Category: News

Adnan Adams Mohammed

Consumers of electricity power will from next month pay extra 17.5 percent on their bills as new taxes are added to the billing elements.

The Ghana Revenue Authority (GRA), last week, tasked the Electricity Company of Ghana (ECG) to charge Value Added Tax, (VAT) and others on domestic consumers. The new tax and levies include; VAT of 12.5%, GETFUND Levy of 2.5% and NHIL Levy of 2.5%.

This has been a surprise to many Ghanaians including financial, tax and economic experts as this is the first time VAT is to be charged on a basic necessity like electricity. Also, this comes at a time government has promised to take part of electricity consumption bill from Ghanaians to ameliorate the hardship impact of the COVID-19 lockdown.

“This is absolutely cold blooded, insensitive, and ill-considered”, financial expert, Alex Mould has fumed. He expatiated that, “On one hand you (government) claim to have given the Ghanaian people a 3-month 50% tariff waiver; and then you slap us at the same time with new taxes to increase our bills.”

Consequently, the Minority in Parliament is demanding the immediate withdrawal of the new tax and levies on electricity as it warns of dire consequences on domestic consumers.

Addressing the media in Parliament, the minority spokesperson on Mines and Energy, Adam Mutawakilu, accused the president of giving 50 perfect rebates to consumers with one hand and taking it back with another.

The Damango MP warned that both consumers and ECG will be worse off with the move.

“That means that you will pay more for electricity, it will deny you from the food that you buy because you have to do your scale of preference and consumers will be burdened the more…so this 50 per cent was just to deceive Ghanaians, so you gave it to Ghanaians with one hand and then you take it with another hand.”

The decision to impose VAT on electricity for consumers comes a month after the President reduced electricity consumption by 50 per cent to commercial and domestic consumers and free lifeline consumers.

Former Executive Director of Standard Chartered Bank, Mr Alex Mould is urging government to discontinue the decision to use National Board for Small Scale Industries (NBSSI) to disburse the GHS600million soft Loan stimulus package for Small Medium Enterprises (SMEs).

The soft loans which is under the Coronavirus Alleviation Programme (CAP) is intended to mitigate the effects of COVID-19 on the operations SMEs.

The government this week, announced NBSSI will have access to the fund this month and begin with the disbursement to SMEs in the country. But the Energy and Finance Expert, Mr Mould believes NBSSI is not qualified to disburse the loans.

According to him, unlike financial institutions that are regulated, have credit underwriting standards and credit approval procedures, “the NBSSI is a bureaucratic institution controlled by politicians.

 “Financial institutions should be the channel for disbursing the GHS600m earmarked for the SMEs under the CAP, or it could become a political slush fund otherwise” the immediate past Chief Executive of Ghana National Petroleum Corporation stressed.

Read full statement below:

NBSSI NOT QUALIFIED TO DISBURSE SMEs FUND UNDER CAP

Government should be crystal clear on the terms of GHS600m loan fund allocated to SMEs under Coronavirus Alleviation Programme.

The National Board for Small Scale Industries (NBSSI) will, from this month, have access to government’s GHS 600 million soft loan stimulus package for SMEs.

The loan, which comes with a one-year moratorium and a two-year repayment period is intended to mitigate the effects of COVID-19 on the operations of micro, small and medium-sized businesses.

I want to highlight some of the potential challenges with this model.

Firstly, I can emphatically state the NBSSI is not qualified to disburse loans. Unlike Financial institutions that are regulated,  have credit underwriting standards and credit approval procedures, the NBSSI is a bureaucratic institution controlled by politicians. 

What safeguards has the NBSSI put in place to ensure that  the funds disbursed are used for the approved purpose?

Other questions that require immediate clarity are:

1. What exactly is the qualifying criteria the NBSSI will outline for funds eligibility; in addition to the  basic guidelines outlined by the Ministry of Finance?

2. What precisely can these funds be used for?: for example, are these eligible:

– workers salaries and statutory expenses

–  interest repayments on loans to banks

– rent payments

– utility payments

– other working capital needs

Financial institutions should be the channel for disbursing the GHS600m earmarked for the SMEs under CAP, or it could become a political slush fund otherwise.

