Tar97 ghana top500 by The Africa Report

Angola, South Africa, Zimbabwe... Is this change we can believe in?

João Lourenço, Cyril Ramaphosa, and Emmerson Mnangagwa

Bright Ghana

How the country finally turned the lights on

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AFRICAN COMPANIES A glimmer of hope JEUNE AFRIQUE MEDIA GROUP INTERNATIONAL EDITION

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 130 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90

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Angola, South Affrrica, Zimbabwe... Is this change we can believe in?

João Lourenço, Cyril Ramaphosa, and Emmerson Mnangagwa

Bright Ghana

Hoow w the country fi finally turned the t lights on

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THE AFRICA REPORT # 97 - FEBRUARY 2018

AFRICAN COMPANIES JEUNE AFRIQUE MEDIA GROUP

A glimmer of hope

INTERNATIONAL EDITION

BUSINESS

06 EDITORIAL No man is an island

58 TOP 500 COMPANIES Time to tighten up With the reversal of fortunes in the commodity markets, and rejuvenated trade partners, things are looking up for African companies. A perfect time for serious reform

08 LETTERS 10 THE QUESTION

BRIEFING 12 SIGNPOSTS 14 PEOPLE Khalifa Haftar, head of the Libyan National Army 16 INTERNATIONAL

74 OIL & GAS Rolling with it as the barrel bobs 76 AGRICULTURE Weathering the weather

17 CALENDAR

FRONTLINE

COVER CREDITS: FOTOLIA; GEERT VANDEN WIJNGAERT/AP/SIPA; SIPHIWE SIBEKO/REUTERS; CHEN YAQIN/XINHUA-REA

18 SWEEPING CHANGE Southern Africa shows a different face While ‘Liberation-era’ parties have been harangued for failing to deliver prosperity to citizens, serious change is afoot in the south of the continent

TOP

30 LIBERIA Where there’s a will...

36 ANANSI Of bromance and betrayal

COUNTRY FOCUS 39 GHANA Power madness After decades of dumsor the lights are on. Now the new government faces the bill THE AFRICA REPORT

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79 LOGISTICS High flyers and long haulers

ART & LIFE

26 ETHIOPIA Targeting the Tigray Once the kings of the political federation of post-Derg Ethiopia, the Tigrayans are now making do with being the king-makers in an increasingly Oromodominated political scene

34 INTERVIEW Kashim Shettima, Governor, Borno State, Nigeria

78 MINING Bouncing back from the bottom

80 OPINION Can ‘Made in Nigeria’ be financed by foreign investors?

POLITICS

32 SOUTH AFRICA Can he deliver?

77 TELECOMS Data duels

COMPANIES

After a bad year for African corporates, it’s the moment to heed calls for ground-up corporate governance reform

82 MUSIC Legends of J-Town From humble beginnings, a mighty music empire has been built, making Jos the epicentre of the Naija sound so popular around the continent, and birthing stars like 2face Idibia and P-Square 86 FILM Reel surreal 87 MUSIC Sista Becky: The only way is up 88 LIFESTYLE Ghanaian author and novelist Ayesha Harruna Attah 89 TRAVEL Gisenyi, Rwanda 90 DAY IN THE LIFE Johannesburg chef Vusumuzi Ndlovu

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THE AFRICA REPORT A Jeune Afrique Media Group publication

BY PATRICK SMITH

57‑BIS, RUE D’AUTEUIL – 75016 PARIS – FRANCE TEL: (33) 1 44 30 19 60 – FAX: (33) 1 44 30 19 30 www.theafricareport.com

No man is an island

hat great English poet John Donne, unlike Russia’s Alexander Pushkin, did not have African blood coursing through his veins, as far as we know. Yet his elegiac ‘No Man is an Island’ is a wonderful expression of the Zulu idea of Umuntu ngumuntu ngabantu, meaning that a person is a person through other people. The short form Ubuntu, meaning ‘I am because you are’, has come to encapsulate a central tenet in South African philosophy. Donne ends his meditation in a similar vein: ‘Any man’s death diminishes me, because I am involved in mankind. And therefore never send to know for whom the bell tolls; it tolls for thee.’ These parallels between Zulu concepts and European poetry point to a universality in the belief in community and cooperation. At the same time, it is part of the answer to the vulgar xenophobia and narrow nationalism on display in the US presidency and in the wave of fascist movements in Europe. Not only did the recent White House outburst prompt the African Union to demand an apology, but it led to diplomatic protests from more than 20 African states. It also provoked a strongly worded open letter to the White House from 78 of Washington’s former ambassadors pointing out Africa’s historical and contemporary contributions, as well as the interdependence of all peoples. It is a measure of the current political climate that such a point needs to be made publicly to a US president. Other liberal commentators pushed back against the latest nationalist myth-making, citing the official data showing that 41% of African migrants to the US have a bachelor’s degree or

CHA I R M A N A ND F O UND E R BÉCHIR BEN YAHMED P UB L I S HE R DANIELLE BEN YAHMED publisher@theafricareport.com E X E CUT I VE P UB L I S HE R JÉRÔME MILLAN

higher – compared with 28% of US citizens as a whole. Apart from confirming that some of Africa’s best and brightest minds are key to the West’s, and increasingly Asia’s, productive and creative economies, these figures tell a starker story about socioeconomic realities on the continent. Much more will have to be done, not just on the policy level but also in terms of nurturing creativity and innovation. Two decades ago, the late Claude Ake, one of Nigeria’s foremost political scientists, wrote: ‘The assumption so readily made Much that there has been a failure of development more will is misleading.’ Instead have to his conclusion was: be done ‘The problem is not so much that developto nurture ment has failed as that creativity it was never really on the agenda in the first and place.’ He would, howinnovation ever, be heartened to see that development – industrial policy and leapfrog technologies – is today very much on the continental agenda. Apart from the effort, particularly in commodity-dependent economies, to diversify and industrialise, negotiations for Africa’s Continental Free Trade Area have moved into the technical stage. A summit to sign the agreement should occur before the end of March. With manufactured goods accounting for 41% of intra-African trade, according to UN data for 2014, a wider free trade area could give a fillip to diversification efforts. Africa may benefit from opening its trade, just as some regions seek to put up new barriers. Ubuntu.

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M A R K E T I NG & D E VE L O P M E NT ALISON KINGSLEY‑HALL E D I T O R I N CHI E F PATRICK SMITH M A NA G I NG E D I T O R NICHOLAS NORBROOK editorial@theafricareport.com A S S O CI AT E E D I T O R MARSHALL VAN VALEN B US I NE S S E D I T O R MARK ANDERSON R E S E A R CH & P R O D UCT I O N OHENEBA AMA NTI OSEI RE G IO NA L E D I T O R CRYSTAL ORDERSON (SOUTHERN AFRICA) A RT & LI FE ED I T O R BILLIE ADWOA MCTERNAN S UB - E D I T O R S ALISON CULLIFORD ERIN CONROY P R O O F R E A D I NG KATHLEEN GRAY A RT DI R E CT O R MARC TRENSON DESIGN VALÉRIE OLIVIER (LEAD DESIGNER) SYDONIE GHAYEB CHRISTOPHE CHAUVIN (INFOGRAPHICS) CAMILLE CHAUVIN R E S E A R CH SYLVIE FOURNIER P HO T O G R A P HY XAVIER ROUSSEAU SAMUEL BOUAROUA SALES SANDRA DROUET Tel: (33) 1 44 30 18 07 – Fax: (33) 1 45 20 09 67 sales@theafricareport.com CONTACT FOR SUBSCRIPTION: Webscribe Ltd Unit 4 College Road Business Park College Road North Aston Clinton HP22 5EZ United Kingdom Tel: + 44 (0) 1442 820580 Fax: + 44 (0) 1442 827912 Email: subs@webscribe.co.uk ExpressMag 8275 Avenue Marco Polo Montréal, QC H1E 7K1, Canada T : +1 514 355 3333 1 year subscription (10 issues): All destinations: €39 ‑ $60 ‑ £35 TO ORDER ONLINE: www.theafricareportstore.com A D VE RT I S I NG D I F CO M INTERNATIONAL ADVERTISING AND COMMUNICATION AGENCY 57‑BIS, RUE D’AUTEUIL 75016 PARIS ‑ FRANCE Tel: (33) 1 44 30 19‑60 – Fax: (33) 1 44 30 18 34 advertising@theafricareport.com PRINTER: SIEP 77 ‑ FRANCE N° DE COMMISSION PARITAIRE : 0720 I 86885 Dépôt légal à parution / ISSN 1950‑4810 THE AFRICA REPORT is published by GROUPE JEUNE AFRIQUE

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DRIVERS OF VIOLENT EXTREMISM ARE MULTIPLE AND COMPLEX

People to watch, key data and analysis to guide you through the political and economic year ahead

