News Guide Africa

Category: News

  • 2024 Budget ‘undoubtedly ambitious’ – SAS 

     

    Strategic African Securities

     

     

    Adnan Adams Mohammed

     

    The Strategic Africa Securities (SAS) has described the government’s policy targets for 2024 as ‘undoubtedly ambitious’.

     

    It, however, believe that the presents a balanced approach to achieving macroeconomic stability and growth.

     

     

     

    Ghana’s 2024 Budget and Economic Policy focus on infrastructure, digitalization, and leveraging climate financing for green growth presents significant opportunities for economic diversification and sustainable development.

     

    “The challenges lie in effectively executing these plans, managing external risks, and ensuring that the benefits of growth and development are inclusive and sustainable”, SAS indicated in its post-budget analysis.

     

    “These will require a strong commitment to structural reforms, managing debt sustainability, and providing social protection.”

     

    These will also require careful policy execution, transparency, and stakeholder engagement. The government’s ability to adapt to changing global and local economic conditions while staying committed to these goals will be critical to the success of this budget.

     

    On the sectorial policy targets, SAS commented as follows:

     

    Introduction

     

    The 2024 Budget Statement and Economic Policy themed: “Pursuing Growth & Development Within a Stable Macroeconomic Environment” seeks to stabilize the economy and reposition the country toward sustainable growth. It covers different

    aspects of the economy, with a strong emphasis on fiscal consolidation measures and ambitious goals.

     

    We present below our comments:

     

    Banking Sector and Credit Availability

     

    The growth in the banking sector’s assets is a positive sign, but the rising NPL ratio is a concern. This suggests that while the banking sector remains robust, there are underlying vulnerabilities, particularly in asset quality, that need addressing.

     

    Exchange Rate and Monetary Policy

     

    The depreciation of the Cedi against major currencies, albeit at a reduced rate compared to the previous year, signals ongoing challenges in the foreign exchange market. Stabilizing the currency will be key to enhancing investor confidence and managing inflation.

     

     

    Macroeconomic Stability:

     

    Real GDP Growth

     

    The targets for Ghana’s overall real GDP growth of 2.8% and non-oil real GDP growth of 2.1% by 2024 are reasonable and not overly ambitious considering the global economic situation and domestic challenges. At the broad level, the GDP growth targets reflect a cautious yet optimistic outlook, which is important for the country’s long-term economic health. To achieve these targets, it is crucial to implement the outlined policies effectively, while maintaining fiscal discipline, especially going into the 2024 elections.

     

    The mixed trends in interest rates indicate a challenging environment for monetary policy. The central bank will need to navigate these complexities to support economic growth while keeping inflation and exchange rate volatility in check.

     

    Fiscal Consolidation and Debt Management

     

    The budget reflects a strong commitment to fiscal consolidation, as evidenced by the projected primary surplus of 0.5% in 2024 against 2.6% in 2023 and the efforts to keep the overall fiscal deficit in check. The success of the Debt

    Restructuring Programme will be crucial in this regard. The challenge lies in maintaining fiscal discipline while supporting growth and development initiatives, especially with elections on the horizon.

     

    The significant progress in fiscal consolidation, indicated by lower-than-programmed total revenue and expenditure, shows the government’s commitment to financial discipline. This approach is crucial in light of the high-end-period inflation rate of 31.3% and the substantial debt-to-GDP ratio of 66.4%. Fiscal prudence will be key in navigating these challenges.

     

    Completing the Debt Restructuring Programme and adhering to the IMF-Supported PC-PEG highlight a strategic approach to managing national debt.

     

     

    Inflation Management

     

    The target to reduce inflation to 15.0% by the end of December 2024 is a challenging one, considering the year-end 2023 inflation rate of 31.3%.

     

    Achieving this goal will require the government to strike a balance between effective monetary policies and fiscal discipline. With the 2024 election season on the horizon, we anticipate that the government will increase its spending on unplanned social interventions and infrastructure projects, which may make it difficult to meet the target.

     

     

    External Sector Developments

     

    The improvement in the trade and current account balances is a positive development. However, albeit reduced, the overall balance of payments deficit indicates persistent external vulnerabilities. How the government navigates these challenges,

    especially in global economic uncertainties, will be crucial.

     

     

     

     

     

  • Petroleum Receipts and Utilisation for 2024.. Gov’t targets US$1.07bn

     

     

    Adnan Adams Mohammed

     

    The Benchmark price for 2024 has been calculated as a seven-year moving average of prices, as captured in the 2024 budget statement.

     

    This has yielded a benchmark crude oil price projection of US$75.44 per barrel, up from the price of US$74.00 per barrel for 2023.

     

    The gas price for 2024 is also projected at US$6.84 per MMBtu, estimated as a seven-year moving average in line with the PRMA.

     

    This is in consistency with the First Schedule (Section 17) of the Petroleum Revenue Management Act (PRMA), 2011 (Act 815) as amended.

