Category: News

 

Adnan Adams Mohammed

 

The Bank of Ghana (BoG) has called on banks and other financial institutions under its regulatory supervision immediately to put an end to charging customers unfairly.

 

The directive was given under the legal powers of the Bank under Section 3 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930).

 

In a statement copied to this paper, it noted that this directive is in line with BoG’s mandate to deal with unlawful or improper practices of banks and SDIs.

 

“It is also to ensure that the interest of customers of banks and SDIs are adequately protected”, the statement emphasized.

 

It further expatiated on some of the malpractices of the banks and SDIs in the country as follows:

 

Credit Insurance Premium Overcharges

 

As part of credit underwriting policies, a number of banks and SDIs require borrowers to hold credit insurance against eventualities such as death, permanent disability and termination of employment.

 

The Bank of Ghana said while it acknowledges the importance of this practice as a loss mitigating norm in credit management, a number of banks and SDIs take advantage, to overprice the premiums charged to customers, resulting in the increased cost of borrowing.

 

It therefore directed banks and SDIs to apply the same premium charged by the underwriting company to borrowers.

 

Also, banks and SDIs are not permitted to retain insurance premiums collected from customers with the intention of implementing an internal insurance policy. This however excludes commissions for Bancassurance arrangements.

 

Maintenance fees on Savings Account

 

The Central Bank said the application of “Account Maintenance Fees” by banks and SDIs on savings accounts inhibits deposit mobilisation and discourages the use of banking systems by the general public.

 

It therefore noted that the application of such fees has driven a number of savings accounts into debit and in so doing, eroded the deposits of vulnerable depositors who would generally expect their savings accounts to earn interest.

 

This practice it believes is detrimental to financial inclusion and negates the gains of the financial literacy programmes geared towards promoting personal savings.

 

Over the Counter (OTC) withdrawal charges

 

The Bank of Ghana noted that some banks and SDIs impose penal charges on customers who withdraw their own funds from banking halls of affected banks and SDIs.

 

The reason commonly attributed to this practice is to encourage customers to use digital platforms provided by the banks/SDIs for such withdrawals, in order to decongest banking halls. These digital platforms are however not offered for free.

 

But the Central Bank said while it acknowledges the support of banks and SDIs in the digitization agenda, this action deters some customers, especially those who are averse to the use of digital platforms, from opening and operating accounts.

 

The practice it said negatively affects the financial inclusion drive, thus the banks and SDIs are directed to desist from levying penalties on customers who withdraw own funds below certain thresholds from the banking halls.

 

In addition, banks and SDIs shall not levy penalties against customers who request account balances within banking halls.

 

Change of ownership of collateral documents

 

The Bank of Ghana noted that some banks and SDIs require borrowers who secure credit facilities with movable assets, to transfer ownership of such assets into the joint names of the borrower and the bank or SDI involved.

 

In addition, borrowers are made to bear the cost associated with the transfer prior to loan approval and after settlement of loan. This practice of some banks and SDIs, it said, is contrary to section 7 of the Borrowers and Lenders Act, 2020 (Act 1052) which does not permit a security interest to operate as a transfer of title from a borrower to a lender.

 

In addition, the regulator said the practice further denies borrowers the opportunity to secure multiple loans with a single collateral duly registered in the name of the respective borrowers.

 

It therefore barred banks and SDIs from engaging in the practice of changing ownership of collaterals presented by borrowers to secure credit facilities from the borrower to the bank or SDI.

 

Application of interest on penal charges

 

The regulator observed such practice among some banks and SDIs, where penal interest rates levied against defaulting loan customers, are made to accrue interest.

 

In effect, interest is computed on penal charges in addition to interest on the outstanding loan amount.

 

This practice it noted results in high outstanding loan balances which customers are unable to pay, resulting in high non-performing loans. The practice is detrimental to the credit market and it therefore directed banks and SDIs to desist from the application of interest on penal charges.

 

Additionally, it said penal charges shall only be applied on the amount of the delayed interest or principal payment and not on the total outstanding loan amount in accordance with section 55(3) of the Borrowers and Lenders Act, 2020 (Act 1052).