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Double issue

xploring the narrative from northern Nigeria and Morocco, the two writers [‘Interview: Mahi Binebine & Elnathan John’, TAR96 Dec/ Jan 2018] identify poverty, marginalisation, lack Africa in of education, and hopelessness among the youth as the driving forces of violent extremism in the two regions. Indeed, the drivers and enablers of violent extremism are multiple, complex, context-specific, and have religious, ideological, political, economic and historical dimensions. This is further confirmed by UN Development Programme’s recent report on the ‘Journey to Extremism in Africans’. With few economic prospects or outlets for meaningful civic participation, and little trust in the state to provide services or respect human rights, the study suggests, such an individual could, upon witnessing or experiencing perceived abuse of power by the state, be tipped over the edge into extremism. Siddharth Chatterjee, UN Resident Coordinator, Kenya

2018

JEUNE AFRIQUE MEDIA GROUP

INTERNATIONAL EDITION

Algeria 550 DA • Belgium €5.90 • Canada CA$ 7.95 • DR Congo US$ 9 • Denmark 60 DK • DOM 8 € • Ethiopia 90 Birr • France €5.90 • Germany €5.90 • Ghana GH¢ 10 • Italy €5.90 • Kenya KES 410 • Morocco 40 DH • Netherlands €5.90 • Nigeria 800 NGN • Norway NK 70 • Portugal €5.90 • Rwanda RWF 6,000 • Sierra Leone LE 15,000 • South Africa R40 (tax incl.) • Spain €5.90 • Sweden SEK 70 • Switzerland 9.90 FS Tanzania TZS 10,000 • Tunisia 5.4 DT • Uganda UGX 10,000 • UK £4.50 • United States US$ 6.95 • Zambia 48 ZMW • Zimbabwe US$ 4 • CFA Countries 3,500 F CFA • Euro Zone €5.90

IS VODAFONE BRACING ITSELF FOR EXPANSION? Vodafone Group’s transfer of 35% of its indirect shareholding in Safaricom to its sub-Saharan African subsidiary Vodacom Group […] increased its ownership in Vodacom from 65% to 70% [‘Vodacom’s eastern pivot’, TAR95 Nov 2017]. With this move, Vodafone Group has consolidated its operations in sub-Saharan Africa into a single entity, with Vodafone Ghana remaining its only standalone business. Is the move simply in line with structuring and simplifying management of the Group’s sub-Saharan African holdings? Or is this a first step towards

strategically positioning Vodacom as the entity through which it plans to explore possible acquisition opportunities across the continent? There may be interesting times ahead for the telecom industry.

trading. Currently subject to limited regulation and even fewer reporting requirements, companies engaged in physical commodity trading of oil, gas and minerals should be required to publicly report on their transactions with government entities. The good news is that in 2015, Swiss trading giant Trafigura broke ranks with its secretive peers, and published data on $4.3bn in payments to governments. Others, including Gunvor and Glencore, need to follow suit. Otherwise we will keep waiting for investigative journalists to break scandal after scandal. And we will keep tallying the lost billions, years too late for the citizens of Congo and other developing nations.

Elisa Peter, Executive Director, Publish What You Pay

DRAWING A NEW PERCEPTION OF BLACK

As a ‘black’ artist, it was important to join artists from around the world and add my voice to the Twitter hashtag #DrawingWhileBlack [‘Digital Devine Kofiloto, Arts: Uncaped Crusaders’, TAR95 Nov Freelance telecoms analyst 2017]. It actually makes the world know [Africa], where art was born, although as Africans we don’t get to make as much money out of it as our Western COMMODITY TRADING counterparts. It also helps to send SHROUDED IN OPACITY a message to the world showing what Your article on Gunvor in the Republic black artists are capable of. Now people of Congo [‘Gunvor, the Kremlin, oil will at least know that black people and corruption’, TAR95 Nov 2017] don’t only fight, but they can draw too. is a sharp reminder of the opacity that That’s positive enough for me. Nana Yaw Pencil, Artist, Ghana characterises international commodity

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ADVERTISERS’ INDEX MCB GROUP p 2; LIQUID TELECOM p 4-5; EMIRATES GROUP p 7; OCP p 9; AFRICA CEO FORUM 2018 p 11; CHANNELS TV p 37; ACCRA CITY HOTEL p 38; VODAFONE GHANA p 43; WAGPCO p 46-47; CNERGY GLOBAL HOLDINGS p 51; JONMOORE INTERNATIONAL p 53; GOLDEN EXOTICS p 55; N. DOWUONA & CO. CORP. SERV. p 55; AVNASH p. 57; TAR SUBSCRIPTION p 65, 69; BREVITY ANDERSON TRADE ADV. p 69; CNN p 91; MSC p 92 THE AFRICA REPORT

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To respond to this month’s Question, visit www.theafricareport.com. You can also find The Africa Report on Facebook and on Twitter @theafricareport. Comments, suggestions and queries can also be sent to: The Editor, The Africa Report, 57bis Rue d’Auteuil, Paris 75016, France or editorial@theafricareport.com

#dtmh (don’t touch my hair) became a rallying cry when Lupita Nyong’o and Solange Knowles called out the press for digitally altering their natural hair and braids. But are people reading too much into our hairstyles?

Has natural hair become too politicised?

Yes VICTORIA E. B. WOOD Student, Benjamin N. Cardozo Law School, US

We live in a culture where hair, black hair for that matter, has been unnecessarily overpoliticised and laden with social undertones and subtexts. A few years ago, Olympic gold medalist Gabby Douglas was the subject of online criticism because her hair was ‘in need of a perm’ during the competition. To even think that her hairstyle would be the subject of contention, when a young 16-year-old was competing globally at such a high level, was quite disappointing. Moreover, many people assume that a black woman who wears her hair naturally is rebelling against the system. While I do not dispute that this has been the case in the past, especially during the civil rights movement, I think that this is no longer true for most black women wearing their natural hair. Personally, my decision to go natural five years ago had nothing to do with a revolution or a desire to make any statement whatsoever, it was more a journey of self-discovery and self-love. Many women today are going natural simply because they are enjoying their natural hair and learning to embrace it. The worth of a woman is not determined by the texture of her hair. She should not be confined to the straitjacket of society’s dictates of what ‘good hair’ looks like.

No YEJIDE ORUNMILA President, African National Women’s Organi sation

It’s not too political; it’s popular. While popularity is not necessarily a bad thing, I believe the political connotations are lost behind the frivolity of achieving length or doing the perfect twist hairstyle. In the 1960s, African hairstyles became incredibly political as African people showed their pride and unity with the struggle for black power/decolonisation. We decolonised the way we looked; opting for afros, African-inspired braiding styles, African clothing and African names. We did all of this as a form of protest and reclamation. Today, for the most part, wearing natural hair is just a healthy styling choice and does not represent any political unity with the African freedom struggle. With that said, I do believe that the verve toward wearing African hair naturally is good. It shows that African women are becoming more comfortable with their natural curl pattern and are learning to prefer it more than chemical straightening. It is unfortunate, however, that a few become evangelists and shame other women who choose to straighten their hair or wear weaves. Obviously, this is counterproductive. What we should understand by now, is that how we choose to wear our hair is an extension of how we feel about ourselves. For some women, weaves and relaxers make them feel good and for others natural hair makes them feel good – and that’s okay. As for me, I prefer to wear my hair naturally as a form of decolonisation.

Not at all. If anything, more needs to be done to change perceptions of beauty and to address the stereotype that natural hair is burdensome and unattractive! @kapere No matter what black women and girls choose to do with our hair, it will always be political. In the decades since the American civil rights and Black Power movements, where black women and girls proudly began to embrace their natural, textured, tightly curled hair, we still face constant scrutiny and criticism for asserting our identities through our hair. Those who claim that black hair has become too political fail to recognise the constancy of the culture of white supremacy. Syreeta McFadden Black hair is scrutinised, no matter the style – unless it is ‘Europeanized’: fried, died, laid to the side or removed completely. Our hair [is] antennae to the cosmos. That connection’s severance is strongly encouraged with fades, ceasars, conks, wigs, extensions (of dubious origins), weaves, lacefronts glued on with chemicals, bleached and toxified. Michael Nicklette Wearing your hair natural is an affirmation of how God created you. Naomi Patricia Franklin

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The Akosombo dam, once Ghana’s only source of electricity, is still its largest

Power madness Ghana’s lights are back on, but the chaos is not over. President Akufo-Addo’s government must address a legacy of emergency power plant commissions and costly over-production if it is to embrace the opportunities for growth By Nana Yaa Mensah and Patrick Smith in Accra

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year into his presidency, Nana Akufo-Addo exudes optimism about the prospects of turning the country around. A day after marking 25 years of multiparty politics on Republic Day at Independence Square in central Accra, Akufo-Addo told The Africa Report: “We are on course. We’re delivering free secondary education as promised […]. We have in place a really strong economic team, and we’ve got the lights back on.”