     

    “The 2024 Benchmark crude oil output is estimated at 51.15 million barrels (139,754 barrels of crude oil per day)”, the Finance Minister, Ken Ofori-Atta, while presenting the budget statement last week to Parliament, he said.

     

    Also, the Ghana group’s share of the total Benchmark crude oil output (51.15 million barrels) based on Ghana’s fiscal regime is 10.15 million barrels consisting of: Royalty volume of 2.82 million barrels; and Carried and participating interest volume of 7.32 million barrels.

     

    Similarly, the Benchmark gas output, has been estimated at 116.46 trillion Btu for 2024.

     

    From the above, the projected petroleum receipts for 2024 is US$1,072.35 million, made up of Royalties (US$213.08 million), Carried and Participating Interest (US$552.47 million), Corporate

    Income Tax (US$306.04 million) and Surface Rentals (US$0.76 million).

     

     

     

     

     

     

     

     

  • V-Talk Session Ignites Critical Conversations About Malaria during inauguration 

    V-Talk Session

     

     

    Adnan Adams Mohammed

    Vitality Health International launched its inaugural V-Talk panel discussion last week with the aim of addressing critical health, wellness and economic challenges facing the African continent.

     

     

     

    In the V-Talk series, leading experts are invited to identify and implement innovative healthcare solutions that protect, enhance and save lives across the African continent.

     

     

     

    The inaugural V-Talk focused on malaria and panelists included Mike Mpanya (Business Innovation Specialist at Vitality Health International), Sherwin Charles (Co-founder and CEO of Goodbye Malaria), Robbie Brozin (Co-founder of Nando’s and Goodbye Malaria), Dr Ron Whelan (Deputy CEO of Discovery Health), Dr Noluthando Nematswerani (Chief Clinical Officer at Discovery Health), and the CEO of Vitality Health International Africa, Emma Knox. Special guests included highly respected infectious diseases specialist, Professor Lucille Blumberg, as well as Dr Brian Brink, retired chief medical officer at Anglo American and treasurer on the Section27 board. Dr Brink also serves on the board of directors of the Global Fund to Fight AIDS, Tuberculosis and Malaria.

     

     

     

    In acknowledgment of the SADC (Southern African Development Community) Malaria Week (6 to 10 November) and SADC Malaria Day (6 November), the first V-Talk panel discussion – themed ‘African solutions to African problems’ – delved into the state of malaria in Africa and how working together in partnership, the senseless loss of lives to a disease that is totally preventable and treatable can be achieved.

     

     

     

    CEO of Vitality Health International: Africa, Emma Knox, opened the discussions by pointing out that malaria continues to be the leading cause of mortality across many countries in Africa. Despite significant changes and enhancements in prevention and treatment, the progress is still fragile.

     

     

     

    “Malaria is a fully preventable and treatable disease, and it has been eliminated in several countries across the world; but sadly, in Africa, it continues to take lives. One child dies of the disease every minute,” she said.

     

     

     

    Just over 50% of malaria deaths worldwide take place in four African countries

     

    According to the World Health Organization (WHO), four African countries accounted for just over half of all malaria deaths worldwide:

     

    · Nigeria (31.3%)

     

    · The Democratic Republic of the Congo (12.6%)

     

    · The United Republic of Tanzania (4.1%)

     

    · Niger (3.9%)

     

     

     

    Africa continues to carry a disproportionately high share of the global malaria burden. Statistics released in the 2022 WHO World Malaria Report revealed that Africa had 95% (234 million) of malaria cases and 96% (593,000) of malaria deaths. Eighty percent (80%) of these annual deaths are sadly those of children under the age of five.

     

     

     

    A powerful partnership breathes new life into the drive to eliminate malaria

     

    Vitality Health International, an innovative health insurer that rewards healthy living for employees in Africa (and owned by Discovery Group), has partnered with social benefit organisation, Goodbye Malaria, with a common cause and goal. This partnership shares a strategic focus in the fight against malaria in Africa, with the aim of striving to eliminate this deadly, yet preventable, disease in years to come.

     

     

     

    Mpanya explained how the partnership evolved: “During the planning phase of expanding our shared-value model into the rest of Africa, we were faced with a question of how we contextualise our shared-value health insurance approach. Based on findings from credible research sources, we can confirm that that malaria was the biggest health issue facing Africa. There are about 250 million cases of malaria in Africa every year.”

     

     

     

    Mpanya explained that expanding into Africa was not just about business anymore, it was now about saving lives.

     

     

     

    Mpanya continued: “For a traditional insurer that could be a contradiction but for Discovery, with a core purpose of making people healthier and enhancing and protecting lives, it made a lot of sense. Our focus shifted from how we create commercial value to how we can make a meaningful difference. That’s when we reached out to Goodbye Malaria who continues to contribute effortlessly towards fighting against malaria and who also aligned well with Vitality Health International’s core purpose.”

