Category: News

By Elorm Desewu

The government, through the Bank of Ghana, (BoG), will for the second quarter of this year raise an amount of GHC17.9 billion, from the domestic money market by issuing Treasury Bills, Notes and Bonds.

This amount is slightly lower than GH¢19.087 billion the government borrowed during the first quarter of this year.

Of the GH¢17.95 billion, GH¢13.6billion would be used to rollover maturities and the remaining GH¢4.27billion is fresh borrowing to meet Government’s financing requirements.

For the second quarter of 2020, the Bank of Ghana would issue 91 day Treasury Bills worth GHC8.2 billion, 182 day Treasury Bills worth GHC1.62billion, 384 day Treasury Bills worth GHC2.75 billion, a 2 year Notes worth GHC700 million, a 3 year worth GHC1.8 billion, a 5 year bond worth GHC1 billion, a 7 year bond worth GHC800 million, a 10 year bond worth GHC800 million and a 20 year bond worth GHC287.87 million.

The Calendar is developed based on the Net Domestic Financing in the 2020 Budget, the domestic maturities and the Medium Term Debt Management Strategy (MTDS) for 2020-2023.  The Calendar shows the securities that are intended to be issued in respect of Government’s Public Sector Borrowing Requirements for the period January to March, 2020.

Per the calendar, Government aims to build benchmark bonds through the issuance of the following instruments:  The 91-day and 182-day will be issued weekly; The 364-day bill will be issued bi-weekly also through the primary auction with settlement being the transaction date plus one working day; Securities of 2-year up to 10-year will be issued through the book-building method; Issuance of the 20-year bond as a shelf offering will be re-opened based on investors request and on market conditions.

The Calendar also takes into consideration Government’s liability management programme, market developments (both domestic and international) and the Treasury & Debt Management objective of lengthening the maturity profile of the public debt.

The 2020 debt strategy focuses on an appropriate financing mix to mitigate the costs and risks to achieve the desired composition of the public debt portfolio with respect to borrowing from external and domestic sources.

 The financing strategy for 2020 proposes issuances of Government securities on the domestic market and create cash buffers on top of the programmed net domestic financing for active liability management and cash management purposes.

The strategy is to issue / re-open medium to long-term instruments (2-year, 3-year, 5-year, 7-year, 10-year, 15-year and 20 Year bonds) and refinance some of the maturing Treasury bills and Bonds. The strategy also plans to issue marketable and non-marketable debt against possible contingent liabilities arising from the financial and energy sectors in 2020.

On the external front, the strategy proposes the issuances on the International Capital Market provided market conditions are favourable and additional external borrowing for priority development projects, which cannot be financed on concessional terms.

 

 

Adnan Adams Mohammed

 

Ghana is to benefit from the African Development Bank Group’sUS$10 billion COVID-19 Response Facility to assist regional member countries including Ghana in fighting the pandemic.

 

The Facility, which will be available to governments and the private sector, is the latest measure taken by AfDB to respond to the pandemic and will be the institution’s primary channel for its efforts to address the crisis.

 

The AfDB acknowledges the devastating fiscal challenges African countries are faced with in attempts to respond to the coronavirus pandemic effectively. The bank is showing concern with deploying its full weight of emergency response support to assist the continent at this critical time to protect lives.

 

“This Facility will help African countries to fast-track their efforts to contain the rapid spread of COVID-19,” Dr. Akinwumi Adesina, President of the African Development Bank Group said. Adding that, the package took into account the fiscal challenges that many African countries are facing.

 

The Facility entails US$5.5 billion for sovereign operations in AfDB countries, and US$3.1 billion for sovereign and regional operations for countries under the African Development Fund, the Bank Group’s concessional arm that caters to fragile countries.

 

An additional US$1.35 billion will be devoted to private sector operations.

 

Commenting on the Facility, Acting Senior Vice-President Swazi Tshabalala said: “The setting up of the Facility required a collective effort and courage by all our staff, Board of Directors and our shareholders.”

 

Two weeks ago, AfDB launched a record-breaking US$3 billion Fight COVID-19 Social Bond, the world’s largest US dollar-denominated social bond ever on the international capital market.

