Category: News

 

 

Adnan Adams Mohammed

 

Almost all the known Drivers and Transport owners in the country including other stakeholders have reacted negatively to the government’s decision to allow commercial transport fares to be increased by 15 percent effective last week Staurday, July 11, 2020.

 

According to the unions, they needed percentage increment more than what the government has allowed explaining that, it will really affect their operations and general income at a time when all other goods and services prices are frequently being increased due to the COVID-19 pandemic. Notable among the unions is the Ghana Private Road Transport Union (GPRTU) which expected a 50% increment due to increased fuel prices and cost of spare-parts and other material used in running the business.

 

Most Ghanaians have lamented and shared their grievances and fears that, a transport price increase could affect the price of goods and services. The Chamber of Petroleum Consumers (COPEC) has asked the Transport Ministry to immediately rescind its decision. According to COPEC, the new directive which was announced by Deputy Transport Minister, Titus Glover and yet to be rolled out is unjustified. The dictatorial role played by the transport ministry he said, only aggravates the burden of commercial vehicle drivers since fuel prices keep surging.

 

“Whatever increases should be halted immediately forthwith and let us find a more lasting solution than these increases,” the Executive Secretary of COPEC, Duncan Amoah has said.

 

“Things only go up in this country without a corresponding remedy to bring it down when the factors or conditions necessitate it coming down and that for us is problematic and so we do not support these increases we are seeing. We think it is unjustified, we think that any attempt to also twist the arms of these drivers from their 20%, 30% or 50% by the ministry cannot be grounded in law because you are not bearing their input cost so you cannot bear their output numbers equally by determining 15%,” he added.

 

Dr. Amoah advised that the Ministry needs a comprehensive database on transport operators to be able to devise a lasting solution that specifically meets their needs to stop drivers from always demonstrating to get their pleas heard.

 

“A section of the drivers say they won’t agree so there’s chaos and we think that this chaos could have easily been resolved if the government had built a comprehensive database that allows the government to target the public transport operators,” he said.

 

The Deputy Transport Minister, Daniel Titus Glover last week noted that, the various drivers’ unions presented a petition to the ministry on Monday and were promised that the issue will be looked into.

 

It was after a meeting between the Transport Ministry and other stakeholders Mr Glover disclosed, that it was agreed for the fare to be increased by 15 percent across the board.

 

“It is obvious that transport operators have sacrificed to ensure that the nation fights COVID-19, and therefore the state also has to put in some measures to ensure they are not worse-off while they continue to ensure social distancing in their vehicles and invest in getting PPE, sanitisers and handwashing materials at the stations to help fight COVID-19.

 

“The decision takes effect last week Saturday, July 11. We are going to ensure that all the COVID-19 protocols are still practiced at all transport station across the country. Just as is done anytime there is an increase like this, authorities at the station have been asked to print the new rate and paste it at the various stations – and also in cars to prevent any argument,” the Deputy Transport Minister said.

 

However, members of the Sofoline Drivers’ Union in Kumasi in the Ashanti region have rejected the 15% transport fare increment amidst threats to demonstrate against the Ghana Private Road and Transport Union (GPRTU) National Chairman and the Transport Minister if the percentage is not reviewed upwards.

 

They lament that the 15% increase is woefully inadequate to cover the cost of fuel price hikes, social distancing directive, amongst others.

 

Chairman of the group Albert Boamah accused the national leadership of GPRTU of conniving with the transport ministry to force the 15% on drivers. He insisted that, his members will be forced to defy the COVID-19 protocol by loading passenger to full capacity if nothing is done immediately.

 

Meanwhile, the Industrial Relations Officer of the Greater Regional Branch of GPRTU, Abass Ibrahim Moro has thrown his support behind his colleagues in the Ashanti region.

 

Alhaji Imoro said: “Someone is saying this is the first upward transport adjustment in 2020 without proper explanation to drivers so we have every right to stand against it.

 

“GPRTU is a democratic union, when Ghana was not practising democracy, when we were in an era of coups, GPRTU was practising democracy so it is their right to demonstrate because to be honest with you, we were looking for something around 30, 40, 50 per cent increment and our leadership came up with this 15%.

 

This is because currently, no one controls fuel prices. All the filling stations have different prices…”

 

Also, members of the True Drivers Union have rejected government’s 15% transport fares increment insisting it will rather stick with 30% hike.

