ukraine has been reshaping European politics.

The former Soviet bloc countries of Central and Eastern Europe – all now members of the European Union and NATO – have proved to be a major force in shaping the West’s strategy for preserving Ukraine as an independent nation-state. And none more so than Poland.

When discussions about imposing a price cap on Russian seaborne crude oil stalled last fall, it was Poland, Lithuania, and Estonia that the United States lobbied to break the impasse. These governments had dug in their heels to demand an even lower price (of $30 per barrel), in order to cut more deeply into the Kremlin’s oil revenues. Then, at the start of this year, US Treasury o cials turned to Latvia, Lithuania, Estonia, and Poland again, to see what maxi-

mum price level they would accept for additional caps on Russian re ned petroleum products.

Before the war, Poland and the Baltic states were often portrayed as being irrationally intransigent when it came to dealing with Russia. Owing to their memory of Russian imperialism, occupation, and oppression, they had long exhibited a “Russia realism,” in stark contrast to the pragmatic, economically-minded stance of Germany and France. This divergence in perspective prevailed up until Russia’s full-scale invasion last February. Even though the US intelligence community had presented compelling evidence that Russian President Vladimir Putin was about to send in his forces, most other Western governments con-

tinued to insist that such a move was “irrational” and thus “improbable.” By contrast, Poland and the Baltic states took the reports at face value and braced for the worst.

One year later, their strategic posture has become the new Western standard. Central and Eastern European governments now enjoy signi cant in uence in Brussels, London, and Washington, especially when it comes to designing policies to punish Russia. Some have demonstrated unwavering resolve, even as their bigger, more powerful EU neighbors have made half-hearted e orts and dragged their feet. For example, Poland has provided  more military, humanitarian, and nancial assistance to Ukraine than most other Western countries. It has welcomed 1.5 million Ukrainian refugees (more than

any other country), and increased  defense spending to a record 3% of GDP this year, putting the Polish army on track to become one of Europe’s nest. Of course, not all Central and Eastern European countries are on board. Most notably, Poland’s formal “illiberal” ally, Hungary, has adopted an openly pro-Russian stance. Its anti-EU propaganda  and obstruction of sanctions  against Russia have been a major a headache for both the EU as a whole and its Visegrád neighbors (the Czech Republic, Poland, and Slovakia). Poland and Hungary used to be in lockstep when they would break with the EU on issues such as migration and the rule of law. Now, they nd themselves in opposite corners. This falling out leaves the Visegrád Group in a tough spot. Both the Czech and Slovak governments

are among Ukraine’s top supporters globally, in terms of total bilateral aid as a percentage of donor GDP. They have also shown solidarity with Ukraine by welcoming hundreds of thousands of Ukrainian refugees and providing heavy weaponry. Moreover, Slovakia has used its position as the president of the Visegrád Group to mute foreign-policy cooperation with Hungary. But this clear foreign-policy orientation could have been bolstered by closer alignment in other policy arenas, notably, on energy policy. The EU’s oil embargo last year was a case in point: the Czech Republic, Hungary, and Slovakia all negotiated exemptions allowing them to continue importing Russian oil through the southern Druzhba

Pipeline.

While the commitments from some Central and Eastern European states remain patchy, Poland has continued to rise to the challenge. But to emerge decisively as a new force in the EU, it will have to do more to win the con dence of other Western governments. That means shaking o its image as Hungary’s  illiberal fellow-traveler and addressing its own democratic shortcomings head-on.

by its partners as o ering largely constructive positions. Under its chairman, Jarosław Kaczyński, PiS has stripped the judiciary of its independence, smeared independent media outlets, curtailed access to legal abortion, ended state funding of in-vitro fertilization, and – as recently as last fall  – harassed LGBT and women’s rights activists.

Poland’s democratic backsliding came fully under the spotlight during the pandemic, when it ended up in a stando with the European Commission over a rule-of-law requirement for receiving EU recovery funds. Poland’s government is now pursuing limited reforms designed to

free up the funds that were allocated for it. Looking ahead, one hopes that the 73-year-old Kaczyński’s in uence will diminish, enabling PiS to undergo a political facelift. Many now regard Prime Minister Mateusz Morawiecki – a former banker and economic adviser to former Polish Prime Minister  Donald Tusk – as being more modern, competent, and independent (from Kaczyński) than his PiS predecessors were. This fall, the 2023 general election will o er a fresh opportunity for a reset and revival of democratic institutions. Poland’s geostrategic importance is undeniable, and its re-

sponse to Russia’s war of aggression has improved its international standing. With leaders who understand the nuances and complexities of dealing with Russia, it can serve as an e ective broker for Central and Eastern European interests in Brussels, and for Europe’s interests in the world. But to be taken seriously, Poland must defend democratic values and freedoms at home with the same resolve it has shown in standing with Ukraine. The views expressed here do not re ect the views of the Ministry of Foreign and European A airs of the Slovak Republic. predecessors were. This fall, the 2023 general election will o er a

fresh opportunity for a reset and revival of democratic institutions. Poland’s geostrategic importance is undeniable, and its response to Russia’s war of aggression has improved its international standing. With leaders who understand the nuances and complexities of dealing with Russia, it can serve as an e ective broker for Central and Eastern European interests in Brussels, and for Europe’s interests in the world. But to be taken seriously, Poland must defend democratic values and freedoms at home with the same resolve it has shown in standing with Ukraine. The views expressed here do not re ect the views of the Ministry of Foreign and European A airs of the Slovak Republic.