 

Last week, the Board of Directors also approved a US$2 million grant for the World Health Organization for its efforts on the continent.

 

“These are extraordinary times, and we must take bold and decisive actions to save and protect millions of lives in Africa. We are in a race to save lives. No country will be left behind,” Adesina said.

 

 

 

The International Labour Organization (ILO) has predicted that, the COVID-19 crisis is expected to wipe out 6.7% of working hours globally in the second quarter of 2020, equivalent to 195 million full-time workers.

 

ILO indicated that, substantial reductions in employment were foreseen in Arab countries with 8.1% or 5 million full-time employees, Europe with 7.8% or 12 million full-time workers and Asia and the Pacific with 7.2% or 125 million full-time workers.

 

According to the Organization, the sectors most at risk include accommodation and food services, manufacturing, retail and business and administrative activities.

 

“Workers and businesses are facing catastrophe, in both developed and developing economies,” said ILO Director-General Guy Ryder, addressing journalists via video conferencefrom the ILO headquarters in Geneva.. Suggesting that, “We have to move fast, decisively and together. The right, urgent measures could make the difference between survival and collapse.”

 

Massive losses are expected across different income groups, but especially in upper-middle-income countries of 7%, translating to 100 million full-time workers.

 

“This far exceeds the effects of the 2008-9 financial crisis,” said Ryder.

 

“Perhaps more strikingly, that reduction translates into the loss in three months of 195 million full-time jobs equivalent around the world and this is calculated with the basic assumption of a working week of 40 hours,” he explained.

 

“If you look at the economic and social issues we are discussing today, they are in effect a direct consequence of deliberate policymaking in the field of health,” he added.

 

Ryder said the ILO, which represents organized labor, employers and countries, supported an integrated approach to the health, economic and social dimensions of the pandemic as is taken by the UN.

 

The eventual increase in global unemployment during 2020 will depend substantially on future developments and policy measures.

 

“There is a high risk that the end-of-year figure will be significantly higher than the initial ILO projection of 25 million,” said Ryder.

 

The ILO said that more than four out of five people — 81% — in the global workforce of 3.3 billion were currently affected by full or partial workplace closures.

 

 

Adnan Adams Mohammed

 

Marketing Companies of Liquefied Petroleum Gas (LPG) and consumers have put up stiff opposition against the National Petroleum Authority’s introduction of a new levy/margin, the ‘Cylinder Re-circulation Recovery Margin as two entities have filed a lawsuit for it withdrawal.

 

The retailers of the LPG are afraid that, the domestic consumption of gas in Ghana as preferred globally as against the use of other fuel sources such as; firewood and coal will reduce drastically due to its high price. They vowed that, they will do everything possible to ensure that the many levies, including the newly-introduced LPG Cylinder Recovery Levy, are removed.

 

Already, the NPA has been sued by the Chamber of Petroleum Consumers (COPEC) and the Consumer Protection Agency (CPA) for the introduction of the levy pleading for its withdrawal. The NPA, in a circular issued on April 1, 2020, announced a new levy of GHp13.5 as Cylinder Investment Margin, to help the LPG marketing companies offset aspects of the cost involved in procuring and branding cylinders for the new energy policy (the Cylinder Recirculation Model) as well as an increase in Fuel Marking Margin from GHp3.0 to GHp4.5 per litre for fuel. But, the energy and finance expert, Alex Mould wants the government to reduce fuel prices drastically to help cushion commercials drivers who are asked to reduce number of passengers amidst social distancing.

 

“We believe that Ghanaian consumers are being choked with many taxes on LPG; globally, LPG consumption is on the rise, LPG is the fuel of choice. LPG consumption, globally, is growing between 8 to 10% but in Ghana, we are stagnant because we keep a lot of taxes on the product, and we are not able to grow consumption. If we don’t start doing anything drastically about the LPG prices, consumption will start going down”, Vice-Chairman of the Marketing Companies Association, Gabriel Kumi stressed in an interview, last week.

