THE Ghana Statistical Service (GSS) will from today start a literacy workshop for media practitioners at Dodowa, Accra.
The two-day workshop, according to the GSS is meant “to enlighten media practitioners on the compilation procedures used in the national accounts, the consumer and producer inflation.”
In a letter distributed to selected media houses in Accra, the service said the practitioners would be trained in analyses and interpretation of economic statistics compiled and disseminated by the GSS.
The United Nations Development Programme (UNDP) will sponsor one person from each selected media house “but media houses can increase their number of nominees at their own additional cost.”
Sunday, May 29, 2011
Tuesday, May 24, 2011
Securities market experiences first awards nigh
PLAYERS of the nation's securities market, regulated by the Security and Exchange Commission over the weekend experienced their first awards night, virtually 20 years after the Ghanaian capital market took shape.
The Ghana Investment Awards (GIA), organised by the Premier Networking Investment Club (PNIC), was among other things to recognise the dedicated performance of individuals and institutions towards the nation's country's capital market, and in so doing encourage competition to breed excellence in the industry.
In all, 13 institutions and three individuals were awarded for their respective hardwork in their areas of operations.
President of the PNIC, Mr Kwame D Ampofo, noted that the awards were meant "to educate the investor public about the products and services available to them, while helping create awareness of the market."
He said this year's awards night, having been the maiden edition "has been without challenges. We, however, been overwhelmed at the support we have received from all stakeholders" adding that the GIA team had successfully gone through them to have the event.
He said the team was hoping to "continually" improve on the procedures with "increased rigour in order to reward only deserving winners."
The minister of finance and economic planning, who was the guest of honour noted that a well developed securities market in the country would "help mobilise private funds and channel such funds to the most productive sectors of the economy.
"Government, is therefore committed to the development of this market," the Chief Director of the ministry, Mr Nicholas Jamil, who represented the finance and economic planning minister said.
The deputy Managing Director of the Ghana Stock Exchange, Mr Ekow Afedzi, observed that the award scheme "was a good initiative. There has never been an initiative like this to recognise the hard work and commitment of people and institutions to the development of the securities market since it started shaping about 20 years ago."
He was also of the view that the award scheme would help spur up competition in the sector and thus hoped that the market would in the coming years witness excellent operations.
The Ghana Commercial Bank won the Best Performing Stock for the year 2010.
Other industry players such as CAL Brokers, CAL Asset Management, Databank Group, IC Securities, Merban Investment Holdings, Strategic African Securities, HFC Investments Services, SDC, HFC Brokerage, Ecobank Development Corporation (EDC), SIC Financial Services Ltd., Merban Investment Holdings and Ecobank Investment Managers also received awards ranging from gold to silver.
The Ghana Investment Awards (GIA), organised by the Premier Networking Investment Club (PNIC), was among other things to recognise the dedicated performance of individuals and institutions towards the nation's country's capital market, and in so doing encourage competition to breed excellence in the industry.
In all, 13 institutions and three individuals were awarded for their respective hardwork in their areas of operations.
President of the PNIC, Mr Kwame D Ampofo, noted that the awards were meant "to educate the investor public about the products and services available to them, while helping create awareness of the market."
He said this year's awards night, having been the maiden edition "has been without challenges. We, however, been overwhelmed at the support we have received from all stakeholders" adding that the GIA team had successfully gone through them to have the event.
He said the team was hoping to "continually" improve on the procedures with "increased rigour in order to reward only deserving winners."
The minister of finance and economic planning, who was the guest of honour noted that a well developed securities market in the country would "help mobilise private funds and channel such funds to the most productive sectors of the economy.
"Government, is therefore committed to the development of this market," the Chief Director of the ministry, Mr Nicholas Jamil, who represented the finance and economic planning minister said.
The deputy Managing Director of the Ghana Stock Exchange, Mr Ekow Afedzi, observed that the award scheme "was a good initiative. There has never been an initiative like this to recognise the hard work and commitment of people and institutions to the development of the securities market since it started shaping about 20 years ago."
He was also of the view that the award scheme would help spur up competition in the sector and thus hoped that the market would in the coming years witness excellent operations.
The Ghana Commercial Bank won the Best Performing Stock for the year 2010.
Other industry players such as CAL Brokers, CAL Asset Management, Databank Group, IC Securities, Merban Investment Holdings, Strategic African Securities, HFC Investments Services, SDC, HFC Brokerage, Ecobank Development Corporation (EDC), SIC Financial Services Ltd., Merban Investment Holdings and Ecobank Investment Managers also received awards ranging from gold to silver.
Sunday, May 22, 2011
Companies raise red flags - Over environmental tax
The 20 per cent tax imposed on plastic materials, otherwise known as Environmental Tax has taken effect but not without some uneasiness from major plastic consuming and producing companies in the country. Maxwell Adombila Akalaare reports.
KEY plastic consuming and producing companies in the country are protesting the 20 per cent tax imposed on plastic materials.
The 2011 Budget and Economic Policy Statement of the government through which the tax was introduced stated that the tax was meant "to protect the environment” and would be collected at “importation and any production or collection points" throughout the country.
But the plastic manufacturing companies disagree, they are questioning the rational for railroading the 20 per cent charge on plastic material into the national tax policy.
In separate interviews with the GRAPHIC BUSINESS, sources within the Association of Ghana Industry (AGI) and other major plastic consuming and producing companies in the country have, however, challenged such an intend describing it as "misplaced" and “not meeting the tax' target.”
The Managing Director of Unilever Ghana, which now hosts the head office of Unilever's West African operations, excluding Nigeria, Mr David Mureithi told the GRAPHIC BUSINESS that the tax was "purely a revenue collection measure" rather than an environment one as had been indicated in the budget.
"Or is the government saying this environmental tax is a 'sin tax’, the MD asked.
A sin tax is a form of punitive tax placed on products that are deemed unwanted by "society" and thereby aimed at discouraging or reducing consumption of the product.
He further wondered if funds to be generated through the tax would “go to the Ministry of Finance and Economic Planning or the Environmental Protection Agency for environmental purposes.”
The Managing Director was of the view that government should engage industry on how best to handle plastic waste and “set up small enterprises that would be responsible for the recycling of these wastes”. He said that a legislative measure from local government authorities such as the assemblies on how to dispose plastic waste was more welcoming than the tax.
“In the midst of this escalating global commodity prices, you can count on industry to pass on the effects of these price hikes and that of the 20 per cent tax onto the final products and the hardships that it would bring to them is not what industry wants”, he stated
A source within the AGI also told the GRAPHIC BUSINESS that the association was wondering why government is yet to make use of a committee's proposals on adding addictive - Oxo-Bio Degradable Additives to raw materials used in manufacturing plastic bags that would cause them to desolve within 90 days once they were exposed to sun rays and the air after usage.
"This committee, made up of officials from the Ghana Standards Board, Plastic Manufacturers Association, the AGI and government officials contracted a UK-based bio lab company to carry out a research into the best ways of managing these materials. The committee submitted its report to the Ministry of Trade and Industry on July, 2009.
"We also advised government on a lot of measures to adopt towards solving this problem. See, we told government to pass a Legislative Instrument that would compel all plastic manufacturers and importers to make all their products bio-degradable. Once that is done, it compels all of them to meet this standard; import or produce plastic materials that are only bio-degradable. We further stated that they should encourage establishment of recycling plants by giving out incentives to entreprenuers to engage in recycling."
"So how come all these opportunities are there, they are not exploited yet all that government could do was to impose a 20 per cent tax on plastic materials?" the source asked.
The Association of Ghana Industry, Ghana Plastic Manufacturers Association (GPMA), the umbrella body of plastic manufacturing companies in the country, the Private Enterprise Foundation and some other business groupings in the country have, following the introduction of the tax late last November been spearheading negotiations with government on possibilities of withdrawing the tax or reducing the rate.
The source however lauded government on its transparency and willingness towards the negotiations adding that those negotiations have led to government agreeing to limit the tax "to only soft plastic materials; polythene bags and the likes that mostly litter while excluding the hard ones that barely litter. But this boils down to the same point; that the tax is not serving its purpose but rather a money making venture.”
Many companies at the receiving end of the tax are asking “if the tax is really meant to protect the environment as the government wants us to believe, then why exempt sachet water producers who are the worst pollutees of the environment with their products?”
Prices of plastic related wares in the country have already started pulling gone up. Several companies have have posted on their entrances telling their prospective customers that “in view of the 20 per cent Environmental Tax being introduced, there would be price increases very shortly on all containers.”
Checks by the GRAPHIC BUSINESS within some key plastic consuming and producing companies in Accra indicated that most of these companies had restructured their internal expenses to capture the tax as tax agents at the ports last February started to implement the 20 per cent at the importation of plastic products.
The National Security Advisor, Brigadier-General Nunoo Mensah ealry last week hinted to Citi FM, a private radio station in Accra that government was considering a ban on plastic water because of the waste it generates.
Plastic waste materials, mostly those from pure water sachets and polythene bags are currently competing for space in open gutters and virtually every available space nation-wide.
The plastic menace currently engulfing the country dates back to decades. As a result, the problem has received various high profile institutional and individual attentions including committees, funds as well as parliamentary and Cabinet level attentions. These efforts by various political administrations are yet to yield the desired results.
Time would, however tell if the latest move, a 20 per cent tax on plastic materials aimed at “protecting the environment” would remedy the country’s plastic waste mess.
KEY plastic consuming and producing companies in the country are protesting the 20 per cent tax imposed on plastic materials.
The 2011 Budget and Economic Policy Statement of the government through which the tax was introduced stated that the tax was meant "to protect the environment” and would be collected at “importation and any production or collection points" throughout the country.
But the plastic manufacturing companies disagree, they are questioning the rational for railroading the 20 per cent charge on plastic material into the national tax policy.
In separate interviews with the GRAPHIC BUSINESS, sources within the Association of Ghana Industry (AGI) and other major plastic consuming and producing companies in the country have, however, challenged such an intend describing it as "misplaced" and “not meeting the tax' target.”
The Managing Director of Unilever Ghana, which now hosts the head office of Unilever's West African operations, excluding Nigeria, Mr David Mureithi told the GRAPHIC BUSINESS that the tax was "purely a revenue collection measure" rather than an environment one as had been indicated in the budget.
 |
| David Mureithi doubts if the Environmental Tax is a 'sin' tax |
"Or is the government saying this environmental tax is a 'sin tax’, the MD asked.
A sin tax is a form of punitive tax placed on products that are deemed unwanted by "society" and thereby aimed at discouraging or reducing consumption of the product.
He further wondered if funds to be generated through the tax would “go to the Ministry of Finance and Economic Planning or the Environmental Protection Agency for environmental purposes.”
The Managing Director was of the view that government should engage industry on how best to handle plastic waste and “set up small enterprises that would be responsible for the recycling of these wastes”. He said that a legislative measure from local government authorities such as the assemblies on how to dispose plastic waste was more welcoming than the tax.