 

Quotation of monthly interest rates on credit facilities

 

In accordance with section 55 (2) of the Borrowers and Lenders Act, 2020 (Act 1052), the Bank of Ghana said banks and SDIs shall impose on a borrower an interest rate that is calculated on an Annual Basis only in all credit agreements.

 

Consequently, the regulator cautioned banks and SDIs to desist from the quotation of monthly interest rates on all credit facilities and associated fees.

 

In addition to the interest rate, the Central Bank said banks and SDIs are not to disclose the Annualized Percentage Rate (APR) related to every credit facility in accordance with the Disclosure and Product Transparency Rules for Credit Products and Services.

 

Third party deposit/Withdrawal violations

 

The Central Bank observed with concern, the lack of compliance with the requirement of banks and SDIs to obtain full personal details (name, address, ID and telephone numbers) of a person who makes a deposit into or withdrawal from an account on behalf of another person.< /o:p>

 

Deposit slips of some banks and SDIs do not make provision for depositors’ signatures.

 

The regulator said this anomaly makes it possible for third parties to deposit into customer’s account under the guise that the deposit was made by the customer, by simply writing “self” in the column for depositor’s name.

 

It, therefore, cautioned banks and SDIs to desist from this practice, adding, banks and SDIs shall ensure that depositors sign on deposit slips at all times.

 

 

 

Adnan Adams Mohammed

 

The Bank of Ghana has announced that it has reviewed the fees for collateral registry services effective 1 July 2021.

 

All banks, specialised deposit-taking institutions, non-bank financial institutions and the general public have been asked to take note and be guided accordingly.

 

Pursuant to Section 77 of the Borrowers and Lenders Act, 2020 (Act 1052) and further to its Notice No. BG/GOV/SEC/2021/07 dated 19 April 2021, it is announcing for the information of all banks, specialised deposit-taking institutions, non-bank financial institutions and the general public that with effect from 1 July 2021, the fees for the services of the collateral registry shall be as follows:

 

“Registration of Secured Interest is now GH¢20.00 and Searches are now GH¢10.00”, the central bank  in a statement noted.

 

Under the statutory Mandate of the Borrowers and Lenders Act 2008 (Act) 773, the Bank of Ghana operationalized the establishment of the Ghana Collateral Registry on 1st February 2010, to register charges and collaterals created by borrowers, to secure credit facilities provided by lenders. This was pursuant to its mandate to regulate, supervise and direct the banking and credit system, and ensure the smooth operation of the financial sector.

 

Some of the services of the Collateral Registry includes: Registration of Security Interests

(The Collateral Registry provides a user-friendly online platform for the registration of security interests); Searches (We facilitate searches on registered security interests using our easy-to-use online platform); Realisation of security interest (We facilitate the realisation of assets upon default by a borrower); and Post Registration Activities (Our online platform supports a wide range of post-registration activities so as to ensure security interests are up-to-date).

 

The Collateral Registry is one of the innovations in the credit market introduced by the Bank of Ghana to reduce information asymmetry between borrowers and lenders in credit transactions. To this end, the Collateral Registry is equipped with the requisite legal framework and technologies to facilitate the registration of notices of security interests, searches on assets pledged as collateral to ascertain their level of encumbrance and enforcement of collateral upon default by borrowers.

 

Registered users can log into the Collateral Registry Application Software (CRAS) to patronize the services offered by the Registry. Clients who do not have user accounts can use the search module on the CRAS to gain access to information on assets pledged as collateral.

 

As the first Secured Transactions Registry on the African continent, the Collateral Registry remains on course to achieve its mission of creating an enabling environment to promote easy access to credit. The Collateral Registry combines professionalism, responsiveness and leadership in delivering an effective and efficient service to its cherished stakeholders.

 

The establishment of the Collateral Registry at the Bank of Ghana, as mandated under the Borrowers and Lenders Act 2020 (Act 1052) is indeed a welcomed innovation to credit delivery in Ghana.