 

“Our association is prepared to do everything and anything to ensure that this levy does not stay. We are preparing to do everything and anything possible within the legal framework of our country to ensure that this levy goes off. In fact, our members are angry”, he told Citi TV.

 

The Marketers have noted that, before the introduction of the LPG Cylinder Recovery Levy, it had been calling on the government to remove existing taxes, and, therefore, they were shocked to see the introduction of a new tax at the time the price of the commodity was going down.

 

They said, members of the association were rather expecting the NPA to obey President Akufo-Addo’s directive of giving businesses tax waivers and a stimulus package.

 

“We have been appealing to them to take the taxes off. We believe this is the time that we rather need to reduce the price of the product so that we can make it accessible and affordable to every Ghanaian.

 

“If you look at the price build-up of LPG, there is 5 pesewas per kilo of LPG margin that consumers have been paying for the past 20 years.

 

“Currently, that 5 pesewas per kilo brings in GHS1.2 million a month. We don’t know what that money is being used for”, said Mr Kumi.

 

He added: “We are sounding a caution to our regulator that we are demanding immediate removal of this levy from the price build-up of LPG. If they don’t do it and the time comes and we are taking any action, we are expecting the consumer, the whole country to support us.”

Prof John Gatsi

 

Prof. John Gatsi writes

 

The announcement by the IMF Executive Board that US$1Billion loan under the RCF has been approved for Ghana is good news. However, this does not take away the fiscal, growth, debt management and international reserve realities for Ghana.

 

The IMF as an international financial institution has provided for countries to access Rapid Credit Facility (RCF) in emergency situations, normally occasioned by developments that are beyond the strategic anticipation of countries. This could be in the form of natural disasters, health pandemic, among others, which compromises stable balance of payment and fiscal developments for economies.

 

As classified by the IMF, the loan comes under RCF, which is why about a month after the application by the Government of Ghana (GoG), the loan disbursement has been rapidly approved so that the loan will start hitting the account of GoG in tranches timeously. This rapid disbursement does not happen because of extraordinary efforts by countries accessing the facility but the exigencies of the times.

 

It further means even though the RCF is not a program-based facility, progress report on the utilization of the earlier disbursement should be seen to address Coronavirus related issues, balance of payments and fiscal management issues.

 

As discussed in an earlier article, the main feature of the RCF is its “zero interest rate with grace period covering about 5.5years for 10-year maturity loan. This defines the concessionary nature of the RCF as against most of the recent market-based loans (commercial loans) with greater burdens of repayment”.

 

It was also stated in the earlier article on the RCF that this loan does not attract program-based reviews and evaluation by the IMF, but Ghana must prove how the facility addresses underlying balance of payment issues, financial support to vulnerable families, stimulus packages to micro and small scale businesses in a manner that deals with poverty reduction and immediate health care needs at the time.

 

This loan has displayed some important fiscal management issues that make the prudent utilization of the RCF by GoG comparable to the canonical demands of the Ten Biblical Commandments.

 

Overall, the fiscal deficit deteriorated from -7% of GDP in 2018 to -7.5% in 2019 and is projected to further decline to -9.5% in 2020 based on government data submitted to the IMF inclusive of financial and energy sector costs.

 

The primary balance which is a critical domestic anchor for debt sustainability also deteriorated from -1.1 in 2018 to -1.8 in 2019 and expected to close the year 2020 with -4.1.

 

The debt to GDP ratio has also deteriorated by 4.2% (59% to 63.2% from 2018 to 2019) and projected to worsen to about 69% in 2020, excluding ESLA bonds.

 

There will be about 6.5% reduction in GDP per capita for Ghanaians between 2019 and 2020.  This compromises the share of Ghanaians in the national cake.

 

While the expectation for recession is a possibility for fragile economies in Sub-Saharan Africa, if the Coronavirus pandemic is contained early enough, Ghana may not slip into a recession but will experience sharp reduction in economic growth from 6.1% in 2019 to 1.5% in 2020.

 

This is why judicious application of all the funds being generated from the WorkdBank, IMF, the Stabilization Fund and the COVID-19 Trust Fund is required with greater transparency and accountability. We must apply the funds to avoid delay in resuming normal economic activities. We must avoid food crisis in post Coronavirus era.