 

“We’ll not back down; the 30 per cent is what we’re working with, Spokesperson for the union, Yaw Barima fumed.

 

He threatened that they will picket at the Transport Ministry, should any driver be arrested for charging the 30 per cent increase in transport fares being demanded by the drivers.

 

“We’ll mass up at the Ministry if they dare arrest any driver. Any driver who’ll be arrested should reach us on 0500312104, and we’ll mobilize our members and storm the Ministry,” Yaw Barima threatened.

The growth in Deposit Money Banks’ (DMBs) credit to the private sector and public institutions has declined slightly recording GH¢7,358.1 million or 16.5% in the 12-month period to March 2020, down from GH¢8,594.0 million or 23.9% over the corresponding period in 2019.

Private sector credit accounted for a share of GH¢6,617.5 million or 89.9% compared with GH¢7,001.8 million or 81.5% during the same period in 2019.

The flow of credit to the private sector was concentrated in five sub-sectors including services, commerce and finance, construction, manufacturing and transport, storage and communication, which collectively absorbed 79 percent of the credit extended over the period.

Outstanding credit to the private sector at the end of March 2020 was GH¢45,339.5 million compared with GH¢38,722.1 million last year.

In real terms, growth of credit to the private sector over the 12-month period to March 2020 was 8.6 percent, down from 14.6 percent during the corresponding period in 2019, thus, moving below the long-term trend DMBs average lending rates similarly eased downward by 71 basis points from 23.09 percent in April 2019 to 22.38 percent in April 2020.

The average rate on 3-month term deposits remained unchanged at 11.50 percent. The general decline in nominal interest rates and the recent jump in inflation pushed real interest rates significantly down.

 

 

 

Adnan Adams Mohammed

 

Ghana is working to tackle its carbon emissions as it has signed a deal with the World Bank in 2019 intended to reward community efforts to reduce carbon emissions from deforestation and forest degradation.

 

 

According to officials at the Energy Ministry, there is scope for improvement in renewable energy electrification usage and grid projects. Ghana’s power sector has not been free of difficulties. The phenomenon of “Dumsor” has seen sporadic power outages. This has been driven by low water levels and problems with paying bills to Nigeria for gas.

 

 

Recent estimation put Ghana’s access to power around 86%. The National Electrification Scheme (NES) was launched in 1990, at a point when power access was estimated at 20%. There are considerable resources. The Akosombo Dam project was completed in 1972 and generates around 900 MW. Hydropower accounts for about 64% of the country’s power generation.

 

 

“The government plans to gradually diversify towards renewable energy sources (solar, wind and nuclear) in the medium term, and pursue low-cost power delivery to the consumers,” officials at the energy ministry has said.

 

 

This will involve expansion of the country’s distribution system in addition to bolstering “mini-grid and off-grid applications to achieve this policy objective. This will also support the national goal set forth in Ghana’s Intended Nationally Determined Contribution (INDC) submittal dated September 2015, to scale up renewable energy penetration by 10% by 2030.”

 

 

Companies have made offshore gas finds in the last few years. These come in addition to the West Africa Gas Pipeline (WAGP), which brings gas from Nigeria.

 

 

There are challenges, though. “We are undertaking an ambitious reform programme to protect the future of the sector because, as it exists today, it is not financially sustainable. We are committed also to private sector participation in the Electricity Company of Ghana (ECG) in the distribution of electricity,” a government representative close to the sector said, pleading anonymity.

 

 

At the heart of Ghana’s plans for reforms, under the Energy Sector Recovery Programme (ESRP), is the aim of securing power at affordable prices for the country. The World Bank-backed ESRP runs from 2019 to 2023.

 

 

Moving the country beyond aid, as the government intends, “can only be achieved with a sustainable and cost-effective energy sector”.

 

 

The government is under pressure to demonstrate progress on this front. A presidential election is due to be held in early December. This will see President Nana Akufo-Addo square off against former president John Dramani Mahama. The two have run against each other repeatedly.

 

 

Take or pay contracts have put pressure on Ghana, with the country still on the hook for power it cannot absorb. Costs related to take-or-pay agreements, generation tariffs and financing are passed to consumers in capacity charges, the government source noted.