 

Barima Okofo Gyekye Mante II

The elders and people of Teacher Mante, a fast-growing town situated along the Accra-Kumasi Highway near Nsawam, have enstooled a new chief, who has promised to spearhead the socio-economic development of the area.  

Barima Okofo Gyekye Mante II was enstooled on 10th May, 2021, and was outdoored on the seventh day as custom demands on 16th May, 2021 in the palace in Teacher Mante. The selection, installation and successful enstoolment of Barima Gyekye Mante as the Teacher Mantehene of the Akyem Abuakwa Traditional Council in the Ayensuano District of the Eastern Region put to end years without a substantive chief in the town.

Known in private life as William Yaw Gyekye Odame, the Teacher Mantehene, Barima Gyekye Mante II, is a royal of the Ahimso Clan of Aduana Abrade of Larteh Kubease in the Akuapem North District of the Eastern Region. He hails from the Titus Mante House of Ahimso, Larteh Kubease.

His great grandfather, Titus Mante, a teacher, catechist, presbyter and farmer, was the head man who founded Teacher Mante with the approval of the then chief of Apedwa (Apedwahene) of Akyem Abuakwa, which has since developed into a burgeoning town. Barima Gyekye Mante is a construction engineer by profession and holds a Masters degree in Project Management.

He succeeded Barima Anim Mante I, the son of the late Baffour Gyebi Siaw Mante of Teacher Mante, who died on 16th September, 2018 (on his birthday) aged 70. He reigned for 12 years. Known in private life as Ebenezer Oscar Yaw Anim Mante, he was a teacher and journalist.

He was enstooled on 17th April, 2006. In 2013, Barima Anim Mante I was elevated from Odikro/Baffour to Barima status by the late Apedwahene Osabarima Obenakwa  Kwarifa II. His elevation was a result of his exquisite leadership and vision for the development of Teacher Mante and the surrounding communities. This status gave him a more dignifying title in the hierarchy of chieftaincy in the Akan political system.

He had proved his vision by making the town more attractive to investors who were willing to invest to bring massive development to his people. Teacher Mante is a rapidly developing town located along the Nsawam-Suhum Road, five minutes’ drive from Nsawam and 30 minutes’ drive to the Accra Metropolitan Area.

With less traffic due to the operation of the Pokuase Interchange, Teacher Mante is a suitable destination for real estate, healthcare, educational institutions and other businesses. Other areas which are close to Teacher Mante are ideal for commercial agriculture (fish farming, cattle rearing, grasscutter rearing, poultry, piggery, etc.), and for industries due to easy access to raw materials like pineapple, oranges, pawpaw, cassava, timber, stone quarries, and utility services like water and electricity as well as transportation and communication.

Socio-culturally, Teacher Mante celebrates a festival called Asanka at the end of every year. The festival commemorates a feast of love and exchange of pleasantries, while showing care by offering gifts to the needy to foster unity and instill kindness and generosity among the people.

Okyeman Tease!

Okyeman Nkwaso!

Teacher Mante Nkoso!

Nana Nya Nkwa Daa!! 

By Elorm Desewu

The banking sector has remained sound and profitable, with adequate levels of capital and liquidity to withstand moderate to severe shocks.

The industry has witnessed sustained growth in deposits, total assets, profits, and shareholder funds.

The COVID–19 policy and regulatory response measures have somewhat helped to mute the effect of the pandemic on corporates and households and are being maintained in the near-term.

Profit before tax increased by 39.6 percent to GH¢2.3 billion, recovering from the marginal growth of 7.5 percent a year ago. Non-Performing Loans (NPL) ratio increased marginally from 15.0 percent in April 2020 to 15.5 percent in April 2021 arising partly from the general pandemic-induced repayment challenges as well as some bank specific loan recovery challenges.

The total assets increased by 16.4 percent to GH¢155.7 billion. This reflected strong growth in investments in government securities by 34.9 percent to GH¢73.3 billion funded by deposits and loan repayments.

Total deposits recorded an annual growth of 24.2 percent to GH¢104.9 billion on the back of the strong liquidity flows from the fiscal stimulus and payments to contractors, and to depositors and clients of defunct SDIs and SEC-licensed fund managers respectively.