“In the midst of this escalating global commodity prices, you can count on industry to pass on the effects of these price hikes and that of the 20 per cent tax onto the final products and the hardships that it would bring to them is not what industry wants”, he stated
A source within the AGI also told the GRAPHIC BUSINESS that the association was wondering why government is yet to make use of a committee's proposals on adding addictive - Oxo-Bio Degradable Additives to raw materials used in manufacturing plastic bags that would cause them to desolve within 90 days once they were exposed to sun rays and the air after usage.
"This committee, made up of officials from the Ghana Standards Board, Plastic Manufacturers Association, the AGI and government officials contracted a UK-based bio lab company to carry out a research into the best ways of managing these materials. The committee submitted its report to the Ministry of Trade and Industry on July, 2009.
"We also advised government on a lot of measures to adopt towards solving this problem. See, we told government to pass a Legislative Instrument that would compel all plastic manufacturers and importers to make all their products bio-degradable. Once that is done, it compels all of them to meet this standard; import or produce plastic materials that are only bio-degradable. We further stated that they should encourage establishment of recycling plants by giving out incentives to entreprenuers to engage in recycling."
"So how come all these opportunities are there, they are not exploited yet all that government could do was to impose a 20 per cent tax on plastic materials?" the source asked.
The Association of Ghana Industry, Ghana Plastic Manufacturers Association (GPMA), the umbrella body of plastic manufacturing companies in the country, the Private Enterprise Foundation and some other business groupings in the country have, following the introduction of the tax late last November been spearheading negotiations with government on possibilities of withdrawing the tax or reducing the rate.
The source however lauded government on its transparency and willingness towards the negotiations adding that those negotiations have led to government agreeing to limit the tax "to only soft plastic materials; polythene bags and the likes that mostly litter while excluding the hard ones that barely litter. But this boils down to the same point; that the tax is not serving its purpose but rather a money making venture.”
Many companies at the receiving end of the tax are asking “if the tax is really meant to protect the environment as the government wants us to believe, then why exempt sachet water producers who are the worst pollutees of the environment with their products?”
Prices of plastic related wares in the country have already started pulling gone up. Several companies have have posted on their entrances telling their prospective customers that “in view of the 20 per cent Environmental Tax being introduced, there would be price increases very shortly on all containers.”
Checks by the GRAPHIC BUSINESS within some key plastic consuming and producing companies in Accra indicated that most of these companies had restructured their internal expenses to capture the tax as tax agents at the ports last February started to implement the 20 per cent at the importation of plastic products.
The National Security Advisor, Brigadier-General Nunoo Mensah ealry last week hinted to Citi FM, a private radio station in Accra that government was considering a ban on plastic water because of the waste it generates.
Plastic waste materials, mostly those from pure water sachets and polythene bags are currently competing for space in open gutters and virtually every available space nation-wide.
The plastic menace currently engulfing the country dates back to decades. As a result, the problem has received various high profile institutional and individual attentions including committees, funds as well as parliamentary and Cabinet level attentions. These efforts by various political administrations are yet to yield the desired results.
Time would, however tell if the latest move, a 20 per cent tax on plastic materials aimed at “protecting the environment” would remedy the country’s plastic waste mess.
MASLOC targets apex body status; To strengthen microfinance institutions
The country’s microfinance sector has over the past few years witnessed the dramatic proliferation of more companies. But unlike the rural banks which come under the ARB Apex Bank, and the securities market which is also under the watchful eyes of the Security and Exchange Commission (SEC), microfinance institutions are yet to get such a sub-sectorial control. Maxwell Adomila Akalaare reports on how the Microfinance and Small Loans Centre (MASLOC) of the Office of the President is hoping to take up such a role in the near future.
THE Microfinance and Small Loans Centre (MASLOC) is currently striving to, in the near future make practical its policy document status of being the apex body of microfinance institutions in the country.
Should it succeed, the centre would then be more empowered to subsequently concentrate much of its lending efforts on wholesale lending rather than spending time on its present three mandates of loaning to groups, individuals and that of other microfinance institutions.
According to the MASLOC, such a move would help regularise the activities of these institutions while helping to boost credit availability to the informal sector which continue to accommodate a large chunk of the country’s entrepreneurial community yet receives the least financial attention from banking and non-banking financial institutions nation-wide.
The Chief Executive Officer of the centre, Ms Bertha Ansah-Djan told the GRAPHIC BUSINESS that the centre was now aiming at making proper use of its policy document status as “the apex body of microfinance institutions”.
Associations such as the Ghana Association of Microfinance of Microfinance Institutions (GHAMFIN), Money Lenders Association of Ghana (MLAG) and the ‘Susu’ Collectors Association (MLAG) are currently serving as the respective umbrella bodies of their individual institutions.
The microfinance sector has for the past few years witnessed dramatic growth, but regulations, supervision and monitoring of the activities of these institutions in the country has however left much to be desired. The sector was, until 2007 legally under the control, supervision and licensing of the Criminal Investigations Department (CID) of the Ghana Police Services, a mandate many financial experts thought was not well placed and therefore not well executed by the criminal body.
The passage of the Non-bank Financial Institutions Act, 2007, Act 774 has, however, transferred that mandate of regulating and licensing these institutions which fall under the microfinance sector from the police onto the BoG. Many however think that the numerous roles of the Central Bank including regulating the country’s financial sector and commercial banks would not give it the needed time and resources to monitor and supervise the sub-sector.
The BoG had earlier on observed that a number of financial service providers, including financial NGOs, Susu companies, money lenders, and companies that come under the microfinance sector have over the past few years emerged to its keen attention.
The BoG has under the ARB Apex Regulations, LI 1826, delegated its monitoring and supervision powers to the ARB Apex Bank to monitor and supervise rural banks while the Securities and Exchange Commission (SEC) at the moment also serves as the apex body of the country’s security or the capital market. The microfinance sector is however yet to get such a sub-sectorial control delegated by the BoG.
MASLOC is therefore currently aiming at getting such a mandate that would enable it to become the umbrella body of these microfinance institutions, effectively monitor and supervise their activities and subsequently lend its funds to them for onward lending to the informal sector in general.
But that, according to the MASLOC CEO would require the passage of center’s policy document into a a law to give them full mandate to play such role.
The document, she said was currently before Cabinet “read through by all the authorities” and awaiting the relevant measures to get it passed.
Government earlier this year hinted of its readiness to restructure and re-organise the MASLOC to enable it ”effectively finance local entrepreneurs and rural agriculture.”
According to Ms Ansah-Djan, stepping up MASLOC’s wholesale lending to microfinance institutions in the near future would help boost credit access to the sector to enable it undergo the needed expansions.
With an estimated figure of 60 per cent of the nation’s workforce currently in the informal sector, the MASLOC CEOsaid “their lack of access to finance would mean a definate stall of the country’s development agenda.”
The Operations Manager of the MASLOC, Mr Enoch B. Donkoh said the Centre’s was now applying best practices of microfinance activities in its operations leading to the centre’s improved recovery rate for “new loans” which currently stands at 95 per cent.
She however said the Centre was at the moment recovering old loans that were given out before the present management team took office. Those loans, he mentioned currently stands at about GH¢40 million
THE Microfinance and Small Loans Centre (MASLOC) is currently striving to, in the near future make practical its policy document status of being the apex body of microfinance institutions in the country.
Should it succeed, the centre would then be more empowered to subsequently concentrate much of its lending efforts on wholesale lending rather than spending time on its present three mandates of loaning to groups, individuals and that of other microfinance institutions.
According to the MASLOC, such a move would help regularise the activities of these institutions while helping to boost credit availability to the informal sector which continue to accommodate a large chunk of the country’s entrepreneurial community yet receives the least financial attention from banking and non-banking financial institutions nation-wide.
The Chief Executive Officer of the centre, Ms Bertha Ansah-Djan told the GRAPHIC BUSINESS that the centre was now aiming at making proper use of its policy document status as “the apex body of microfinance institutions”.
Associations such as the Ghana Association of Microfinance of Microfinance Institutions (GHAMFIN), Money Lenders Association of Ghana (MLAG) and the ‘Susu’ Collectors Association (MLAG) are currently serving as the respective umbrella bodies of their individual institutions.
The microfinance sector has for the past few years witnessed dramatic growth, but regulations, supervision and monitoring of the activities of these institutions in the country has however left much to be desired. The sector was, until 2007 legally under the control, supervision and licensing of the Criminal Investigations Department (CID) of the Ghana Police Services, a mandate many financial experts thought was not well placed and therefore not well executed by the criminal body.
The passage of the Non-bank Financial Institutions Act, 2007, Act 774 has, however, transferred that mandate of regulating and licensing these institutions which fall under the microfinance sector from the police onto the BoG. Many however think that the numerous roles of the Central Bank including regulating the country’s financial sector and commercial banks would not give it the needed time and resources to monitor and supervise the sub-sector.
The BoG had earlier on observed that a number of financial service providers, including financial NGOs, Susu companies, money lenders, and companies that come under the microfinance sector have over the past few years emerged to its keen attention.
The BoG has under the ARB Apex Regulations, LI 1826, delegated its monitoring and supervision powers to the ARB Apex Bank to monitor and supervise rural banks while the Securities and Exchange Commission (SEC) at the moment also serves as the apex body of the country’s security or the capital market. The microfinance sector is however yet to get such a sub-sectorial control delegated by the BoG.
MASLOC is therefore currently aiming at getting such a mandate that would enable it to become the umbrella body of these microfinance institutions, effectively monitor and supervise their activities and subsequently lend its funds to them for onward lending to the informal sector in general.
But that, according to the MASLOC CEO would require the passage of center’s policy document into a a law to give them full mandate to play such role.
The document, she said was currently before Cabinet “read through by all the authorities” and awaiting the relevant measures to get it passed.
Government earlier this year hinted of its readiness to restructure and re-organise the MASLOC to enable it ”effectively finance local entrepreneurs and rural agriculture.”
According to Ms Ansah-Djan, stepping up MASLOC’s wholesale lending to microfinance institutions in the near future would help boost credit access to the sector to enable it undergo the needed expansions.
With an estimated figure of 60 per cent of the nation’s workforce currently in the informal sector, the MASLOC CEOsaid “their lack of access to finance would mean a definate stall of the country’s development agenda.”
The Operations Manager of the MASLOC, Mr Enoch B. Donkoh said the Centre’s was now applying best practices of microfinance activities in its operations leading to the centre’s improved recovery rate for “new loans” which currently stands at 95 per cent.
She however said the Centre was at the moment recovering old loans that were given out before the present management team took office. Those loans, he mentioned currently stands at about GH¢40 million
SSNIT informal sector Fund; Tool for revenue generation
THE Managing Director of the Social Security and National Insurance Trust (SSNIT) Informal Sector Fund (SISF), Dr Francis Sapara-Grant, has stated that the operations of the fund points to the fact that the fund is an effective revenue mobilisation mechanism towards national development.