     

     

     

    Discovery Vitality MoveToGive has partnered with Goodbye Malaria to help eliminate the deadly infectious disease across Southern Africa. This initiative enables Discovery Vitality members to donate their Discovery Miles towards a range of interventions in support of ending malaria. Dr Ron Whelan explained, “Members who engage in healthy lifestyle activities like meeting their exercise goals on a weekly basis, driving responsibly and spending appropriately, get to unlock Vitality Active Rewards and Discovery Miles. The Discovery Miles earned can then be used to buy a range of products on the Vitality Mall or they can be donated to good causes through Vitality MoveToGive. In this case, MoveToGive provides the option for members to donate Discovery Miles to a range of malaria eradication initiatives led by Goodbye Malaria. For a small amount members can therefore support Goodbye Malaria in funding the costs of spraying of houses, providing malaria rapid test kits and medicine for the treatment of malaria.”

     

     

     

    Goodbye Malaria is an African-run initiative with the ultimate goal of eliminating malaria. Founded by concerned African entrepreneurs including Robbie Brozin (who also founded the international food chain Nando’s), Goodbye Malaria believes our generation can create innovative solutions that change the way the world sees Africa. Brozin explains, “Goodbye Malaria facilitates public-private partnerships, bringing together the private sector, the governments of Mozambique, Eswatini and South Africa as well as The Global Fund while supporting and catalysing on-the-ground malaria elimination programmes. In Southern Africa alone, over the last 10 years, Goodbye Malaria together with their private sector partners has committed US$ 13 million (around R247 million) to the fight against malaria in Mozambique, South Africa and Eswatini (known as the MOSASWA region).”

     

     

     

    Sherwin Charles adds, “When we started out, we found that the primary challenge extended beyond advocacy, there was a real lack of consistent, sustainable implementation on the ground. This realization prompted a strategic shift in our approach. We discovered that for us to make a real impact we needed boots on the ground. We also needed to bring the private sector mindset to the implementation of public health interventions. Although we have made significant progress in reducing the malaria burden in the three countries, the challenge now is to sustain that success and widen our scope to more countries in Africa.”

     

     

     

    A multi-pronged approach to dealing with malaria

     

    From a medical perspective, Dr Noluthando Nematswerani believes that awareness of malaria and malaria prevention is key. Nematswerani said, “Even though we are in a country [South Africa] that has low transmission rates, we do have high transmission zones within South Africa, and we share borders with countries that have a high prevalence. Since Vitality Health International is also operating in countries that have a high prevalence of malaria, we are perfectly positioned to play a part in working towards eliminating the disease.”

     

     

     

    Like with most infectious conditions, malaria requires a multipronged approach – indoor spraying, nets and the responsible use of prophylactics when travelling. Nematswerani continued, “It is a timely discussion because the holiday season is approaching. Today you can go to a pharmacy and get your medication without a prescription, removing the barrier of getting a prescription from a doctor. It is also important for travellers to protect themselves in malaria areas by, for example, wearing long covering clothes, staying indoors around dusk and dawn and using insect repellent appropriately.”

     

     

     

    The indoor residual spray is highly effective for households

     

    The challenge with insecticide-treated bed nets is that there is only one insecticide that is currently used, and the mosquitoes become resistant to this insecticide after a while. The World Health Organization recommends using nets treated with other types of insecticides in order to overcome this resistance.

     

     

     

    “Indoor residual sprays allow for rotation of insecticides making it a great alternative to nets,” said Nematswerani.

     

    Brozin concurred, “Spraying houses is incredibly impactful and, in our experience, one of the most effective solutions. You can control the implementation and therefore you control the impact and the outcome. Furthermore, it only costs R80 to protect a life through indoor residual spraying.”

     

     

     

    A new malaria vaccination brings hope for children

     

    Another exciting development is the research that has been done on developing a malaria vaccine for children against the most deadly malaria parasite, Plasmodium Falciparum. Young children have lower immunity levels and as such are highly vulnerable to malaria. The vaccine is currently recommended for children from the ages of 5 months who live in regions with moderate to high malaria transmission. It has already been rolled out in a few African countries and more countries are expected to start rolling it out in 2024.

     

     

     

    Sherwin Charles said, “The vaccination is an important addition to our toolbox. We must continue advancing and creating innovative tools that result in greater impact. Our communities report, and research confirms, that despite their efforts, malaria cases are on the rise in certain countries. Part of the messaging and the advocacy that we need to build awareness around, is how effective the vaccine is in preventing child death. The vaccine must, however, be integrated with proper vector control measures.”

     

     

     

    Raising the malaria voice

     

    Professor Lucille Blumberg, malaria champion and advocate, is excited about the partnership that has emerged. “We’ve really made great progress in eliminating malaria in four Southern African countries. The last miles are the hardest. It’s all about raising the malaria voice. COVID has led to the dampening of that voice and low awareness in communities. Goodbye Malaria has made a notable difference and hopefully it will continue to do so with Vitality Health International and Discovery Vitality on board. We have the science, energy, passion and innovation to make a real difference.”

