News Guide Africa

Category: Economy and Finance

  • Cedi to stabilise as gov’t rebuild reserves with $2bn

    Cedi to stabilise as gov’t rebuild reserves with $2bn

    Adnan Adams Mohammed

    In spate of escalating exchange rate between the local currency (Cedi) and other major foreign trading currencies, especially the U.S dollar, government plans to build up the international reserves with US$2.0 billion.

    This, among other major economic recovery measures deliberated on and adopted during the crunch cabinet over the weekend at Peduase Presidential lodge, as hinted by government officials present at the meeting are expected to heal and restore credibility and confidence in the economy.

    The reliefs include tackling the rising fuel prices occasioned by the global economic turmoil from the ongoing Russia-Ukraine conflict, and measures to address the persistent rise in prices of goods and services.

    The meeting chaired by President Akufo-Addo tasked the Minister of Agriculture, Dr. Owusu Afriyie Akoto, roll out measures to arrest the rising inflation from food prices.

    Also, the Energy Minister, Dr. Matthew Opoku Prempeh and Minister of Finance, Ken Ofori-Atta, have been urged to put up measures to mitigate the rising cost of fuel and its attendant pressures on the cost of living.

    Other measures include the opening of the country’s land borders, easing of general COVID-19 restrictions, and measures to arrest currency depreciation.

    Sources at the Cabinet retreat also disclosed that COVID-19 tests will be scrapped for vaccinated passengers who are either entering or leaving the country whilst government will cut its expenditures significantly.

    In a tweet on Thursday, Minister for Information, Kojo Oppong Nkrumah, disclosed that the essence of the retreat was to enable government to proffer solutions to ease the burden on Ghanaians.

    “In the coming days details will be announced including when and how borders will be opened, the removal of some testing protocols, shoring up the currency and further cutting expenditures while ensuring growth,” the minister told pressmen on the sides of the retreat.

    It is expected that the President, Finance Minister, and other ministers as well as the Bank of Ghana, in the coming days, will provide details on the reliefs and the appropriate sectors.

    The reliefs are also expected to answer questions being posed by economic watchers on how the Government of Ghana will respond to the current global economic challenges.

  • Cashew market analysis: Africa’s share of EU market, production increase

    Cashew market analysis: Africa’s share of EU market, production increase

    By : Isaac Piyuori   

    For the first time since the 1970s, Africa’s share of the European cashew kernel market reached double digits in the 2021 cashew season. Africa’s share of the market increased to 11% in 2021, making it the second-largest exporter of cashew kernels into Europe behind Vietnam.

    Despite being the world’s largest producer of raw cashew nuts (RCNs), Africa’s share of the kernel market has remained within a single-digit percentage due to the low rate of local processing in the continent, which remains less than 10%.   

    Data available to the African Cashew Alliance (ACA), however, shows that from an export range of between 110,000 and 120,000 tons in 2020, Africa’s cashew kernels export into Europe increased to between 140,000 to 170,000 tons, representing 11% of the EU kernel market, in 2021.

    Vietnam, the highest cashew processor in the world, had the greatest share of the EU kernel market, with 77% of the market share. Indian exports accounted for 7% of the kernel market in Europe, Brazil held 2% of the market share while Indonesia and other smaller cashew processing countries had a 1% share of the market, respectively.

    Africa’s share of the United States cashew kernel market remained single digit, with only 5% of cashew kernel imported into the US coming from Africa. Vietnam dominated the US cashew kernel market as well with 89% shares while 3% of kernels in the US were imported from Brazil.

    Though Africa’s share of the major cashew markets remained low despite the continent producing almost 60% of global cashew in 2021, a cashew expert and consultant with the ACA, Jim Fitzpatrick, who presented these statistics at the maiden section of the ACA’s Global Market Encounter (GME) in 2022 held virtually on Wednesday, March 2, believes an 11% share of Europe’s market is progress and will improve with time. He highlighted that the increase in the market share is a result of an increase in local cashew processing in Africa, though still very low.

    Coordinator for Sector Organisation in the ACA, Fadel Karimou, believes Cote d’ Ivoire, has particularly made significant progress in encouraging local cashew processing.

    “The progress we see in Cote d’Ivoire is a result of deliberate government policies to increase local processing of cashew. The government has introduced several policies, including direct subsidies for local processors as well as a policy that preserves some number of RCNs for local processing,” he said in an interview.

    Another important contributing factor to the increase in Africa’s share of the market is that there has been a general improvement in food safety, traceability, and transparency in cashew processing in Africa. Through consistent sensitisation and technical support from organisations and projects, local processors have become more attentive to following international cashew processing guidelines. The ACA Seal, an industry mark that represents compliance with international quality, food safety, and labour standards, is, for instance, ensuring that processors follow the right processing procedures.

    With recognition by several international cashew buying organisations, including Intersnack, Caro nuts, OLAM, and Red River Foods, who are committed to buying ACA Seal approved kernels, African cashew kernels have gained acceptance and credibility in terms of food safety and quality in international markets.

    For a continent that produces more than half of global cashews, Fadel believes its share of the kernel market must improve. This means Africa must increase its local processing rate and this requires collective actions from both the governments and the private sectors. There need to be a deliberate policy on the part of governments to encourage local processing in the various cashew-producing countries. The right conditions should be created for investors to go into cashew processing and for the existing factories to process to capacity. Local banks need to support local processors with loans at reasonable interests and terms, Fadel highlighted.

    Generally, demand for cashew in the major cashew consumption countries remained positive in 2021.

    From a drop-in cashew consumption due to the impact of the pandemic which disrupted processing and affected consumption in the past two years, India, the greatest cashew consumer in the world, increased its cashew consumption by 10% in 2021, from around 275,000 tons to an estimated 290,000 tons. Though this is a clear indication that the Indian kernel market is recovering to the pre-covid era, particularly in 2019 where India’s consumption reached about 320,000 tons, an analysis of growth rate in a 10-year period shows that consumption growth in 2021 was 4% and below the average growth rate of 7% up to 2019, Jim analysed. He was however optimistic that with the gradual easing of Covid 19 restrictions in the Asian country, chances are high that cashew consumption will recover fully in 2022.