Clear risk sharing allocation protocols must be agreed between Government and Financial institutions.

Additionally, stakeholder engagement e.g. trade associations, Association of small scale induatries (ASSI) etc is necessary to help determine the needs of SMEs amid the COVID-19 pandemic.

We should all remember this is NOT free money and approval criteria needs to be obvious and transparent.

Signed

Alex Mould

15/05/2020

 A delegation from the Tem-Kotokoli Development Association has presented a cheque of GHS10,000.00 as their contribution into the COVID-19 National Trust Fund.

The delegation led by a Senior Lecturer at the Department of Psychology of the University of Ghana Legon, Dr. Inusah Abdul-Nasiru made the donation at the Jubilee House on Thursday, May 14, 2020.

Making the donation on behalf of Wuro Dauda Chedere Brenai II, Overlord of Tem-Kotokoli of Ghana, and on behalf of all Tem-Kotokolis of Ghana, Dr. Abdul-Nasiru who is also the Chairman of the Tem-Kotokoli Development Association thanked the President, Nana Addo Dankwah Akufo-Addo for effectively handling the fight against the pandemic.

He also encouraged all Ghanaians to observe the preventive protocols, minimize anxiety and avoid stigmatization as we all make efforts to stop the spread of the deadly virus.

The delegation included other Tem-Kotokoli chiefs and opinion leaders such as Wuro Adamu Salifu (Wuro Bemo Esso), Adenta Municipal Zongo Chief, Wuro Zakaria Chaa-Agodomu who is the Jaayoo Kotokoli Chief, Nana Alia Isso-Nyena (Tchaa Atakora I).

Others were Wuro Mudasiru Alhassan, Batoolim na bonyoo wey, the Ogbodjo Tem-Kotokoli Chief and Al-haaj Mochktar Zamba-Zamba, the Vice-Chair of the Association who doubles as President of AKTEG.

The COVID-19 National Trust Fund has in a short while received many donations and contributions from businesses and individuals to complement the efforts of government in the fight against the disease.

Over GHs44 million has so far been donated to the National COVID-19 Trust Fund to support the fight against the novel coronavirus, chairperson for the Fund, Sophia Akuffo has disclosed.

“We have received an amount of GHS44,900,000. The board of trustees will ensure the judicious and transparent application of all money and other resources received for their intended purposes. We deeply recognise and appreciate the individuals, corporate bodies and groups who have enthusiastically donated cash and in-kind as well as donors who have made direct transfers into Ghana Commercial Bank and Consolidated Bank accounts”, she said.

The World Trade Organisation (WTO) in recent report noted that e-commerce is flourishing in the wake of the COVID-19 and the accompanying measures to forestall its spread which include lockdowns.

The report noted that one of the most significant segments of online purchasing by value, tourism and travel has plummeted as a result of the COVID-19 pandemic for obvious reasons.

In March, for example, 30 per cent of US consumers reported delaying vacations and 25 per cent delaying flights.

In this environment, e-commerce by tourism-related purchasing platforms has likewise fallen. For example,the holiday accommodation rental platform AirBNB has experienced a dramatic reduction in customer traffic.

However, spurred by social distancing and stay-at-home requirements, e-commerce in services that can be delivered electronically has flourished, with demand rising sharply. While it may be a short-term phenomenon that might not last beyond the current crisis, as with online shopping, longer-term shifts in customer habits could potentially make businesses and consumers more accustomed to consuming online services in both work and personal settings.

One example is media services. Facebook reports that its online messaging, voice and video call services are up by more than 50 per cent, with Italy showing a 70 per cent surge overall, and a 1,000 per cent increase in group calls. Spain’s Telefonica has seen an increase in IP (i.e. internet protocol) and mobile data traffic of 40 per cent and 50 per cent, respectively. Thailand reported an 828 per cent rise in data traffic from Zoom Video Communications and a 215 per cent spike on Skype video conferencing.