He said the minimal withdrawal rates recorded by the fund since it started mobilising contributions from members on a voluntary basis has re-enforced suggestions that the fund could be an effective tool for national development.
The fund which started operations as an independent body in 2008 to address the low patronage by informal sector workers towards SSNIT contributions has so far recorded an 18.4 per cent withdrawals, a rate the managing director observed had re-enforced thoughts from its stakeholders that “the fund is an important tool for savings towards the development of the national economy.”
Dr Sapara-Grant made the observation when a five-member delegation from Tanzania led by the country’s Labour and Employment Minister, Ms Gaudentia M Kabaka, paid a working visit to the fund’s head office in Accra.
Taking the Tanzanian delegation through the operations and modalities of the fund, Dr Sapara-Grant said the operations of the SISF was aimed at addressing the low patronage of the informal sector towards the SSNIT pension scheme.
According to him, a SSNIT sponsored research on the causes of the low patronage of the pension scheme revealed that “most informal sector workers were unwilling to join the scheme because they could not have access to their finance except they were on retirement.
As a result, Dr Sapara-Grant said SISF’s operations have been made “flexible and easy to access and join as a way of getting more of the country’s large informal sector workers to register.”
As part of that flexibility, the managing director said that members of the fund were permitted to use their voluntary contributions as mortgage towards acquiring residential homes, adding that “the fund can also give contributors loans, upon request.”
He was of the view that the fund needed government and other key stakeholders’ sponsorship to enable it “bring on board most of the people in the informal sector and in the process save money that can be used for economic development.”
“If SSNIT, upon its current coverage of 10 per cent of the country’s populace, can do all that it has done, then you can imagine what would happen if SISF is able to get a large chunk of the informal sector registered and contributing.”
The fund currently has a membership of about 85,000, “a tip of the iceberg” when compared to the over 80 per cent of the country’s workforce that are said to be engaged in the informal sector.”
The Tanzanian Labour and Employment Minister and officials from the country’s Social Security Regulatory Authority (SSRA) are in the country to understudy the Ghanaian pension scheme as the authority seeks to improve on its operations.
Ms Gaudentia Kabaka later told the Daily Graphic that “it was interesting to hear how Ghana runs its social security scheme and we hope to replicate some of the experiences shared when we go back.”
He said the minimal withdrawal rates recorded by the fund since it started mobilising contributions from members on a voluntary basis has re-enforced suggestions that the fund could be an effective tool for national development.
The fund which started operations as an independent body in 2008 to address the low patronage by informal sector workers towards SSNIT contributions has so far recorded an 18.4 per cent withdrawals, a rate the managing director observed had re-enforced thoughts from its stakeholders that “the fund is an important tool for savings towards the development of the national economy.”
Dr Sapara-Grant made the observation when a five-member delegation from Tanzania led by the country’s Labour and Employment Minister, Ms Gaudentia M Kabaka, paid a working visit to the fund’s head office in Accra.
 |
| DR Sapara-Grant giving a soft copy of the presentation to Ms Guadentia M Kabaka |
Taking the Tanzanian delegation through the operations and modalities of the fund, Dr Sapara-Grant said the operations of the SISF was aimed at addressing the low patronage of the informal sector towards the SSNIT pension scheme.
According to him, a SSNIT sponsored research on the causes of the low patronage of the pension scheme revealed that “most informal sector workers were unwilling to join the scheme because they could not have access to their finance except they were on retirement.
As a result, Dr Sapara-Grant said SISF’s operations have been made “flexible and easy to access and join as a way of getting more of the country’s large informal sector workers to register.”
As part of that flexibility, the managing director said that members of the fund were permitted to use their voluntary contributions as mortgage towards acquiring residential homes, adding that “the fund can also give contributors loans, upon request.”
He was of the view that the fund needed government and other key stakeholders’ sponsorship to enable it “bring on board most of the people in the informal sector and in the process save money that can be used for economic development.”
“If SSNIT, upon its current coverage of 10 per cent of the country’s populace, can do all that it has done, then you can imagine what would happen if SISF is able to get a large chunk of the informal sector registered and contributing.”
The fund currently has a membership of about 85,000, “a tip of the iceberg” when compared to the over 80 per cent of the country’s workforce that are said to be engaged in the informal sector.”
The Tanzanian Labour and Employment Minister and officials from the country’s Social Security Regulatory Authority (SSRA) are in the country to understudy the Ghanaian pension scheme as the authority seeks to improve on its operations.
Ms Gaudentia Kabaka later told the Daily Graphic that “it was interesting to hear how Ghana runs its social security scheme and we hope to replicate some of the experiences shared when we go back.”
Thursday, May 19, 2011
Cal Bank explores ways to recapitalise
CAL BANK Limited, one of the indigenous banks operating in the country says it is not ruling out the possbilities of a meager or an acquisition as it strategises to meet the Central Bank’s new minimum capitalisation of GH¢60 million before the end of 2012.
Managing Director of the bank, Mr Frank Brako Adu Jnr, will, however not say which financial institution the bank would be meaging with or would be acquired by except to “those are part of a wide range of options that we are considering to meet that goal of the recapitalisation.”
In an interview with the Daily Graphic after the bank took its turn at the Ghana Stock Exchange's "Facts behind the Figures" in Accra, the Mr Adu said the bank was at the moment aiming at meeting the new capital requirement on or before the deadline of 2012 and "whatever strategy we would use to meet that requirement, the bank is open to them."
"We are not just looking at one means of raising the capital but any means that would lead us to our aim and also make us deliver value to our shareholders; be it mergers, acquisitions, amalgamations, a rights issue, private placement or whatever, we are open to it," Mr Adu noted.
The BoG itself has been vocal on the need for local banks to consider mergers or inter-bank acquisitions as ways of raising enough capital to meet it’s revised capital base requirement of Gh¢60 million by the close of 2012.
Cal Bank in 2009 undertook a rights issue as it sought to raise an initial amount of GH¢30 million to enable it increase the bank’s stated capital to GH¢100 million and thus meet the BoG’s new GH¢60 million capital base requirement.
The issue was, however, under subscribed, with only GH¢13.91 million realised and "the allotment of any shares unsubscribed under the rights issue" as was authorised by the bank’s board of directors had also yielded only GH¢2.1million, prompting the bank to now explore other means of raising the said capital before the 2012 deadline.
The Chairman of the bank’s Board of Director’s, Mr Paarock A VanPercy, last two months told its shareholders during the bank's AGM in Accra that the bank had opened discussions with development finance institutions including Proparco and DEG as a way of shoring up its capital to the GH¢100 million.
On the bank's performance in the first four months of this year, Mr Frank Adu Jnr said the bank's profit after tax increased by 28.53 per cent, with its Non Performing Loans (NPLs) dipping to 11.86 per cent compared to 12.32 per cent in 2010.
He added that the bank expected a 35 per cent growth in its loans within the year, noting that "though some may think that it is not aggressive enough, our past experience with NPLs has shown that in pursuing loans, you have to tread cautiously, otherwise, you would give it back."
Managing Director of the bank, Mr Frank Brako Adu Jnr, will, however not say which financial institution the bank would be meaging with or would be acquired by except to “those are part of a wide range of options that we are considering to meet that goal of the recapitalisation.”
In an interview with the Daily Graphic after the bank took its turn at the Ghana Stock Exchange's "Facts behind the Figures" in Accra, the Mr Adu said the bank was at the moment aiming at meeting the new capital requirement on or before the deadline of 2012 and "whatever strategy we would use to meet that requirement, the bank is open to them."
"We are not just looking at one means of raising the capital but any means that would lead us to our aim and also make us deliver value to our shareholders; be it mergers, acquisitions, amalgamations, a rights issue, private placement or whatever, we are open to it," Mr Adu noted.
The BoG itself has been vocal on the need for local banks to consider mergers or inter-bank acquisitions as ways of raising enough capital to meet it’s revised capital base requirement of Gh¢60 million by the close of 2012.
Cal Bank in 2009 undertook a rights issue as it sought to raise an initial amount of GH¢30 million to enable it increase the bank’s stated capital to GH¢100 million and thus meet the BoG’s new GH¢60 million capital base requirement.
The issue was, however, under subscribed, with only GH¢13.91 million realised and "the allotment of any shares unsubscribed under the rights issue" as was authorised by the bank’s board of directors had also yielded only GH¢2.1million, prompting the bank to now explore other means of raising the said capital before the 2012 deadline.
The Chairman of the bank’s Board of Director’s, Mr Paarock A VanPercy, last two months told its shareholders during the bank's AGM in Accra that the bank had opened discussions with development finance institutions including Proparco and DEG as a way of shoring up its capital to the GH¢100 million.
On the bank's performance in the first four months of this year, Mr Frank Adu Jnr said the bank's profit after tax increased by 28.53 per cent, with its Non Performing Loans (NPLs) dipping to 11.86 per cent compared to 12.32 per cent in 2010.
He added that the bank expected a 35 per cent growth in its loans within the year, noting that "though some may think that it is not aggressive enough, our past experience with NPLs has shown that in pursuing loans, you have to tread cautiously, otherwise, you would give it back."
Inflation and people’s pocket
As the Consumer Price Index (CPI) goes down it is expected that the purchasing power of people will increase. But is that really the case? Asks Maxwell Adombila Akalaare
ANNUALISED inflation for the month of April dipped by 0.11 per cent from its previous month’s figure of 9.13 per cent to 9.02 per cent in the month under review.
The fall, the second in a row after an increase in the ex-pump prices of some petroleum products in the country reversed an 18-month downward rate, has re-affirmed earlier thoughts from policy makers and some analysts, especially the government’s economic handlers that the January and February rise in the rate was only a blip due to the fuel price hike.
The Government Statistician, Dr Grace Bediako, who announced the figures noted that the food and the non-alcoholic beverages group, which contribute a 44.91 per cent weight on the overall basket, helped to push the rate downward.
According to her, while the food and non-alcoholic group had a 0.52 per cent point decline, the non-food group recorded a 0.16 per cent increase.”
Dr Bediako attributed the 0.52 per cent decline in the rate in the food and non-alcoholic beverages group to “the present stable exchange rate and the bumper harvest experienced last year.”
INFLATION IN THE REGIONS
The Greater Accra Region again recorded the highest inflation rate of 12.31 per cent, followed by 11.58 per cent for the Upper East and West regions.
The Volta Region, however, recorded the least rate of 5.24 per cent, followed by the Northern Region, which recorded 6.83 per cent just a 0.01 per cent difference from the Eastern region's figure.
APRIL INFLATION DOWN, SO WHAT?
Inflation in basic terms measures the rate at which prices of goods and services in the country changes, so that if the figure is consistently rising, then prices of goods and services are consistently increasing and that definitely is not good for the private individual, business community and the government as well. For the private individual, the family budget would have to be tightened or left loose because, a loaf of bread can sell from GH¢0.80 this week but jump to to GH¢1 come next week or two.