Overall, the impact of the pandemic on the industry’s performance was moderate, as banks remained liquid, profitable and well-capitalized.

Financial soundness indicators remained strong, underpinned by improved solvency, liquidity and profitability indicators. The industry’s Capital Adequacy Ratio of 21.8 percent as at end-April 2021 was well above the regulatory minimum threshold of 11.5 percent.

Core liquid assets to short-term liabilities was 24.9 percent in April 2021, relative to 30.1 percent in April 2020. Net interest income grew by 18.4 percent to GH¢4.1 billion, compared with the 18.8 percent growth over the same comparative period. Net fees and commissions grew stronger by 26.5 percent to GH¢917.6 million, relative to 8.8 percent growth during same period last year, reflecting a gradual recovery in trade finance-related and other ancillary businesses of banks. Accordingly, operating income rose by 16.8 percent, marginally higher than the corresponding growth rate of 15.2 percent a year ago.

The banking sector deployed effective cost control measures which resulted in a marginal 1.7 percent growth in operating costs over the review period, significantly lower than the 17.8 percent growth for the same period in 2020. Loan loss provisions however increased by 29.4 percent, compared with 7.1 percent a year ago, on account of continued elevated credit risks.

 

Adnan Adams Mohammed

Ghana’s Financial Intelligence Centre (FIC) has indicated it’s preparedness to consolidate the gains on the Anti-Money Laundering (AML) reforms.

The Centre, mandated to combat Money Laundering and Terrorism Financing (ML/TF), noted that even though Ghana has completed its action plan, it is important for all stakeholders to continue working hard to consolidate the gains brought by the reforms in our Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime.

It has therefore appealed to all stakeholders that, the International Cooperation Review Group (ICRG) of the Financial Action Task Force (FATF) process is a difficult one, so stakeholders must not rest on their oars but continue working hard so that Ghana does not get back to where we came from.

“It’s been quite an arduous journey, and we have to ensure that we do not get back to where we came from,” Chief Executive Officer of the FIC, Kwaku Dua speaking at separate sensitisation workshops organised by for the banking and real estate sectors.

It will be recalled that Ghana was placed on the Financial Action Task Force ‘grey list’ as a result of some deficiencies identified in its Anti-Money Laundering regime during its Second Round of Mutual Evaluation Report (MER).

An Action Plan was drawn for it with timelines by the International Cooperation Review Group (ICRG) to complete, or risk being placed on the FATF blacklist with all its adverse effects on our economy.

The International Cooperation Review Group of the FATF is the technical committee or group charged with the responsibility of identifying, reviewing and monitoring the progress of jurisdictions with strategic AML/CFT deficiencies that present a risk to the international financial system.

Following FATF’s action, the European Union (EU) also decided to place Ghana on their list of third countries with strategic deficiencies in the AML/CFT regime.

The FIC took up the challenge, and with the support of relevant stakeholders executed the action plan even ahead of time.

At the recently held Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) Plenary in Lome, Togo (from May 16-21, 2021), GIABA commended Ghana’s efforts and hoped that it will serve as a source of inspiration to other member-states in the sub-region.

It is to be noted that Ghana is the first country in the sub-region to have gone through the Second Round of Mutual Evaluation and completed the ICRG Process in record time.

As part of the ICRG Processes and Procedures, a team was in the country during May 2021 to conduct an on-site assessment – based on which a final decision will be taken at the June 2021 FATF Plenary meeting.

Despite the Action Plan’s completion, the CEO believes that work must go on unabated to reap its benefits.

He disclosed that the two workshops are only part of a series of capacity building programmes lined up, all to help strengthen our AML/CFT regime.

He used the opportunity to commend all stakeholders for their various roles played and advised that they keep up the momentum.

Finally, he commended the Ministry of Finance (MoF) – and for that matter, government – for their support and political commitment exhibited during the exercise. He observed that but for political commitment all efforts would have been in vain, and said he hopes government will continue to show political commitment.