Both companies and governments are moving to address capacity constraints and facilitate consumer access. Some publishers have, for example, made COVID-19-related content freely available online. In addition, social distancing measures have dramatically boosted the demand for audiovisual content; and, as consumers cannot attend cultural events physically, content is being brought online. For example, a number of opera and concert houses have chosen to offer free online streaming of their repertoire.

The considerable increase in demand for these digital services, as illustrated above, has led to an equivalent increase in data volumes which, in some cases, has strained the telecommunications infrastructure. In order to ensure continuity of service, Netflix and YouTube have reduced video quality to alleviate network congestion. In India, this move by Netflix has reduced its network traffic by 25 per cent.

In the financial sector, some mobile phone companies have moved independently to reduce their fees on mobile payments, and these moves have been complemented by governments in an effect to discourage the use of cash.

Many central banks have lifted some of the restrictions and requirements applied to e-payment systems, particularly in Africa, where mobile payments are common. Ghana, for example, agreed to alter policies for mobile money transactions for a period of three months; smaller withdrawals will not carry a charge, and transaction limits and balance levels have been increased. Rwanda has removed fees on all mobile money transactions, with increased daily and monthly limits depending on the type of user.

Following discussions with Uganda’s central bank, mobile providers of payment services announced temporary measures that included removing fees for lower-value transactions, and certain providers will make mobile wallet-to-bank transactions cost-free. Kenya introduced similar temporary measures, such as increasing daily transaction limits and suspending fees for transferring funds between mobile services and banks. Egypt has raised contactless payment limits and reduced costs of mobile cash transfers.

Once the crisis necessitated the closure of businesses and schools, demand for online collaboration tools and learning platforms grew dramatically. Platforms such as Amazon have chipped in, offering the public sector free access to its remote education, remote working and research tools, and Cisco has made its Webex video conferencing tool free of charge.15 Looking forward, the current crisis is likely to have a significant and lasting impact on the demand for e-working facilities and online education traded across borders.

Adnan Adams Mohammed

The Ghana Stock Exchange benchmark index closed 60.18 points (-2.81%) lower after seven financial with oil marketing and telecom counters shed off their prices, closing at 2,083.72 with a -7.68% year-to-date return.

Also, the market capitalization declined by 1.12% to settle at GH¢55.02 billion amidst COVID-19 negative impact on global economy.

Financial stocks led the loser’s chart as five of its counters, GCB (-0.22%), EGL (-2.37%), CAL (-2.50%), SOGEGH (-7.14%) and RBGH (-12.28%) dragged the GSE Financial Index down by 20.82 points (-1.09%) to close at 1,883.37 with -6.75% year-to-date return. GOIL (-2.44%) and MTNGH (-5.88%) summed up the losers’ chart.

“We expect trading activity to pick up as investors take advantage of bargain stocks”, SAS Research optimistic.

Meanwhile, the SAS Manufacturing Index stayed at level of 3,192.63 with a -8.30% year-to-date return as at last week, Wednesday.

Trading activity surged as 14,307,206 shares valued at GH¢9,180,920 changed hands from 13,253 shares valued at GH¢35,386 at the previous session. MTN Ghana dominated trades by volume and value, accounting for 99.47% of the total volume traded and 99.21% of the total value traded.

GCB has given notice that its Annual General Meeting (AGM) scheduled for 29th May 2020 has been put on hold.

The Bank’s decision to put the AGM on hold is a way of responding to the risk associated with the Covid-19 pandemic and the current state in the country.

Also, UNIL has announced that its Annual General Meeting scheduled for Thursday, May 14, 2020, has been put on hold until further notice.

Their decision is in compliance with the Directive on public gatherings issued by the President of the Republic of Ghana and the Ghana Stock Exchange as a result of the COVID-19 pandemic on the 15th and 16th of March 2020 respectively.

Adnan Adams Mohammed

The legitimate claims made to depositors of Savings & Loans and Micro Credit institutions whose funds were locked up due to the financial sector clean-up is at GH¢5.06 billion, according to a government official.

Out of this, GH¢2.11 billion in cash has so far been paid to depositors with about GH¢2.95 billion in zero-rated coupon bonds known as debt instruments have been issued.