As for the business community, planning a business decision becomes a game of chance because the folks are not quite sure of the price of the company's raw materials come next week.
And for the government, consistent price surges will mean a distress populace seeking extra money to offset the increases not to talk of its reeling effects on other macro-economic indicators and government policies and decision. A declining inflation rate leads to the reverse of the above.
EFFECTS OF DECLINING INFLATION
The issue of falling inflation and "feeling it in the pocket" as running contrary has received much attention, and that could be partly due to the misconception that once the inflation rate is falling, prices of goods and services should equally be declining. In most cases, however, this has not been so.
This is because the basket that measures the year-to-year inflation on monthly basis is taken to be 100 per cent but further divided into two major groups, the non-food (which has 55.09 per cent weight) and the food and non-alcoholic group (with 44.91 per cent weight). Each of these groups has further sub-groups that individually act to determine the respective group's impact on the overall figure.
For instance, if the individual sub-groups of the non-food group records minimal price increases for the period under review, say May, while that of the food and non-alcoholic beverages group records a heavy rise, the lower average change in prices recorded by the non-food group, which has a weight of 55.09 per cent, would offset the overall figure and possibly cause it to go down despite a rising prices within the other sub-group.
When this happens, and the (May) figure is announced as having gone down, ordinary Ghanaians would have every right to say "let us feel it in our pockets". But understanding the dynamics is also key.
The reverse can also happen for the figure to go up or remain unchanged.
The other reason why declining inflation may not be felt in the pocket is that even though inflation may decline, the actual situation on the ground might have been "suppressed" by the continuous fall in the prices of other sub-groups within the same group or outside.
The third reason is this caution that a downward inflation would not mean that prices of goods and services are not increasing. What it rather means is that the prices could still be rising but at a rather slower pace.
So let us take inflation to be a moving vehicle. The fact that the vehicle's speed has been slowed in traffic (inflation has dropped) does not mean that it is not moving again. What it rather means is that the vehicle (prices of goods and services) is now moving on a consistently slow pace (the prices are rising slowly.)
ANNUALISED inflation for the month of April dipped by 0.11 per cent from its previous month’s figure of 9.13 per cent to 9.02 per cent in the month under review.
The fall, the second in a row after an increase in the ex-pump prices of some petroleum products in the country reversed an 18-month downward rate, has re-affirmed earlier thoughts from policy makers and some analysts, especially the government’s economic handlers that the January and February rise in the rate was only a blip due to the fuel price hike.
The Government Statistician, Dr Grace Bediako, who announced the figures noted that the food and the non-alcoholic beverages group, which contribute a 44.91 per cent weight on the overall basket, helped to push the rate downward.
According to her, while the food and non-alcoholic group had a 0.52 per cent point decline, the non-food group recorded a 0.16 per cent increase.”
Dr Bediako attributed the 0.52 per cent decline in the rate in the food and non-alcoholic beverages group to “the present stable exchange rate and the bumper harvest experienced last year.”
INFLATION IN THE REGIONS
The Greater Accra Region again recorded the highest inflation rate of 12.31 per cent, followed by 11.58 per cent for the Upper East and West regions.
The Volta Region, however, recorded the least rate of 5.24 per cent, followed by the Northern Region, which recorded 6.83 per cent just a 0.01 per cent difference from the Eastern region's figure.
APRIL INFLATION DOWN, SO WHAT?
Inflation in basic terms measures the rate at which prices of goods and services in the country changes, so that if the figure is consistently rising, then prices of goods and services are consistently increasing and that definitely is not good for the private individual, business community and the government as well. For the private individual, the family budget would have to be tightened or left loose because, a loaf of bread can sell from GH¢0.80 this week but jump to to GH¢1 come next week or two.
As for the business community, planning a business decision becomes a game of chance because the folks are not quite sure of the price of the company's raw materials come next week.
And for the government, consistent price surges will mean a distress populace seeking extra money to offset the increases not to talk of its reeling effects on other macro-economic indicators and government policies and decision. A declining inflation rate leads to the reverse of the above.
EFFECTS OF DECLINING INFLATION
The issue of falling inflation and "feeling it in the pocket" as running contrary has received much attention, and that could be partly due to the misconception that once the inflation rate is falling, prices of goods and services should equally be declining. In most cases, however, this has not been so.
This is because the basket that measures the year-to-year inflation on monthly basis is taken to be 100 per cent but further divided into two major groups, the non-food (which has 55.09 per cent weight) and the food and non-alcoholic group (with 44.91 per cent weight). Each of these groups has further sub-groups that individually act to determine the respective group's impact on the overall figure.
For instance, if the individual sub-groups of the non-food group records minimal price increases for the period under review, say May, while that of the food and non-alcoholic beverages group records a heavy rise, the lower average change in prices recorded by the non-food group, which has a weight of 55.09 per cent, would offset the overall figure and possibly cause it to go down despite a rising prices within the other sub-group.
When this happens, and the (May) figure is announced as having gone down, ordinary Ghanaians would have every right to say "let us feel it in our pockets". But understanding the dynamics is also key.
The reverse can also happen for the figure to go up or remain unchanged.
The other reason why declining inflation may not be felt in the pocket is that even though inflation may decline, the actual situation on the ground might have been "suppressed" by the continuous fall in the prices of other sub-groups within the same group or outside.
The third reason is this caution that a downward inflation would not mean that prices of goods and services are not increasing. What it rather means is that the prices could still be rising but at a rather slower pace.
So let us take inflation to be a moving vehicle. The fact that the vehicle's speed has been slowed in traffic (inflation has dropped) does not mean that it is not moving again. What it rather means is that the vehicle (prices of goods and services) is now moving on a consistently slow pace (the prices are rising slowly.)
Sunday, May 15, 2011
Metro Mass increase its routes
The Metro Mass Transit (MMT), a public passenger transport company, is to add 15 more routes to its present routes nation-wide, before the end of the year.
The move which will bring to 265, the total number of routes, forms part of the company's wider corporate objective of opening up its routes in all the 170 district, municipal and metropolitan assemblies throughout the country by 2014.
The Head of Communications at the MMT, Mr Eric Boadi-Misa, told the Daily Graphic in an interview that the MMT's resolve to expand its route networks in the nation was meant to "provide affordable transportation throughout the country."
The company last week inaugurated two new routes at Mehame, a cocoa and food production town in the Asutifi South District of the Brong Ahafo and Enchi in the Western region.
Mr Boadi-Misa added that the opening up of more routes and the distribution of the company's passenger buses was done "according to the profitability of the area."
The transport fares of the company's passenger buses have not increased despite the 30 per cent increase in the ex-pump price of petroleum products which consequently saw fuel prices and transport fares going up.
Mr Boadi-Misa said the non-increment had caused the patronage of "our service to shoot up by 17 per cent."
According to him, the company was "capitalising" on some of the routes that its private competitors thought to be unprofitable to make up its loses.
He said "the MMT had now weaned itself of government subventions and we are at the moment operating without government support."
As part of reducing the company's accident levels, Mr Boadi-Misa said the MMT had trained 24 female drivers to add to the present team of competent drivers.
He said; “Females, as you may know, have the temperament to go through the shocks of the job unlike their male colleagues who are 'hot' especially when on the road."
The move which will bring to 265, the total number of routes, forms part of the company's wider corporate objective of opening up its routes in all the 170 district, municipal and metropolitan assemblies throughout the country by 2014.
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| One of the MMT's buses |
The Head of Communications at the MMT, Mr Eric Boadi-Misa, told the Daily Graphic in an interview that the MMT's resolve to expand its route networks in the nation was meant to "provide affordable transportation throughout the country."
The company last week inaugurated two new routes at Mehame, a cocoa and food production town in the Asutifi South District of the Brong Ahafo and Enchi in the Western region.
Mr Boadi-Misa added that the opening up of more routes and the distribution of the company's passenger buses was done "according to the profitability of the area."
The transport fares of the company's passenger buses have not increased despite the 30 per cent increase in the ex-pump price of petroleum products which consequently saw fuel prices and transport fares going up.
Mr Boadi-Misa said the non-increment had caused the patronage of "our service to shoot up by 17 per cent."
According to him, the company was "capitalising" on some of the routes that its private competitors thought to be unprofitable to make up its loses.
He said "the MMT had now weaned itself of government subventions and we are at the moment operating without government support."
As part of reducing the company's accident levels, Mr Boadi-Misa said the MMT had trained 24 female drivers to add to the present team of competent drivers.
He said; “Females, as you may know, have the temperament to go through the shocks of the job unlike their male colleagues who are 'hot' especially when on the road."
Economy registers 7.7 percent growth
THE country's economy saw a 7.7 per cent growth rate last year, indicating a 3.7 per cent leap from the 2009 growth rate of four per cent.
The Gross Domestic Product (GDP), which calculates the total value of goods and services produced in the country during 2010, also amounted to GH¢46 million, representing a GH¢9,725 million surge from the 2009 GDP figure.
Launching the maiden edition of the quarterly release of the country's GDP estimates in Accra, the Government Statistician, Dr Grace Bediako, said, "The economy was robust throughout the year, with stronger growth witnessed in the last two months of 2010.”
On a quarterly basis, she said the last seasonal quarter of 2010 saw the economy growing by 9.6 per cent, as compared to the 6.2 per cent rate recorded for the same period in 2009.
With regard to the contributions of the various sectors to the economy, she said the services sector continued its dominance, recording 9.8 per cent, followed by industry and agriculture, which recorded 5.6 and 5.3 per cent, respectively.
According to Dr Bediako, the Ghana Statistics Service (GSS) had resolved to release GDP figures on a quarterly basis, instead of the yearly releases, and hoped that the quarterly release "will help in policy decision making by the government and also guide the business community".
"Many economic experts attribute the economic downturn that engulfed the world in 2008 to the year-long release of GDP figures that do not give early warnings about the economy to the government and policy makers," she noted.
She observed that the quarterly release of the GDP would help give early snapshots about what was happening to the economy to policy makers and the government.
On inflation for April, Dr Bediako said the rate inched down to 9.02 per cent from its March rate of 9.13 per cent, partly causing the Monetary Policy Committee of the Bank of Ghana to cut its policy rate by 5o basi points, from 13.5 to 15 poits.
The drop, the second in a two-month row after a January increment in prices of fuel prices pulled the rate up has also raised expectation among policy makers and managers of the economy that the downward inflationary trend might be resuming.
The April rate indicated a 0.11 per cent annual dip from the previous month’s figure.
The Government Statistician, at a news conference to announce the rate, said the downward trend in inflation for the period of March and April 2011 could “be attributed to the food and non-alcoholic beverages group”.
“While the food and non-alcoholic group had a 0.52 per cent point decline, the non-food group recorded a 0.16 per cent increase,” she said.
Dr Bediako attributed the 0.52 per cent decline in the food and non-alcoholic beverages to “the present stable exchange rate and the bumper harvest experienced last year”.