 

Adnan Adams Mohammed

The mouthpiece of large-scale mining companies in the country has echoed the need for government to give 30 percent of mining royalties to mining communities instead of the current 13 percent to speed up development in those areas.

Ghana Chamber of Mines believes the percentage of mineral royalties that go to the host mining communities for development purposes are insufficient thereby snail pacing their infrastructural development.

For past years, many indigenes from mining communities have complained of the underdeveloped nature of the mining communities with many motorists raising many concerns with the road networks in those communities, especially, Tarkwa, Prestea, Obuasi and others town roads.

“The Chamber continues to urge government to increase the host communities’ share of royalties to 30 percent and earmark same for specific sustainable infrastructure projects in the host communities,” President of the Chamber, Dr Eric Asubonteng  stated at the recently held Annual General Meeting (AGM) of the Chamber. “The share of mineral royalty that was used to support development in mining communities was negligible.”

Addressing the issues of royalties due to host communities, Dr Asubonteng stressed “obviously, this is woefully inadequate to address the infrastructure shortfalls in the hosts of the country’s mineral wealth.”

He pointed out that apart from the statutory proportion of mineral royalty that was returned to the host mining communities, all the other streams of fiscal revenue originating from the mining sector accrued to the central government.

“In the case of mineral royalty, only 13 per cent of the mineral royalty is returned to the communities where mining takes place. Out of this amount, 4.95 per cent accrues to the respective District Assemblies while the Mining Community Development Scheme (MCDS) set up under the Minerals Development Fund Act, 2016(Act 912) receives 4 per cent. The remaining amount is disbursed to traditional authorities and stools in the host mining communities,” President of the Chamber explained.

According to Dr Asubonteng, the poor state of mining communities was largely a function of the development status of the country as well as an outcome of the mechanism for allocating and utilising fiscal revenues realized from the extraction of mineral resources.

Deplorable state of railway infrastructure, the Chamber noted that the western railway line, which was the primary mode of hauling bulk minerals to the Takoradi port, had deteriorated over the years due to obsolescence and limited investments.

Consequently, bulk mining companies, like the other producers of bulk export commodities, had had to make use of the more expensive road haulage option, which was estimated to be 50 per cent more expensive than rail.

According to the Chamber, successive budget statements and economic policies consistently pointed out the intention of government to rehabilitate the western rail network yet nothing was done.

“As an industry association, we believe that the benefits of a well-functioning railway system will not be a preserve of our industry but the entire economy. It will also serve as an alternative means of transporting people, foodstuff, and other commodities across the country. The Chamber is therefore pleased at government’s efforts to rehabilitate the country’s railway network, particularly, the western railway line,” the President said.

It urged government to expedite action since it had the inherent potential to generate revenue to pay back the initial investment cost.

This year’s AGM was themed “Positioning Ghana as a mining support services hub.

Dr. Mohammed Amin Adam

Adnan Adams Mohammed

Dr. Mohammed Amin Adam has called for the merger between the Public Utilities Regulatory Commission (PURC) and the Energy Commission as regulators in the power utilities sector.  

The call was backed with explanation that, the merger will help “lessen the burden power sector investors go through” to secure approvals for projects and tariffs setting.

PURC and the Energy Commission are the two main regulatory agencies in the power sector, responsible for technical regulation—including licensing and setting of standards—and economic regulation, respectively.

“If we want to avoid over-regulation, then we need a one-stop shop where both economic and technical regulation takes place. We learnt our lessons when we decided to set up Petroleum Commission”, the Deputy minister-designate for Energy noted during his vetting for reappointment to the same portfolio under the term of the Akufo Addo administration. “There, we decided to add technical and economic regulation in one institution, and this is the proposal that we discussed for the merger of PURC and the Energy Commission.”

On the reported lack of collaboration between Italian oil major Eni and Ghanaian operator Springfield towards unitisation of the Sankofa-Gye Nyame and Afina oil fields, Dr. Amin Adam stated: “I wish commercial partners cease releasing statements because it is a sensitive matter as government moves to negotiate between the two parties.”

Government last year directed Eni and Springfield to begin talks to combine their adjacent oil and gas fields, but the two are yet to reach an agreement.