The Information Minister, Kojo Oppong Nkrumah, speaking at the meet-the-press series in Accra, last week, disclosed that, depositors are expected to receive payments after validation of claims by the end of May, 2020.

“They want to conclude the final second level validation of GH¢340 million and make payment accordingly. They expect that by the end of May they should be done with that one,” he indicated.

“There are some organizations whose books and records still have challenges and they are processing those for some investigations. And finally, they will issue a report to the Bank of Ghana on the depositor payment”, Oppong Nkrumah added.

Earlier, the Receiver for the collapsed Savings & Loans and Micro Credit institutions, Eric Nana Nipah said about 290,000 customers, representing 98 percent of individual depositors will be paid fully in cash, whilst the remaining 2 percent will receive their payments in cash and bonds.

Adnan Adams Mohammed

The Natural Resource Governance Institute (NRGI) and the Ghana Oil and Gas for Inclusive Growth (GOGIG), in collaboration with the Civil Society & media Bid and Licensing Round Monitoring Group (“the CSO Working Group”), have virtually launched the CSO Working Group Report on Ghana’s first oil bid and licensing round.

The report titled “Ghana’s First Oil Licensing Round Monitoring Report” launched last week, recommended five (5) areas of focus for government beyond the application of the law in subsequent bidding rounds to ensure greater success.

It recommended that: Government must start issuing reconnaissance licenses to gather quality data to aid future bidding rounds.

“The cost for such an activity will be recovered from data fees during competitive tendering”, the report expatiated, adding that, Liberia used this approach to acquire data which enabled them to carry out competitive tendering.

It added that: government must publish disaggregated information on bidders and their respective blocks they are prequalified for; Disclosures on beneficial ownership must be made publicly available during the prequalification stage. This allows for citizens to monitor the bidding process and to identify politically exposed persons in the contract process.

The other recommendations included: Government must ensure that direct negotiations are done only where peculiarities that point to a specific company to optimise the resources are established; and the government must make deliberate efforts to engage the public beyond the requirement of the law. It is recommended that such engagements must have feedback systems to encourage citizens to share information that might be relevant for the licensing round and by extension, the national interest.                                                                                                                                    

Ghana’s first licensing round was officially launched in October 2018 to give effect to the open contracting provisions of Act 919. Prior to the enactment of Act 919, Ghana largely relied on direct negotiations for the award of petroleum licenses, which often crowds out experienced companies while encouraging politically induced awards. The plan was to award a total of six blocks: three via an open and competitive bidding process in line with section 10(3) of Act 919; two via direct negotiations in line with section 10(9) of same Law; and one reserved for the Ghana National Petroleum Corporation (GNPC) to partner with strategic investors in line with sections 7(9) and 11(5) of Act 919.

To ensure openness and competitiveness of the bid process, and efficient implementation of the regulatory policy, NRGI and GOGIG convened and established a CSO monitoring group (made up of civil society and the media) to serve as a strong external oversight and social accountability body throughout the process.

The CSO monitoring groups were tasked to ensure an objective assessment of the country’s adherence to the legal regime, best practice standards and ensure Ghanaians are well informed about the process for accountability. Working with three consultants, the Monitoring Group has produced a comprehensive report on the three stages of the bid process; a useful learning tool to inform future bid rounds in Ghana and beyond.

Chief Executive Officer of GEXIM, Lawrence Agyinsam

Adnan Adnan Mohammed

The Ghana EXIM Bank has hinted it is considering going on the bond market for sustainable long-dated financial instruments to meet demands for financing support from local export-focused businesses.

Being the financial backbone to champion Ghana’s industrialisation agenda through supporting manufacturing industries, agribusinesses and exported production companies, the Bank’s current source of funding is from an import levy which is not a sustainable way of meeting its core mandate.

As GEXIM is looking beyond its current source of funding to other sustainable and cheaper sources, then the bond market is surely a sustainable source of funding for a policy and developmental driven financial institution such as GEXIM Bank. It can also access longer maturity facilities mostly directed towards long-term development projects.