     

     

     

    Knox concluded the inaugural V-Talk session with optimism for the powerful partnership and shared vision of people who are passionate about eliminating malaria, “How much do we care? A lot! We are extremely proud to be joining this panel of incredible partners who have already been making a difference on the continent for more than a decade. We are excited to join that journey and movement, and align with their core revelation of If not us, then who? If not now, then when?”

  • Gov’t to pursue aggressive domestic revenue mobilisation in 2024

     

    Ken Ofori-Atta in Parliament

     

    Adnan Adams Mohammed

     

    The Government of Ghana has targeted to pursue ‘aggressive’ domestic revenue in combination with other macroeconomic stabilization and fiscal consolidation policies in next year.

     

    In reading the 2024 Budget Statement and Economic Policies to Parliament, last week, the Finance Minister indicated that, the medium-term macroeconomic framework has been prepared to achieve the objective of the IMF-Supported PC-PEG through the under-listed priorities. 

     

    They include implementation of the IMF-Supported PC-PEG which is set to achieve; macroeconomic stabilization, fiscal consolidation, ‘aggressive domestic revenue mobilisation’, expenditure rationalization, structural reforms, and social protection. The government has projected a Non-oil Domestic Revenue of 15.1 percent of GDP in 2014 against a total revenue and grants of 16.8 percent of GDP. In value the government has targeted to mobilise, Total Revenue and Grants of GH¢176.4 billion (16.7% of GDP). 

     

    “The projection is underpinned by permanent non-oil revenue measures which are expected to yield at least 0.9 percent of GDP consistent with the medium-term revenue path under the IMF-Supported PC-PEG and the Medium-Term Revenue Strategy”, Ken Ofori-Atta emphasized during the budget statement presentation.

     

    “The fiscal effort for 2024 is anchored on the following revenue and expenditure measures.”

     

    In outlining some of the revenue measures the government plans to implement, Mr Ofori-Atta noted that, notwithstanding the efforts made by Government so far, there still exists a significant 

    VAT gap that needs to be urgently addressed to improve revenue performance. 

     

    In this respect, the following measures will be put in place: the Commissioner-General’s certified invoice will be the basis for all deductible expenses for income tax purposes; the second phase of the electronic invoicing system (e-VAT) covering six hundred large taxpayers and more than two thousand small and medium taxpayers will be implemented; the implementation of the upfront VAT on imports of Vatable goods by unregistered importers will continue; A VAT flat rate of 5 percent will replace the 15 percent standard VAT rate on all commercial properties will be introduced to simplify administration and enhance revenue mobilisation; and some VAT exemptions will also be reviewed to reduce distortions and abuses in the system.

     

    Also, among the priorities are: Completion of the Debt Restructuring Programme; Finalization and implementation of the Growth strategy with a focus on value addition, export promotion, domestic and foreign investments, Agriculture, Industry, Tourism, Textile & Garments, and Digitalisation;  Leveraging climate financing for Green Growth; 

     

    Focus on completing ongoing Infrastructure for Poverty Eradication Programme (IPEP) projects rather than start new ones; Road infrastructure; Rural electrification and telephony; Complete the issuance of Ghana Cards; Promote Peace and Security; and, The 2024 general Elections (Governance Institutions, NCCE, Electoral Commission).

     

  • Solar Africa advocates for support for Electrochem operations 

     

    Solar Africa

     

    Solar Africa, a Civil Society Organization (CSO) has registered its disappointment of the absolute machinations and sheer sabotage of all efforts of McDan Group of Companies and its subsidiary, Electrochem Ghana Salt Mining Company.

     

    Electrochem is legally authorized for the mining of salt in the Ada Songhor Lagoon for exploration and extraction.

     

    The Mcdan Electrochem Ghana secured a Concession lease by Government of Ghana, a 41,000 acreage within the Songhor Salt Mining Lagoon, for a period of 15 years effective 2020. This was backed by the Parliament of the Republic.

     

    Solar Africa in a press statement released today noted that, Mcdan Group has employed about 3,000 youth this year and plans to augment the labour force with an additional 4,000 employees in 2024.

     

    “By this gesture, the chiefs and people of Ada are overly excited to benefit from these natural resources which have been politicized and have been unproductive for decades”, statement signed by Kenteman Nii Laryea Sowah, Executive Chairman said.

    Below is the full statement:

    SOLAR AFRICA
    (Accountable Governance on Natural Resources)

    IMMIDIATE PRESS RELEASE

    Solar Africa, a Civil Society Organization (CSO) has learnt with dismay, the absolute machinations and sheer sabotage of all efforts of McDan Group of Companies and its subsidiary, Electrochem Gh Salt Mining Company who have been legally authorized for the mining of salt in the Ada Songhor Lagoon for exploration and extraction.