 

In 2020, oil GDP is cut to about -2.1% with ever dwindling donor support expected to be about $514Million in 2020 against $826Million in 2019.

GoG must deal with this crisis to hold the confidence of foreign investors to apply the break of investment withdrawals or dis-investing.

 

The IMF indicated balance of payments as one of the areas that the $1Billion disbursement will address.  The gross international reserve which is a protection for domestic currency performance and confidence of foreign investors is not in good shape. On average, between 2018 and 2020 the gross international reserve covers about 2.9 months of imports in which 2.7 months of imports is expected in 2020. This means between 2018 to the first quarter of 2020 there is no record of the reserve performing better than what is presented to IMF.

 

The net international reserve, which in practice is the critical measure, averages 2.2months of imports from 2018 to 2020 with expectation of 2.1 months of imports in 2020.

 

While Parliament did a good job by providing fast track approval to government to borrow from the IMF, the reality is that there are recorded deterioration in the key fundamentals before the Coronavirus. Government should make good use of the flow of funds. This is important as the chances that government may bundle more areas that will create further problems is high.

 

The criteria for individuals and businesses to benefit from the Coronavirus Alleviation Program should be made more transparent and well targeted.

 

A matrix of primary balance, lower revenue prospect, critically low expected growth rate, heightened expenditures and deteriorating debt to GDP ratio as well as the weak international reserve position makes 2020 and 2021 very difficult years for the Ghanaian economy.

 

In the midst of the Ebola crisis, energy sector crisis and collapsed of crude oil prices spanning from 2013 to 2016 with the right decisions and investments of available funds, Ghana’s economy did emerge stronger.

 

Though, one is not compelled to compare the Ebola period with Coronavirus pandemic, the two periods remain times of massive shocks that require similar determination and commitment to rewrite new financial and fiscal notes about the Ghanaian economy.

 

  

Commercial Banks in Ghana are offering GHC10 million as a donation to support the country’s fight against the deadly coronavirus which has infected over a million people globally and killed thousands of them.

 

Ghana Association of Bankers which announced the package Monday said the amount being provided by its member banks will go into a COVID-19 fund and used for the procurement of protective gears as well as support frontline medical personnel in residence.

 

It will also go into easing the burden and practical difficulties face by some vulnerable citizens who will have to endure due to the restriction of movement during the partial lockdown in parts of the country.

 

President Nana Akufo-Addo on Sunday announced that the Covid-19 National Trust Fund which was established a week ago to support government’s efforts in the fight against the virus, has so far yielded 8.75 million cedis.

 

The amount, the President explained, will be used “to assist in the welfare of the needy and the vulnerable.”

 

Meanwhile, the Ghana Association of Bankers (GAB) explained in its statement that the donation forms part of a number of interventions it is taking “to mitigate the financial impact of Covid-19 on the general public”.

 

The Association said it will keep monitoring the impact of the coronavirus outbreak of the pandemic on the country’s health systems, supply chains and the general way of life of the people.

 

It also indicated that as part of their interventions, banks have already either reduced significantly or removed completely charges on digital banking platforms.

 

That it explained, is to ensure that “customers do not have to make financial decisions on whether to switch to an alternate platform or not”

 

“As we entreat customers during this period to switch to available digital banking platforms to enable banking halls of banks to handle limited banking services, we have decided to make the switch less painful and financially advantageous,” the Association said.

 

Meanwhile it said banks are to hold bilateral discussions on further reprieve for customers operating in worst affected industries.

 

“We recognize with concern the challenges some of our clients have had to go through during the pendency of the pandemic; to mention a few, we note real challenges facing the airlines and general transportation businesses; hotels and other tourism related businesses; importers/exporters and our clients who are staff of these worst affected businesses” it observed.

 

On the bank of that, it said banks have agreed to hold bi-lateral discussions with customers who have loan exposures with respective banks so a more tailor-made solution can be agreed with their bankers.

 

“We advise customers to exercise restraint during this exercise as delays may be expected as banks will be using existing lean staff on roll to begin individual discussions on loan extensions, restructuring or other solutions respective banks will proffer to lessen the impact the virus may have caused,” it urged.