Analysts say unitisation will optimise the exploitation of the fields and increase the benefits to government.

 



 

 

Adnan Adams  Mohammed

Ghana is in the speeding up process to launch a digital currency as a proactive measure to meet up with the digital currency revolution in the world.

Ghana’s version of the digital currency to be named ‘E-Cedi’ is set to go through a three-phase process of development and authentication before it will be release into the system.

The ‘E-Cedi’ development which is near the final phase, where it will be piloted is to determine whether the digital currency will be feasible or not before it goes into circulation.

“The Bank of Ghana was one of the first African Central Banks to declare that we were working on a digital currency looking at the concept of an E-Cedi,” Dr Ernest Addison disclosed at a news conference in Accra, last week.

“Yes, we are quite advanced in that process. As you know, with these types of things, you have to go at it in phases and the first phase was really on the design of the electronic money and the team that has gone quite far in the design phase, they are looking at the implementation phase.

“After the implementation phase, we have a pilot phase where a few people would be able to use the digital cedi on the mobile applications and other applications that are currently running.

“From that pilot, we will be able to determine whether this is feasible and what sort of things needed to make it work effectively.”

It is anticipated that ‘E-cedi’ will be less volatile than Bitcoin.

 

Activities of cryptocurrencies are currently not regulated because of their volatility.

“You have seen the sharp changes in the valuations of some of these coins, the Bitcoin large, large swings in the value of the currency. The basic function of currency is for them to be used effectively as a medium of exchange or even as a unit of account, so when you have a currency whose value is so unstable, you really cannot use it effectively to meet any of the standard functions of money.

“This is why, I think there is a lot more emphasis on looking at digital money which is backed by the state, backed by the central banks. These private forms of money really are not able to perform the functions of money effectively”.

In April this year, China became the first major economy to introduce a digital currency, the digital yuan.

China’s version of a digital currency is controlled by its central bank, which issues the electronic money.

 

It is expected to give China’s government vast new tools to monitor both its economy and its people as it negates one of bitcoin’s major draws: anonymity for the user.

 

It is also seen as an attempt to replace cryptocurrencies as it may be used internationally.

 

 

 

 

Adnan Adams Mohammed

Natural Resource Governance Institute (NRGI) has admonished that energy transition challenge cannot be solved by one type of solution as a multi-stakeholder approach is needed.

This, it says, should include governmental agencies, private sector, think-tanks, NGOs and academicians, adding that, an effective energy transition should be timely, inclusive, sustainable, affordable and secure.

During a virtual Energy Transition Dialogue for Civil Society and Media, an energy expert with the NRGI indicated that energy transition is a governance issue and requires political buy-in from policy makers at the highest level and as well believe that political interference in GNPC can be positive or negative depending on level of appreciation of energy transition.

“Openness of GNPC to engage all stakeholders will ensure consensus on a viable path to the transition”, Denis Gyeyir of the NRGI Africa Office juxtaposed. “GNPC should be allowed to operate commercially to seize opportunities of energy transition.”

 On the issue of how can Ghana positions itself to take advantage of the opportunities, he suggested that: the Ghana government must diversify in response to the revenue risk while maximizing current production such as investing in low carbon electricity, hydrogen, renewable energy; increased competitiveness and managing stranded asset risks can maximize opportunities; accelerating de-carbonization and environmental governance

The resource governance expert added that: as an Extractive Industry Transparency Initiative (EITI) implementing country, Ghana is encouraged to make disclosures that will deepen public understanding and debate on revenue sustainability and resource dependence; embrace technology, innovation and improve governance; build a domestic financing base e.g direct budgetary allocation, SWF investment; positioning strategically to attract global climate financing; develop and share its energy transition plans, and invite public debate on the plan.

Consequently, a Senior Economist at Natural Resource Governance Institute (NRGI), David Manley, has said Ghanaians have contributed to climate change yet not immune against the impact of energy transition in any case.

According to the economist, Ghana contributes 0.7tonnes CO2 per person, while United States of America contributes 15tonnes CO2 per person.