40 COUNTRY FOCUS | GHANA

SCRAMBLE FOR JOBS

Fixing those economic structures, in effect reforming the colonial economy, was a central promise in Akufo-Addo’s election campaign. To be met, many of his pledges – on education, a factory in each district and a massive job creation programme – demand reliable electricity. Fixing that, at least in the short-term, has been a tangible achievement of the government’s first year. Yet questions linger over how durable the fix is. Have Ghanaians finally cracked a problem

that has haunted them for decades, or simply deferred the pain? In sub-Saharan Africa, Ghana remains second only to South Africa for power provision to the population: 80% of Ghanaians have access to electricity. But the longest-standing players – the Electricity Company of Ghana (ECG), the principal distributor, and Volta River Authority (VRA), the main generator – have failed to manage mountains of debt. The VRA alone was said by late 2016 to owe crude oil suppliers $170m, suppliers of Nigerian natural gas $180m, and GhanaNationalGasCompanymorethan $600m.Governmentdepartments,which routinely ignore their bills, owed more than $650m to the ECG and producers, and $500m to bulk oil distributors. The 2012-2015 energy crisis was not the country’s first. In 1997, after a prolonged drought, water levels in the Akosombo Dam fell perilously low. The then NDC government of Jerry Rawlings announced nationwide ‘load shedding’. For the first time since the 1950s, when colonial administrators commissioned diesel plants to light up the cities, the whole country plunged into darkness. In 1998, the country lacked 300MW of the 1,100MW it required. The biggest single consumer of electricity, the Volta

Aluminium Company (Valco) smelter in Tema, curtailed operations by 70%, freeing up 100MW. A second crisis in 2006 and 2007 under John Kufuor’s NPP government was described by the World Bank as ‘avoidable’. Again, Ghana was forced to shed 30% of its regular supply, now 1,500MW. Rainfall eased the strain but not in time to save the NPP, which lost the 2008 election to John Atta Mills’s NDC. Paradoxically, the 2006-2007 crisis coincided with the discovery of commercial quantities of oil, which soon came to be seen as the only potential plug for Ghana’s power deficit. The electricity sector failed to keep pace with demand as governments

Ghana’s electricity generation mix from 2006 to 2016 80%

Generation Mix (%)

Hydro

60%

Thermal

40% 20%

Renewable 0% 2006

2008

2010

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SOURCE: CENTRE FOR GLOBAL DEVELOPMENT

True, the economy is growing strongly again and the free secondary education policy is wildly popular, even if there are gripes about how it is being managed on the ground and questions about how to finance it (see page 54). Akufo-Addo concedes that his government’s task was more daunting than expected: “The sheer volume of meetings, social interventions that the president is expected to make across the board […]. That’s something of a shock […], even for someone like me, who has been a minister on the campaign trail.” For the previous seven hours, AkufoAddo had been locked in a meeting with the top leaders of the governing New Patriotic Party (NPP). They are determined to consolidate their hefty victory in the December 2016 elections. To do so, they have to keep morale high, they need resources, and, above all, they need a message that resonates. After a brief respite early last year, politics in Ghana has returned to its former partisan intensity. The opposition National Democratic Congress (NDC) is trying to regroup after its defeat, vowing to defend its former ministers from charges of grand corruption and throwing the same accusations at the new NPP government. In the first week of 2018, the immigration service advertised for 500 recruits to join its training scheme. Within hours, a queue hundreds of metres long had formed, with as many as 50,000 applicants waiting in the sun to submit forms to the recruiting centre at El Wak stadium. This dramatic rush for jobs quickly became the new year story on radio and television. It was a wake-up call to both politicians and business people of the relentless pressure posed on an economy whose structural reliance on commodity exports is out of kilter with rapid urbanisation and demand for higher living standards.

GHANA | COUNTRY FOCUS 41

Public Utilities Regulatory Commission (PURC) for failing to set boundaries for the sector. Despite a $3bn Chinese loan to develop the Atuabo gas plant in the Western Region, there was no sign of Ghana being able to leverage direct investment so that legacy plants could get needed maintenance and upgrades.

The high cost of keeping the lights on

The bright lights of Accra, no longer dimmed by the power outages known as dumsor

invested little in expanding provision beyond the 400MW Bui Dam, a project first mooted in the 1920s and revived in 2008. Yet the trigger for the 20122015 crisis was an accident. An anchor severed the West African Gas Pipeline, which carries Nigerian natural gas to Ghana, shutting down the privately owned Sunon Asogli plant in Greater Accra and wiping 200MW off the grid. It also left the VRA’s own Takoradi and Tema thermal plants hamstrung, forcing them to fall back on expensive crude oil to keep the turbines turning. Ghana was obliged to shed more than 600MW from a system then generating a dependable 1,800MW. Ordinary Ghanaians bore the full brunt of dumsor (‘off and on’). This time the effects were far more severe. Manufacturing shrank by 8% in the fourth quarter of 2014 as the lights went out. A 2013 World Bank report estimated ‘Ghana needs to invest over $4bn in the next 10 years to make up for the past investment deficit and upgrade its powersector infrastructure’ and called for the restructuring of state-owned interests. The report sharply criticised ECG, VRA and partner institutions, singling out the THE AFRICA REPORT

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NYANI QUARMYNE/PANOS-REA

MAHAMA’S MEASURES

Small businesses, from barber shops to beer bars, folded. A new middle class had come to expect reliable power; these people were unable to work without electricity to charge their phones and fire up their tools, and current fluctuations damaged valuable equipment. The government, by then led by the NDC’s John Mahama, scrambled to pass the 2015 Energy Sector Levy Act, raising taxes on fuel to address the power utilities’ debts. It also concluded several emergency power purchase agreements (PPAs), with a heavy emphasis on thermal plants. In the past 10 months, the Akufo-Addo government has announced ambitious plans for growth. Finance minister Ken Ofori-Atta has emphasised that he sees gas, rather than oil, as the main source of power for agriculture projects and other programmes. Indeed, many of the government’s other projects are linked to gas or wholly dependent on it: a petro chemicals hub in the Western Region, an integrated aluminium industry linking Kyebi and Awaso, and a liquefied natural gas (LNG) plant in Tema. Though power supply failed to match growth in the early 2010s, the emergency measures that Mahama introduced have bought Ghana breathing space – at a price. Agreements actioned by the last government added 1,400MW to supply, taking provision from under just 3,000MW in 2015 to the present glut of 4,400MW. Usual peak domestic demand hovers between 2,100MW and 2,200MW, which leaves a generous reserve of almost 50% to manage the grid. Another 1,000MW is expected to come on-stream in the next two years. Electricity remains expensive because of Ghana’s dependence on thermal plants for roughly 1,700MW, which are running at way below the optimum 80% capacity. The new political leaders are exploring ways of slowing the stream of contracts entered into by the past government. In June, energy minister Boakye Agyarko (see

THE AMERI PROJECT The ‘build, own, operate and transfer’ deal with a Dubai-based provider for a 250MW gas-fired plant at Takoradi was whisked through parliament in 2015 and cost $510m. Critics say it was overpriced by $150m. THE KARPOWER DEAL In 2015 ECG signed a 10-year power purchase agreement with Turkey’s Karpower for 450MW via a floating heavy fuel oil-powered station, convertible to gas. Ghana’s first ‘powership’, with a 235MW installed capacity, arrived in Tema harbour in November 2015, to be replaced by a second ship generating the full 450MW in August 2017. A junior minister reported that it costs Ghana $10m a month to service the payments. The energy think tank ACEP has said the Karpower deal is ‘even worse than Ameri’. Others chafe at the fact that at the end of its 10-year service the barge will sail away into the sunset. THE ‘T2’ DEAL Expansion of the existing Takoradi thermal power plant by the 90% Abu Dhabi-owned Takoradi International Company (TICO). The “T2” deal, including maintenance of the original plant, cost $440m and added 110MW to the existing 220MW. The turbine began supplying the grid in 2015. OYANDZE SOLAR PLANT Built by Chinese-owned BXC, Ghana’s largest solar plant added 20MW to the grid for $30m in 2016.