 

“The ESRP will tackle these problems by optimising the installed generation capacity in order to provide a more efficient and cost-effective sector for all involved,” the official said.

 

The bill for excess power is estimated at $500 million. Installed capacity in mid-2019 reached 5,082 MW, while peak demand is 2,700 MW.

 

Demand is rising but not quickly enough to absorb this excess. The aim is to renegotiate deals with independent power producers (IPPs).

 

 

“The ESRP steering committee, together with the relevant ministries, departments and agencies in the energy sector are exploring options and negotiating comprehensive and collaborative solutions with each IPP,” the government official said.

 

Progress should be coming in the near term.

 

The aim is to allow all parts to flourish. Where private investors can grow and help meet local needs. “These reforms will ensure funds are well spent on projects that will drive forward the economy.” The official was reluctant to commit to a deadline for progress.

 

Gas is one of the sources of power for Ghana, in part driven by supplies from the offshore. The Sankofa project enshrines the country’s take-or-pay problems.

 

The deal was signed in 2015, when the country was struggling with power shortages. The agreement was backed by the World Bank with the aim of providing cleaner and more reliable power.

 

 

Financing of the Sankofa non-associated gas field involved commitments to an escrow account, to ensure payments to the producers. This was backed by a $500mn letter of credit, which was in term insured through a World Bank guarantee.

 

 

The price paid for Sankofa gas is also high. In mid-2019 this was reported to be $9.8 per million British thermal units. Under the 2020 budget, the benchmark gas price was projected to be $4.57 per mmBtu.

 

 

The current government, the New Patriotic Party (NPP), has been critical of the previous government’s signing of the deals.

 

 

Ghanaian Finance Minister Ken Ofori-Atta said the NPP had been forced to tackle the “exorbitant energy bill from expensive, difficult-to-explain ‘take or pay’ of Power Purchase Agreements; a pile-up of unpaid arrears and outstanding commitments, mostly accrued from contracts awarded without the slightest care for the public purse”.

 

 

Talks are being held with “gas suppliers with a view to reducing the price of natural gas”, the source said, in response to a question on the Sankofa deal. Further, the government plans to develop and increase productive non-power uses for gas, for example, for fertiliser.”

 

 

Gas from the Eni-operated field began flowing to a floating power plant, owned by Karpowership, at the end of 2019.

 

 

There has even been some discussion of power exports. The government representative said Ghana was “working on increasing exports to Benin, Côte d’Ivoire, Burkina Faso and Togo, as well as ongoing arrangements in relati

on to supplying the West African Power Pool (WAPP), which will cover Liberia, Nigeria and Sierra Leone.”

 

Economic analysts at Standard Bank, the parent company of Stanbic Bank Ghana, have indicated that Ghana’s economy is likely to see a full recovery in 2024 due to the impact of COVID-19. This was contained in the May 2020 edition of the bank’s African Monthly Report (AMR).

 

According to the report, the 6–8 percent year-on-year growth that seemed reasonable at the beginning of the year is no longer likely.

 

“COVID-19 undoubtedly will affect economic growth meaningfully. Whereas growth of 6% – 8% y/y in the next 2 – 3 years seemed reasonable before, now 1.0% y/y seems likely this year, with a recovery only next year. In our base case, we see economic growth topping 5.0% y/y only by 2022,” the report said.

 

The report further indicated that the economic situation will make it difficult for the government to control the fiscal gap, which will in turn affect the strength of the local currency.

 

The report noted that “Our bear scenario sees an economic contraction this year, then recovering to over 5.0% y/y growth by 2024. In this scenario, the government would find it hard to arrest a widening fiscal deficit, triggering significant portfolio outflows that would lead to faster depreciation of the Ghana Cedi than in our base scenario”.

 

Furthermore, the report indicated that the fall in oil prices will further undermine long-term economic growth particularly because oil revenues are a significant part of government revenue.

 

According to the report “Naturally, given the oil price collapse, and the flux in that market, Ghana’s oil production will be restrained too. A significant source of uncertainty is how long oil prices will remain as depressed. The longer so, the greater the likelihood that investment in the oil sector will dwindle, undermining long-term growth”.