 

Ghana’s covid-19 situation

 

 

Ghana has recorded 214 covid-19 cases since the first two cases were confirmed in the country on March 12. Five of them who had underlying conditions have since died while three others have recovered.

 

Forty-nine others have been discharged for home management by health officials who say additional 155 others are doing “well and responding to treatment” across the country.

 

So far cases have been recorded in six of the `16 regions of the country with Greater Accra leading with 189 followed by the Ashanti Region with 12 cases, Northern Region with 10 cases, and one case each in the Upper West, Eastern and Upper East regions.

 

By Stephen Kwabena Effah|3news.com|Ghana

Veteran politician has called on electorates all over the world to vote against governments in the wake of the epidemic novel corona virus (COVID-19) and its response.

Mr. Joshua Attoh Quarshie said during elections, politicians give out free gift such as bags of rice, edible oil; television sets, money, outboard motors, and other valuables to electorates but these same politicians have not been able to provide basic needs to stay safe and prevent the spread of the epidemic when the needs arise.

Globally, the coronavirus has killed 16,558 people and affected 381,761 people as of March 24, 2020.

In Ghana, the virus has affected 132 and killed three as at March 26, 2020, and health expert believes the figure could increase.

Speaking in an interview on the issue, Mr. Attoh Quarshie observed that “politicians all over the world, especially in Africa, do not have a love for their subjects”.

“During elections time, they [politicians] give out TV, rice, and other valuables but when the disease came, common handwashing soaps, alcohol-based hand sanitizers are being given to their agents to sell and make money. It should have been shared free to the people”.

Mr. Attoh explained that “hand gloves, sanitizers, nose masks and other protective should have been distributed to the citizens free but not to sell them at exorbitant prices”.

“It’s not just Ghana but the whole world. Almost every country is selling hand gloves and sanitizer to the citizens so the people should know that government everywhere show no love for their citizens, likewise Rev fathers, imams, pastors, whose duties were to preach in their churches and mosques and to invite medical doctors at their own expense to their various churches and mosques to educate the congregations on the virus but they rather collect money from them”.

He said “the same as our native chiefs”.

The veteran, therefore, accused the opposition political parties of also doing nothing to put the government on its toes to do the right thing in fighting against the virus.

“The opposition parties are weak and pastors are also collecting money from their congregations. That is wickedness. American is given free sanitizers and other needed items to its citizens but the prices of these good are increased in Africa and parts of the world”.

“In Africa, it is an opportunity for businessmen and women. They encourage the government, PMs, chiefs, rev fathers, to put heavy loads on their subjects physically and spiritually, when they are worrying to get money to buy these items, they are also worrying against this deadly virus”.

   The Order of Volta of Star national award winner noted that “those who voted for such people in government should not vote for them again”.

“This shows that those selling hand gloves, hand soap, nose masks, do not care about the people and those selling them should stop”.

He called on the electorate to boycott any election because their leaders have failed them.

“We should boycott elections internationally, likewise the chiefs who are supposed to beat gongon in their jurisdictions but have failed, and those chiefs must be distooled because they showed no love for their subjects”.

He said “the same thing applies to ‘kangaroo’ rev fathers and Imams”.

He questioned that “what excuse would they give to their people when they need the support of their subjects”.

“When chiefs, imams, counsellors and MPs approach their subjects to think about the welfare of their subjects, what would they tell them?” he queried.

“The same thing to the kangaroo churches who go after peoples wives and money and nothing else”, he said.

Mr. Attoh Quarshie advised that “we must ignore those who come to us with the sweet mouth during the campaign for our votes, particularly in Africa, to be MPs, council members and chiefs”.

“If the COVID-19 had taken them to the grave, would they have come to campaign to them at the graveyard?”, he queried.

The veteran said “so long as the virus is a concern, what were the preparations by the government all over the world for the citizens? I am appealing that they must make provision for to save lives”.

 

 

 

 

 

Adnan Adams Mohammed

 

A former Chairman of Public Interest and Accountability Committee (PIAC) has cautioned the government to be serious with the management of state resources in this crisis times.