    Demand and consumption of cashew in Europe again followed its positive trend of a surge in the past few years. From about 160,000 – 170,000 tons in 2020, consumption of cashew in Europe increased by 3.8% in 2021.

    The United States, the largest import market for cashew in the world, ended 2020 with an incredible cashew import growth of 8%, the highest in ten years. This positive trend continued in 2021 as demand and consumption of cashew increased by 9.5%. Jim expects cashew demand to remain strong in the US in 2022.

    In China, demand and consumption of cashew also increased by 7.5%, with 85,000 tons of imports, according to Vietnamese export figures, and an annual growth rate of 12% in a ten-year period. Though China is not yet a giant market in the cashew industry, Jim believes it is a big market with a bigger potential to grow.

    Generally, with the positive consumer trends on the market, low level of prices, and the lifting of Covid 19 restrictions, especially in India, Jim expects demand for cashew to remain strong and recover to the average pre- Covid rate.

    “Overall, we expect in 2022 that consumption will turn back to the average. So, that means it will be positive in most of the markets. If we look at the market in general, we see very positive growth in the consumption of cashews worldwide,” Jim said.

    While Africa looks to increase its share of the international kernel market, it is important for local processors to develop the local markets. Africa consumes an insignificant percentage of global cashew. This is due to several factors, including lack of proper understanding of the health benefits of consuming cashew, poor marketing strategies on the part of local processors, and high prices of cashew. There is a need for proper media sensitisation on the health benefits of consuming cashew, and to debunk the many misconceptions about consuming cashew. Local processors should adopt strategic marketing methods to attract more local cashew consumers.  

    Africa remained the highest producer of global raw cashew nuts in 2021, producing over 60% of the world’s cashews. West Africa produced about 1.8 million tons, representing 50% of global cashew while East Africa produced 11%. The major highlight of 2021 cashew production was that Cote d’Ivoire recorded its highest ever RCN production, producing more than 1 million tons, remaining the largest producer in the world. Nigeria’s production in 2021 was estimated to be around 220,000 tons while Guinea Bissau produced around 230,000 tons of RCNs.

    Following the establishment of the Tree Crops Development Authority to regulate cashew and other three crop sectors in Ghana, cashew production in the country saw a slight increase and was around 120,000 tons while West African counterparts, Benin, produced around 130,000 tons of RCNs in 2021.

    In Asia, Cambodia increased its RCN production from an estimated 225,000 tons in 2020 to an estimated 350,000 tons in 2021. With the use of high yield varieties, the availability of a large area suitable for cashew, and a readily available and closer buyer in Vietnam, Jim analyses that Cambodian production could increase up to between 450,000 and 500,000 tons in 2022.

    From early indicators of the 2022 cashew season, production is expected to remain strong. West Africa’s production could increase to up to 2.9 million tons, data from the ACA shows. It also shows that though early crops in Cote d’ Ivoire are below expectation, the West African country will exceed 1 million tons. Nigeria’s production could be 15% lower than that of 2021 due to long harmattan. Production is therefore expected to be around 190,000 tons and 220,000 tons in Nigeria. Though Benin’s official estimate for the season is 200,000 tons, the data shows that production could remain around 130,000 tons in 2022. Production in Burkina Faso and Mali could be impacted by the weather. Forecast for production in these countries however remains positive as in Ghana, Guinea Bissau, Senegal, and Guinea. Guinea Bissau’s production could increase slightly up to 240,000 tons while Ghana could remain around 120,000 tons.

    Generally, global RCN production is expected to remain strong, between 3.8 million and 4.3 million tons in 2022. This is expected to be driven mainly by Cambodia and India, which are expected to recover from the Covid 19 impacts on production, according to Jim Fitzpatrick.        

    Cashew processing remained highly concentrated in Asia in 2021, where 90% of global cashews are processed. Vietnam remains the largest cashew processing country in the world, processing over 80% of the world’s cashew. Despite making some progress, especially in Cote d’Ivoire, cashew processing in Africa remains less than 10%. This could increase in 2022 as countries continue to put measures in place to encourage local processing, and through the support of development partners.     

  • New US Investments Unlock Trade Potential for Businesses in Ghana

    New US Investments Unlock Trade Potential for Businesses in Ghana

    By United States Embassy – Accra, Ghana

    U.S. Ambassador Stephanie S. Sullivan last week announced new co-investments by the U.S. Agency for International Development (USAID) totaling $4.2 million with five companies operating in Ghana.

    These projects, leveraged with private sector funds, will help these companies scale up operations, develop export opportunities, and create jobs.

    Ambassador Sullivan made the announcement during the U.S. Embassy’s Providing Opportunity for Women’s Economic Rise (POWER) program for women entrepreneurs from Ghana and the North American diaspora.

    As part of Women’s History Month, the Embassy, in collaboration with Howard University and the International Trade Centre, is hosting the Women’s Empowerment Lab.

    The program will help Ghanaian and American women entrepreneurs take advantage of the African Continental Free Trade Area (AfCFTA) and the African Growth and Opportunity Act (AGOA) to grow their businesses by seizing export opportunities while facilitating networking opportunities across the Atlantic.

    “The West Africa Trade and Investment Hub was created to help entrepreneurs like those participating in the Women’s Empowerment Lab take advantage of export opportunities. Ghanaian companies can export more than 6,500 goods duty-free to the United States today, and the AfCFTA opens up a $3.4 trillion market. These co-investments will help these companies access African and U.S. markets, while creating jobs here in Ghana,” said Ambassador Sullivan.

    Co-created at USAID/Ghana, the grants are aimed at deepening the United States’ commercial relationship with Africa in line with the Prosper Africa Initiative, the African Growth and Opportunity Act, and President Biden’s Build Back Better World initiative.

    USAID recently awarded $4.2 million in co-investment grants to five companies operating in Ghana under the West Africa Trade & Investment Hub (Trade Hub): AMAATI Company Ltd, DTRT Apparel, FreezeLink, Maphlix Trust, and Nuts 4 Growth. The grants build on USAID/Ghana’s work to drive large-scale development by supporting firms poised for catalytic growth. By leveraging USAID’s co-investments, these companies are expected to generate over $45 million in private investment, increase exports by $166 million, and create more than 2,000 new jobs, mostly for women and youth.