 

The report continued that “Oil revenues are a significant source of government revenue, at 5.5% of total revenue, with dividends from oil accounting for an additional 6.8% of revenue. Also, consider the service suppliers to the oil industry. Were oil prices to remain depressed for long, overall economic activity would suffer”.

 

These conditions notwithstanding, the report predicts less pressure on inflation this year and foresees the Central Bank’s Monetary Policy Committee easing its policy stance in a bid to boost economic activity. The report also sees strong official financial inflows, which will likely leave the country’s balance of payment in a healthy position this year despite pressure on the current account.

 

The African Markets Report is a monthly report issued by the Standard Bank Group, the parent company of Stanbic Bank Ghana and focuses on the economic and financial outlook of African countries. The report also reviews current economic situations and makes short to medium-term predictions about the economies of African countries.

 

 

Adnan Adams Mohammed

 

Ghana’s banking sector, for the few years, have been experiencing operational restructuring as the sector is strategically and aggressively catching up with peers in developed economies with technological innovations to improve on their services while cutting down labor cost.

 

This is evident in the President of the Chartered Institute of Bankers (CIB) Ghana, Patricia Sappor’s recent comment which suggested that, banks in Ghana aggressively driving their digital products and service to help government move the economy from a cash-based system into one that is near cashless or at least, cash-lite.

 

In recent times, we have witnessed many launching ceremonies by banks collaborating with Financial Technology (Fintech)companies and other technological entities to develop more convenient and user friendly digital platforms to enhance their operations as well as the numerous adverts from the banks encouraging customers to jump onto the digital train with the use of the digital channels such as mobile apps, USSDs, internet banking, ATMs to facilitate banking transactions among others.

 

“One of the key impacts of the current pandemic is the emphasis on social/physical distancing and contactless payment options. The situation presents financial institutions with the opportunity for digital transformation both at the front and back office levels,” Patricia Sappor said during a webinar organised by Krif Media Limited, publishers of Integrity Magazine last week, adding that, “if banks would undertake this initiative effectively, it could result in efficient service delivery, quicker turn-around time and improvement in the overall service experience for bank customers.”

 

In this regard, staff of banks and financial institutions have been urged to adapt to the rapid developments in digitisation in order to stay relevant in the industry.

 

The Head of Channels at UMB Bank, Myles Hagan in his interaction on the subject cautioned that, any banker who wants to remain employed would need to enhance their education and skills in digital banking operations.

 

“Presently, certain institutions have adopted working from home, which means you do not necessarily have to come to the office but can use digital tools to execute your functions. Moving forward, in terms of workforce and digital adoption, staff who can equip themselves with knowledge to use technology are in a better position to remain in their jobs, as against those that may find challenges in adopting digital tools,” he said.

 

Making the technological advancement in the banking sector and other sectors of the economy is the onset of COVID-19 which has spurred growth in digital adoption, with most entities in the ecosystem (banks, Fintechs and allied services like telcos) reengineering their existing portfolio have affected processes.

 

Several major technological trends are converging and transforming digital banking services for businesses. The result is that banks across the country and beyond are waking up to growing competition and the changing demands of their clients.

 

Companies of all sizes across the globe are embarking on their own digital transformations. Businesses want faster and more convenient methods to transfer funds and analyse their financial data. This means shifting away from manual paper-based processes and adopting electronic, increasingly automated payment processes that also allow more sophisticated, data-driven decisions.

 

“For example, if there was patronage initially of a mobile app, customers now want a little bit more than what used to be on the app. Most banks will be recording about 90 percent uptake in digital services—and that is very good. It helps us drive more uptake by advising customers and putting up educative materials so most customers will move towards digital rather than analogue”, Mr Hagan emphasized.

 

He added that, banks need to provide a better, more relevant service, and invest in products that meet the changing customer needs of real-time, mobile, frictionless and simple banking. For Instance, UMB presently has pushed digital uptake to 90 percent, and for the future they plan to ensure that all banking services are done digitally, Mr. Hagan indicated.

 

On how well banks are prepared to meet the dynamics of customer expectations, he stated: “Most banks are enhancing their levels of investments in the adoption of predictive analysis, artificial intelligence and business analytical tools, which can help us preempt customer expectations. So what is going to happen is most banks can forecast that this customer per his strength may need this.”

