THE Ministry of Trade and Industry (MoTI) has challenged the country’s industrial community to manufacture quality products that can withstand the threat posed by foreign products rather than waiting on the government to encourage protectionism in the local market.
The sector Minister, Ms Hannah Tetteh, who threw the challenge during the 22nd anniversary celebration of the Africa Industrialisation Day in Accra said the solution to the influx of foreign goods into the country “is not only through increased tariffs of protectionism from the government.
“The solution is a well-developed and strong industry capable of manufacturing quality products that can match up to the foreign ones if not undo them,” the minister said.
The Africa Industrialisation Day is a day set aside by the United Nations Industrial Organisation (UNIDO) aimed at promoting industrialisation in the continent through a shared responsibility with the various governments and industrial organisations.
The annual event, which celebrates industries in Africa, is often celebrated in the country by UNIDO in conjuction with the Association of Ghana Industries (AGI), the umbrella body of industries in the country. It was on the theme: ‘Tackling energy poverty in Africa’.
The launch, which coincided with the AGI’s industrialisation week, attracted representatives from the UNIDO, UNDP, the Energy Ministry, as well as the MoTI.
While admitting that foreign goods posed a threat to local industries and the economy at large, Madam Tetteh said the government would continue to play its part in checking the trend but called on local industries to step up the quality of their products as a way of undoing the foreign ones, most of which were often shoddy.
She also encouraged the AGI “to take industrialisation to the rural areas instead of limiting them in the cities and towns.”
Madam Tetteh mentioned the launch of the ministry’s industrial policy document earlier this year as some of the initiatives aimed at stimulating industrialisation in the country.
The Industrial Policy, she said, was aimed at increasing the accelerating growth in the country’s industry through a targeted growth rate of 12 per cent.
The President of the association, Nana Owusu Afari, who chaired the function later told the Daily Graphic that the association “is not asking the government to support local industries produce shoddy goods.
“Quality is not the problem,” he stated and added that the “AGI itself is even passionate about quality products but we also need government policies that will help local industries to produce to meet the local capacity”.
The president tasked the government and industry stakeholders “to be proactive in dealing with our age old challenges,” noting that the recently launched Industrial Policy Document by the Ministry of Trade and Industry could prove a “strategic document for revitalising industry in Ghana.”
Friday, November 25, 2011
Wednesday, November 23, 2011
Chamber worried over cost of mining
THE Ghana Chamber of Mines (GCM) has expressed worry over the rising cost of mining in the country as it impacts negatively on the individual margins of the mining companies.
The chamber hopes that laudable economic policies will be implemented by the government in the wake of the oil production “to properly integrate the gas into other resources for industries to use.”
The Chief Executive Officer (CEO) of the chamber, Dr Toni Aubynn, who expressed the chamber’s worries to the Daily Graphic in an interview, said “mining companies in Ghana incur one of the highest operational costs in the sub-region,” a development he said was discouraging investors from investing in the country’s mining sector.
Such costs, he said, ranged from mining companies’ use of utilities, fuel and the provision of social amenities for mining communities to the cost of hiring expatriate labour due to the lack of skilled natives for specific jobs in the sector and the import of equipment and materials for their operations.
“Most of the mining communities don’t have social amenities such as roads, hospitals, schools and so on which forces the mining companies to provide those amenities at their own costs,” the CEO said.
He also explained that the rising cost of materials in the global arena impacted negatively on the local mining industry “because we import most of the equipment and materials that are used in the work. In effect, we import some of the costs although we could have sourced them locally at a much lesser cost if there were local companies supplying them,” he said.
The CEO also lamented the unavailability of specific companies in the country that could produce for the sector to help reduce costs in the sector while earning revenues for themselves and the country at large.
Dr Aubynn has, however, admitted that the establishment of an alternative power generating plant for use by mining institutions has reduced the cost of electricity in the sector but said it could even slow further should the gas generated from the oil drilling be used properly.
Mining companies in the country pay a specially rated price for diesel, far above the government subsidised ex pump price of the product.
On the whole, Dr Aubynn said “the rising cost is not making things easy and that is impacting negatively on revenues generated from the sector.”