Newmont pays GH¢184.6m dividend

After the right-wing populist Law and Justice (PiS) party came to power in 2015, Poland’s reputation nosedived. Once the EU’s leading economic success story, the country ceased to be viewed Newmont Golden Ridge Ltd (Akyem Mine) has presented a cheque for GH¢184.6 million to the Government of Ghana, as dividend for the year 2022.

The amount represents the government’s carried interest in the operations of the Akyem mine.

The cheque presentation was made by executives of Newmont Africa, led by the Regional Senior Vice-President - Africa Operations, David Thornton.

Mr Thornton thanked the government for its continuous support to Newmont Africa’s Ahafo and Akyem mines and reiterated the company’s commitment to responsible mining operations, while looking to expand New-

mont Africa’s footprint in the country with the Ahafo North project.

“Our Ahafo North project remains a key strategic growth prospect for Newmont Africa, and its successful construction and subsequent operation will have immense bene ts to our host communities, the local economy, as well as the broader economy of Ghana, in terms of employment creation, local supply chain opportunities, as well as taxes, royalties, and dividend payments to government,” Mr Thornton said.

On Newmont Africa’s direct support to the Ghanaian economy in the past year, beyond statutory

payments, Mr Thornton mentioned the company’s support for the government’s gold buying programme that was meant to shore up the country’s gold reserves and help stabilise the economy.

In spite of global economic challenges that had negatively impacted businesses globally, Newmont Africa was the rst mining company to support the government’s gold buying programme by selling 3,500 ounces of gold to the government, through the Bank of Ghana (BoG) in May 2022.”

“An additional 22,500 ounces of gold was sold to BoG in October and November 2022, making a

total of 26,000 ounces of gold sold to government in 2022,” he added.

Newmont commended

Receiving the cheque, the Minister of Finance, Ken Ofori-Atta, commended Newmont Africa for its compliance to tax and other nancial payments to the government of Ghana.

The minister also lauded Newmont Africa for its prompt payment of taxes and acknowledged the potential bene ts of the Ahafo North project. He said, “We welcome payments such as these, especially during these challenging times, and we wish to commend you for being

prompt with your payments, be they taxes, royalties, or dividends.”

“We are aware that the Ghana Revenue Authority has recognised you, on several occasions, for your tax compliance. We look forward to the resumption of your Ahafo North project this year, which will bring in even more revenue to the state.”

Through a combination of tax payments in United States dollars, as well as making forex available to the BoG, Newmont Africa has supported and impacted forex availability to the government of Ghana.

Globalization’s latest last stand

By Robert Skidelsky,

1990. Communism had just collapsed in Central and Eastern Europe. In China, Deng Xiaoping was unleashing capitalist enterprise. And political scientist Francis Fukuyama famously proclaimed the “end of history,” by which he meant the triumph of liberal democracy and free markets.

Years earlier, the British economist Lionel Robbins, a rm believer in free markets, warned that the shaky political foundations of the postwar international order could not support a globalized economy. But in the euphoria and triumphalism of the early 1990s, such warnings fell on deaf ears. This was, after all, a “unipolar moment,” and American hegemony was the closest thing to a world government. With the Soviet Union vanquished, the thinking went, the last political barrier to international economic integration had been removed. Dazzled by abstractions, econo -

mists and political scientists should have paid more attention to history. Globalization, they would have learned, tends to  come in waves, which then recede. The rst wave of globalization, which took place between 1880 and 1914, was enabled by a huge reduction in transport and communication costs. By 1913, commodity markets were more integrated than ever, the gold standard maintained xed exchange rates, and capital – protected by empires –owed freely and with little risk. Alas, this golden age of liberalism and economic integration gave way to two world wars, separated by the Great Depression. Trade shrank to 1800 levels, capital ows dried up, governments imposed tari s and capital controls to protect industry and employment, and the largest economies separated into regional blocs. Germany, Japan, and Italy went to war to establish blocs of their own.