According to her, the 30 per cent increase in the ex-pump prices of petroleum products was still having ripples on the transport sector, causing it to record a monthly rate of 21.72 per cent, the highest in the non-food group.
Communications, however, recorded no change in its inflation rate for the period.
Non-alcoholic beverages recorded 1.52 per cent, the highest in the sub-group, while bread and cereals, two key consumables nation-wide, also recorded negative inflation rates of -1.55 per cent, being the lowest in the sub-group.
On the regional inflationary outlook, the Greater Accra Region recorded the highest rate of 12.31 per cent, while the Volta Region’s 5.24 per cent was the least.
Strangely, however, the Upper East and Upper West regions, both farming regions, recorded the highest inflation rates in the food group.
The rate of inflation, which measures the average price change of goods and services in the country, had, until last January, recorded continuous declines from 20.74 per cent in June 2009 to 8.58 per cent in December last year.
The trend, however, changed as the rate inched up by 0.5 and 0.08 per cent in January and February, respectively.
With the present consistent two-month decline in the rate, many are anxious to see if the trend will run deep into the year.
The Vice-President of the Association of Ghana Industries (AGI), Dr George Dawson-Ahmoah, who chaired the event, said the quarterly figures would help "businesses like us in the AGI to get essential information on the economy at the shorter frequency".
That, he added, was necessary to help the business community plan and forecast investment plans properly.
He called on the GSS to endeavour to sustain the initiative, since it was relevant to industry and policy makers nation-wide.
The Gross Domestic Product (GDP), which calculates the total value of goods and services produced in the country during 2010, also amounted to GH¢46 million, representing a GH¢9,725 million surge from the 2009 GDP figure.
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| Dr Kwabena Duffuor is Ghana's Finance Minister |
Launching the maiden edition of the quarterly release of the country's GDP estimates in Accra, the Government Statistician, Dr Grace Bediako, said, "The economy was robust throughout the year, with stronger growth witnessed in the last two months of 2010.”
On a quarterly basis, she said the last seasonal quarter of 2010 saw the economy growing by 9.6 per cent, as compared to the 6.2 per cent rate recorded for the same period in 2009.
With regard to the contributions of the various sectors to the economy, she said the services sector continued its dominance, recording 9.8 per cent, followed by industry and agriculture, which recorded 5.6 and 5.3 per cent, respectively.
According to Dr Bediako, the Ghana Statistics Service (GSS) had resolved to release GDP figures on a quarterly basis, instead of the yearly releases, and hoped that the quarterly release "will help in policy decision making by the government and also guide the business community".
"Many economic experts attribute the economic downturn that engulfed the world in 2008 to the year-long release of GDP figures that do not give early warnings about the economy to the government and policy makers," she noted.
She observed that the quarterly release of the GDP would help give early snapshots about what was happening to the economy to policy makers and the government.
On inflation for April, Dr Bediako said the rate inched down to 9.02 per cent from its March rate of 9.13 per cent, partly causing the Monetary Policy Committee of the Bank of Ghana to cut its policy rate by 5o basi points, from 13.5 to 15 poits.
 |
| Grace Bediako is the Government's Statiscian |
The drop, the second in a two-month row after a January increment in prices of fuel prices pulled the rate up has also raised expectation among policy makers and managers of the economy that the downward inflationary trend might be resuming.
The April rate indicated a 0.11 per cent annual dip from the previous month’s figure.
The Government Statistician, at a news conference to announce the rate, said the downward trend in inflation for the period of March and April 2011 could “be attributed to the food and non-alcoholic beverages group”.
“While the food and non-alcoholic group had a 0.52 per cent point decline, the non-food group recorded a 0.16 per cent increase,” she said.
Dr Bediako attributed the 0.52 per cent decline in the food and non-alcoholic beverages to “the present stable exchange rate and the bumper harvest experienced last year”.
According to her, the 30 per cent increase in the ex-pump prices of petroleum products was still having ripples on the transport sector, causing it to record a monthly rate of 21.72 per cent, the highest in the non-food group.
Communications, however, recorded no change in its inflation rate for the period.
 |
| Arthur Amissah heads the MPC of the BoG |
On the regional inflationary outlook, the Greater Accra Region recorded the highest rate of 12.31 per cent, while the Volta Region’s 5.24 per cent was the least.
Strangely, however, the Upper East and Upper West regions, both farming regions, recorded the highest inflation rates in the food group.
The rate of inflation, which measures the average price change of goods and services in the country, had, until last January, recorded continuous declines from 20.74 per cent in June 2009 to 8.58 per cent in December last year.
The trend, however, changed as the rate inched up by 0.5 and 0.08 per cent in January and February, respectively.
With the present consistent two-month decline in the rate, many are anxious to see if the trend will run deep into the year.
The Vice-President of the Association of Ghana Industries (AGI), Dr George Dawson-Ahmoah, who chaired the event, said the quarterly figures would help "businesses like us in the AGI to get essential information on the economy at the shorter frequency".
That, he added, was necessary to help the business community plan and forecast investment plans properly.
He called on the GSS to endeavour to sustain the initiative, since it was relevant to industry and policy makers nation-wide.
HFC to buy back shares; To enhance share price appreciation
HFC Bank (Ghana) Limited has secured its shareholders’ approval that would enable it to make a five per cent maximum buy back share purchase of the bank.
The move, the bank said, was expected to help push its share price to an “appreciable level.”
The share price of the bank on the stock market has over the years remained low despite the bank’s impressive performance, a situation the managing director of the Ghana Stock Exchange last attributed to “too much institutional shareholding of the company’s shares.”
At an Annual General Meeting held in Accra, the shareholders passed a special resolution that gave the bank the authority “to make market purchases of the company’s ordinary shares up to a maximum of five per cent of its issued share capital and to operate a share capital deals accounts for that purpose.”
The shareholders also passed another resolution that allows the bank to convert the equivalent of US$2million invested by the Aureos Africa Fund as convertible bonds in the bank to ordinary shares without “first offering them to all existing shareholders.”
Managing Director of the HFC Bank, Mr Asare Akuffo, would, however, not comment on the expected impact of those two resolutions on the bank’s performance in the coming years except to say “buy back is not something new in the bank.”
The Chairman of the bank’s Board of Directors, Nana Agyei Duku, said the bank’s profit after tax in 2010 was GH¢8.6 million, a 49.7 per cent leap from its 2009 figure.
According to him, the bank’s continuous expansions in its branch networks had “resulted in an increase in customer deposits by 27 per cent to GH¢156.5million last year.”
The Chairman said the board had thus recommended a dividend of GH¢0.016 per share, a difference of GH¢0.001 from the previous two year’s dividend figure of GH¢0.015.
But some shareholders at the AGM said the recommended dividend was “woefully inadequate” taking into consideration the “impressive performance of the bank within the year.”
“The dividend, I think is on the downside; it is woefully inadequate. The increase from the previous year’s dividend is just GH¢0.001 which is nothing to write home about,” Mr Smauel Akwasi Adiku, a shareholder of the bank said at the AGM.
According to him, “the bank wanted to keep the rest of the money so that it can use it to buy back the extra shares. But I think there’s an alternative solution; pay us high dividend so that the share price would rather rise,” Mr Adiku further advised.
The Managing Director, Mr Asare Akuffo, however, disagreed that the recommended dividend was on the low side and said that “it is the question of how many shares you have. If compared to our peers in the industry, our is even on the higher side.”
He thus called on the shareholders to “invest more in the bank so that you can get more dividends because some shareholders would be taking away as high as GH¢5,000 and GH¢110,000 just because they have invested heavily in the bank.”
On the bank’s outlook for 2011, Mr Akuffo said the bank would be focusing much of its attention on “growing its mortgage portfolio”.
He said the expected increase in the supply of the middle income residential properties should have a major boost to our home loan business and “HFC Realty Limited, a subsidiary of the bank would be a major contributor to the supply of new homes on the market.”
According to the MD, although margins are expected to be lower in 2011 due to competitive pressures and the general reductions in interest rates and growth in assets of the bank “expansions in the other business areas and cost control should compensate for the downward pressure on the earnings.”
The move, the bank said, was expected to help push its share price to an “appreciable level.”
The share price of the bank on the stock market has over the years remained low despite the bank’s impressive performance, a situation the managing director of the Ghana Stock Exchange last attributed to “too much institutional shareholding of the company’s shares.”
At an Annual General Meeting held in Accra, the shareholders passed a special resolution that gave the bank the authority “to make market purchases of the company’s ordinary shares up to a maximum of five per cent of its issued share capital and to operate a share capital deals accounts for that purpose.”
The shareholders also passed another resolution that allows the bank to convert the equivalent of US$2million invested by the Aureos Africa Fund as convertible bonds in the bank to ordinary shares without “first offering them to all existing shareholders.”
Managing Director of the HFC Bank, Mr Asare Akuffo, would, however, not comment on the expected impact of those two resolutions on the bank’s performance in the coming years except to say “buy back is not something new in the bank.”
The Chairman of the bank’s Board of Directors, Nana Agyei Duku, said the bank’s profit after tax in 2010 was GH¢8.6 million, a 49.7 per cent leap from its 2009 figure.
According to him, the bank’s continuous expansions in its branch networks had “resulted in an increase in customer deposits by 27 per cent to GH¢156.5million last year.”
The Chairman said the board had thus recommended a dividend of GH¢0.016 per share, a difference of GH¢0.001 from the previous two year’s dividend figure of GH¢0.015.
But some shareholders at the AGM said the recommended dividend was “woefully inadequate” taking into consideration the “impressive performance of the bank within the year.”
“The dividend, I think is on the downside; it is woefully inadequate. The increase from the previous year’s dividend is just GH¢0.001 which is nothing to write home about,” Mr Smauel Akwasi Adiku, a shareholder of the bank said at the AGM.
According to him, “the bank wanted to keep the rest of the money so that it can use it to buy back the extra shares. But I think there’s an alternative solution; pay us high dividend so that the share price would rather rise,” Mr Adiku further advised.
The Managing Director, Mr Asare Akuffo, however, disagreed that the recommended dividend was on the low side and said that “it is the question of how many shares you have. If compared to our peers in the industry, our is even on the higher side.”
He thus called on the shareholders to “invest more in the bank so that you can get more dividends because some shareholders would be taking away as high as GH¢5,000 and GH¢110,000 just because they have invested heavily in the bank.”
On the bank’s outlook for 2011, Mr Akuffo said the bank would be focusing much of its attention on “growing its mortgage portfolio”.
He said the expected increase in the supply of the middle income residential properties should have a major boost to our home loan business and “HFC Realty Limited, a subsidiary of the bank would be a major contributor to the supply of new homes on the market.”
According to the MD, although margins are expected to be lower in 2011 due to competitive pressures and the general reductions in interest rates and growth in assets of the bank “expansions in the other business areas and cost control should compensate for the downward pressure on the earnings.”