    The Mcdan Electrochem Ghana has secured a leasehold by Government of Ghana, a 41,000 acreage within the Songhor Salt Mining Lagoon, for a period of 15 years effective 2020.This was backed by the Parliament of the Republic. Subsequently, Mcdan Group has employed about 3,000 youth this year and augment the labour force with an additional 4,000 employees in 2024.
    By this gesture, the chiefs and people of Ada are overly excited to benefit from these natural resources which have been politicized and have been unproductive for decades. The forces militating against the good job of McDan Group of Companies is simply intolerable and condemnable. The enormous benefits of this progressive government initiate to lease the project to McDan include but not limited to the following;
    1. The Salt extraction project shall serve as a source of human and community development.
    2. Shall be a reliable source for public finance and state revenue.
    3. Shall serve as a source for job creation.
    4. Shall end all family and community disputes since the ancient of days in the Ada Traditional Area.
    5. Shall accelerate infrastructural development.
    6 .The company shall embark on a sensitization exercise through radio programs and community engagement to encourage the youth to apply for employment with the Electrochem Gh. to rather reduce crime rate in the traditional area and beyond.
    Solar Africa wishes to appeal to all citizens of Ada and beyond to let cool heads prevail for the youth of Ada to cooperate with the chiefs to ensure progressive development in the Traditional area. Similarly, the exploits of Electrochem Gh. in Ada shall encourage other Ghanaian local entrepreneurs to invest in other natural resources in other parts of the country. All must take note that investment in our natural resource exploration is quite expensive. Thus our local businessmen/women deserve encouragement rather than “pull him down” attitude. Ghana needs peace and harmony to help develop our human and natural resources into their full utilization.
    Solar Africa is appealing to all religious organizations, chieftaincy secretariat, all human rights and civil society organizations, the security agencies to also voice their indignation against reactionary forces working against the progress of Ada Traditional Area. The Ada Songhor Lagoon is the property of the state and it behooves on the political authorities including the Member of Parliament and the Municipal Chief Executive as well as the media to offer their maximum support to the Electrochem Gh. to help transform the lives of the people in Ada and the Satellite Communities.

    Kenteman Nii Laryea Sowah
    (Founder & Executive Chairman) (

  • Senco Developers commences its Senco Homes project in Accra

    Senco Homes engineers

     

    Ghana’s fast real estate development company, Senco Global Developers Ltd has announced the commencement of their flagship project, Senco Homes at Amrahia, Accra in the Adentan Municipality of the Greater Accra Region.

     

    According to a statement signed by the company’s Chief Executive Officer, Mr. Mawuli K. Senyo, the “Phase 1 of the  Senco Homes project is a luxurious mini-gated community project that seeks to offers residents a touch of comfort and secured homes at a serene environment with modern architectural design and a green natural environment.”

     

    “This housing solution is tailored to meet the housing needs of all class of customers. Our pricing policies take into consideration key elements like affordability, quality, security and luxury for all clients.” – Mr. Senyo added

     

    He revealed that the “current project which will be ready to move-in by December 2023 has two (2), Three (3) and four (4) bedroom houses with distinctive features in a gated community which already has Police station, children playground, hospital, and basketball court among others” adding that they are starting with “ten (10) housing units at a discounted price with a flexible  payment plan of 2 to 3 years where the customer pays an agreed percentage of the total sum as deposit and then move-in whiles paying the remaining amount.”

     

    “We also give our customers an opportunity  to pre-order and get the building plan customized to suite their taste and specifications. Our buildings are completed within 3-6months for the customer to move-in.” – He stressed

     

    Mr. Senyo has thus called on possible property investors to take advantage of the locations of their projects to invest in the Senco Homes project as it guarantees higher returns.

     

    “We want to use this opportunity to call on investors to consider investing in the Senco Homes projects as the locations and designs of our houses make it highly appealing for home owners hence guaranteeing high returns.”

     

    Read the full statement

     

    For Immediate Release

     

    To: All Media Houses

     

    Date: November 8, 2023

     

    Subject: Senco Developers commences its Senco Homes project in Accra

     

    We are excited to announce to the general public the commencement of our Senco Homes project. The project which started on Monday, October 16, 2023 is located at Amrahia on the main Amrahia-Katamanso Road in the Adenta Municipality of the Greater Accra Region, Ghana.

     

    Phase 1 of the  Senco Homes project is a luxurious mini-gated community project that seeks to offers residents a touch of comfort and secured homes at a serene environment with modern architectural design and a green natural environment.

     

    This housing solution is tailored to meet the housing needs of all class of customers. Our pricing policies take into consideration key elements like affordability, quality, security and luxury for all clients.

     

    Our current project which will be ready to move-in by December 2023 has two (2), Three (3) and four (4) bedroom houses with distinctive features in a gated community which already has Police station, children playground, hospital, and basketball court among others.

     

    The Senco Homes Amrahia Phase 1 project has ten (10) housing units at a discounted price with a flexible  payment plan of 2 to 3 years where the customer pays an agreed percentage of the total sum as deposit and then move-in whiles paying the remaining amount.