 

Also, Deputy CEO of Ghana Association of Bankers, John Awuah, noted that credit expansion to productive sectors such as the manufacturing and SME financing, banks investing heavily to enhance fintechs capabilities, government introducing policy initiatives to redirect trajectory of credit expansion and the banking regulator proactively balancing the need for regulatory prudence and inertia post COVID-19 would revive the economy faster.

 

“We will be seeing the beginning of the end of the palace-style bank branches in the glamour we currently have them, as most banking services, in our estimation, will transition onto self-service platforms in the near-term.

 

This is certain to happen because the overwhelming convenience that is afforded by the alternate channels for delivering banking services far outweighs the trappings of flashy banking premises.”

 

A central bank-initiated clean-up has seen the total number of banks reduced from 30 in 2018 to 23 presently. This has also led to a shrinking of the number of physical bank branches.

 

A recent study by Deloitte on the potential implications of COVID-19 on banking and capital markets revealed that the number of physical bank branches in Ghana has reduced from 1,342 in 2016, when there were 33 banks in operation, to 1,145 branches as at end-2019.

 

This, Mr. Awuah believes, is a foretaste of what is to come where technology will not just be an enabler but will become the business of banking.

 

“What was missing that COVID-19 has helped propel forward is the acceptance and adoption of digital banking channels. For instance, customers who once resisted digital banking are fast realising that they are treading on lonely grounds in this period.

 

Our projections from the association’s perspective are that, as they experience more and more of the digital channels made available by banks, the less likely it is that they will want to go back to visiting brick-and-mortar bank facilities in the future.”

 

Mr. Awuah noted that likely areas of banking operations to be affected include: customer on-boarding activities, product and service origination, bank performance assessment, and work environment design.

 

Other critical areas are staffing requirement in banks and the fluid opportunity for customers to compare and contrast banking service

s.

 

Consequently, on improving banking services to customers and stakeholders in this COVID-19 era, former Deputy Managing Director of Prudential Bank, Mary Brown, has suggested that, banks must set up a Special Credit Coordinating Room that will be responsible for selling and operationalizing the bank’s credit strategy in response to the crisis. This is to ensure a consistent and coherent response across all aspects of the bank’s lending operating model.

 

He stressed that banks have a duty to anchor the economy by cautiously continuing with credit expansion to productive sectors among others.

 

 

Adnan Adams Mohammed

 

Human resource experts are calling on organizations and individuals to invest in virtual infrastructure and assets that will make employees deliver in the new work environment brought about by the Coronavirus Pandemic as it poses as a strong trigger for reforms to embrace technology intensive workplaces globally.

 

Dr Vivian Osei, a senior Lecturer at the Department of Human Resource and Organizational Development at KNUST noted that, the workplace for some employees have moved to the home with inappropriate set up for work coupled with destructive surroundings. 

 

According to the International Labour Organisation (ILO) statistics; only 10.7% of households in Africa have computers in 2019 and internet use was just about 28% when Europe was 83%. This inherently does not support the current situation where most workloads at workplaces are to be done at home to reduce the human-to-human contact hours at workplaces due to the COVID-19 pandemic.

 

“With technology and proper capacity building, everywhere could become the workplace”, Dr Osei posited during her presentation at the University Of Cape Coast School Of Business fourth session of the E-seminar organized on the topic: “Coronavirus Pandemic: implications for workplace reforms and employee wellbeing.”

 

In this pandemic era with attendant downsizing actions by many organizations to cut cost as part of organizations operational cost management decisions, Dr. Osei advised organizations to place a premium on human dignity, pain and empathy to inform any employee who out of extreme consideration and with regards to the law has to be laid off.

 

Some HR experts have noted that the pandemic has placed much attention on health and safety measures at workplaces unlike before which a positive point to sustain post-COVID-19 era, but a little more efforts are needed in terms of investments into office layouts to sustain the benefits to employees.

 

 

Labour experts, therefore, are calling on Governments in Africa to invest in ICT to enhance inclusion of employees and potential employees in the new workplace because access to the internet and ownership of computers in households are abysmal and that this should attract attention. Whilst, employees to protect data and information of their organizations with upscale sensitivity saying flexible workplace and working hours should not increase the risk of organizational secrets and information.

 

The Dean of the Business School at UCC, Prof. John Gatsi in his introductory comments supported the call for increase investment in ICT to enhance the correction of disruptions to work.