Tuesday, May 10, 2011
SSNIT Informal sector fund to rely on ICT
THE Social Security and National Insurance Trust (SSNIT) Informal Sector Fund (SISF) is hoping to take advantage of the high mobile phone penetration and the rising Internet usage in the country to enrol more members onto the fund.
The Managing Director of the fund, Dr Francis Sapara-Grant, said people interested in signing on to the SISF would be given the opportunity to register and pay their contributions into their respective accounts through mobile phones and other Internet powered applications.
In an interview with the Daily Graphic on the state of the fund, the MD added that the fund’s website currently made it possible for members to log on and view their account statements.
“We are also striving to expand our operations to cover the remaining three regions that are not covered yet to give the fund a real national character and make this flexible fund available to all Ghanaians,” Dr Sapara-Grant added.
The fund, which started operations as an independent body in 2008 to address the low patronage by informal sector workers to SSNIT contributions, now has a membership of about 85,000, which the managing director said was still growing by the day.
He said by their estimate, the current SISF membership was “just a tip of the iceberg considering the informal nature of the country’s workforce”.
The sector is estimated to account for over 80 per cent of the country’s working population.
As a result, Dr Sapara-Grant said although the fund had appointed marketing field officers to go round and register members as well as collect their contributions, his outfit was “devising more cost effective methods that can be used to get more people registered.”
And though the fund’s primary target is the informal sector worker, the managing director said, “It has room for formal sector workers and Ghanaians in the Diaspora.”
“Members are registered such that their withdrawals can be paid to them within 48 hours. A member can, however, have access to his or her contributions after five months of contributions,” Dr Sapara-Grant explained.
The passage of the National Pensions Act, 2008 (Act 766) which created the three tier pension scheme has brought in private participation in the sector, thereby opening up the SISF to competition from prospective pension fund managers.
He stated that the opening up of the sector to private participation would help challenge SISF “to be more creative to help sustain the interest in the field.”
The Managing Director of the fund, Dr Francis Sapara-Grant, said people interested in signing on to the SISF would be given the opportunity to register and pay their contributions into their respective accounts through mobile phones and other Internet powered applications.
In an interview with the Daily Graphic on the state of the fund, the MD added that the fund’s website currently made it possible for members to log on and view their account statements.
“We are also striving to expand our operations to cover the remaining three regions that are not covered yet to give the fund a real national character and make this flexible fund available to all Ghanaians,” Dr Sapara-Grant added.
The fund, which started operations as an independent body in 2008 to address the low patronage by informal sector workers to SSNIT contributions, now has a membership of about 85,000, which the managing director said was still growing by the day.
He said by their estimate, the current SISF membership was “just a tip of the iceberg considering the informal nature of the country’s workforce”.
The sector is estimated to account for over 80 per cent of the country’s working population.
As a result, Dr Sapara-Grant said although the fund had appointed marketing field officers to go round and register members as well as collect their contributions, his outfit was “devising more cost effective methods that can be used to get more people registered.”
And though the fund’s primary target is the informal sector worker, the managing director said, “It has room for formal sector workers and Ghanaians in the Diaspora.”
“Members are registered such that their withdrawals can be paid to them within 48 hours. A member can, however, have access to his or her contributions after five months of contributions,” Dr Sapara-Grant explained.
The passage of the National Pensions Act, 2008 (Act 766) which created the three tier pension scheme has brought in private participation in the sector, thereby opening up the SISF to competition from prospective pension fund managers.
He stated that the opening up of the sector to private participation would help challenge SISF “to be more creative to help sustain the interest in the field.”
Family profession; The case of Visap Sea Foods
What started as a fish mongering mother’s request for a helping hand from her daughter has gradually blossomed into a sea foods processing company that currently processes and supplies all kinds of sea foods to hotels and restaurants. Maxwell Adombila Akalaare looks at the ‘how’ of the Visap Sea Foods Processing company and the brain behind it.
FOR many people in Ghana, continuing with a family member’s profession is, perhaps a difficult task and a headache that many do not want to be associated with. And that could simply be because many people think that the professions of family members should at least not also be ‘lineage’: After all, individual family members have differently unique talents if not callings to which they must respectively respond to.
But, for Mrs Vida Sarpong, the founder and now overseer of Visap Sea Foods Company at Tema in Accra, ‘snow-balling” family professions to the future generations are better not cut-off the family hooks.
She told the GRAPHIC BUSINESS that her present profession of processing and supplying all kinds of sea foods to a number of hotels and restaurants within Accra was “bequeathed” to her by her late mother who was a fish-monger
Tracing events that gradually pushed her to her present position, founder and oversee of the operations of the Visap Foods, Mrs Sarpong said as a teenager growing up with her mother, she use to help her in her business.
But as time went on, Mrs Sarpong, decided to start nurturing her own with all the risks associated with it. “Each time I returned from school - during the holidays, I would also go and buy some of the fish, smoke it and go around supplying it within the neighbour hood”.
THE WHITEMEN-CUSTOMERS
For a young lady who was committed to ‘her smoked fish hawking business’, parading the streets with her product, smoked fish was not a big deal to handle. As a result, her customers cut across all manners of people, across different sections and even geographical boundaries.
According to her, she had on one of her ‘hawking sprees’ stumbled upon ”some white men who came to buy fish from her, but because they didn’t have the money to pay for the fish, she had to follow them to their premises for the money.
“And when I got to their place, I realised that they were exporters and they where actually going to export the fish that they had bought from me,” Mrs Sarpong recounted to the paper amidst smiles.
These customers said she lacked the adequate knowledge about the fish quality and the type that was good for the export market.
She therefore took the opportunity, pieced together her expertise from the fish industry, with the little formal education that she had acquired about the fish industry and “educated them on the type and quality of smoked fish that can be exported.
She said the white men acknowledged her education on he right fish for export and subsequently agreed that she supplied them the fish for export.
During those days, Mrs Sarpong said she had also opened up business doors with Marx Mart, a shopping mall in Accra which subsequently gave her the opportunity to supply fish to the mall and also wholesale some to retailers.
THE CURIOSITY THAT PAYS
While supplying fish to her newly discovered white-customers, Mrs Sarpong said she also observed how they use to do the processing of the fish before exporting them.
And since then, Mrs Sarpong’s ambition of adding colour to her mother’s profession of fish mongering opened the doors to supply processed fish to some hotels and restaurants throughout the Greater Accra Region.
She said the company does virtually a weekly supply of the products to hotels and restaurants and added that her Visap Sea Food Processing was also into the wholesaling of the “processing of all kinds of sea foods to retailers for onward selling to individual customers.”
According to Mrs Sarpong, her outfit also intends to bequeath her current profession of processing and supplying sea foods to her children and expressed the hope that her children would do a better job than she is currently doing.
At the moment, Mrs Sarpong said the company was currently getting its stocks from “some Chinese vessels at the ports and sometimes from the canoes.”
But those supplies, Mrs Sarporg said was still below the company’s capacity to supply to its growing clients.
She mentioned that the company was currently striving to import the sea foods as she aims at expanding to meet the growing demand for its products across the country, adding that it was her ambition to “make Visap Foods the number one supplier of sea foods in the country.
A BETTER-HALF’S PUSH
According to Mrs Sarpong, the perishable nature of sea products makes working in the fish sector “very tensed.”
“Sometimes if there is an order and you miss it, it makes you become so tensed such that it can easily break your heart” and stressed that “I always have courage and trust in God”.
Though Mrs Sarpong can only rely on Almighty God for a push to her business, she easily and perhaps, quickly finds cover under her supportive husband’s arms whenever the perishable nature of her products strikes.
She said her husband, Mr Ebenezer Akofi Sarpong, who stepped down from his job to enable him offer full support to her wife’s business has been very supportive to me and the business.
“Even if I sometimes don’t want to do something, my husband would motivate me to do it. He left his job just to come and help me in the business and I think that is very good”, she stated
Mr Sarpong also told the GRAPHIC BUSINESS that men needed to develop patience to be able to cope with the always busy nature of their business wives.
He further called on men who are married to businesswomen to “try and help women who have the foresight to achieve what they wanted to achieve”.
FOR many people in Ghana, continuing with a family member’s profession is, perhaps a difficult task and a headache that many do not want to be associated with. And that could simply be because many people think that the professions of family members should at least not also be ‘lineage’: After all, individual family members have differently unique talents if not callings to which they must respectively respond to.
But, for Mrs Vida Sarpong, the founder and now overseer of Visap Sea Foods Company at Tema in Accra, ‘snow-balling” family professions to the future generations are better not cut-off the family hooks.
She told the GRAPHIC BUSINESS that her present profession of processing and supplying all kinds of sea foods to a number of hotels and restaurants within Accra was “bequeathed” to her by her late mother who was a fish-monger
Tracing events that gradually pushed her to her present position, founder and oversee of the operations of the Visap Foods, Mrs Sarpong said as a teenager growing up with her mother, she use to help her in her business.
But as time went on, Mrs Sarpong, decided to start nurturing her own with all the risks associated with it. “Each time I returned from school - during the holidays, I would also go and buy some of the fish, smoke it and go around supplying it within the neighbour hood”.
THE WHITEMEN-CUSTOMERS
For a young lady who was committed to ‘her smoked fish hawking business’, parading the streets with her product, smoked fish was not a big deal to handle. As a result, her customers cut across all manners of people, across different sections and even geographical boundaries.
According to her, she had on one of her ‘hawking sprees’ stumbled upon ”some white men who came to buy fish from her, but because they didn’t have the money to pay for the fish, she had to follow them to their premises for the money.
“And when I got to their place, I realised that they were exporters and they where actually going to export the fish that they had bought from me,” Mrs Sarpong recounted to the paper amidst smiles.
These customers said she lacked the adequate knowledge about the fish quality and the type that was good for the export market.
She therefore took the opportunity, pieced together her expertise from the fish industry, with the little formal education that she had acquired about the fish industry and “educated them on the type and quality of smoked fish that can be exported.
She said the white men acknowledged her education on he right fish for export and subsequently agreed that she supplied them the fish for export.
During those days, Mrs Sarpong said she had also opened up business doors with Marx Mart, a shopping mall in Accra which subsequently gave her the opportunity to supply fish to the mall and also wholesale some to retailers.
THE CURIOSITY THAT PAYS
While supplying fish to her newly discovered white-customers, Mrs Sarpong said she also observed how they use to do the processing of the fish before exporting them.
And since then, Mrs Sarpong’s ambition of adding colour to her mother’s profession of fish mongering opened the doors to supply processed fish to some hotels and restaurants throughout the Greater Accra Region.
She said the company does virtually a weekly supply of the products to hotels and restaurants and added that her Visap Sea Food Processing was also into the wholesaling of the “processing of all kinds of sea foods to retailers for onward selling to individual customers.”
According to Mrs Sarpong, her outfit also intends to bequeath her current profession of processing and supplying sea foods to her children and expressed the hope that her children would do a better job than she is currently doing.