    Summaries of the five co-investment grants follow are below:

    AMAATI Company Ltd: A woman-owned, Ghanaian social enterprise that pioneered the revival of fonio, a nutritious African grain, AMAATI aims to support 5,800 landless women farmers in northern Ghana. USAID/Ghana’s $742,000 grant, together with private investments of $4.5 million, will help create a new West African global value chain for increased exports of fonio to North America and Europe, while generating income for 8,000 farmers. AMAATI will use American-made John Deere equipment and sell to Century Green and Mayaresa in the American market.

    DTRT Apparel: With a USAID/Ghana grant of $760,000, West Africa’s regional market leader in apparel manufacturing will leverage additional private investments to expand its existing garment manufacturing capabilities, with the goal of achieving more than $100 million in exports annually by 2025 and supporting more than 5,000 local workers. At least 2,000 new jobs will be created, mostly for women, as the company scales up its operations and expands its exports to large international clothing brands, including several leading U.S. companies.

    FreezeLink: Ghana’s leading third-party provider of temperature-controlled transport, warehousing, and engineering services, FreezeLink will receive a $767,000 USAID/Ghana grant to install affordable cold storage units to boost horticultural exports from Ghana and reduce vaccine spoilage, including for COVID-19 vaccines. USAID’s grant will catalyze $6.7 million in additional investment and boost exports by $11 million. FreezeLink will use refrigeration units for its trucks from American company Carrier and has partnered with Zipline, an American medical product delivery company.

    Maphlix Trust: A leading orange-fleshed sweet potato exporter in Ghana, Maphlix will use USAID/Ghana’s grant of $970,000 and private investments of $6 million to support 1,100 farmers and boost sales of value-added purée products addressing Vitamin A deficiency. Maphlix has American investors and will install $1.2 million of food processing technology from Sinnovatek, an American company, to process the purée. By 2024, Maphlix anticipates earning annual revenues of $4.4 million, of which 60 percent will be from exports.

    Nuts 4 Growth (N4G): An up-and-coming large-scale shea and soy processor, N4G will leverage a USAID/Ghana grant of $980,000 to catalyze additional private investment and help expand the incomes of 20,000 women soy farmers. Increasing the number of women within its out-grower program, expanding its pool of international buyers, and boosting production capacity through upgraded machinery, N4G expects to achieve $30 million in shea butter exports to the U.S. and E.U. markets by April 2024. N4G supplies American firm Bunge and relies on American lab equipment manufactured by Agilent and BrandTech Scientific. This equipment uses high-performance liquid chromatography and nuclear magnetic resonance to monitor and ensure purity in food, air, and water during factory operation.

    Africa can adopt renewable energy on a massive scale and save billions along the way

    When it comes to building the future of energy in Africa, the decisions facing the continent’s leaders today are nothing less than of historical importance. More than anything else, energy systems are the very fabric of business and society. Countries across Africa want to make good on their objective of building huge amounts of new generation capacity to anticipate on vast increases in energy demand and set the continent on the path of growth and development it deserves.

    Africa knows where it needs to go. The big question is how. And more specifically: what is the most cost-effective energy mix that can be built to deliver all the new electricity capacity that is needed? Wind, solar, gas turbines, coal, gas engines… numerous options are available, but there is only one sweet spot.

    For the past decade and more, world-class engineers and analysts at Wärtsilä have tapped into their deep bench of experience in the African energy sector to answer these very questions, country by country. We have mobilized state-of-the-science, technology-neutral energy modelling techniques, and took all local technical constraints, all technologies, and natural resources into account. Multiple energy mix scenarios have been developed and compared. We ran the models rigorously and the numbers have spoken. They reveal cost differences of mind-boggling magnitude between the various energy strategies possible.

    When it comes to the choice of energy technologies, keeping an open mind, free from preconceptions, is paramount. Technologies that can be right for Europe considering its existing infrastructure, population density, or natural resources, can be wrong for others. Each country, each region, must find its own optimal way to building its energy system. Many African countries have however one important point in common: maybe more than anywhere else, the models indicate that the best path to building the most cost-optimal energy system is to maximize the use of renewable energy.

    One fact must be established once and for all. The cost of renewable energy equipment has decreased very rapidly in recent years, and when this equipment runs on Africa’s massive solar and wind resources, what you have is a cost per KW/h produced that beats all other electricity technologies hands down. If you add to this the fact that most electricity grids on the continent are relatively underdeveloped, favouring renewable energy over traditional power generation like coal or gas turbine power plants becomes a no-brainer.

    Although relatively ambitious renewable energy targets have been set by governments across the continent, it does not always go far enough. Contrary to what some industry and political leaders may believe, maximizing the amount of renewable energy that can be built in the system is by far the cheapest strategy available, while at the same time ensuring a stable, reliable network.

    In Africa, renewables must become the new baseload. And yes, renewables are intermittent. But combining them to flexible power generation capacities will guarantee the stability of the grid and save billions of dollars along the way.

    It would be misguided to consider the intermittency of renewables as a showstopper. It is not, provided they are paired up with highly flexible forms of electricity generation like gas engine power plants.

    To maintain a balanced system, flexible back-up and peak power must be available to ramp up production at the same rate that wind or solar production fluctuates, but also to match the fluctuating energy demand within the day. The systems must be able to respond to huge daily variations in a matter of seconds or minutes.

    Gas engine power plants are the only source of backup generation that is designed to do just that. They will keep the system safe, while allowing the grid to accommodate huge amounts of cheap renewable energy. For Senegal alone, to take only one example, the studies reveal a $480 Million difference in total system cost over the next 15 years between a system incorporating lots of renewables combined to flexible gas engines, and a system built around inflexible thermal generation and minimal renewable capacity.

    Renewables and flexible gas are the two pillars of a winning energy strategy for Africa. Similar studies conducted on other African countries indicate that this energy mix strategy will provide efficiencies worth billions of dollars continent-wide over the next few decades.

    Highly ambitious renewable energy objectives in Africa are not only achievable, but they are also the soundest and cheapest strategy for the successful electrification of the continent. Making the smart strategy decisions will lead to more resilient electricity systems and offer vastly superior whole-system efficiencies.