     

    We also give our customers an opportunity  to pre-order and get the building plan customized to suite their taste and specifications. Our buildings are completed within 3-6months for the customer to move-in.

     

    We want to use this opportunity to call on investors to consider investing in the Senco Homes projects as the locations and designs of our houses make it highly appealing for home owners hence guaranteeing high returns.

     

    Editor’s Note:

     

    Senco Global Developers Ltd is a real estate development and civil engineering company located in Accra-Ghana. Our services focus on real estate development, building construction, civil and electrical engineering, architectural drawing, land management, quantity and land surveying.

     

    Senco Global Developers has Senco Properties & Investment, Senco Concrete, Senco Furniture as its subsidiaries.

     

    It has its head office at No. 40, Westlands Blvd, West Legon-Accra; sales offices at Adenta Housing Down and Tamale.

     

    Web: https://sencodevelopers.com

     

    Email: senyo@sencodevelopers.com

     

    Tel: +233201950509

     

    Signed:

     

    Mawuli K. Senyo

     

    CEO,

     

    Senco Global Developers Ltd.

  • Ghana and private creditors to reach agreement by mid-2024 – Fitch 

     

    Ken Ofori-Atta, Ghana Finance Minister

     

    Adnan Adams Mohammed

     

    Ghana is likely to reach an agreement with private creditors by mid-2024, Fitch has revealed.

     

    This expectation follows an agreement reached fortnight ago with the official creditor committee (OCC).

     

    Ghana is looking to restructure US$20 billion of its external debt, including bilateral debt, export credit agencies-backed commercial loans, Eurobonds and non-insured commercial loans, under the G20 Common Framework.

     

    Financing assurances from the official creditor committee (OCC) were provided in May 2023. This agreement is crucial to the Ghanaian economy as the release of the second tranche of US$600 million of the International Monetary Fund, (IMF) is dependent on it.

     

    “Under its baseline scenario, Fitch expects Ghana to reach an agreement with private creditors by mid-2024, following an agreement with the OCC”, it said.

     

    In October, the IMF and Ghana reached a staff-level agreement (SLA) on the first review of the three-year Extended Credit Facility. As one of the requirements, monetary financing of the fiscal deficit ended in May 2023.

     

    IMF board approval of the first review, which would permit a US$600 million disbursement, is pending on an agreement between Ghana and the OCC.

     

     

  • 24-hour economy: economist and unionists say ‘could be the game-changer’   

    John Mahama’s 24-hour economy

     

    Adnan Adams Mohammed

     

    Trade Unions and economist have hailed the proposed 24-hour economy for Ghana by former President John Mahama.

     

    They believe it ‘could be the game-changer’ and asked to know a lot more about this ‘great idea’.

     

    The Ex President Mahama during his engagement with Trades Union Congress (TUC) as part of his Building a Better Ghana Tour, last week, proposed the idea of 24-hour economy to help in expanding the economy whiles creating jobs. 

     

    “I think, this one, Comrade [referring to Mr Mahama], you have to take your time, because I can imagine the amount of jobs that this kind of thing will create”, Secretary-General of TUC, Yaw Baah, affirmed idea. 

     

    “Such an economy “could be the game-changer”, explaining: “…You have an opportunity in this country, to work 24 hours: three shifts. So, if you don’t get a job in the morning, you can get it in the afternoon or in the night”.

     

    “So, where are the young people? Get ready for jobs”, Dr Baah charged.

     

    Consequently, in a statement released last week, a US-based economist, Dr Sa-ad Iddrisu, expressed his enthusiasm for Mahama’s policy, stating that it has the potential to be a game-changer for the Ghanaian economy.

     

    Dr Iddrisu highlighted the advantages of such an economic model, stating, “The concept of a 24-hour economy, common in most developed nations, involves three working shifts and offers many advantages.”

     

    Dr Iddrisu highlighted the advantages of such an economic model, stating, “The concept of a 24-hour economy, common in most developed nations, involves three working shifts and offers many advantages.”

     

    He explained that extending business operating hours beyond the conventional 8 am to 5 pm would substantially reduce Ghana’s high unemployment levels.

     

    The need for additional shifts would create job opportunities and offer workers flexible working hours, promoting a sustainable and productive workforce, the statement said.

     

    Dr Iddrisu noted that implementing a 24-hour economy would require enhanced security measures, leading to a reduction in urban crime rates and generating additional employment opportunities within the security forces, particularly benefiting the youth.

     

    He emphasised that a 24-hour economy would drive improvements in essential services like electricity and water supply, which are vital for the economy’s uninterrupted functioning.

     

    “Addressing these services would significantly benefit citizens, as consistent power and water supply are essential for sustaining a 24-hour economy,” he added.

     

    Dr Iddrisu also highlighted the potential for nightlife tourism as a significant benefit of a 24-hour economy.