At the moment, Mrs Sarpong said the company was currently getting its stocks from “some Chinese vessels at the ports and sometimes from the canoes.”
But those supplies, Mrs Sarporg said was still below the company’s capacity to supply to its growing clients.
She mentioned that the company was currently striving to import the sea foods as she aims at expanding to meet the growing demand for its products across the country, adding that it was her ambition to “make Visap Foods the number one supplier of sea foods in the country.
A BETTER-HALF’S PUSH
According to Mrs Sarpong, the perishable nature of sea products makes working in the fish sector “very tensed.”
“Sometimes if there is an order and you miss it, it makes you become so tensed such that it can easily break your heart” and stressed that “I always have courage and trust in God”.
Though Mrs Sarpong can only rely on Almighty God for a push to her business, she easily and perhaps, quickly finds cover under her supportive husband’s arms whenever the perishable nature of her products strikes.
She said her husband, Mr Ebenezer Akofi Sarpong, who stepped down from his job to enable him offer full support to her wife’s business has been very supportive to me and the business.
“Even if I sometimes don’t want to do something, my husband would motivate me to do it. He left his job just to come and help me in the business and I think that is very good”, she stated
Mr Sarpong also told the GRAPHIC BUSINESS that men needed to develop patience to be able to cope with the always busy nature of their business wives.
He further called on men who are married to businesswomen to “try and help women who have the foresight to achieve what they wanted to achieve”.
Friday, May 6, 2011
Shareholders must form unified body - Anane-Antwi
THE Centre for Corporate Governance (CCG), a good corporate governance advocacy initiative in the country, has called on shareholders to consider forming an umbrella body, a shareholders association to enable them voice out their legitimate concerns regarding companies that they hold shares in.
According to the Centre, such a move will enable the individual shareholders to help expose their colleagues to the various rights that individual shareholders hold within the companies in which they hold shares.
Speaking at a public lecture on the theme "the rights of shareholders" in Accra, the Founder of the Centre and a Legal Practitioner as well as a Chartered Accountant, Mr Adu Anane Antwi, said shareholders nation-wide had over the past not exercised in fullest the various rights due them as enshrined in the Company's Act.
The lecture was sponsored by the University College of Management Studies and chaired by Mrs Eldora Koranteny, a legal consultant. It was the fourth in a series organised by the Centre meant to sensitise shareholders and the general public on the rights that shareholders have in companies that they have invested in.
Mr Antwi said, "Shareholders coming together to form a body such as a Shareholders Association would enable institutions such as the Securities and Exchange Commission (SEC) and the CCG to sensitise them on some of their rights."
According to him, the lack of an umbrella body of that kind in country was making it difficult "to communicate so well to shareholders in the country about their legitimate rights in these companies," a situation the founder observed had been left unattended to years.
"Buying shares in a company means part ownership of that company and that gives the shareholder certain legitimate rights within the said company. But how many shareholders are aware of these rights?" Mr Antwi asked.
Moves by the Ghana Stock Exchange sometime in 2007 to get shareholders of listed companies on the bourse to form a strong umbrella association as a means of deepening understanding of operations of the market and their rights as well has since not materialised.
Most listed companies throughout the country have over the past few months started holding their annual AGMs. Though almost all shareholders of these companies do endeavour to attend, few of them are ready to ask questions regarding the performance of the respective companies.
But, Mr Antwi said, these shareholders have a range of rights including the right to discuss, determine and approve the terms and conditions of serving Chief Executives, CEOs, MD, Executive Directors and other top managers' terms and conditions "before they start taking them."
"But how many of these top managers' remuneration’s come to shareholders for approval before they are paid to them," Mr Antwi said.
He noted that while other countries were embracing the shareholder rights to the fullest in so doing, helping to strengthen the internal operations of the respective companies, those in Ghana were yet to realise them.
The shareholder, he said, "holds invaluable rights in the company" and further called them throughout the country to take shareholder rights education serious.
According to the Centre, such a move will enable the individual shareholders to help expose their colleagues to the various rights that individual shareholders hold within the companies in which they hold shares.
Speaking at a public lecture on the theme "the rights of shareholders" in Accra, the Founder of the Centre and a Legal Practitioner as well as a Chartered Accountant, Mr Adu Anane Antwi, said shareholders nation-wide had over the past not exercised in fullest the various rights due them as enshrined in the Company's Act.
The lecture was sponsored by the University College of Management Studies and chaired by Mrs Eldora Koranteny, a legal consultant. It was the fourth in a series organised by the Centre meant to sensitise shareholders and the general public on the rights that shareholders have in companies that they have invested in.
Mr Antwi said, "Shareholders coming together to form a body such as a Shareholders Association would enable institutions such as the Securities and Exchange Commission (SEC) and the CCG to sensitise them on some of their rights."
According to him, the lack of an umbrella body of that kind in country was making it difficult "to communicate so well to shareholders in the country about their legitimate rights in these companies," a situation the founder observed had been left unattended to years.
"Buying shares in a company means part ownership of that company and that gives the shareholder certain legitimate rights within the said company. But how many shareholders are aware of these rights?" Mr Antwi asked.
 |
| Mr ADu Anane Antwi |
Most listed companies throughout the country have over the past few months started holding their annual AGMs. Though almost all shareholders of these companies do endeavour to attend, few of them are ready to ask questions regarding the performance of the respective companies.
But, Mr Antwi said, these shareholders have a range of rights including the right to discuss, determine and approve the terms and conditions of serving Chief Executives, CEOs, MD, Executive Directors and other top managers' terms and conditions "before they start taking them."
"But how many of these top managers' remuneration’s come to shareholders for approval before they are paid to them," Mr Antwi said.
He noted that while other countries were embracing the shareholder rights to the fullest in so doing, helping to strengthen the internal operations of the respective companies, those in Ghana were yet to realise them.
The shareholder, he said, "holds invaluable rights in the company" and further called them throughout the country to take shareholder rights education serious.
Fashion out debt policy - CEPA
THE Centre for Policy Analysis (CEPA), a policy analysis think tank has called on managers of the country’s economy to, as a matter of urgency, fashion out a “debt policy” that will help deal with the country’s mounting debt problems.
The Centre was of the view that the country’s debt issues had “reached such a time when it must have a real debt policy” that would among other things spell out the various mechanisms to be used in handling the nation’s present rising debt.
Commenting on a range of the macroeconomic issues during the launch of the Centre’s special edition of its “Ghana Economic Review and Outlook 2009-2012” dubbed “The dawn of the oil era”, Executive Director of the centre, Dr Joseph Abbey, said the scattered nature of the country’s debt made their validation a problem to policy makers and the country at large.
“We must, before the end of this year, come up with the actual situation regarding the country’s public debt. To us at CEPA, Ghana must validate its debt so that if any contractor somewhere some day comes up with a debt issue, then we will be able to trace the source of that debt and specifically know what to do with that claim.”
Ghana’s total public debt as at September, 2009 was US$8,551.7 million but surged to US$11,247.7 million in September, 2010, representing a 32.1 per cent leap within the twelve month period.
But the government, through the Ministry of Finance and Economic Planning, last March released nearly GH¢600 million towards settling some of these arrears and that subsequently lowered the country’s public debt margin.
Dr Abbey, who had earlier this year called for the consolidation of the country’s domestic debts, said governments should also refrain from the habits of awarding projects without proper funding from its coffers.
“We should not also allow the creation of debts to the informal sector; if we want to embark on any project, then, let’s ask for the total cost of that project and provide the needed amount before the project actually takes off.”
To him, the practise whereby past and present governments awarded development projects without providing actual payment for those projects was helping to pile the country’s debt problems, a situation the CEPA Executive Director noted had dire consequences for the country’s financial sector and the economy at large.
He observed that such a practice had a greater tenderccy of increasing the already hiking Non-Performing Loans (NPLs) within the banks and thus discouraging the banks from lowering interest rates.
On the NPLs, Dr Abbey said the centre had “picked signals” that some banks under distress of these mounting bad loans sometimes negotiate with the enterprises that owe them “to re-finance some of these loans.
“What we have actually heard is that the bank involve offers the owing institution a new loan which actually includes the interest of the already bad loan that was given earlier,” Dr Abbey explained.
Should that be the case, the Executive Director intimated that the rate of the NPLs “may just be far more than what we currently know and we must also look at that.“
The rate of NPLs among the country’s commercial banks stretched from 14.9 per cent in 2009 to 20 per cent in 2010, partly prompting the banks to keep lending rates tight at 25 per cent across board despite the lowering of the policy rate by the BoG.
Dr Abbey therefore called on the “authorities concerned to find this out and if it indeed exists, they should stamp it out now.”
Forecasting on the economic outlook of the nation in the next two years, Dr Abbey said, “the CEPA projects an overall fiscal deficit of 5.1 per cent of GDP for both 2011 and 2012.”
A key assumption, he said, was that the planned comprehensive strategy to regularise the end-2012 stock of GH¢3.5billion of domestic payment arrears and public sector obligations in respect to SOE debts would be completed and put into operation before the close of 2011.
He thus added that the “so-called informal public debts would be a thing of the past and there would be no need for provisions to clear arrears and no new arrears would be countenanced.”
The Centre was of the view that the country’s debt issues had “reached such a time when it must have a real debt policy” that would among other things spell out the various mechanisms to be used in handling the nation’s present rising debt.
Commenting on a range of the macroeconomic issues during the launch of the Centre’s special edition of its “Ghana Economic Review and Outlook 2009-2012” dubbed “The dawn of the oil era”, Executive Director of the centre, Dr Joseph Abbey, said the scattered nature of the country’s debt made their validation a problem to policy makers and the country at large.
“We must, before the end of this year, come up with the actual situation regarding the country’s public debt. To us at CEPA, Ghana must validate its debt so that if any contractor somewhere some day comes up with a debt issue, then we will be able to trace the source of that debt and specifically know what to do with that claim.”
Ghana’s total public debt as at September, 2009 was US$8,551.7 million but surged to US$11,247.7 million in September, 2010, representing a 32.1 per cent leap within the twelve month period.
But the government, through the Ministry of Finance and Economic Planning, last March released nearly GH¢600 million towards settling some of these arrears and that subsequently lowered the country’s public debt margin.
Dr Abbey, who had earlier this year called for the consolidation of the country’s domestic debts, said governments should also refrain from the habits of awarding projects without proper funding from its coffers.
“We should not also allow the creation of debts to the informal sector; if we want to embark on any project, then, let’s ask for the total cost of that project and provide the needed amount before the project actually takes off.”
To him, the practise whereby past and present governments awarded development projects without providing actual payment for those projects was helping to pile the country’s debt problems, a situation the CEPA Executive Director noted had dire consequences for the country’s financial sector and the economy at large.
He observed that such a practice had a greater tenderccy of increasing the already hiking Non-Performing Loans (NPLs) within the banks and thus discouraging the banks from lowering interest rates.