  • Growing Ghana’s E-commerce; a catalyst for economic development

    Growing Ghana’s E-commerce; a catalyst for economic development

    By: Stanbic Bank

    The fourth industrial revolution, which is wholly anchored on technological advancement and innovation opened up vast opportunities in different areas of economies around the world.

    Social, economic, and commercial lives have seen remarkable developments with the rise of the internet, technology, and digitization. In Ghana, the pioneering of mobile money in 2009 has been revolutionary in this regard.

    The World Bank has recognized Ghana as the fastest growing mobile money market in Africa over the last 5 years. This growing trend of mobile money penetration has been a catalyst for the booming e-commerce industry in the country. The industry has been growing steadily over the past decade and has evolved over time to become the mainstay for many small and medium scale enterprises (SMEs) in Ghana.

    Besides mobile money, several factors have contributed to the emergence of e-commerce in Ghana chief among which is the level of internet penetration. According to Kepois, a social media research organization, internet penetration in Ghana is among the highest in the West African sub-region.

    Out of a population of 32.06 million people, 16.99 million (53.0%) are active internet users, meaning that well over half of Ghanaians are on the internet at one point or the other. This is a huge opportunity and many users have taken advantage of this to either start businesses or expanded their businesses to include online channels.

    From Instagram to WhatsApp, Snapchat to TikTok, there are millions of Ghanaians, both young and old, using the opportunity to trade in goods and services on these platforms with payments enabled mainly through mobile money and other electronic payment mediums. Online retail outfits have become a core part of the modern Ghanaian lifestyle.

    Furthermore, the Ghana Interbank Payment and Settlement Systems (GhIPSS) launched an internet payment gateway to enable holders of domestic Automated Teller Machine (ATM) cards to make payments and purchases online. Subsequently, the launch of the ‘gh-link E-commerce will promote e-commerce and enhance the services needed in the e-commerce value chain.

    The benefits of this new trend of doing business are enormous. Digitization and e-commerce have unlocked the entrepreneurial spirits of many Ghanaians, making it a major source of employment and revenue generation avenue for them. Many of Ghana’s young population have found stable employment leveraging the benefits of the internet, mobile money, and apps to unlock new opportunities to connect demand and supply sides of the economy through e-commerce.

    E-commerce has also allowed businesses to diversify their offerings and expand their business operations from hitherto fixed operating times to 24/7 operations with increasing productivity and value extraction.

    Traditional businesses that hitherto used to conduct business physically have expanded their portfolios of services and products in response to evolving consumer demands through e-commerce. Today, banks, insurance companies, restaurants, and grocery shops have online options that deliver the same, if not better, services to customers and clients with less stress.

    In terms of public revenue generation, government becomes a beneficiary through the widening of the tax net to capture businesses operating within this segment. The Ghana Revenue Authority (GRA) has announced that it intends to introduce an e-commerce tax in April this year to rake in some GHS 2.4 billion. When done effectively, this could possibly have a huge positive impact on domestic tax mobilization by the government to bring us closer to the desired tax to GDP ratio of our peers.

    To fully realize the benefits of e-commerce in Ghana, however, the government must dialogue with other stakeholders, to shape e-commerce and the digital economy by defining the rules that shape and govern the sector. This is a huge challenge that will involve adapting existing policies, laws, and regulations to cater to this emerging and growing trend of e-commerce in Ghana.

  • Ghana Deploys Hardware Wallets for CBDC – ‘eCedi’

    Ghana Deploys Hardware Wallets for CBDC – ‘eCedi’

    By: Sujha Sundararajan

    Ghana’s central bank is deploying hardware wallets and other devices for CBDC.

    Notably, around 43% of Ghana’s population does not have access to a bank account. The bank is looking to improve financial inclusion with the use of eCedi.

    Bank of Ghana (BoG) has proposed using hardware wallets for its central bank digital currency (CBDC) dubbed ‘eCedi.’ The bank intends to make eCedi available for those who do not have a bank account or even internet access.

    In a design paper released on Tuesday, Africa’s largest gold producer said that the digital currency should “compliment” mobile money. According to the central bank, eCedi needs to be as intuitive as possible and seeks to improve financial inclusion.

    “eCedi usage has to be as easy and intuitive as possible. Consumers should be able to make a payment in the minimum number of steps, with a minimum required level of technical literacy.”

    The release noted that the BoG had designed two types of wallets for its CBDC. Hosted wallets managed by financial institutions will require access to the internet.

    According to World Bank data, these hardware wallets work in offline mode, given only 53% of Ghana’s individuals were internet users as of 2019. In January 2021, only 15.7 million individuals had access to the internet from Ghana’s total population of 31.40 million. Around 43% of Ghanaians do not hold a bank account.

    Additionally, the banking regulator said that eCedi transactions would be free of additional costs, unlike mobile-money transfers that come with a transactional fee.

    Offline eCedi was first introduced in October 2021 through smart cards – physical cards embedded with a chip, similar to debit/credit cards.

    Kwame Oppong, head of fintech and innovation at the BoG, emphasized that the offline functionality will enable Ghanaians, who lack reliable access to electricity and internet connectivity, to embrace the country’s CBDC.

    Ghana has positioned itself at the forefront of exploring and adopting a CBDC, cryptocurrencies such as BTC, and other digital assets in the West African region.

    It quickly follows south-central African nation Zambia in looking into the merits of a CBDC to promote financial inclusion. Zambia said that it is close to finishing research and implementing a CBDC by the end of the fourth quarter.

    Nkatya Kabwe, Assistant Director at the Bank of Zambia, told Bloomberg in February,

    “The research results will form part of the input in the policy considerations on whether to introduce a central bank digital currency in Zambia”

    Besides, eNaira marks the first African CBDC in circulation, issued back on October 25, 2021, regulated by the Central Bank of Nigeria. Digital currency serves as both a medium of exchange and a store of value.

    It offers better payment prospects in retail transactions when compared to cash.

    Growing Ghana’s E-commerce; a catalyst for economic development

    By : Stanbic Bank

    The fourth industrial revolution, which is wholly anchored on technological advancement and innovation opened up vast opportunities in different areas of economies around the world.

    Social, economic, and commercial lives have seen remarkable developments with the rise of the internet, technology, and digitization. In Ghana, the pioneering of mobile money in 2009 has been revolutionary in this regard.