The second wave of globalization, which began in the 1980s

and accelerated following the end of the Cold War and the rise of digital communications, is now rapidly retreating. The  global trade-to-GDP ratio fell  from a peak of 61% just before the 2008 nancial crisis to 52% in 2020, and capital movements have been increasingly restricted in recent years. As the United States and China lead the formation of separate geopolitical blocs, and the world economy gradually shifts from interconnectedness to fragmentation, deglobalization seems well underway.

To understand why globalization has broken down for a second time, it is worth revisiting John Maynard Keynes’s memorable description of London on the eve of World War I. “The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise,” he wrote in 1919, “were little more than the amusements of [the investor’s and consumer’s] daily newspaper, and appeared to exercise almost no in uence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.”

In our own time, geopolitics is once again threatening to break the international order. Commerce, as Montesquieu observed, has a pacifying e ect. But free trade requires strong political foundations capable of soothing geopolitical tensions; other -

wise, as Robbins warned, globalization becomes a zero-sum game. In retrospect, the failure to make the United Nations Security Council truly representative of the world’s population might have been the original sin that led to the current backlash against economic openness. But geopolitics is not the only reason for the breakdown of globalization’s second wave. Neoliberal economics, which came to  dominate policymaking in the 1980s, has fueled global instability in three major ways.

First, neoliberals fail to account for uncertainty. The ecient-market hypothesis – the belief that nancial markets price risks correctly on average – provided an intellectual basis for deregulation and blinded policymakers to the dangers of setting nance free. In the run-up to the 2008 crisis, experts and multilateral institutions, including the International Monetary Fund, were  still claiming that the banking system was safe and that markets were self-regulating. While that sounds ridiculous in retrospect, similar views still lead banks to underprice economic risks today.

Second, neoliberal economists have been oblivious to global imbalances. The pursuit of market-led economic integration accelerated the transfer of manufacturing production from developed economies to developing economies. Counterintuitively, though, it also led to a ow of capital from poor to rich countries. Simply put, Chinese work -

ers supported the West’s living standards while Chinese production decimated Western manufacturing jobs. This imbalance has fueled protectionism, as governments respond to public pressure by restricting trade with low-cost producers, and contributed to the splintering of the world economy into rival economic blocs.

Lastly, neoliberal economics is indi erent to rising inequality. Following four decades of hyper-globalization, tax cuts, and scal tightening, the richest 10% of the world’s population own  76% of the total wealth, while the poorest half own barely 2%. And as more and more wealth ends up in the hands of tech speculators and fraudsters, the so-called “e ective altruism” movement has invoked La er curve-style logic to argue that allowing the rich to become even richer would encourage them to donate to charity.

Will globalization’s second wave collapse into a world war, as the rst one did? It is certainly possible, especially given the lack of intellectual heft among the current crop of world leaders. To prevent another descent into global chaos, we need bold ideas that build on the economic and political legacies of Bretton Woods and the 1945 UN Charter. The alternative could be a more or less direct path to Armageddon.

Understanding how banks analyse your business loan application (2)

By Korsi Dzokoto

By gaining an understanding of the company's past, not only do we gain a better understanding of the company, but we also discover the entrepreneurial capabilities of the client, as well as the extent to which they are exible and willing to take advantage of market opportunities and to mitigate the risk and problems they face.

What is the company's core business?

With this qualitative aspect, we must determine what the business is doing. It is therefore important to understand the client's business in order to de ne all the elds that are relevant to the analysis and assessment of possible risks. In order to acquire the required business information, it is necessary to determine the organizational structure of larger companies. In any quality analysis, the credit o cer must have an in-depth understanding of the client's industry.

Product, manufacturing process, and technical equipment

The credit o cer would determine whether the object of the company activity is a merchandise, products, or services. Concerning this factor, the o cer must determine the maximum and ideal production capacity, as well as whether or not there is a bottleneck in this process.

In addition, it should examine the underlying assets and their obsolescence, as well as the costs associated with preserving the funds. Both the volume of inventory and the length of time the client may go without purchasing fresh inventory are crucial pieces of information.

Market for the client

The credit o cer should be knowledgeable about the client's product, the competitors, and the product's strengths, shortcomings, and price. First, the client's market must be dened geographically and in

terms of the clients it serves.

Here is the list of some necessary questions to make a proper determination of the market:

Who needs the products that the company produces or sells and what is their purpose?

What is the type of demand, i.e. what is their price elasticity and possible substitution with other products?

Who buys the products, who are end users, whether the products are for nal consumption or for further trade?

Does the sale of products o er additional services such as transporting products to the consumer etc.?

Who are the competitors of the borrower and how much is their market share?

Is the borrower competitive based on pricing, quality, or service in comparison to other competitors?

What is the potential demand for products, is the market overshadowed, what are the distribution channels of the product?

Buyers and suppliers

Relationship with buyers

Necessary information that bank needs for the companies’ buyers are as follows:

What are the dynamics of buying, whether they are regular buyers or are ad hoc, can their plan be planned, what is the percentage of chargeability, etc.