     

    “Major cities like Accra, Kumasi, Tamale, Takoradi, and Ho could stimulate nightlife tourism, attracting youth and travelers seeking unique experiences and generating additional revenue for local businesses and the overall economy,” he projected.

     

    Among other advantages, he mentioned traffic reduction and increased foreign competitiveness, stating that a 24-hour economy has the potential to alleviate traffic congestion during peak hours and enable Ghanaian youth to compete globally without relocating.

     

    Information technology companies, for instance, could cater to foreign clients around the clock, leading to increased revenue and employment opportunities, he stated.

     

    While acknowledging the numerous benefits of a 24-hour economy, Dr Iddrisu also cautioned about potential challenges, such as an increase in night crimes.

     

    He stressed the importance of vigilant support and engagement from citizens, community leaders, religious figures, and chiefs, as well as careful consideration when identifying sectors within the Ghanaian economy suitable for 24-hour operation.

     

    This balanced approach would avoid overwhelming specific industries.

     

  • 2024 Budget to focus on jobs, economy expansion amidst tax review calls by businesses 

     

    Ken Ofori-Atta in Parliament

     

    Adnan Adams Mohammed

     

    Ghana’s Parliament awaits the presentation of the 2024 fiscal budget and economic policies of government on November 15, 2023.

     

    The Speaker of Parliament, Alban Sumana Kingsford Bagbin, announced the date during a parliamentary session, last week.

     

    The Minister of Finance has already indicated that, the government intends introducing some strategies in the 2024 budget to propel job creation.

     

    “As part of the 2024 budget, the government will also roll out a strategy to complement the micro-fiscal reforms we are implementing under the IMF programmes”, Ken Ofori-Atta said at the Ghana Mutual Prosperity dialogue held inAccra, last week.

     

    “This is to ensure the growth of jobs and critical components of the economy,” he added.

     

    Apparently, key stakeholders of the economy have called for review of many tax policies to facilitate government’s aim of creating more jobs while expanding the economy.

     

    To this, the Ghana Federation of Labour (GFL) has said the government must urgently review nuisance taxes, particularly excise duties on the beverage industry.

     

    A statement from the federation signed by Secretary-General Abraham Koomson, said this has to be announced in the 2024 budget.

     

    It said: “These burdensome taxes have hindered economic growth, stifled business development, and placed an unfair burden on hardworking Ghanaians and effective operation of industries”.

     

    “It is imperative that the government takes immediate action to alleviate these challenges and foster a more conducive environment for businesses and workers”, the federation stressed.

     

    It noted: “The GFL firmly believes that the review of nuisance taxes and excise duties stated above is an urgent necessity”.

     

    “These taxes, often excessive and unnecessary, have impeded the growth and competitiveness of local businesses, stifling Innovation, investment, and job creation”.

     

    “The burden they impose on businesses is detrimental to their sustainability and ability to contribute to the economic development of Ghana. It is time for the government to acknowledge the adverse effects of these taxes and take decisive action to address them.”

     

    Also, the Ghana Union of Traders Association (GUTA), is calling for the withdrawal of both the COVID-19 Levy and the Special Import Levy in the yet to be read 2024 budget.

     

    Specifically, GUTA wants the removal of the 1% COVID-19 Levy, the 2% Special Import Levy, and addressing the complex nature of Value Added Tax (VAT). The COVID-19 Health Recovery Levy was introduced in 2021 as a standalone tax applied to the gross value of taxable goods and services provided under the Standard Rate and VAT Flat Rate Schemes.

     

    “Reducing the cost of doing business would lead to increased productivity and better revenue collection for the government’, Dr Joseph Obeng, the President of GUTA justified their demand.

     

    Also, the Food and Beverage Association of Ghana has outcried that, the business sector is currently riddled with too many taxes, levies, duties and indeed an overtaxed economy, thereby stifling growth.

     

    Members of the Association believe that the government stands to rake in more revenue for development if taxes are reduced and some are cancelled.

     

    John Awuni, the executive chairman of the association at a press conference said “We strongly advocate for major tax cuts and the cancellation of some taxes in the 2024 fiscal year. This will spur the gains the economy has started making to sustainable levels”.

     

    Currently, he said the “prices of goods and services are very high consequently reducing the demand for these goods and services. Considering the level of low wages and salaries in the country, the government can trigger higher demand for goods and services in the private sector if taxes are reviewed downwards.”

     

    For its immense role it plays in the financial sector of the economy, the Ghana Co-operative Credit Unions Association wants the government to exempt them from paying taxes to protect the investments unions.

     

    Board Chairman of GCUA, Dr Bernard Bingab, explains that all African countries exempt co-operatives from tax. However, in recent years the Ghana Revenue Authority has clamped down on credit unions asking some to pay as high as one million cedis.

     

    “This is a group that is there to help the country. Monies that we take as credit unions get back to the pool, so, we have difficulty as to why other African countries have exempted co-operatives and yet the credit unions are being asked to pay tax”, Dr Bingab said during the 55th-anniversary of the Ghana Co-operative Credit Unions Association at Koforidua in the Eastern region, last week.