    The World Bank has recognized Ghana as the fastest growing mobile money market in Africa over the last 5 years. This growing trend of mobile money penetration has been a catalyst for the booming e-commerce industry in the country. The industry has been growing steadily over the past decade and has evolved over time to become the mainstay for many small and medium scale enterprises (SMEs) in Ghana.

    Besides mobile money, several factors have contributed to the emergence of e-commerce in Ghana chief among which is the level of internet penetration. According to Kepois, a social media research organization, internet penetration in Ghana is among the highest in the West African sub-region.

    Out of a population of 32.06 million people, 16.99 million (53.0%) are active internet users, meaning that well over half of Ghanaians are on the internet at one point or the other. This is a huge opportunity and many users have taken advantage of this to either start businesses or expanded their businesses to include online channels.

    From Instagram to WhatsApp, Snapchat to TikTok, there are millions of Ghanaians, both young and old, using the opportunity to trade in goods and services on these platforms with payments enabled mainly through mobile money and other electronic payment mediums. Online retail outfits have become a core part of the modern Ghanaian lifestyle.

    Furthermore, the Ghana Interbank Payment and Settlement Systems (GhIPSS) launched an internet payment gateway to enable holders of domestic Automated Teller Machine (ATM) cards to make payments and purchases online. Subsequently, the launch of the ‘gh-link E-commerce will promote e-commerce and enhance the services needed in the e-commerce value chain.

    The benefits of this new trend of doing business are enormous. Digitization and e-commerce have unlocked the entrepreneurial spirits of many Ghanaians, making it a major source of employment and revenue generation avenue for them. Many of Ghana’s young population have found stable employment leveraging the benefits of the internet, mobile money, and apps to unlock new opportunities to connect demand and supply sides of the economy through e-commerce.

    E-commerce has also allowed businesses to diversify their offerings and expand their business operations from hitherto fixed operating times to 24/7 operations with increasing productivity and value extraction.

    Traditional businesses that hitherto used to conduct business physically have expanded their portfolios of services and products in response to evolving consumer demands through e-commerce. Today, banks, insurance companies, restaurants, and grocery shops have online options that deliver the same, if not better, services to customers and clients with less stress.

    In terms of public revenue generation, government becomes a beneficiary through the widening of the tax net to capture businesses operating within this segment. The Ghana Revenue Authority (GRA) has announced that it intends to introduce an e-commerce tax in April this year to rake in some GHS 2.4 billion. When done effectively, this could possibly have a huge positive impact on domestic tax mobilization by the government to bring us closer to the desired tax to GDP ratio of our peers.

    To fully realize the benefits of e-commerce in Ghana, however, the government must dialogue with other stakeholders, to shape e-commerce and the digital economy by defining the rules that shape and govern the sector. This is a huge challenge that will involve adapting existing policies, laws, and regulations to cater to this emerging and growing trend of e-commerce in Ghana.

  • Lack of quorum in Parliament hangs two loan agreement depending approval

    Lack of quorum in Parliament hangs two loan agreement depending approval

    Lack of quorum in Parliament for the second time in seven days has resulted in delay for approval of two major loan agreements within two weeks.

    In the first instance, the House failed to approve a €38 million loan agreement meant for the construction of three 40-bed capacity district hospitals due to lack of quorum on Thursday, March 10, 2022.

    The failure to approve the agreement between the government of Ghana and the Deutsche Bank of Frankfurt came after the National Democratic Congress (NDC) MP for Tamale Central, Mr Ibrahim Murtala Muhammed, raised an objection on lack of quorum.

    He had made an application to the First Deputy Speaker of Parliament, Mr Joseph Osei-Owusu, who was presiding, that the House did not have a quorum and therefore proceedings should be adjourned.

    At today’s sitting, which was presided over by the Second Deputy Speaker, Mr Andrew Asiamah Amoako, the House also failed to approve a €20 million agreement between the government of Ghana and the German Development Bank Group, Frankfurt.

    Objective of loan

    The amount is to finance the Green Credit Line under the Reform and Investment Partnership between the government of Ghana and the Federal Republic of Germany.

    The loan, which seeks to expand Ghana’s access to renewable energy, among others, is part of the G20 Compact with Africa and will be repaid in 32 years at an interest rate of 12 percent with a grant element of 53.2 percent.

    The overall objective of the project is to achieve the national target of reducing greenhouse gas emissions by 15 percent by 2030 and achieving a renewable energy (RE) share of 10 percent of the total energy mix (excluding hydroelectric power plants).

    The project will also contribute to the development of a sustainable green finance market as one of the preconditions for promoting RE and energy efficiency market in Ghana.

    Why no approval?

    The inability of the House to endorse the agreement came after the Minority raised an objection on the lack of quorum due to the limited number of members in the House.

    The objection came soon after the Chairman of the Finance Committee, Mr Kwaku Kwarteng, had presented the committee’s report on the facility and moved the motion for the House to approve the agreement.

    The Minority Chief Whip, Mr Mohammed-Mubarak Muntaka, raised objection on the lack of quorum and suggested that the Speaker caused the bell to be rung for 10 minutes to draw members from both sides of the House into the Chamber.

    “If quorums are raised, you cannot negotiate them out,” he said, and after a while suggested that the loan approval be deferred for both sides of the House to mobilize their members on Friday.

    “Believe me that any attempt to carry on would create problems for all of us. I agree that this is a grant that is coming to us as a country at almost free of charge,” the MP for Asawase stated.

    Let’s compromise

    Reacting, the Majority Chief Whip, Mr Frank Annoh-Dompreh, informed the House that prior to the commencement of business in the House today, the leadership engaged in extensive consultation for the motion on the agreement to be moved and passed.

    While he however agreed that the bell be rung, he urged the House to look at the agreement from the perspective that it would improve Ghana’s renewable energy mix aspirations.

    “We are masters of our own rules, and I only want to plead with my colleagues that a motion has been moved; let’s wait for it to be second and then we can debate it.

    “It is very important that we deal with this matter as it cannot be shelved. I am not contesting the issues raised; you are right and I am just pleading that we let go and get this thing passed,” he said.