42 COUNTRY FOCUS | GHANA

box), announced that he had reviewed up to 30 PPAs; the government was seeking to avoid additional capacity charges of $700m that it would incur if all 30 projects were to come online. More problematically, the government announced in September that it had cancelled a contract with Quantum Energy to build a plant to process imports of LNG in favour of a supply and construction deal with Russia’s Gazprom. Although Energy Minister Agyarko claims this would produce savings of $1bn, the Gazprom deal outlined in the memorandum of understanding with the government doesn’t cover the estimated $300m-$400m cost of building a special jetty to offload the LNG. Subregional power-sharing continues, with sales of electricity to neighbouring Togo, Benin and Burkina Faso, as well as import/export power trading with Côte d’Ivoire. WEAK GOVERNANCE

Kweku Awotwi, the VRA’s board chairman, describes the authority’s stewardship of its hydro plants as still “world-class” but concedes: “For whatever reason, we’ve not been able to replicate that standard for thermal assets.” He attributes this to Ghana having launched thermal technology without investing sufficient care in acquiring the vital expertise, unlike with Akosombo. But he blames the power sector’s systemic problems largely on financial irresponsibility by producers and consumers alike, the high costs of gas, operational inefficiencies of up to 40% and weak governance. At a lecture late last year, he noted that the VRA had lost 574m on the 5,746GWh of electricity it supplied to the ECG in 2016. The bulk generation tariff set by the PURC is roughly 10 pesewas per unit lower than production cost. The regulator, argues Awotwi, has been far too inclined to bow to political pressures to keep energy prices low. Ghanaian consumers will have to adjust to realistic pricing, he says: “Up until 1997/98 when the VRA began to run thermal plants, it was a very solvent institution, making profits of up to $30m to $50m a year. We didn’t have to buy crude oil, so cash wasn’t a problem.” But the World Bank warns that government revenues from oil and gas are likely to peak in 2020 and tail away. The game may already be up for investing in the great white hope of thermal energy.

Boakye Agyarko Energy minister, Ghana

From can’t-do to can-do

nergy minister Boakye In late 2017, the financial Agyarko is scathing about community was highly critical of the past chaos in the electricity NPP government’s attempts to clear sector, but bullish about debts owed to state-owned the future. “As far back as 2009, companies in the energy sector. The the alarm was raised that the system former Bank of New York man offers would grind to a halt by 2020 a counterintuitive response to press if nothing was done to address claims that the 2017 bond offer shrinking capacity. Yet the NDC through an Energy Sector Levy Act government sat idle and did nothing.” (ESLA) special-purpose vehicle failed He continues: “There was no money to raise the target ¢6bn ($1.4bn) […]. The government hadn’t settled because it did not carry a government its insurance credits, so the power guarantee. “Although Ghana’s energy plants couldn’t run beyond narrow debt wasn’t the prettiest thing on operating hours. These restrictions the market, we had a sense of room meant that the plants couldn’t do for manoeuvre. We made allowance scheduled maintenance, which led for up to 20%, and the ¢4.86bn to repeated breakdowns.” He says we achieved at 19.5% was enough that created a negative spiral: to cover our immediate requirements.” “So began the wholesale rush to commission emergency plants. Agyarko recommends an It took them two years to draw up incrementalist approach for the ruinous plans to increase capacity. government’s goal of raising ¢10bn They made 40 power purchase to pay off those debts : “We’ve carved agreements, contracting the country the debt problem into segments, to buy in 11,000MW [...] when for each of which we will seek specific we needed 4,800MW.” funding and will come back to the He says the current government market, possibly at a lower rate,” has been making progress in the minister says. maximising utilisation of installed “The critics want plain vanilla,” capacity: “Through the NPP Agyarko continues. “The presence government’s efforts, we have of a sovereign guarantee for a managed to raise the available capacity from “We’ve carved the debt into under 1,900MW to segments, for each of which 2,620MW, using the we will seek specific funding” same equipment.” Agyarko, an economist with a quirky taste for bond is the surest indicator of debt bow ties, says the administration of the riskiest sort. ESLA is a has improved supply partly by parliament-backed debt, which “infusing the sector with a new guarantees flows. And its put-anddynamism. Independent suppliers call option agreements in fact of crude oil had given up on working allow for a higher rate of investment with the government. Yet these interest. The investors of yesteryear are the very groups that understand may see Africa as a basket case. every aspect of the problem we face.” The investors of tomorrow, on the He says: “We engaged with them. other hand, are prepared to back It brought about a total change the basket and understand that of psychology, from can’t-do to it is good business.” Interview by Nana Yaa Mensah can-do. Then we moved to return in Accra to the markets and restore trust.” THE AFRICA REPORT

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PEOPLE TO WATCH The business leaders who are ahead of the curve FREDA DUPLAN

NESTLÉ

Clouds with chocolate linings Nestlé’s managing director for Ghana, Liberia and Sierra Leone faces a comparatively smoother ride this year as a rebound in consumer confidence and economic growth in Ghana is set to raise demand. Appointed in April 2015 as the first Ghanaian to run Nestlé’s Ghanaian operations, Duplan has had the difficult task of guiding the company through Ghana’s turbulent economic times. Switzerland’s Nestlé will have to step up its marketing campaigns to convince consumers from switching to relatively cheaper substitutes that have recently flooded the Ghanaian market. On the positive side, the government’s focus on agriculture and industrialisation could also help to strengthen the company’s raw material base and to reduce its operational costs.

JOSEPH BOAHEN AIDOO Crafty cocoa chief The recent fall in the cocoa price has been a challenge for the Cocobod chief. He is looking to secure a deal with Côte d’Ivoire to see if the two countries can influence prices through strategic interventions. Aidoo has also made clear that he does not see smuggling from Côte d’Ivoire as much of a challenge, insisting that border controls will stop any influx into Ghana. He is also finalising a $750m loan to fund the board’s rehabilitation, mass spraying and artificial pollination.

KWABENA DUFFUOR II In 2017, Duffuor became chief executive of UniBank after four years as chief operating officer. Duffuor, son of a former finance minister, previously worked for Ghana International Bank and Standard Chartered. In 2015, UniBank was Ghana’s sixth-largest bank by assets. It is expected to attain a capital base of close to 1bn ($221.5m) before new minimum capital requirements take effect in December.

ERNEST ADDISON

Streamlining the banking sector Central bank governor Addison is keeping a watchful eye over the financial sector. In his first year, he has initiated an internal reorganisation of the bank, closing six out of 26 departments. Following the collapse of UT Bank and Capital Bank, Addison says he will issue a whistleblowing policy to encourage transparency and accountability. The two banks are to be integrated into Ghana Commercial Bank in the coming months, and analysts foresee further mergers.

Banking boss

PATRICK AKORLI

Fending off the smugglers

GhanaOilCompanymanagingdirector Patrick Akorli is looking to boost revenue while keeping expenditures low as dwindling margins and fuel smuggling threaten the company’s growth agenda. The measures are needed to keep the company’s revenue growth on the strong trajectory of 2015 and 2016. Information gleaned from 2017 quarterly results points to a slowdown. Smuggling is estimated to have slowed growth in the downstream petroleum subsector by about 10% and costs the country close to $100m per month. THE AFRICA REPORT

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GHANA | COUNTRY FOCUS 45

COMPANIES

Power is back on, but much more is needed Economic growth is now on an uptick, but reforms are needed to make the Ghanaian economy and its companies more dynamic

hana'sprivatesectorisbreathing easier. According to the World Bank, the economy is expected to grow 8.3% in 2018, owing largely to an improved energy outlook and increased production in oil and gas. The crippling power crisis of 20122015 that hamstrung business has significantly abated, with the government now ensuring a stable and reliable power supply. This has resulted in a 14% price cut in electricity tariffs for non-residential consumers as of January this year, a major boost to businesses. But that does not mean that Ghana has fixed its business environment, however: it dropped 12 places to reach 120th position – out of 190 – in the latest World Bank Doing Business report. And while headline figures are good, they mask a slide in the real economy. According to the consultants at PwC Ghana, non-oil sector growth decreased from 5% in 2016 to 4.8% in 2017, “largely due to the subdued private sector credit growth and a front-loaded fiscal consolidation that led to a significant cut in capital expenditure”. Reviving sectors such as agriculture and manufacturing will be crucial. Statebacked initiatives such as the one district, one factory programme (see page 56) and the Akufo-Addo Programme for Economic Transformation are currently facing tough economic realities. In October 2017, Ghana's communications regulator approved the merger of Airtel Ghana and Millicom Ghana (Tigo), resulting in an entity – AirtelTigo – that is now the country's second-largest mobile network operator. The government has also shortlisted three airlines to help relaunch a Ghanaian national carrier. Discoveries of lithium – a key component in batteries – in commercial quantities will also make it an interesting year for the mining sector. Oheneba Ama Nti Osei

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Top 20 Banks INSTITUTION

TOTAL ASSETS ($m)

NET BANKING INCOME ($m)

NET PROFIT ($m)

Ecobank Ghana

1 888 611

282 852

72 944

2016

Ghana Commercial Bank

1 423 931

251 066

70 768

2016

Unibank Ghana

1 346 261

92 106

9 338

2016

Barclays Bank of Ghana

1 239 752

167 599

67 747

2016

Standard Chartered Bank Ghana

1 025 207

107 884

49 945

2016

Fidelity Bank Ghana

978 334

108 112

3 273

2016

United Bank for Africa Ghana

881 459

31 672

2016

Cal Bank

848 297

86 070

2 271

2016

Zenith Bank Ghana

805 165

28 727

2016

Universal Merchant Bank

653 990

46 023

-4 548

2016

Access Bank Ghana

628 181

63 910

9 332

2016

National Investment Bank

586 989

57 070

26 441

2015

Société Générale Ghana

574 032

76 992

14 215

2016

Agricultural Development Bank

555 326

71 058

-18 806

2015

HFC Bank (Ghana)

444 806

47 257

-10 596

2016

Prudential Bank

397 276

38 849

2 380

2016

YEAR OF RESULTS

Guaranty Trust Bank Ghana

362 242

48 506

16 404

2016

First Atlantic Bank

338 497

38 584

3 531

2016

Bank of Africa - Ghana

268 278

26 340

5 376

2016

88 749

2 085

-424

2016

Energy Bank (Ghana) Top 20 Companies

NET TURNOVER PROFIT ($m) ($m)

YEAR OF RESULTS

COMPANY

ACTIVITY

MTN Ghana

ICT/Telecoms

Gold Fields - Tarkwa Mines

Mining

708 900 116 900

2016

SSNIT

Financial services

673 574 359 807

2015

Tullow Ghana

Oil & Gas

666 600

2016

Volta River Authority

Utilities

662 887 -340 594

2015

Ghana Oil Co.