Renewable energy transition will definitely results in losses or decline in taxes and royalties from oil production, oil revenues from share of national oil companies profit and drastic decline in exploration and developments or cancellation of oil production related activities and projects.

“The energy transition is a big risk for Ghana and Ghana National Petroleum Corporation (GNPC) could make it worse”, the economist alluded.

For about three centuries now, the activities and progress of our world has been powered by fossil fuel.

We have lived to accept that fossil fuel consumption cannot be exempted from our everyday activities, right from cooking our foods to fueling our vehicles to powering our machines. The use of fossil fuel is inevitable in both obvious and subtle ways.

In the latest dialogue held by the NRGI on energy transition for civil society and media it was noted that, even though Ghana has not contributed much to global climate change, this global climate change will affect Ghana in any case.

In recent past decades, a series of concerns have been raised about the disadvantages of fossil fuels on the environment. As energy experts indicate, the continuous usage of fossil fuel will lead to environmental catastrophe.  Due to this, the world is drastically drifting to the usage of safer and renewable energy.

Renewable energy is useful energy that is collected from renewable resources, which are naturally replenished on a human timescale, including carbon neutral sources like sunlight, wind, rain, tides, waves and geothermal heat. Renewable energy transition however, is the ongoing energy transition which is replacing fossil fuels.

This transition can positively impact our environment.  The following are some of the benefits of transitioning to renewable energy.

First and foremost, the energy transition is to limit the adverse effects of energy consumption on the environment which includes the reduction of the emission of greenhouse gases and the mitigation of climate change. The burning of fossil fuel leads to the emission of greenhouse gas which causes problems for humans, animals and the environment in general.

Studies have proven that renewable energy resources produce low to zero carbon or greenhouse gases. Thus, environmental related issues such as premature death of humans, loss of livestock and wildlife, reduction in crop yield due to acidic rain, loss of fish population, air pollution and rise in sea level will be massively minimised should the country switch to hundred percent renewable energy.

The United Nations Industrial Development Organisation (UNIDO) at its 2017 conference revealed that, indoor pollution because of the use of fossil fuel caused 2 million deaths in 2016, and 4 million as at October, 2017, this figure is four times the number that dies from malaria.

 

By Elorm Desewu

Provisional data from the Bank of Ghana, (BoG) on budget execution for the first quarter of 2021 indicates an overall broad cash budget deficit of 2.6 percent of Goss Domestic Product (GDP), slightly higher against the target of 2.5 percent of GDP.

Over the first quarter, total revenue and grants amounted to GH¢12.8 billion representing 3.0 percent of GDP, lower than the projected GH¢15.8 billion which was 3.7 percent of GDP.

Total expenditures and arrears clearance amounted to GH¢24.3 billion representing 5.6 percent of GDP against the target of GH¢26.5 billion which was 6.1 percent of GDP.

The primary balance also recorded a deficit of 0.7 percent of GDP compared to the target deficit of 0.4 percent of GDP.

Financing of the fiscal deficit in the first quarter was mainly from domestic sources, which pushed up the stock of public debt to GH¢304.6 billion at the end of March 2021, compared with GH¢292.7 billion at the end of December 2020.

Of the total debt stock, domestic debt was GH¢163.6 billion representing 37.7 percent of GDP, while the external debt was GH¢141.0 billion also representing 32.5 percent of GDP.

There are signs that the execution of the budget for the first four months point to some improved revenue collections and expenditure containment to ensure real re-alignment to the consolidation path. The fiscal data shows that fiscal revenues have significantly outpaced developments a year ago but slightly lags behind target, according to Dr Ernest Addison, governor of BoG.

The gap in revenue performance viz-a-viz the budgeted target has been somewhat compensated for by expenditure containment measures.

He said risks in the fiscal outlook surrounding wage settlements, energy IPP payments, the potential for arrears build-up, potential for scaled-up expenditures associated with COVID-19 waves and mass vaccination efforts, and the implementation of the Ghana CARES programme, which would have to be carefully managed in a time consistent manner to minimize any deviation from the path of fiscal consolidation.