    He added that the agreement was time-dependent and it was important that the House got it passed.

    “Please, do not forget that there are very important fiscal variables in this agreement and partners who are waiting on this agreement to be passed as it is almost like a grant.”

    He was of the view that the overdependence on the national grid by public institutions such as educational institutions could be weaned off with the implementation of the project, with the national grid focused on supporting industries.

    He, therefore, urged the House to support the loan approval.

    Later, Mr Annoh-Dompreh conceded that while it was quite regrettable for an objection to be raised on the lack of quorum, “I would accede to the request by the colleague Muntaka that you do not put a question on the motion and we take it tomorrow.”

  • ‘It’s a matter of being fiscally disciplined and not E-Levy versus IMF’ – finance expert to gov’t

    ‘It’s a matter of being fiscally disciplined and not E-Levy versus IMF’ – finance expert to gov’t

    Adnan Adams Mohammed

    A finance expert has rubbish the government obsession and justification for the implementation of the Electronic Transaction Levy (E-Levy) to save the economy.

    The experts says, it is a matter of the government being disciplined with it’s expenditure. Although, some economists and financial analysts have advised the government to go to the International Monetary Fund (IMF) for a bailout to restore credibility to the economy and debt sustainability, the government have proofed adamant.

    In a latest twist, www.newsguideafrica.com has picked that, government is expected to hold a crunch cabinet meeting to find solutions to the raging economic challenges. Among other things, the meeting is expected to take place at the Peduase Lodge, from Thursday, March 17, to Sunday, March 20, 2022, is to discuss whether the government force E-Levy on the citizens or seek bailout from IMF. But, the finance expert disagree with the government posturing.

    “It’s not between IMF and e-Levy ohhhh”, former executive director at Standard Chartered Bank, Alex Mould has insisted in a quick response to a teaser of the crunch meeting on Gabby Okyere Darko’s Twitter account. “It is between being disciplined and doing the right thing versus rampant spending on foolish political manifesto promises that only result in state capture.”

    The crunch meeting will be chaired by President Akufo-Addo, together with all NPP MPs, ministers, government appointees, and the governing New Patriotic Party (NPP) leadership.

    According to JoyNews’ sources, the meeting will discuss whether government should continue to push through with the E-levy Bill or resort to the International Monetary Fund (IMF), in the face of the current fiscal hurdles.

    Confirming the retreat on Joy FM’s Midday News on Thursday, the source further said the meeting will discuss other pertinent issues relating to the country’s development.

    In a tweet on Thursday, a leading member of the ruling New Patriotic Party, Gabby Otchere-Darko also indicated that given the current deadlock on the controversial E-Levy Bill, there’s the need for a ‘national debate’ on the way forward.

    “2022 began without the usual $3 billion injections of Eurobond cash. Govt’s post-COVID recovery GhanaCARES programme hinged partly on an E-levy which Parliament may not even OK.

    “There should be a national debate: do we want IMF or E-Levy or both or none? Tough decisions confront Ghana”, he tweeted.

    Meanwhile, an Economist and former Board Chairman of the Ghana Revenue Authority (GRA), Professor Stephen Adei has refuted claims that Ghana’s economy is on the verge of collapse.

    Speaking in an interview on JoyNews’ Upfront, he said the economy is not collapsing but “we are in difficult times.”

    According to him, the country’s economy is stronger “than the word broke.”

    His comment comes after an economist with the University of Ghana Business School (UGBS), Prof. Godfred Alufar Bokpin, warned of possible collapse of Ghana’s economy.

    Speaking on the Super Morning Show, Prof. Bokpin reiterated that as the country’s debt stock hits high distress levels, the current debt situation could get worse by the end of September if proper interventions are not implemented.

    Ghana’s current public debt stock stands at a staggering ¢341.8 billion with a corresponding debt to GDP ratio of more than 77% as of September ending 2021.

    This means if the country should share this amount across the country’s 30.8 million population, everyone will owe approximately ¢11,000.

    In terms of interest payments on our borrowings, Ghana has spent on average 147 billion Ghana cedis, which is 47 billion Ghana cedis more than our projected revenue plus grants for 2022.

    In the first quarter of 2022, government has indicated that it will borrow a total of ¢24.5 billion from the domestic market of which ¢20.7 billion will be used to service existing debt in the local market, leaving government with just ¢3.8 billion to finance other expenses.

    Commenting on the country’s debt stock, Prof Adei proposed that the country’s expenditure be reduced.

    “If you are exceeding your income, then you must accept to live below your income, which is the easy way, otherwise if you are earning ¢3,000 and you are in debt of ¢10,000 you cannot day to day spend ¢3,000.

    For you to get out of the rag you will have to cut your expenditure to ¢2,000 because you must service your debt. So we are in that situation as a country,” he said.

    He explained that although cutting expenditure might be difficult for the government, especially nearing an election period, that is the right way to go.  

    “… And they [government] must thank God that this crisis has come now and not 2023, because if they don’t go for the hard one now, which normally will take about 18 months to go over this type of hunch, then they have a good chance by the middle of 2023 to see some good results in 2024.

    If not, things would get worse and they want to prevent being thrown out of government, they would be thrown out anyway,” he said.

  • Use $550mn crude oil sales windfall to cushion consumers – Energy expert to gov’t

    Use $550mn crude oil sales windfall to cushion consumers – Energy expert to gov’t

    An energy expert has projected that Ghana will earn an additional $550million from crude oil sales.

    This is aside the government’s expected $1billion revenue from Ghana’s crude oil sales.

    According to him, this unexpected windfall could go a long way to help government cushion consumers from sharp price hikes that have characterized the cost of fuel at the pumps in the past months.

    “It will be prudent of government to cease worrying about revenue losses as it plans to reduce levies on petroleum products and instead look at the extra revenue it will make from oil sales, royalties and taxes from oil companies”, Former Ghana National Petroleum Corporation boss, Alex Mould urged during a TV program yesterday.

    “Because our benchmark price was about $61 or something like that and the average price that is projected by all the research companies in the world is showing that our crude oil price is going to be no less than $85 for the full year.

    “For the first quarter we’re going to look at something above $100, the second quarter it will drop to about $90, and for the rest of the year it will be in the $80s. So the average for the year is going to be about $85 to $90.