Oil & Gas

620 118

7 455

2016

Produce Buying Co.

Agribusiness

443 348

-3 694

2016

Perseus Mining Ghana

Mining

348 018

-35 569

2016

Total Petroleum Ghana

Oil & Gas

273 360

5 401

2016

Chirano Gold Mine

Mining

258 500

2016

Golden Star Resources

Mining

221 290

-41 763

2016

Abosso Goldfields - Damang Mining

183 400

-4 500

2016

GRIDCo

Utilities

157 953

16 205

2016

Tigo Ghana

ICT/Telecoms

142 000

2016

GNPC

Oil & Gas

141 479

11 547

2015

Guinness Ghana Breweries

Agribusiness

132 748

-1 800

2016

Airtel Ghana

ICT/Telecoms

131 625

-60 108

2016

Unilever Ghana

Manufacturing

116 339

9 153

2016

Fan Milk

Agribusiness

90 576

15 501

2016

Enterprise Group

Financial services

87 700

15 940

2016

746 921

2016

WAPCo’s REGULATING AND METERING STATION, TAKORADI GHANA.

WAPCo repositioning

to meet changes in sub-regional energy markets

he West African Gas Pipeline Company Limited (WAPCo), owner and operator of the West African Gas Pipeline (WAGP) is repositioning its operations to respond to the changing energy market dynamics within the countries of its operations. WAGP was originally built to transport natural gas from Nigeria to Benin, Togo and Ghana. However, in recognition of the changes in the sub-regional energy market, WAPCo has begun undertaking a number of actions in order to fulfil the aspirations of its initiator; ECOWAS. That is, to provide a sub-regional infrastructure that will help promote sub-regional energy integration and development by transporting gas from areas where there was abundance to other areas of need. The first major step was to make WAGP an “open access” system to allow other shippers to use the pipeline to transport gas to any of the three WAGP states. The original arrangement was for WAGP to have a single shipper for at least a decade. This changed on July 1st 2012, when WAGP was declared open to other shippers. This means that any suitably qualified entity can apply to become a “shipper” on the system with a view to entering into gas transportation contracts. Charges for using the system (“tariffs”) must be agreed by WAPCo and its regulator and approved by the WAGP

states. WAPCo has recently admitted two new shippers on the WAGP and is working with them to develop new agreements for gas transportation.

National Petroleum Corporation and the Ghana National Gas Company to establish an interconnection at Takoradi (Aboadze) with WAGP.

WAGP’s very unique position of being a gas transmission system to help promote economic development in the sub-region requires flexibility and adaptability to developments within the energy sector of the participating countries. These developments since WAPCo began commercial operations in March 2011 include continued rapid growth in demand for power, the discovery of oil and gas in Ghana and the emergence of independent production companies in Nigeria. These changes have created new opportunities for increase in gas supply and WAPCo is working assiduously to meet market requirements in an efficient and cost effective way.

The TTIP Engineering works has reached an advanced stage and is expected to be delivered in the third quarter of 2018. This project when completed will achieve the following:

WAPCo recently completed an upgrade of its Tema Regulating and Metering station from an initial capacity of 70MMSCFD to 140MMSCFD to meet the emerging demands of its current and prospective customers. The Takoradi-Tema Interconnection Project (TTIP) Also, WAPCo, under the Takoradi-Tema Interconnection Project (TTIP) is collaborating with the Government of Ghana and key energy stakeholders including Eni, Ghana

● Upgrade WAPCo’s Takoradi Regulating & Metering station from 128mmscfd to 225mmscfd and that of its Tema Station from 140mmscfd to 345mmscfd. ● Enable the WAGP to be used for the reverse flow of natural gas from Takoradi to Tema, thereby supporting Ghana’s gas supply flexibility to evacuate gas from the western fields in Takoradi to the Eastern part of the country (Tema) while at the same time continue to supply gas from Nigeria.

WAPCo is committed to ensuring a secure infrastructure that is responsive to the changing energy needs of Ghana, Togo, Benin and Nigeria. As a testimony to this commitment WAPCo has reliably operated its pipeline network over the past years without any lost time and managed its assets integrity in line with world class operational excellence management system to achieve this enviable availability record.

WAPCo is committed to transporting gas from sources where there is abundance to other areas of need. ADVERTORIAL

WAPCo’s REGULATING AND METERING STATION, TEMA, GHANA.

Brief history of WAGP

WAPCo profile

1982

Economic Community of West African States (ECOWAS) proposes a Natural Gas Pipeline across West Africa as a key Regional Economic Goal

1992

World Bank Study confirms viability of a Natural Gas Pipeline based on ample reserves of Nigerian Natural Gas, and Regional Energy Needs

■ The West African Gas Pipeline Company Limited (WAPCo) is a limited liability company that owns and operates the West African Gas Pipeline (WAGP).

2000

Leaders of Benin, Ghana, Nigeria and Togo sign Agreement for the Development of the West African Gas Pipeline (WAGP) based on Private Investment and Commercial Principles The four Nations sign Intergovernmental Agreement for Harmonized Fiscal and Regulatory Regime for the Development, Construction and Operation of the Pipeline

August 2002

Preliminary Commercial Structure established, including Volta River Authority’s Takoradi Power Plant as foundation customer

January 2003

Benin, Ghana, Nigeria and Togo sign West African Gas Pipeline (WAGP) Treaty

May 2003

Formation of WAPCo to build, own and operate WAGP

May 2003

Signing of International Project Agreement (IPA) by WAPCo and the Governments of Benin, Ghana, Nigeria and Togo with ECOWAS Secretariat as Witness

October 2004

Ratification of WAGP Treaty by the 4 Project countries

April 2008

Commissioning of onshore and offshore pipeline begins with the opening of valves at Itoki inlet

December 2008

First natural gas supply through WAGP arrives in Takoradi, Ghana

April 2009

Ghana’s Volta River Authority generates electricity with natural gas from WAGP

August 2010

Volta River Authority receives gas atTema Regulating &Metering Station the first time

December 2010

WAPCo starts full commissioning of WAGP system

January 2011

First natural gas delivered through WAGP to Togo

February 2011

Compressed gas transported on WAGP for the first time

March 2011

Commercial operations declared

July 1, 2012

Pipeline open to all shippers

■ WAPCo is a joint venture between public and private sector companies from Nigeria, Benin, Togo and Ghana. ■ The company’s main mandate is to transport natural gas from Nigeria to customers in Benin, Togo and Ghana in a safe, responsible and reliable manner, at prices competitive with other fuel alternatives. ■ WAPCo is owned by Chevron West African Gas Pipeline Ltd (36.9%); Nigerian National Petroleum Corporation (24.9%); Shell Overseas Holdings Limited (17.9%); and Takoradi Power Company Limited (16.3%), Societe Togolaise de Gaz (2%) and Societe BenGaz S.A. (2%). ■ The West African Gas Pipeline Authority based in Abuja is the regulatory body for WAGP.

FOR FURTHER INFORMATION CONTACT

The General Manager Corporate Affairs West African Gas Pipeline Company Codemm House Nii Nortei Nyanchi Street, West Airport P.O. Box OS 458, Accra, Ghana Tel. +233 302 740 190 Fax. +233 302 768 905 / 780 503 E-mail: info@wagpco.com

1995

■ The company has its headquarters in Accra, Ghana, with an office in Badagry, Nigeria, and field offices in Cotonou - Benin, Lome - Togo, Tema and Takoradi, both in Ghana.