On the NPLs, Dr Abbey said the centre had “picked signals” that some banks under distress of these mounting bad loans sometimes negotiate with the enterprises that owe them “to re-finance some of these loans.
“What we have actually heard is that the bank involve offers the owing institution a new loan which actually includes the interest of the already bad loan that was given earlier,” Dr Abbey explained.
Should that be the case, the Executive Director intimated that the rate of the NPLs “may just be far more than what we currently know and we must also look at that.“
The rate of NPLs among the country’s commercial banks stretched from 14.9 per cent in 2009 to 20 per cent in 2010, partly prompting the banks to keep lending rates tight at 25 per cent across board despite the lowering of the policy rate by the BoG.
Dr Abbey therefore called on the “authorities concerned to find this out and if it indeed exists, they should stamp it out now.”
Forecasting on the economic outlook of the nation in the next two years, Dr Abbey said, “the CEPA projects an overall fiscal deficit of 5.1 per cent of GDP for both 2011 and 2012.”
A key assumption, he said, was that the planned comprehensive strategy to regularise the end-2012 stock of GH¢3.5billion of domestic payment arrears and public sector obligations in respect to SOE debts would be completed and put into operation before the close of 2011.
He thus added that the “so-called informal public debts would be a thing of the past and there would be no need for provisions to clear arrears and no new arrears would be countenanced.”
Tuesday, May 3, 2011
STC in deep crisis; Cannot add to its fleet of buses.
THE image of the once acclaimed safe, comfortable and reliable passenger transport service provider in the country and the sub-region at large, the Intercity STC Coaches Limited (ISTC) is gradually being replaced with frustrating disappointments to some of its decade-old patrons. Maxwell Adombila Akalaare traces the problem to a mounting debt and other thing within the company.
AN over GH¢23 million debt owned by the Intercity STC Coaches Limited, a state-owned passenger transport service delivering company in the country has gradually dragged the once celebrated STC to its knees.
The debt, GH¢23,236,395.20 is the total amount owned by the company to various financial institutions and some of its service providers in the country. The said debt dates back to nearly a decade ago, virtually after the Social Security and National Insurance Trust (SSNIT) took over the majority shareholding of the company from Vanef Consortium Limited sometime in 2003.
As a result, the company has for about four years now not been able to procure new buses to add to its present 30 roadworthy buses out of a total of 70 fleet of buses that the company owns.
The company's over GH¢23million debt victims ranges from banks to oil marketing companies and to spare part dealers in and around the county.
Although the Business Development, Marketing and Public Relations Manager of the transport company, Ms Gabriella D. Tettey would rather not confirm nor deny the debt owned by the company, she contended that "ISTC is undergoing challenges” adding “but that is not threatening our viability at all."
According to her, the company’s roots in the public sector as a public service institution had initially made its operations “not to be profit inclined. But things are now beginning to change, at least for the better," Ms Tettey added.
SSNIT which holds 80 per cent of the company's shares has already hinted of its intentions to offload all shares. Though, neither SSNIT nor ISTC has yet given any reason that could have necessitated SSNIT's hint of its intentions to offload the 80 per cent shares in the company, ISTC's staggering debt of over US$23 million could be playing a lead role in such corporate decision.
Sources within both institutions mentioned that SSNIT was yet to meet government on the matter. It is however not clear if government, the current minority shareholder would express interest in buying off SSNIT's 80 per cent shares to add to its already 20 per cent shares.
Obsessed by its locked-up capital at ISTC in the name of debt owned it, one of the company's mounting debt victims, the National Investment Bank (NIB) sometime in 2009 secured a court order obligating it (the bank) to freeze the assets of the ISTC as it sought ways of getting the company to pay off the debt. Some sources told the GRAPHIC BUSINESS that the said NIB loan that generated the court order was “used to secure 30 Faw buses for the company.
But the STC’s debt to the bank has since continued to soar and currently stands at GH¢5,850,687 million.
The General Manager of the ISTC, Brigadier General ( Rtd) Edward Lord Attivor last week told Asempa FM, a private radio station based in Accra that lack of planning had caused the company to lose about 80 per cent of its customers.
Insider sources, however told the GRAPHIC BUSINESS that the problem was beyond lack of planning. "There's mismanagement, corruption and some supposed mafia groups have emerged here," the source explained.
According to the source, the ISTC generates an average annual revenue of about GH¢10million "yet the company finds itself in debt virtually after the end of every year. ISTC does not control cost. All that happens is the money comes in but were it passes out, no one knows.” Another source wondered if “STC has ever had a serious managing director who has the experience and expertise of the business.”
According to the source, the company’s MDs have so far been “political appointees.” The political coloration of the MDs, the source said was not "as much an issue as their competence. Their expertise in the sector is what I’m talking about.”
To be efficient and effectively carry out its mandate of offering reliable, safe and comfortable transportation services to its clients, the company's fleet of buses ought to be replaced after every four years. Its current fleet are over four years old but the company's lack of finance has virtually stalled every effort by the company to secure new buses. Frequent breakdown of buses has now engulfed the company’s fleet due to what the Business Development, Marketing and PR Manager of the company said was "due to the pressure on the buses.”
She said the STC currently needs “an immediate injection of about new 30 buses”.
STC had initially earned the reputation of being one, if not the only transport service delivering company in the country that could have been associated with timeliness, comfort and quality service delivery throught-out the country and the sub-region at large.
Passengers of the company’s intercity bus services now frequently throng the company’s head offices along the Circle-Kaneshie road complaining of one mistreatment or the other.
But as more private transport service operating companies continue to pop-up nation-wide, thereby tightening up competition in the sector, the ISTC would have to revitalise its operations in other to survive in the present environment.
The Transport Minister, Mr Collins Dauda after paying a visit to the company's offices in Accra last week hinted that the government was seeking a partner to help bailout the company from its present crises, reports Asempa FM.
He noted that, the partnership that saw SSNIT coming in as the ISTC's majority stakeholder has not injected a pesewa into the business "thereby running the company down."
In the meantime, the minister said his outfit had opened talks with the Metro Mass Transit (MMT), another transport service delivering company to assist the ISTC with buses to augment its broken down vehicles
At the moment, stakeholders of the company are hoping that the anticipated offloading of the SSNIT’s majority shares and the government's hint of a possible divestiture of the company, when successful could help “inject the necessary capital and human resources into the company” that a source said was presently needed “to help turn STC around.”
AN over GH¢23 million debt owned by the Intercity STC Coaches Limited, a state-owned passenger transport service delivering company in the country has gradually dragged the once celebrated STC to its knees.
 |
| Can STC survive its current debt crises? |
The debt, GH¢23,236,395.20 is the total amount owned by the company to various financial institutions and some of its service providers in the country. The said debt dates back to nearly a decade ago, virtually after the Social Security and National Insurance Trust (SSNIT) took over the majority shareholding of the company from Vanef Consortium Limited sometime in 2003.
As a result, the company has for about four years now not been able to procure new buses to add to its present 30 roadworthy buses out of a total of 70 fleet of buses that the company owns.
The company's over GH¢23million debt victims ranges from banks to oil marketing companies and to spare part dealers in and around the county.
Although the Business Development, Marketing and Public Relations Manager of the transport company, Ms Gabriella D. Tettey would rather not confirm nor deny the debt owned by the company, she contended that "ISTC is undergoing challenges” adding “but that is not threatening our viability at all."
 |
| Only 30 out of the company's 70 vehicles are roadworthy |
SSNIT which holds 80 per cent of the company's shares has already hinted of its intentions to offload all shares. Though, neither SSNIT nor ISTC has yet given any reason that could have necessitated SSNIT's hint of its intentions to offload the 80 per cent shares in the company, ISTC's staggering debt of over US$23 million could be playing a lead role in such corporate decision.
Sources within both institutions mentioned that SSNIT was yet to meet government on the matter. It is however not clear if government, the current minority shareholder would express interest in buying off SSNIT's 80 per cent shares to add to its already 20 per cent shares.
Obsessed by its locked-up capital at ISTC in the name of debt owned it, one of the company's mounting debt victims, the National Investment Bank (NIB) sometime in 2009 secured a court order obligating it (the bank) to freeze the assets of the ISTC as it sought ways of getting the company to pay off the debt. Some sources told the GRAPHIC BUSINESS that the said NIB loan that generated the court order was “used to secure 30 Faw buses for the company.
But the STC’s debt to the bank has since continued to soar and currently stands at GH¢5,850,687 million.
The General Manager of the ISTC, Brigadier General ( Rtd) Edward Lord Attivor last week told Asempa FM, a private radio station based in Accra that lack of planning had caused the company to lose about 80 per cent of its customers.
Insider sources, however told the GRAPHIC BUSINESS that the problem was beyond lack of planning. "There's mismanagement, corruption and some supposed mafia groups have emerged here," the source explained.
According to the source, the ISTC generates an average annual revenue of about GH¢10million "yet the company finds itself in debt virtually after the end of every year. ISTC does not control cost. All that happens is the money comes in but were it passes out, no one knows.” Another source wondered if “STC has ever had a serious managing director who has the experience and expertise of the business.”
According to the source, the company’s MDs have so far been “political appointees.” The political coloration of the MDs, the source said was not "as much an issue as their competence. Their expertise in the sector is what I’m talking about.”
To be efficient and effectively carry out its mandate of offering reliable, safe and comfortable transportation services to its clients, the company's fleet of buses ought to be replaced after every four years. Its current fleet are over four years old but the company's lack of finance has virtually stalled every effort by the company to secure new buses. Frequent breakdown of buses has now engulfed the company’s fleet due to what the Business Development, Marketing and PR Manager of the company said was "due to the pressure on the buses.”
She said the STC currently needs “an immediate injection of about new 30 buses”.
STC had initially earned the reputation of being one, if not the only transport service delivering company in the country that could have been associated with timeliness, comfort and quality service delivery throught-out the country and the sub-region at large.
Passengers of the company’s intercity bus services now frequently throng the company’s head offices along the Circle-Kaneshie road complaining of one mistreatment or the other.
But as more private transport service operating companies continue to pop-up nation-wide, thereby tightening up competition in the sector, the ISTC would have to revitalise its operations in other to survive in the present environment.
The Transport Minister, Mr Collins Dauda after paying a visit to the company's offices in Accra last week hinted that the government was seeking a partner to help bailout the company from its present crises, reports Asempa FM.
He noted that, the partnership that saw SSNIT coming in as the ISTC's majority stakeholder has not injected a pesewa into the business "thereby running the company down."
In the meantime, the minister said his outfit had opened talks with the Metro Mass Transit (MMT), another transport service delivering company to assist the ISTC with buses to augment its broken down vehicles
At the moment, stakeholders of the company are hoping that the anticipated offloading of the SSNIT’s majority shares and the government's hint of a possible divestiture of the company, when successful could help “inject the necessary capital and human resources into the company” that a source said was presently needed “to help turn STC around.”
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