    “So if you look at the windfall, and we should understand that government will be getting windfall, because government has only budgeted for $61 and so my calculation based on that shows us that based on 59 million barrels of crude oil, Ghana gets about 20% of the total crude oil and it is split between royalties and also something we call the CAPI. And CAPI is basically the Carried and Participatory Interest and then we have taxes,” he said.

    “We’re looking at an increase in royalties from this $20 increase for about $68million with regards to our equity contribution we are looking at about $250million and with regards to taxes, this is from the windfall that will come, we’ll derive to be partners because of the Tullows, the ENIs we’re looking at about $235million.

    “So in all we’re looking at windfall of almost $550million coming the way of government. And this is something government should look at critically if government wants to use part of that to subsidise the price for the consumer,” he added.

  • Fuel price spikes restricting ‘freedom of movement’ – Kwesi Pratt

    Fuel price spikes restricting ‘freedom of movement’ – Kwesi Pratt

    The Managing Editor of the Insight Newspaper, Kwesi Pratt Jnr, has asserted that some significant sections of Ghanaians have begun reducing their daily movements due to the high cost of fuel in the country.

    Although there are global challenges impacting the prices of petroleum products and commodities, Mr Pratt wants the government to fast-track intervention processes that will cushion customers against the hardships induced by the unexpected increase in fuel prices.

    He blamed the current development on what he describes as the “continuous propaganda” by the government and its officials.

    “I can tell you that people have begun to restrict their mobility because of the high fuel prices. We are here because of our continuous propaganda.

    “It is true that we are experiencing some global challenges but the government can meet the Ghanaian consumer half way by stabilising the cedi and reducing or removing some of the taxes on the petroleum products. This will reduce the price here,” he said.

    In an interview on Accra-based Metropolitan Television, the media professional added that the hikes in fuel prices have already impacted negatively on the cost of living of consumers and households.

    Fuel prices at the various pumps are expected to hit ¢11 per litre from Wednesday, March 16 nationwide.

    The Bulk Oil Distributors has blamed the situation on the volatility on the market as well as the rising cost of crude on the international market.

    JoyNews/AdomNews · Fuel prices to hit ¢11 per litre from Wednesday, March 16

    According to the Chief Executive, Senyo Hosi, the cedi which is depreciating among other major trading currencies is also a factor for the rise in the price of the commodities.

    “This is not really with crude but with products on a metric tonne basis. You’re actually breaking the pair and likely breaking 11 as well, subject to which product and how the OMCs want to add some margins on their current prices.

    “What you see from the OMCs publication is quite reflective of what the market situation is and I think a big chunk of it has to do with some of the onset increase around our current cedi issues,” he said.

    Meanwhile, the Institute for Energy Security (IES) says the situation has contributed to the inflationary pressures hitting businesses in the country.

    According to the IES, if government fails to intervene, the price of petrol and diesel will soon move to at the very least ¢10.00 per litre.

    Citing examples like Egypt, Kenya, Togo and South Africa, the IES said these countries have found ways to manage the key determinants of domestic fuel prices through government subsidies on fuels, so citizens and businesses are not badly hit.

    Fuel prices gone up 27% since January 1, 2022

    A monitoring report from IES Research Analysts showed that fuel prices at the pumps have already incurred a net increase of ¢1.8 per liter (27%t) for both petrol and diesel, since the start of the year, and for five consecutive Pricing-windows.

    Referenced to March 2021, the report also revealed that the price of both petrol and diesel have surged by roughly ¢3.33 per litre, suggesting a 65% increment.

    While petrol cost per litre in Ghana has surged by about some 65% between March 2021 and March 2022, Kenya, South Africa, and Egypt have recorded price jumps of approximately 14%, 34%, and 26% respectively, within same period.

    The IES said the differences in prices across the listed countries are due to the interventions of respective governments to the rising international oil prices, and the extent to which local currencies are managed against the US dollar.

    Since the beginning of the year, prices of petrol and diesel have gone up by more than ¢3 per litre.

  • Agric Minister Should Not Downplay the Living Experiences of Farmers and Ghanaians – Associations

    Agric Minister Should Not Downplay the Living Experiences of Farmers and Ghanaians – Associations

    The Peasant Farmers Association of Ghana (PFAG), Chamber of Agribusiness Ghana (CAG), the General Agricultural Workers Union (GAWU), the Rice Millers Association of Ghana (RMAG), and Food Sovereignty Ghana (FSG) are appalled and disappointed by comments and responses by the Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto, during an interview on the Citi Breakfast Show on Wednesday 16th March 2022.

    In the said interview, the Minister responded to questions relating to his performance as the sector Minister over the past five years. Needless to say that, despite broad efforts by the government to address constraints in the sector through consistent engagement of sector actors, the responses of the Minister for the most part were not only evasive and unaccountable, but clearly demonstrated high levels of intolerance, and an outright disrespect to the living experiences of farmers and other actors in the sector.

    It is this approach to policy making in the sector which has largely negated any serious results (if possible) from major interventions in the sector over the past five years and frankly not necessary in a sector as critical as agriculture with several stakeholders.

    Firstly, the Minister, in his response to the current food security situation manifested by constant spikes in food prices and absence of relevant supplies, chided persons, institutions and data that pointed to this reality.

    In fact, in responding to a question on the state of food security captured in the 2021 Global Food Index where Ghana was ranked 82nd dropping from 76th in 2016, the Minister downplayed the content and significance of the report, disagreed and ‘poohpoohed’ the findings even though he could not provide any alternative report.

    The Minister continues to live in the thinking that all things are rosy in the sector when the reality is that we are saddled with unavailability of food coupled with high food prices. Don’t take our words for it! The government’s statistician, the Ghana Statistical Services (GSS) indicates that food inflation in Ghana has reached an all-time high of 17.40 percent as at February 2022.

    If this is not a reflection of the double whammy of escalating prices and weak food supplies which

    undermine food security, then we are not sure what is. Prior to the consistent reports from the GSS,

    several organisations monitoring food supplies across various markets had confirmed these risks, only

    for the sector Minister to refer to his domestic experience in an interview – ‘my wife has not indicated to me food prices have increased’. How inconsiderate and disrespectful to Ghanaians?