48 COUNTRY FOCUS | GHANA

Ken Ofori-Atta Finance minister, Ghana

We met a situation which was quite dire At the centre of President Akufo-Addo’s plan to modernise the economy and launch universal free secondary education is his team at the Treasury. Leading the charge is finance minister Ken Ofori-Atta, who talks through the strategy with The Africa Report

or a man assigned the daunting task of turning Ghana’s economy around from its lowest growth and highest debt levels in 25 years, finance minister Ken Ofori-Atta is remarkably composed. Holding court in his shiny new office – renovated at his personal expense, he quickly points out – Ofori-Atta argues the new government has been able to pull the economy back from the brink over the past year. Few dispute there has been substantive progress. By the end of the new government’s first year, growth had tripled, helped by higher oil production and better prices, and the debt burden had been eased and elongated. Yet the government has still found the money to launch universal free secondary education: that is, no fees, and free books, uniforms and food. Quietly spoken and fond of understatement – but given to frequent biblical allusions – OforiAtta is a no-drama minister. So when he compared raising a $2.25bn bond on the international markets in early 2017 to walking

on water, it was surprising and unsurprising at the same time. Opposition politicians immediately attacked the bond as a bad deal put together by Ofori-Atta’s banking associates in New York. In December 2017, the Commission for Human Rights and Administrative Justice released a 141-page report on the bond issue, finding no evidence of collusion or insider dealing. However, it found some of the rules for bond issuances had been breached. It also called for parliamentary scrutiny over such transactions. Questions remain about how such debt-sale proceeds can be used to support diversification of the economy and how that usage is monitored. By stretching out the repayments on domestic debt, the bond will give the finance ministry more flexibility on the budget. But with local companies reluctant to invest in production when they are paying more than 30% on loans, the next challenge for Ofori-Atta’s team will be developing the financing strategies to support AkufoAddo’s pledge of a new factory in each of Ghana’s 216 districts.

THE FRONTIER FINANCIER 1959 Born in Kibi, in the Eastern Region 1984 BA in Economics from Columbia University, US 1988 BMA from Yale School of Management 1990 Co-founded Databank, which became the pace-setting private sector bank in Ghana May 2017 Becomes Ghana’s finance minister

TAR: What was the state of the economy when you took over last year, and how did that affect your strategy? KENOFORIATTA:Wewereswept into government. In a sense, it was way beyond our [election] promises […], just a deep, organic tiredness of the Ghanaian people, frustration at the directionless way things were going on all levels […]: the running of the economy, the social interventions and the corruption. Growth was the lowest for two decades, our fiscal deficit was 9.4%, inflation 15.4%, a negative primary balance, public debts at 73.1% of GDP, reserves were low, the exchange rate had gone down by more than 10%. You’re on an International Monetary Fund (IMF) programme, but there are mixed signals from the government about that. Why? We had the IMF like a trusted adviser and partner to work with. Once I saw the numbers, it struck me as odd that we needed the IMF to move forward. Because it was clear to me that all the things they were doing, any responsible government should be doing them. Of

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course, deep down within us is the issue of sovereign independence […], that one should be able to do things without some other institution. Some people wanted us out [of the IMF programme] immediately and we said, well, let’s see what happens this year. Come December 2018, we should be out and we are on road to that. Is your strategy working? We have done reasonably well with growth. We moved from 3.7% to 6.6% in the first quarter, 9.3% in the second quarter, 9% in the third quarter – an average of 8.3% for the year. We had a boost from oil [exports]. Beyond that, it’s a gradual climb of real growth. So we’re beginning to see the impact of what we are doing. Get our macroeconomy stabilised, get back to agricultureandthenuseagriculture as a means for the industrialisation that the President has envisioned. You have some big new spending commitments, such as free secondary education. The key is priorities […] understanding what we have to do and then tackling the issue of value for money. For example, the auditor THE AFRICA REPORT

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general went through the arrears. Out of 11bn ($2.4bn), he was able to certify only 5.6bn […]. So we are beginning to see a lot more care for the public purse. After the cuts, how are you boosting revenue? We have a different sense of how to tackle revenue. The IMF’s immediatereactionwastoincrease the [tax] rate. We have a formal sector working force of about five million people, but individuals paying taxes are 1.3 million people. Thecountry’staxrevenuetoGDPis about 16%; comparable countries are doing about 20–25%.

“All the things [the IMF] were doing, any responsible government should be doing” Akufo-Addo talks about Ghana moving beyond aid. How does that shape your strategy? Everybody now knows the marching orders. He’s asking me to diversify the economy, to examine how Ghana can be the regional hub, a financial services centre. There is a huge gap between my savings capacity and

F E B R UA R Y 2 018

the investments I need […]. So, if I’m able to strengthen the financial services sector – capital markets, venture capital, the banking system, insurance – then I’m providing the capital to support agriculture and industrialisation. You have been talking about cutting the cost of government. How does that work when you have 110 ministers? I have three deputy ministers. And with the type of work that we are doing, I’m happy that I have threeofthem.Thearithmeticreally is not that daunting because 75% of these guys are already in the legislature, and so it was really a marginal top-up of resources. You’re saying you can have more ministers but still spend less on administration? As a country, we are very inefficient. In the ministry of finance, there is no way I cannot find three offices for three deputies. So the civil service is 650,000 or something? The wage bill is still something that we need to tackle. It is not about the level of salaries because salaries are not that high. It is not about staff layoffs because

50 COUNTRY FOCUS | GHANA

you have a lot of unemployment. So it really comes to deploying people to work more efficiently. The opposition has strongly criticised your sale of $2.25bn of bonds on the international markets. What’s your response? We met a situation which was quite dire with regard to the interest we were paying. We needed somehow to elongate the maturities on our domestic debt. We were able to have $2.25bn raised, which created a certain stability. I think the opposition was shocked that we were able to attain the credibility to do that. So they filed something with the Commission for Human Rights and Administrative Justice (CHRAJ) about conflict of interest. The CHRAJ report in a sense dismissed those critical issues of conflict of interest or corruption or insider trading. The report found no conflict of interest,butwascriticalofprocess. It was. I read the report and was asking myself whether CHRAJ had gone beyond the mandate and even its competence. But the fundamental issue is that the ministry’s integrity has not been impugned. But now if we want to look at the way in which we issue bonds, that’s a different exercise. As a banker, you would argue that there is no problem with your having done business with some of the fund managers that the government is using? That question is a universal issue. Look at the number of US treasury secretaries coming from Goldman Sachs. We are becoming a country in which you are having citizens who have worked in these areas and you are deploying them in relevant ministries. Anybody can say: ‘You knew him or you knew her.’ There is a reason why I’m here. I know these people […] therefore the magicofwithintwotothreemonthsof being able to attract $2.25bn is about 20 years of relationships. And that’s what Africa is going to have to do to bring in these trillions of dollars that wehavetalkedabout.Ifthat’sgoingto be dismissed as insider trading, then we have some problems.

Interview by Patrick Smith in Accra

Yofi Grant

Chief executive, Ghana Investment Promotion Centre

1D1F has won some interest

rom his headquarters in central There are plenty of obstacles Accra next to the key to his goal of making Ghana the most ministries, Yofi Grant runs the attractive and competitive destination Ghana Investment Promotion in Africa. Last year, Ghana fell 12 Centre (GIPC). As the body’s economic places to 120th out of 190 countries ambassador-in-chief his role is to in the World Bank’s Doing Business back the government’s modernisation rankings. Undaunted, Grant says that strategy. Having brought in some many of the new government’s reforms $5.6bn in new investments – $4.4bn were registered after the assessments from overseas – in construction, ended and that they will push the logistics, timber, mining and country sharply up the table this year. information technology (IT) in the first nine months of 2017, Grant can claim Like many top officials in some early success. Much more is Akufo-Addo’s government, Grant in prospect as he sets out a grand plan has a strong business background. for three new rail projects costed A co-founder of real estate company at around $9bn, linking mines and Coldwell Banker Ghana and investment factories in the east and west with the advisory firm Praxis Fortune Calibre, coast, as well as a new central railway he also chaired Ghana Telecom up to the border with Burkina Faso. and advocated its privatisation. With finance minister Ken Ofori-Atta His responsibilities at the GIPC about to embark on an Asian tour straddle a seat on the foreign ministry’s to talk to investors and pave the way advisory board and working with for President Nana Akufo-Addo’s state vice-president Bawumia on economic visit to China in April, Grant sees a coordination: “The economic sustained uptick of investment coming management team is run from from that region. “On our trip to China last “By the third quarter, we saw year with the vicea lot of the foreign investment president Mahamudu skewed toward manufacturing” Bawumia, we signed memorandums of understanding to the tune of $19bn,” the vice-president’s office and takes a Grant tells The Africa Report. broader look at the macro, the business “Last year we targeted strategic sector and the investment climate.” areas of energy, infrastructure, Grant reports directly to Akufo-Addo, agriculture and agro-processing, both as an adviser on business and tourism and IT,” says Grant. to flag policy issues raised by investors. “But interestingly, by the third quarter The bigger question is how the we saw a lot of the foreign investments headlong rush for investors meshes skewed in favour of manufacturing […]. with the government’s strategy to Our one district, one factory policy create a modern economy, joining seems to have won some interest.” the agricultural centres in the north Most of the proposals for new with a wave of new processing centres. factories were coming from India Part of the answer may lie in the and China, and many were looking research into long-term policy needs for partnerships with local firms done by the National Development in the hope that would help them Planning Commission. One point navigate the markets as well as of agreement is that there will be the local bureaucracy. Untangling no let up in the demand for productive that bureaucracy is one of Grant’s investment in the foreseeable future. Interview by P.S. in Accra most important tasks. THE AFRICA REPORT