He also called on Ghanaians not to look at the mining sector as an industry that should contribute to economic development only through taxes “but should look at how the sector can be properly integrated into the national economy to accelerate development.”
The mining sector alone contributed about 23 per cent to total revenues generated last year and the amount could even rise as global prices of diamond and gold continue to rise.
The chamber hopes that laudable economic policies will be implemented by the government in the wake of the oil production “to properly integrate the gas into other resources for industries to use.”
The Chief Executive Officer (CEO) of the chamber, Dr Toni Aubynn, who expressed the chamber’s worries to the Daily Graphic in an interview, said “mining companies in Ghana incur one of the highest operational costs in the sub-region,” a development he said was discouraging investors from investing in the country’s mining sector.
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| Dr Toni Aubynn, CEO, GCM |
Such costs, he said, ranged from mining companies’ use of utilities, fuel and the provision of social amenities for mining communities to the cost of hiring expatriate labour due to the lack of skilled natives for specific jobs in the sector and the import of equipment and materials for their operations.
“Most of the mining communities don’t have social amenities such as roads, hospitals, schools and so on which forces the mining companies to provide those amenities at their own costs,” the CEO said.
He also explained that the rising cost of materials in the global arena impacted negatively on the local mining industry “because we import most of the equipment and materials that are used in the work. In effect, we import some of the costs although we could have sourced them locally at a much lesser cost if there were local companies supplying them,” he said.
The CEO also lamented the unavailability of specific companies in the country that could produce for the sector to help reduce costs in the sector while earning revenues for themselves and the country at large.
Dr Aubynn has, however, admitted that the establishment of an alternative power generating plant for use by mining institutions has reduced the cost of electricity in the sector but said it could even slow further should the gas generated from the oil drilling be used properly.
Mining companies in the country pay a specially rated price for diesel, far above the government subsidised ex pump price of the product.
On the whole, Dr Aubynn said “the rising cost is not making things easy and that is impacting negatively on revenues generated from the sector.”
He also called on Ghanaians not to look at the mining sector as an industry that should contribute to economic development only through taxes “but should look at how the sector can be properly integrated into the national economy to accelerate development.”
The mining sector alone contributed about 23 per cent to total revenues generated last year and the amount could even rise as global prices of diamond and gold continue to rise.
Plant Pool eyes STC, As SSNIT moves out of the debt-ridden company
THE InterCity STC Coaches Limited (STC) is up for graps by private investors who have the nerve to withstand the various challenges in the country’s transport business. But who is interested? Maxwell Adombila Akalaare peeps into the bidding room of the debt-ridden transport company.
PRIVATE investors interested in reviving and running a transport business in Ghana have started tickling the Transport Ministry as they battle it out for an opportunity to own a part of the InterCity STC Coaches Limited currently under a debt crisis.
Among the companies presently doing the underground bidding include other passenger transport companies, vehicle distribution companies and individual business gurus interested in taking over from SSNIT’s current majority shareholding in STC.
Vanef Consortium Limited (VCL), the company that won a Divertiture Implementation Committee (DIC) bid in 1998 to take over STC is, however, absent on the list.
The battle to own a part of STC followed government’s open intentions of returning SSNIT’s 80 per cent equity in the company to any private investor that may so desire, citing SSNIT’s unwilligness to invest in the transport company as bases.
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| Weak managenment has eroded STC's image |
The Trust has often said that its business portfolio of keeping watch over people’s pensions bars it from gambling in investments, a believe that could have caused it not to “invest a pesewa in STC” after it took over as majority shareholder in STC from Vanef Consortium around 2003.
The Trust’s take over of Vanef’s shares was expected to boost investment in the company, including the procurement of more buses. Such expectations are, however, yet to see reality, nearly a decade after the SSNIT take over. STC currently owns 70 buses, out of which only 30 are roadworthy, a development that is causing intermittent breakdowns of its buses to the frustrations of its age-long passengers.
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| Mr Collins Dauda, Transport Minster |
“SSNIT is currently revaluing its shares in the company so as to arrive at what price tag to place on the trust’s 80 per cent shares in the company for the process to begin,” Mr Dauda said.