 

He asked Human Resource experts to unearth other critical challenges that the pandemic has brought apart from job losses such as health and safety, illnesses related to COVID-19 but not through infections to establish a basis for comprehensive solutions.

 

Mr. Francis Eduku, the Vice President and Human Resource Direc

tor of Goldfields Ghana Limited in his opinion believes that, one of the issues labour unions and leaders are silent about is the effect of the pandemic on a psychological contract which is about the unwritten contracts which cannot be found in the collective bargaining agreements but have become part of the work culture, motivation and recognition.

 

He emphasized that all these things have been eroded such that all the unwritten promises made by management and employers to employees for which performance was good could not be fulfilled. He explained that with a situation where people work from home and virtually in many cases nobody is providing workplace socialization, acknowledging and recognizing as before. In some cases, no employer is interested in whether the home setting provides a conducive environment to work.

 

Mr. Eduku noted that some workers are isolated and filled with anxiety and therefore called for collaborative, caring and engaging relationship between employees and employers.

 

In this regard, academia, especially the Department of Human Resource Management of the School of Business is being charged to conduct a survey into the impact of the pandemic on psychological contracts to provide a balanced perspective of the effect on employees.

 

The Executive Director of the Institute of Human Resource Practitioners Ghana, Dr. Agbettor encouraged employers not to live in fear that the multiple work locations and flexibility being experienced will expose their vital information to the wrong people. He rather asked employers to build such capabilities for their employees to improve trust. Stressing that COVID-19 has increased socialization risk for both employers and employees because their source of joy, sharing of experiences for a long time is the interaction at fixed workplace.

 

The challenge now, he said, is how to build into the new work models the workplace socialization. He appealed to employees to provide interest-free loans to employees if they have the means and alternatively negotiate with financial institutions for flexible loans to their employees to minimize financial anxiety.

 

Dr. Nana Yaw Oppong, a Senior Lecturer at the Department of Human Resource Management, University of Cape Coast School of Business, in his interaction discussed the challenges the pandemic poses to collective bargaining agreements especially post-COVID-19  and call on labour unions to start discussing the issues.

 

He advised employers to follow redundancy procedures and negotiations and advised that redundancy reason as provided by the law is critical. He cautioned employers should not treat employees as victims of the pandemic that should be laid off at the will of the employers without following the redundancy process.

 

 

 

 

Adnan Adams Mohammed

 

A new market survey report released by IHS Markit Ghana PMI has indicated that business confidence has rebounded some few weeks after the restrictions were eased.

 

 

Ghana’s Purchasing Managers’ Index rose by 15 index points in May, registering 46.7 from the record low of 31.7 posted in April representing a leap jump in business confidence to all time high levels since November 2018, according the report.

 

 

Although, the private sector moved towards stabilisation in May as a loosening of coronavirus disease (COVID-19) lockdown measures resulted in much softer reductions in output and new orders than the unprecedented declines recorded in April. An economist with HIS Markit has said, the rebound in confidence does not necessarily mean business activities have picked up and come back to normal, but simply suggests, the rate of contraction slowed substantially from that seen in April as some firms restarted operations following a loosening of COVID-19 lockdown measures.

 

 

“While still signaling a private sector in decline, the May PMI data for Ghana provide cause for encouragement. Rates of contraction in output and new orders eased markedly following the loosening of lockdown restrictions, with both nearing stabilisation”,Economics Director at IHS Markit, Andrew Harker said in the report.

 

 

That notwithstanding, the report adds, there were still marked job cuts recorded in May, only the pace of reduction was slightly softer than that seen in April. Some business owners said they had to cut down on staff due to social distancing rules.

 

 

Mr. Harker said the job cuts situation raises a cause for concern, especially, the fact that most of them are as a result of social distancing rules. He maintains this could potentially delay any return to net hiring, even if new order volumes improve.

 

 

He added that the data raise hopes that a return to growth in the economy may even be seen in June as President Akufo-Addo has further eased the restrictions he imposed in March to contain the spread of the disease.

 

 

Despite the number of recorded cases hitting more than 8,000, President Akufo-Addo says it is time for some important activities to resume, at least partially, in order to reduce the socio-economic impact the restrictions have brought on people.