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GOVERNANCE

‘Winner-takes-all’ politics blocks development Critics want to come up with solutions to the cycle of electioneering and unkept promises that the era of multiparty politics has created

SOURCE: GOVT OF GHANA

$7.4bn

CHRISTIAN SCIENCE MONITOR/GETTY IMAGES

s Ghanaians gathered to celebrate 25 years of multiparty politics on Republic Day, and to hear a succession of upbeat speeches about the country’s prospects, there were some cautionary voices. As Emmanuel Gyimah-Boadi’s Ghana Center for Democratic Development (CDD) put it: “Public corruption remains pervasive; progress of the constitutionally mandated political, administrative and fiscal decentralisationhasstalled;theeconomy remains characterised by jobless growth; income and spatial inequality are on the rise in spite of poverty reduction.” But it was the CDD’s last barb against politicians that hit the hardest: “The nation’s two main political parties, which have alternated in power in the Fourth Republic, have taken on the features of rival cults whose primary purpose seemingly is to win elections, achieve of Martin Amidu, attorney general un‘state capture’ and practise ‘winnerder the former National Democratic takes-all’ politics.” This raises critical issues for Ghana’s Congress (NDC) government until he fell political economy a year after the New out with it, as the first special prosecutor Patriotic Party (NPP) won power with was politically savvy. Amidu relentlessly pursued businessman Alfred Agbesi an ambitious programme to modernise and industrialise the economy. Those Woyome, who was accused of contracteconomic policy ideas will require ing favourable financial deals with both the main political parties. sweeping political change. At the heart of President Amidu will have to move quickly to convince the Nana Akufo-Addo’s plan to sceptics. There is a raft of move Ghana “beyond aid” is the implication that govmuch-criticised energy ernment would be much deals (see page 41) that the more accountable to tax government said it would renegotiate. But few details payers. Akufo-Addo has have emerged about the fired some warning shots new terms and whether in that direction with his calls for greater scrutiny any former officials are to External reserves by the legislature. “Our be prosecuted. available to Ghana as parliament should be able of 24 November 2017 to exercise full authority COOPERATION over our public finances,” he said in Civic activists also want to see a tougher regime governing disclosure of assets June. “It will be necessary to amend by public office-holders, as well as the the constitution. If this were done, it would enhance significantlyparliament’s passing of the Right to Information Bill, oversight capacity.” which has been held up in parliament At the start of the year, Akufo-Addo for 17 years. signed into law a bill to establish a speTo restructure the economy, argues cial prosecutor’s office, which is meant formerfinanceminister Kwesi Botchwey, there would need to be far greater coto have the authority to pursue cases of operation on medium-term policies. corruption. Akufo-Addo’s appointment

Does multiparty democracy get Ghana any closer to the Republic’s founding ideals?

Governments from both parties get locked into the electoral cycle, allowing spending to spin out of control in the run-up to voting, he tells The Africa Report. Incoming governments are often so preoccupied with fixing immediate fiscal crises that they have little time to implement longer-term strategies. “ Mayb e I’ m ideal istic,” says Botchwey, “but it should be possible to get some kind of all-party consensus on fundamental economic issues, fiscal stability laws and so on.” After piloting Ghana through a succession of structural adjustment programmes in the 1980s and 1990s, Botchwey was then appointed chairman of the National Development Planning Commission, which recently produced a 40-year road map for economic change. A senior official in the NDC, Botchwey has stepped down from the commission but hopes there will be a constructive dialogue with the NPP’s policy team on the plan. But the currently intensely partisan climate – with regular Twitter fights – does not favour reasoned discussion, according to Botchwey. Patrick Smith in Accra

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JONMOORE’S YEAR 2017 IN RETROSPECT

Jonmoore International Limited (JMI) is an indigenous Ghanaian Company established in 1998 and specializing in Transport and Project Logistics. 1. Transporting of knocked down Liebherr 9250 excavator. 2. Transporting a complete Liebherr 9250 excavator (275T) with our modular trailer and MAN 8 x 4 600 HP tractor. 3. 400 T Crawler Crane on a barge offshore. 4. 5. Transport of 3 x 8 meter diameter ball mills from Ghana to Guinea.

offers a wide range of services meeting International Standards and always exceeds the expectations of our Clients in the Mining, Construction, Energy, Food Processing as well as the Oil and Gas Sectors within Ghana and the West African Sub-Region. JMI’s services include:

• Transport and Logistics • Expert Project Handling • Cranes and Heavy Lift • International Freight Forwarding • Customs Clearance • Warehousing and Storage

JMI is an asset owned company and all Trucks, Trailers, Cranes, Forklifts, Telehandlers; Cherry Pickers are owned and operated by us. JMI also has its own Customs House Agents License which ensures that all import, export and transit customs clearance are done by our in-house team. Through our Global network of Freight Forwarders, we are able to co-ordinate sea and air freight shipments from various locations all over the world. JMI provides advice and guidance in all aspects of international freight forwarding by incorporating clients’ preferences as an integral part of our service. On 5th January 2017, JMI was contracted by African Mining Services Ghana ADVERTORIAL

(AMS) to transport a Liebherr 9250 excavator with a pay load of approximately 275 metric tons over a distance of 15 kilometer within the Iduapriem Mine in Tarkwa, Ghana. This transport was carried out using a 14 axle- line Scheuerle Kamag - K25 H modular trailer and a MAN 8 x 4 600 HP tractor unit out of JMI’s owned fleet. (2) This was the first time a Liebherr 9250 excavator had been transported in one whole piece. AMS commended JMI stating “It was time saving and a very Safe operation. Takes away all the risks associated with dismantling and assembling.”

over-dimensional cargo with a diameter of 8 meters and delivered safely with no incidents on September 22nd 2017.

JMI is currently supplying cranes on a Power Generation project in Kpone, Greater Accra Region (Ghana). This project is a 350MW-combined cycle Gas Turbine with multiple fuels.

In November 2016, JMI was also awarded the Oil and Gas Service Company of the Year (Lifting) at the Ghana Oil and Gas Awards.

! I n J u n e 20 17, J M I wa s awa rd e d t h e Pro j e c t / Heavylift Forwarder of the year at the maiden Ghana Shippers Award.

JMI over a period supplied 400T Crawler (the biggest crawler crane in Ghana), 160T mobile crane, 100Ton crane and a 50T crane. The supply of equipment was very essential for the on-time completion of this project. JMI is also offering forklift rental services to a Client in the Oil and Gas Sector which include 16 ton, 7ton, 3ton forklifts, 3ton teletruck and warehouse forklifts. In August 2017, JMI customs cleared and transported 3 ball mills from the Takoradi Port of Ghana to Siguiri Mines, Guinea (4-5). This was an exceptional

No. 1 A publishing road P.O. Box co 614 - Tema, Ghana Tel: + 233 (0) 20 139 6339 / 20 226 7919 Email: solutions@jonmoore.com.gh Website: www.jonmoore.com.gh Facebook: www.facebook.com/ jonmooreinternationallimited Linkedin address: www.linkedin.com/ in/jonmoore-international-limited-608405125

DIFCOM/DF- PHOTOS:DR.

JMI

54 COUNTRY FOCUS | GHANA

Ko obina Ankomah-Graham Writer, academic and culturist, Ghana W

When education yearns to be free

ooking back at the 2017 election, it is hard to tell if the New Patriotic Party’s (NPP) victory was a vote of no-confidence in the National Democratic Congress or an endorsement of the NPP’s populist ‘free senior high school (SHS)’ campaign. Introduced in its 2012 manifesto, free SHS failed to swing that year’s election. In now-president Akufo-Addo’s own words, it was considered “a vote-buying gimmick”. His opponents had thrown their weight behind the free and compulsory universal basic education (FCUBE) programme. The government introduced FCUBE in 1995 with the promise of providing universal access to primary and junior high school within a decade. By 2012, however, UNESCO estimated that only half of Ghanaian women and a third of Ghanainian men between the ages of 15 to 29 years who had completed six years of basic education could read a single sentence. In 1987, I was in my penultimate year ofprimaryschool.Myparentswerealready wary of the impending pivot from the British ordinary and advanced (O and A) level system towards a new secondary school system. The government had good intentions: replace an old system designed to create civil servants good at obeying (colonial) commands with a more affordable one which would teach students to do and make things useful to Ghana’s new economy. It was only after the first students graduated that we saw the extent to which the new system failed them. Complaints were so widespread that it prompted calls for extending secondary education from six years to seven. Tellingly, many officials responsible for these decisions sent their children to expensive private schools to sit O and A levels. ‘Quality versus quantity’ is the problem that free SHS cannot shake: what good is universal free education if the quality is questionable? Like many lecturers, I am disheartened by how much miseducation my colleagues and I unravel among students we receive from public schools.