“Just last week, we had a board meeting and we looked at other cheaper and sustainable source of funding. And the bond market was one focused area we will soon go”, the Chief Executive Officer of GEXIM, Lawrence Agyinsam said during a briefing session with executives and editors of the Private Newspaper Publishers Association of Ghana, (PRINPAG) in Accra.

With its current debt recovery rate above 60%, it is a good outlook to take advantage of the domestic and international bond market. This means more local export trade and businesses will get backing and support to do to help leap-jump Ghana’s Non-Traditional Exports (NTEs) earning in near future.

The CEO in his presentation listed with photographical evidences of over 80 factories and farms (existing and new) the Bank has supported for the past three (3) years in the areas of pharmaceutical manufacturing, agrochemicals manufacturing, poultry, fruit juices p

rocessing, other agribusinesses, garments and apparels factories, youth support in greenhouse technology, Shea butter processing among others.

GEXIM established in 2016, by an act of parliament, ACT 991, aim to become a strong financial institution that will be a key engine in the development of Ghana’s export trade, facilitate cross border trade and make Ghana a pillar in regional and continental trade.

Fortnight ago, the Bank pledged to give additional support to local pharmaceutical manufacturing companies to help them meet the World Health Organization (WHO) Good Manufacturing Practice (GMP) compliance so they could export drugs to the West African sub-region.

The bank has initially supported these local pharmaceutical manufacturing companies with a US$10 million facility each to about nine (9) companies some years back. 

Entrance Pharmaceuticals (the largest pharmaceutical manufacturing company in West Africa currently) is set to start production of (Hydroxyl Chloroquine) which is confirmed and being used in many countries as one of the cure for COVID-19 and already producing other essential drugs.

“We are ready to give further support to these pharmaceutical companies as we are impressed with how they utilized the initial support”, the Board Chair for Ghana EXIM Bank, KwadwoBoatengGenfi has said during a tour of some local industries that had received funding support from the Bank.

Ghana is ready to be self-sufficient in pharmaceutical products very soon and export the excesses to help the country earn more foreign income to help strengthen the local currency (Cedi), the Chief Executive Officer of EXIM Bank, Lawrence Agyinsam added in a short address during the tour.

Some of the companies visited were; Entrance Pharmaceuticals (subsidiary of Tobinco Group of Companies), Ernest Chemist, Atlantic Life Scientists (subsidiary of Pharmanova Industries), and Kinapharma Industries.

The Pharmaceutical Manufacturers Association of Ghana (PMAG) has targeted to produce 70 percent of the country’s essential pharmaceutical products within the next three years.

The move is meant to reduce the importation of pharmaceutical products into the country a

nd create more job opportunities in line with the Ghana Beyond Aid agenda.

Currently, the 15 local pharmaceutical companies in the country account for 30 per cent of the country’s essential drug requirement, with the remaining 70 per cent imported.

However, Ernest BediakoSampong, Chief Executive Officer (CEO) of Ernest Chemists Limited (a local manufacturer of pharmaceutical products), during the tour to its new manufacturing plant under construction noted that, the pharmaceutical companies had begun rolling out initiatives to expand their existing infrastructure and to introduce modern technologies into their operations to improve production.

“What is required to realise the targeted output is adequate funding support from the government”, MrSampong posited. 

He added that, GEXIM Bank’s investment into the pharmaceutical industry had helped many of the companies to undertake innovative projects and to acquire appropriate technologies to boost their production.

“We are calling however for funding support to be made sustainable in order to allow us to complete some of our ongoing projects since a lot of pharmaceutical products are going to be manufactured locally.

“We also intend to export and it means that we will earn foreign exchange, employ more people and train them to acquire skills needed to improve the system,” he said.

Additionally, the Managing Director of Tobinco Group, MrKwadwoAsareTwerefour, said investing in key infrastructure projects was crucial to achieving self-sufficiency in the pharmaceutical industry.

He said Tobinco Pharmaceuticals was setting up a sterile plant to enable it to go into producing sterile pharmaceutical products and avoid dependence on imported products.

“All of us are trying to increase our capacity, improve on technology and expand our production lines so that we can produce most of the essential drugs that this country needs; but we need more funds to do this,” he said.