     

    “One of my biggest appeals to our government is tax exemptions for co-operatives”.

     

    Notably, another key player or contributors to the Ghanaian economy is the hospitality industry. This, the Ghana Hotels Association (GHA) has also bemoaned the recent hikes in utility tariffs, taxes, and levies, saying “they are incredibly crippling the hospitality industry.”

     

    The industry already suffered tremendous losses from the COVID-19 pandemic, and instead of helping to rebound faster, the Government had slapped it with hefty taxes, particularly property rates, which had deepened its woes, the Association said.

     

    According to players, one of their major headaches is the property rate regime currently being implemented by the Ghana Revenue Authority, which they describe as a “killer to the sector’s rebound.”

     

    “How could a facility that pays a property rate of GH¢700 suddenly rise to GH¢20,000 or from GH¢1,800 to GH¢50,000? We are not against the increase and the collection by GRA, but we are against the astronomical increases killing our businesses,” Isaac Nkoom, the immediate past Central Regional Chairman of the GHA said in an interview reacting to the current state of the industry.

     

    “We do not know how they arrived at those sharp increases and, as far as we remain stakeholders, we expected some consultations on operational modalities before implementation.”

     

    “This must certainly change for our mutual gain. The entire arrangement appears we are being punished for owning businesses because the rates do not reflect the reality of our business.”

     

    The challenges had also been exacerbated by 20 multiple and duplicate taxes and levies, which were “suffocating the growth of the sector.”

     

    “These include the NHIL, VAT, GETfund, COVID-19 levy, GTA levy, EPA Levy, FDA levy, MMDAs levy, Fire Service levy, and one percent tourism levy.”

     

    “Others are SSNIT for staff, data protection levy, property rates, suitability report levy, and GHAMRO levy, all of which contribute to the pricing mechanisms.”

     

    Mr Nkoom expressed regret over the burden those taxes put on industry operators and said the GHA had no option but to honour all tax obligations, in addition to the cost of maintenance, utilities, and the payment of salaries.

     

    He urged the Government to consider the reduction in VAT charges as the hotel business was gradually grinding to a halt due to very low patronage, because of the economic hardship.

     

    Apparently, the Finance Ministry is scheduled to present the 2024 budget to Parliament in November.

     

    In the lead-up to the presentation, Finance Minister Ken Ofori-Atta has engaged with various interest groups, including GUTA.

     

    Minister Ofori-Atta acknowledged the concerns raised by these groups, particularly regarding the high tax rates in the country.

     

    He assured that their concerns would be taken into consideration before the budget presentation.

     

    Meanwhile, Speaker Bagbin emphasised the importance of scrutinising the budget to ensure it meets the needs of all Ghanaians. He called for a consultative and consensus-building approach during the process, highlighting the Parliament’s demonstrated capacity and experience in budget approval deliberations.

     

    The Speaker also stressed the urgency of passing the budget bill, as it would enable Parliament to engage additional technical personnel, aligning the institution with the imperatives of recent legislations passed by the house.

     

     

  • Ghana to end 2023 with 99% debt-GDP-ratio– Fitch

     

     

     

     

    Adnan Adams Mohammed

     

     

    Ghana’s economy is likely to end 2023 with a public debt to GDP ratio of 99 percent, Fitch Solutions has said. The projected public debt figure is an increase from the previous 88% recorded in 2022.

     

    The primary driver for this projected rise is the depreciation of the cedi against the US dollar, with the local currency having already lost about 11.80% in value to the dollar on the retail market and 22% on the interbank market.

     

    Ghana faces stive debt accumulation matrix. But Fitch is projecting that the public debt could decline by 4 percent of GDP at the end of 2024 to 95% of GDP and further to 94% in 2025 at the back of continues fiscal consolidation and stabilisation of the cedi.

     

    Meanwhile, the International Monetary Fund (IMF) had previously projected a decline in Ghana’s debt-to-GDP ratio for 2023 to 84.9% from 92.4% in 2022.

     

    The October 2023 Fiscal Monitor indicated an expected consistent decline in the country’s total debt-to-GDP ratio over the next five years.

     

    Ghana has faced challenges in its public finances last year, leading to restricted access to Eurobond markets and a significant decline in external liquidity.

     

    This resulted in credit downgrades, including a downgrade to ‘CCC’ by Fitch and subsequent placement on restricted default (‘RD’) in early 2023.

     

    Despite the downgrades, Fitch notes that foreign-currency debt constitutes less than 40% of Ghana’s total public debt, well below the ‘B’ median.

     

    The agency acknowledges Ghana’s stronger levels of governance compared to the ‘B’ median and its democratic record with peaceful transitions of power since 1992.

     

    However, Fitch expresses concerns about the country’s weaknesses, including a low international liquidity position, low per-capita income and human development indicators, and a heavy reliance on exports of oil, gold, and cocoa, exposing it to commodity price volatility.