What is the number of buyers?

This information is necessary due to the diversi cation of the risk of collection of receivables.

Relationship with suppliers

1.Necessary information to be obtained for suppliers of the company are as follows:

2. How many suppliers does the client operate with?

3. Is the client dependent on one supplier?

4. How easily can new suppliers be found?

5. Who pays the transport costs?

Quantitative analysis

Quantitative analysis focuses primarily on the company's nancial statements, such as the Balance Sheet, Income Statement, and Cash Flow Statement. The income statement and cash ow statement describe the business's historical economic status. The balance sheet is a snapshot of the current state of a company's assets and liabilities.

Analysis of Financial Statement

Assessment of liquid assets

Cash in bank accounts, cash on hand, and bank deposits constitute liquid assets. On the day of the analysis, it is crucial for the credit o cer to review the client's accounts and, if he has accounts with other banks, to get extracts from all accounts (bank statement).

Evaluation of customer accounts receivable Trade receivables are a form of working capital that must be converted to cash throughout the collection process. In a dialogue with the client, the corporate referent must disclose which claims are truly charged, consider up to ve main consumers, and establish the method of collection and the terms agreed

upon with the buyers.

The indicator for trade receivables collection might serve as an indicator for the average period of receivables collection:

Trade receivables X 365 / annual sales.

Evaluation of inventory

The corporate referent should examine the inventory structure and assess, through a conversation with the client, if the stock is competitive or uncompetitive.

For example, if the season for a stock has already gone, it will be sold at a discount for the next period, and its cost on the balance sheet at the time of the analysis will not be accurate.

The indicator of inventory turnover provides a strong basis for evaluating the stock and its age: Inventory x 365 / cost of goods sold. If the client seeks for a loan for working capital, it is crucial that: For manufacturing enterprises, the loan repayment duration should coincide with the production process, from the acquisition of raw materials to the sale and return of nished goods. For commercial enterprises, the loan should be repaid by selling the

merchandise and collecting the claims. Evaluation of obligations to suppliers

The client's obligations to suppliers are a form of interest-free loan that must be repaid in the current year. It is essential to learn which customers suppliers depend on, the conditions of payment, and whether payment is governed by payment guarantees or letters of credit. This information will provide a more accurate depiction of the company's liquidity. The payment time for obligations owed to suppliers can be determined using the following indicator:

Short-term obligations to suppliers multiplied by 365 / the purchase price of items sold throughout the year.

Relationship between Balance Sheet and Income Statement

During the preparation of the balance sheet and the income statement, a check or cross check is made between them.

Example 1: If the value of the capital in a balance sheet of the company in 2021 is 100,000 cedis, the value of the capital in the balance sheet in 2022 is

Works and Housing Minister Francis Asenso-Boakye says government remains commitment to deepening collaborations with private sector investors in its quest to provide homes that are accessible to Ghanaians.

“Government recognises the importance of investing in this industry, as it holds the key to the sustainable development of our dear country,” he said.

Commissioning SuCasa properties’ O’Grantson No.1 Community at East Legon Hills, the minister said commissioning of this project is a con rmation that the desired environment is being created by government to attract private sector investments into the housing sector.

“Indeed, the industry contributes to our country’s socio-economic development by providing signicant employment opportunities for both skilled and non-skilled labour,” he added.

He revealed that the ministry will review and enact a legislation to address the institutional gaps, to create the appropriate platform for best practices within the industry. In addition, he said his ministry has initiated the process to establish the Ghana Housing Authority, which will have the mandate to regulate, plan and manage housing developments in the country, in collaboration with private-sector developers.

“Additionally, the Rent Act, 1963 (Act 220) (as amended), which was passed by Parliament some 60 years ago and has, therefore, outlived its relevance due to rapid urbanisation, and population growth, among others, and is currently undergoing extensive review to reect modern trends and dynamics in the housing sector,” he said.

Unveiling of SuCasa Properties

Real estate company SuCasa Properties Limited commissioned phase one of the SuCasa O’Grantson No.1 Community at East Legon Hills.

The Chief Executive O cer of the company, Michael O’Grantson-Agyapong, said his company aim is to tackle the housing infrastructure de cit through the provision of affordable housing units for Ghanaians.

“As a business, we are consciously keeping the prices of our houses a ordable because we believe affordable housing is a must-have for every Ghanaian.

“The grand vision of SuCasa is to build 2000 houses by the close of 2023. We expect to complete phase two of the O’Grantson Community project in March and commission it in April and complete phase three by the end of the year,” he said.

The second phase of the project christened No. 2 O'Grantson Communities (55 units) is on schedule to be commissioned in April while the No. 3 O'Grantson Communities (816 units including malls and cinemas) and the No. 4 O'Grantson Communities located at Ayi Mensah would be completed later in the year.