The GEXIM Bank team was satisfied that the bank’s investment in the pharmaceutical industry was yielding good results and gave an assurance that more funds would be pumped into the industry.

Mr. Agyinsam, in-wrapping
up the tour said, investment in local pharmaceutical companies to produce essential medicines locally was a giant step towards self-sufficiency.

He urged local pharmaceutical companies to get themselves ready to take advantage of opportunities that the African Continental Free Trade Area (AfCFTA) would present to them.

Adnan Adams Mohammed

Pharmaceuticals manufacturers in Ghana with support from the government under the Ghana EXIM Bank facility are prepared to produce COVID-19 essential drugs enough for the country and export the rest to West African sub-region.

The Ghana EXIM bank which had initially supported these local pharmaceutical manufacturing companies with a US$10 million facility each to about nine (9) companies some years back has pledged to give more support to the industry to expand and accelerate production to meet the aspiration of government.

Entrance Pharmaceuticals (the largest pharmaceutical manufacturing company in West Africa currently) is set to start production of (Hydroxyl Chloroquine) which is confirmed and being used in many countries as one of the cure for COVID-19 and already producing other essential drugs.

“We are ready to give further support to these pharmaceutical companies as we are impressed with how they utilized the initial support”, the Board Chair for Ghana EXIM Bank, Kwadwo Boateng Genfi has said, last week, during a tour of some local industries that had received funding support from the Bank.

Ghana is ready to be self-sufficient in pharmaceutical products very soon and export the excesses to help the country earn more foreign income to help strengthen the local currency (Cedi), the Chief Executive Officer of EXIM Bank, Lawrence Agyinsam added in a short address during the tour.

Some of the companies visited were; Entrance Pharmaceuticals (subsidiary of Tobinco Group of Companies), Ernest Chemist, Atlantic Life Scientists (subsidiary of Pharmanova Industries), and Kinapharma Industries.

The Pharmaceutical Manufacturers Association of Ghana (PMAG) has targeted to produce 70 percent of the country’s essential pharmaceutical products within the next three years.

The move is meant to reduce the importation of pharmaceutical products into the country and create more job opportunities in line with the Ghana Beyond Aid agenda.

Currently, the 15 local pharmaceutical companies in the country account for 30 per cent of the country’s essential drug requirement, with the remaining 70 per cent imported.

However, Ernest Bediako Sampong, Chief Executive Officer (CEO) of Ernest Chemists Limited (a local manufacturer of pharmaceutical products), during the tour to its new manufacturing plant under construction noted that, the pharmaceutical companies had begun rolling out initiatives to expand their existing infrastructure and to introduce modern technologies into their operations to improve production.

“What is required to realise the targeted output is adequate funding support from the government”, Mr Sampong posited. 

He added that, GEXIM Bank’s investment into the pharmaceutical industry had helped many of the companies to undertake innovative projects and to acquire appropriate technologies to boost their production.

“We are calling however for funding support to be made sustainable in order to allow us to complete some of our ongoing projects since a lot of pharmaceutical products are going to be manufactured locally.

“We also intend to export and it means that we will earn foreign exchange, employ more people and train them to acquire skills needed to improve the system,” he said.

Additionally, the Managing Director of Tobinco Group, Mr Kwadwo Asare Twerefour, said investing in key infrastructure projects was crucial to achieving self-sufficiency in the pharmaceutical industry.

He said Tobinco Pharmaceuticals was setting up a sterile plant to enable it to go into producing sterile pharmaceutical products and avoid dependence on imported products.

“All of us are trying to increase our capacity, improve on technology and expand our production lines so that we can produce most of the essential drugs that this country needs; but we need more funds to do this,” he said.

The GEXIM Bank team was satisfied that the bank’s investment in the pharmaceutical industry was yielding good results and gave an assurance that more funds would be pumped into the industry.

Mr Agyinsam, in-wrapping up the tour said, investment in local pharmaceutical companies to produce essential medicines locally was a giant step towards self-sufficiency.

He urged local pharmaceutical companies to get themselves ready to take advantage of opportunities that the African Continental Free Trade Area (AfCFTA) would present to them.