 

 

If the government was serious it would rather use the money released for the ‘new voter register’ and the missing GHC600 million oil money, Dr Steve Manteaw stressed when reacting to government’s request to parliament seeking for permission to use part of the Petroleum Stabilization Fund and the Heritage Fund for emergency expenditure in relation the COVID-19 fight.

 

 

PIAC, in its 2018 report indicated that, a whooping GHC650 million of the oil revenue cannot be accounted for. There were no traces as to how or which account the said amount was used or lodged. However, the government had since then not been able to tell Ghanaians of whereabouts of the money meant for all citizens. 

 

   

“If we are a serious nation, why don’t we stop the new voter register & use the money to fix our problems due to COVID-19? We are never serious at all”, Dr Manteaw fumed during a radio discussion in Accra.  

 

 

“We have lots of money in this country that is why GHC650 million has gone missing without any uproar”, he intimated.  

 

 

“We have already mismanaged about GHC650 million of the Oil Revenue. Do we want to mismanage another US$500 million is the Heritage Fund so far meant for future Generations? No way!

 

 

Meanwhile, what government is asking for has its own creation already, which are the Stabilization & Contingency Funds.

 

 

The Heritage Fund was created out of the Petroleum Holding Fund for a purpose. It is being saved to be used later when Ghana has stopped producing oil. Per the Petroleum Revenue Management Act, the government is allowed to use 91% of our Oil Revenue today and save only 9% for Future Generations.

 

 

The energy and tax expert wondered why has the finished all 91% & now wants to jump into the little 9%? What kind of irresponsibility is that?

 

 

“The Heritage Fund not a contingency Fund so why call for it to be used today? It is for the future & Generations unborn

 

 

“It is a fallacy to say future Generations are children born today. They are those ones who would come after our oil is finished.

 

 

“Those calling for the use of the Heritage Fund today are vision-less & short-sightedness”,  

 

 

Adnan Adams Mohammed

 

Real estate developers and agents are assuring that, there could soon be a relief on the way for home renters who might not be able to pay their rent because of coronavirus hardship.

 

 

Realtors and other housing organizations are working on ‘COVID-19 Relief Packages’ for renters including a freeze on evictions.

 

 

The assurance comes as companies across Accra and Kumasi starts laying off or standing down workers as cash flow dries up.

 

 

“Further work will be done to identify on how relief can be provided to both commercial and residential tenancies to ensure that in hardship conditions, there will be relief that will be made available to ensuring a legislation that protects tenants during an epidemic”, Augustine Ewiah, CEO of Cameo1 Homes indicated.

 

 

“We understand that may have an adverse effects on landlords but we all need to put a human face on the situation and make sacrifices”, he added.

 

 

 

 

Absa Bank has also offered a repayment moratorium of up to six months to all its personal and business customers who have been affected by COVID-19.

 

The bank has also reduced its lending rate by 2% to qualified personal and SME customers as well as loans to other impacted industries.

 

These measures took effect from 1 April 2020, and will be implemented across all loans due in April 2020, subject to the necessary arrangements with the bank.

 

The bank, last week, as a way of supporting customers, waived charges on interbank instant transfers on its digital channels, and also made mobile money transfers of up to GHS100 daily free.

 

Absa, also in a statement, said in the face of the challenges customers are facing due to the COVID-19 pandemic, it was only right that it offered some relief to help customers remain in business.

 

Commenting, the Managing Director, Abena Osei-Poku, said: “We have been closely monitoring developments and the growing concerns on COVID-19 in Ghana and the rest of the world, as well as reports from government and health institutions. This pandemic is nothing we have seen before and is very alarming, to say the least. As a caring bank, it is important for us to support our customers who keep us in business.”

 

“While doing that, we are also aware of the efforts the government is making to bring the situation of COVID-19 under control in Ghana. We, therefore, found it dutiful to support the government towards the purchase of test kits to help curb the spread of the virus and PPEs for the protection of our frontline health workers.”

 

The bank said it will keep monitoring developments on COVID-19 and make decisions that will be in the best interest of customers and employees.