Finance has always been a part of the problem. The government says that free SHS will be funded from the proceeds of Ghana’s natural resources. One think tank estimates the cost of the new system at $600m per year. But could government ensure quality free universal education if it rethought the funding of boarding schools? Most of Ghana’s schools offer day and boarding options, both funded by government. In his speech launching free SHS, President Akufo-Addo praised several countries for leading the way with free education. None of these far wealthier countries rely primarily on boarding schools: they create national policy around day schools, leaving boarding to those who can afford it. This forces parents to actually raise their children, instead of dumping them on underpaid, overworked teachers at schools struggling to fit five times the number of students into the same halls that their parents once comfortably occupied. It cannot come as a surprise that our boarding schools become petri dishes, not just for many types of group-think that hold Ghana back, but apparently for a recent outbreak of swine flu. Writer Ama Ata Aidoo tried to get Jerry John Rawlings’s administration to rethink the boarding issue during her brief stint as education minister from 1982-1983, but sentiment clouded the issue. Ghanaians are deeply attached to boarding schools: where the rest of the world uses the term alma mater to describe the universities they attended, we use it to describe our schools. Akufo-Addo linked free SHS to national development, but – as the activist Kinna Likimani pointed out – Ghana’s coat of arms bears the motto: ‘freedom and justice’. Beyond development – and wherever its funding comes from – the success or failure of free SHS will be measured by just how much freedom it gives Ghanaians. THE AFRICA REPORT

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Golden Exotics Limited,

Leader of the production of bananas in Ghana.

● ●

●

65,000 t. of conventional bananas (2017) Developing organic bananas (320 ha, end of 2017) 12,000 t. capacity 2,400 jobs.

Full commitment for the respect of Ghanaian and International social and environmental regulations with constant dedication to HR and responsible farming practices (GlobalGap® certification).

Marketing the fruits all over Europe thanks to the Ghana-EU Interim Economic Partnership Agreement.

Regular shipping route to Europe with two weekly calls at Tema Port for the best shelf-life and quality of the fruits.

Subsidiary company of

56 COUNTRY FOCUS | GHANA

JANE HAHN/PANOS-REA

Pineapples grown for export will now be processed into juice for the domestic market

wehaveonefactorythatistakingbetween one to one and half years to establish, then you can imagine how many years it will take to establish 216 factories.” The 1D1F programme was a key plank of Nana Akufo-Addo and his New Patriotic Party’s 2016 election campaign. They argue it is Ghana’s best bet to reverse the fortunes of the industrial sector. Growth in industry was just 0.3% in 2015 and 1.4% in 2016. TAX BREAKS

Since January 2017, when the new government was inaugurated, more than 400 investors have applied to the trade AGRICULTURE and industry ministry to set up factories under the 1D1F policy, according to the secretariat. 1D1F promises tax holidays and other incentives for private investors, as the government is counting on private firms to set up the factories rather than getting involved directly itself. The government’s 1D1F project promises a factory Critics complain that many local investors lack the funds to get involved in each of Ghana’s 216 districts, but it depends on in the sort of projects that 1D1F calls enticing investors, and will take time, money and effort for. However, the Association of Ghana Industries (AGI) is finalising a financing The Ekumfi factory, which needs an arrangement with the China National newand much-hyped pineapple initial investment of $7.7m, is expected Building Material Company to provide farm and plant at Ekumfi in the low-cost funds to members interested in Central Region will help to show to process about 80tn of pineapple each if the government’s ‘one district, one day. Ghana Export and Import Bank is investing. Seth Twum-Akwaboah, AGI’s factory’ (1D1F) plan can revolutionise chief executive, says a memorandum of providing the initial finance, but, despite the excitement about the launch of the understanding has been signed, paving Ghana’s agro-processing industry and for the way for members to access $2bn project in August 2017, there hasnot been manufacturing base. The country now much to see on the ground. in loans. He says: “This spends about $2.2bn each year on imis project money and it porting food, especially rice and wheat, Construction of the plant so building new processing plants is has started, but outgrowers is possible that we will key to saving money and creating jobs. who have been commisexhaust it within a short sioned to feed the factory However, the time needed to launch the time or not be able to Ekumfi project demonstrates that 1D1F areyettocommencecultivautilise all. It all depends will not be a quick fix for the develoption, as soil testing and other on the capacity.” ment of Ghana’s 216 districts. studies are ongoing. Sam, Although the 1D1F who insists the project is on Kow Sam, a consultant on the 1D1F policy targets all sectors schedule, says the first test programme, complains about the lack of the economy, it seeks run is expected in October, of development in Ghana’s agribusiness to first strengthen areas The 1D1F programme sector: “This is very, very, very shamewithcommercialproduction where the country has a is expected to create ful for a country that has 12 months of due to start in December. competitive advantage. between 7,000 and Agro-processing is one of Withpreviousexperiences sunlight and over nine months of rain.” 15,000 jobs in each of Ghana’s 216 districts in mind, many critics are those subsectors. And in He stresses that, as the maiden project by the end of 2020. sceptical about the potenJanuary, the government of 1D1F, the Ekumfi plant is vital to the announced that three successofthepolicy:“AcountrylikeCosta tial of the 1D1F initiative. other agribusinesses were in their early Rica has taken over [in juice production], Mahama Iddrisu of EEAR Private Equity but we are all in the same zone. So, the Management says the challenges with stages through the 1D1F programme. the pioneer factory feed the perception They include cassava farms and proquestion is: why don’t we churn Ekumfi pineapple out, churn out other fruits and that the policy is a pipe dream. He says: cessing plants in Brong Ahafo Region, food industries to be able to have that “These things should have been done Eastern Region and Volta Region. Maxwell Adombila in Accra import substitution and be competitive?” within the shortest possible time. But if

Factory scheme will bear fruit in the end, say officials

SOURCE: GOVERNMENT OF GHANA

7,000

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AVELINOKENPHOTOGRAPHY

Chef's table

Vusumuzi Ndlovu’s determination to “kick ass” takes the 28-year-old chef to Italy in June, representing the continent at the San Pellegrino Young Chef Awards

ne of the earliest memories for me and all those that I grew up with is my cousin’s butternut soup. The whole family would get together and feast on an impressive spread. I remember being in the kitchen helping with scones and just watching the soup being made. What blew my mind is how such a simple act made everyone at the table feel. Growing up, my aunts and cousins made yummy food and everyone loved it. They would be the most popular people at the family gatherings; everyone knew that if you got on their bad side you would be getting a small portion or nothing at all. After I matriculated in 2009 there was an idea to study engineering but I wasn’t too keen for it. So I just applied for a bunch of jobs, the Sheraton Hotel in Pretoria called and I thought I’d give it a bash. Since then I’ve worked at Greenhouse at The CellarsHohenort (Cape Town), Five Hundred (Johannesburg), In De Wulf (Belgium), and now at The Pot Luck Club pop-up at The Marabi Club in Johannesburg. When I first started working, it was far from love at first bite. In a nutshell, it was a “deer in the headlights” kind of feeling. Everyone was speaking in code and

shouting at me to go faster. I remember ending my first shift and just watching chef videos on YouTube. I was determined to kick ass the next day. Right now, my routine varies. On a normal day, we come in, greet the guys, and tackle the most time-consuming jobs and the technical stuff: making sure the guys are on track, calling a supplier who promised to send something but didn’t, and so on. There’ll also be a meeting about something so I sit in on that. Then as the day winds down we make it a point to have our guys sit down for a bit. In our kitchen the senior guys will be in trenches so I’ll push on with service then end the day with a gin and tonic. People would be surprised by the intensity that goes into preparing something seemingly simple. The trial and error we go through before a dish is put on the menu is also crazy. But the emotions you can evoke with food always excite me. Also, the people you get to meet are surreal; you make friends for life in this world. I always pay respects to Peter Tempelhoff, David Higgs, Kobe Desramaults, and Luke Dale-Roberts. The things I’ve learnt from these great chefs vary but these are lessons I’d never trade for anything. So I make it a point to thank them. Anyone who knows me can confirm that I hate waking up in the morning, that’s a major personal challenge. But the ability to continue to evolve is something I welcome. We can go on about knife skills and the like, but I think your mentality and attitude need to be on point to do well. Everything else follows after that. Interview by Eugene Yiga THE AFRICA REPORT

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