 

 

Some of the businesses and gatherings that have been given green light to come back from hibernation are restaurants, schools, religious events, among others, but under the condition that they will respect and follow the laid down rules outlined.

 

For example, restaurants can now open, but those providing seated services must operate under appropriate social distancing arrangements and hygiene protocols. Again, conferences, workshops, weddings, and political activities, except rallies, are allowed to take place but with limited numbers not exceeding 100 persons present, with the appropriate social distancing and hygiene protocols.

 

 

Then, schools, were only open to final year students in the university, senior high, and junior high but with limited numbers in each classroom, along with observing all the preventive protocols outlined by the Ministry of Health.

 

 

 

 

Adnan Adams Mohammed

 

In spite of Cabinet’s approval of Park Agrotech Limited, a Ghanaian company in the agribusiness sector, as the preferred strategic investor for the Komenda Sugar Factory, the contract is not yet to be in force as its awaits the government to put in place a sugar policy to guide the operations of the factory.

 

 

As the defunct factory is expected to begin operations later this month, the Trade Minister, Alan Kyerematen has informed Parliament that, there is the need for all stakeholders to exercise patience as the sugar policy is being drafted to enable the concessionaire take over fully.

 

 

The Komenda Sugar Factory, which was built at a cost of $35 million from an Indian EXIM Bank facility, was inaugurated by then President John Mahama in May 2016, amid pomp and pageantry but was locked after a few test runs. The factory was also expected to generate energy for its production activities and produce by-products such as molasses for the alcohol industry.But many challenges, including the unreliable supply of sugarcane for continuous processing after the preliminary test run, hampered the operations of the company. However, in November 2017, the Akufo-Addo government initiated processes to revive operations of the factory.

 

 

“Mr Speaker, following the approval by Cabinet as required by conventional practice, the Transaction Advisors entered into final negotiations with the successful bidder with the view to entering into concession agreement for the operations of the Komenda Sugar Factory,” Mr Kyerematen told Parliament last week. Adding that, “The factory was not handed over to the concessionaire for commencement of operation after the farmers negation with the concessionaire.”

 

 

He further explained that, “It became obvious that unless there is a sugar policy which will provide the strategic framework for the work of the concessionaire it wasn’t going to be possible for us to complete the process of handing over the factory to the concessionaire. So, it only stands to reason that we go through the process.”

 

 

The Minister said over the first three years of the agreement, Agrotech would invest $28 million in capital expenditure and working capital, including paying an annual concession fee of US$3.3 million for a period of 15 years.

 

Also, a $24.5million Indian EXIM Bank credit facility was being sourced to develop and implement a plantation and out-grower scheme in a bid to provide raw materials for the factory.

 

 

Under the scheme, some 14,100 acres of sugar cane would be cultivated to feed the plant.

 

 

Agrotech is expected to work with STM Projects Limited, an Indian company with extensive experience in the management and operation of Sugar Mills and plantations both in India and other parts of the world.

 

 

The Agreement would be effective upon completion of Condition Precedent, which includes the approval of the Agreement by Parliament, adding that the required documentation would be brought to the House in due course.

 

 

The Minister said during the final negotiations it became necessary for action on the implementation of the project to be delayed until the finalization of the National Sugar Policy, which was intended to provide the strategic policy framework for the implementation of the project.

 

He explained that after series of extensive stakeholders’ consultations, the National Sugar Policy was finally approved by Cabinet in 2019”.

 

Mr Kyerematen also stated that the approval of the Sugar Policy paved the way for the Concessionaire to be formally introduced to the Chiefs and Elders of the Komenda Traditional area in November, 2019.

 

He informed the House that the formal agreement between Park Agrotech Limited and Komenda Sugar Development Company Limited had now been executed.

 

He assured the legislature that as soon as the restrictions on foreign travels arising from the Covid-19 pandemic is lifted and the necessary protocols and approvals have been secured, the technical partners of Park Agrotech would begin a comprehensive programme to bring the sugar factory back to life.

 

“I wish to assure this august house that as soon as the restrictions on foreign travels arising from the Covid-19 pandemic is lifted and after all the necessary and relevant protocols and approvals have been secured, the technical partners of Park Agrotech will begin a comprehensive programme action to bring the Komenda sugar factory back to life,” he said.