    We hope his responses this morning, and in previous comments such as the reference to his domestic experience are not a reflection of official government position on the developments in the sector. That will be an unfortunate situation! In fact, forecast by analysts and economists suggest that the situation will get worse in the coming months due to existing weaknesses in our systems as well as global pressures.

    Policy makers at the highest level such as the sector Minister cannot be dismissive of these risks and

    reports. At the minimum, such reports should be seen as feedback to enable government and the

    Ministry of Food and Agriculture to examine their policy toolkits to addressing the underlying risks in

    a collaborative manner.

    Secondly, the sector Minister appears not to comprehend issues of fidelity in policy implementation at

    scale, and the cardinal need for generating evidence to improve policy design. The flagship Planting for

    Food and Jobs programme of government has indeed touched on several issues in the agricultural sector,

    which has contributed to the improved performance of the country in recent assessments on progress

    towards the Malabo Declaration.

    However, feedback from farmer associations and other actors in the sector, for the simple reason that the ministry does not have resources to engage all 11.3 million farmers across the country, should be considered seriously and not dismissed nonchalantly as the Minister did this morning.

    Any policy being deployed at scale, will suffer several implementation challenges which only constructive feedback can help manage and rectify. In fact, non-agriculture sector policy decisions can have profound implications on the success of components of the planting for food and jobs programme.

    Take the current increases in fuel prices as a caveat, transportation costs will not only increase in the value chain as a direct consequence, but a pass-through effect which will chip away incomes of farmers and other actors will be threatened, and given the objective of the PFJ, a feedback on this should be considered. One of the main objectives of the PFJ was to ensure immediate and adequate supply of selected food crops across the country.

    A survey of markets and consumers do not imply that there is adequate availability of these food crops. Prices of some of these selected food crops have more than doubled in real terms (when we adjust for inflation) since 2016, and this has nothing to do with how sexy or otherwise, the PFJ programme looks in the eye of the sector Minister. It is the acknowledgement of the problem and consistent engagement with stakeholders that can produce outcomes desirable for both government and Ghanaians. The Minister’s resort to ‘window dressing’ the facts and simply disrespecting the experiences of farmers will not fix the problem. Again, we have more than doubled our maize production from 1.8 million to 3 million tonnes, according to the Minister, but market price of 100 kg of maize has risen from GHS100.00 in 2016 to almost GHS290.00 in 2022.

    Unless the Minister doesn’t have price points such as this or simply does not acknowledge the

    experience of Ghanaians and farmers, both results are not desirable for development of the sector. How

    come poultry farmers continue to lament on the price and availability of corn for their feed? How come

    prices of vegetables such as tomatoes and onions are rising daily and why do we keep importing them

    from our neighbours? It is not smallholder farmers and other sector players that issued a directive to

    ban the export of food to neighbouring countries due to existential risks a few months ago, is it? The

    government acting through the Minister did! It is for this reason that the undersigned organisations as

    key actors in the sector have long called for a shift in the country’s strategy to organic methods of

    farming, most of which will rely on safe domestic agroecological techniques, to insulate the country

    from some of the current external geopolitical pressures. Sadly, we have a Minister who happens to

    have some ‘holy grail data’ manufactured by him, which runs counter to the real experiences of

    Ghanaians and farmers as well as the government’s statistician.

    Lastly, the President of the Republic called for Ghanaians to be citizens not spectators! The approach

    of the sector Minister – a complete disregard for real living experiences and credible data from

    institutions operating in the sector including the government’s statistician, we are afraid suggests the

    contrary. The sector Minister is well within his rights to disagree with the views, data and experiences

    of actors in the sector. But to do that from an uninformed position, while not providing evidence, but

    vituperations and invectives for the simple reason of disagreeing and the insatiable desire to hear the

    sound of his own voice is simply untenable in a sector as important as Agriculture and particularly at

    this time with such risks in the sector. He can do better and frankly should do better! The undersigned

    institutions have at different forums acknowledged the work of the Ministry in the sector, and proceeded

    to point out blinds spots, and areas of weaknesses which can be addressed given the varied experiences

    of different actors in the sector. The Peasant Farmers Association of Ghana for instance has in times

    past worked with the Ministry and created platforms for the leadership therein to engage with its

    community of more than 1.3 million smallholder farmers across the country on modalities for

    implementation of the fertiliser subsidy programme. This is significant, and comments such as that

    made by the Minister on CitiFM this morning that PFAG and other groups in the sector are “people

    who hide behind big names to pretend that they are speaking for a certain group of people” is very

    unfortunate. It is important to remind the Minister that while acting as the Ranking Member of the

    Food, Agriculture and Cocoa Affairs Committee of Parliament in opposition, these same organisations

    collaborated with him and the committee to advocate for several issues in the sector, which the then

    Mahama-led government had to address. We are simply interested in getting the attention of policy

    makers to critical issues that must be addressed to ensure sustainable food production and improvement

    in the livelihood and living experiences of Ghanaians. Our position has not changed! That of the

    Minister has changed and perhaps, a bit more openness and receptive engagement with the 11.3 million

    farmers and key stakeholders across the country represented by the undersigned organisations and their

    allies, will be better for the Ministry and the government!

    2We remain ever committed to working with government and other stakeholders in ensuring some respite

    is brought to farmers and Ghanaians, despite the unfortunate comments of the sector Minister. We are

    in no position to suggest to the Minister how to do his job – take feedback on his policies, adjust to

    fidelity in policy scalability during implementation and certainly conduct of public interviews when the

    living experiences of Ghanaians are in question, but we sure know that this current approach could

    generate negative externalities which are anti-collaborative to turn the fortunes of the sector around.

    Perhaps, the kitchen is too hot? Well, the Minister may well know what to do.

    Sincerely,

    1. Peasant Farmers Association of Ghana (PFAG) – 0203035672

    2. Chamber of Agribusiness Ghana (CAG) – Anthony Morrison – 0540742111

    3. General Agricultural Workers Union (GAWU) – Edward Kareweh – 0244529484

    4. The Rice Millers Association of Ghana (RMAG) – Yaw Adupoku – 0554024137

    5. Food Sovereignty Ghana (FSG) – Edwin Baffour – 0244333095