On the necessity of the move, Mr Dauda said “the business of transport in Ghana is best and efficiently managed by private investors who have the money and expertise to commit into the company and get it runing.”
Mr Dauda will, however, not mention the investors that have currently expressed interest in partnering the government to revive STC except to say “a number of investors have come up willing to take up SSNIT’s shares.”
SO WHO ARE THESE INVESTORS?
Local distributors of Yutong branded buses in the country, J A Plant Pool is one of them.
Signals picked by the GRAPHIC BUSINESS on the underground biddings indicated that Plant Pool which has been assisting the now staggering STC with technical assistance and prsented it with 10 buses this year is now rooting for the company’s 80 per cent stake.
The Transport Minister will, however, not confirm nor deny the information as he insisted on not commenting further.
Although Mr Lolu Akindele, the General Manager of Plant Pool will also not outrightly confirm the company’s interest in acquiring STC’s shares, he insisted on leaving “such a decision for my board to take.
“We have been assisting STC with a lot of things including buses and services and I must say our relationship in the past has been good so far. Investing in the company is something we can consider but such is a decision for my board to take and not me,” Mr Akindele added.
And for those who doubt the expertise of Plant Pool, a vehicle distributing company, in owning and running a transport company like STC, Mr Akindele said “the thing is all about experience. It is basically about management; understanding the dynamics of the business - whether running or selling vehicles - and that is what we Plant Pool have.”
STC’s current debt position, is however, a headache to the Plant Pool GM and his company’s board even though the board is yet to officially announce its bid for STC.
He noted that STC’s infrastrcuctural set-ups such as terminals and workshops across the country were “assets that make the company viable but its debt issue will definately be a headache.”
STC currently operates in five West African countries in addition to its regional routes in Ghana. The company also has 19 local and three international stations offering parcel services and package delivers to all of its destinations in addition to the passenger service.
Metro Mass Transit (MMT) Limited, another transport company in the country that has just weaned itself off government subventions also has its eyes on SSNIT’s shares at STC.
MMT is, meanwhile considered a weaker bidder for STC’s 80 per cent shares mainly because of its shareholding structure. The Government of Ghana holds 45 per cent of the company’s shares with the remaining 55 per cent being in the hands of other institutions, most of which are partly owned by the government).
It is thus not clear if the government will want to ‘own’ STC again after incessantly annoucing its readiness to bring in priavte investors.
There are also speculations of an American-based individual investor with particular interest in construction bidding for the stake.
There is however, less information on the said investor although sources close to the deal insisted the guru is a force to reckon with.
The Managing Director of STC (currently on leave) confirmed to the GRAPHIC BUSINESS on phone that more foreign investors were also interested in investing in STC.
He could, however not mention names but said “some are indidviduals with financial backings and some are also companies wanting to invest in STC .”
THE ACCUMULATED LEAVE
But as the underground bidding for STC continues, a new directive at the company has just sent almost all its regional managers, including its MD going on compulsory leaves.
Sources within STC told the GRAPHIC BUSINESS that the MD’s going followed a directive from the company’s board to that effect.
The source added that the board has consequently commenced investigations into Mr Attivor’s tenure as MD, an investigation Mr Attivor said was baseless.
“Set up a committee to investigate what? I have not done anything wrong. They can go ahead to do what they want but I am not afraid of anything,” he told the GRAPHIC BUSINESS on phone.
But should the board not recall him after his two year accumulated leave comes to an end this November, Brigadier Attivor said “I will find out why.”
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| Ownership of STC is changing hands again |
Relax taxes on mining industry
FOR the government, enabling infrastructural development for economic growth means more revenue and this could also mean more taxes. For industry, however, taxing more means shrinking growth. Maxwell Adombila Akalaare reports
THE Ghana Chamber of Mines (GCM) has signaled to the government to consider relaxing the totalled 20 per cent taxes imposed on companies within the country’s mining sector or risk shrinking growth and job creation within that sector of the economy.
The chamber is of the view that the said taxes will tighten internal investments within the companies and the sector as a whole, suck deep into their margins and in effect limit them from expanding to spur growth and job creation in the coming years.
The government, through its 2012 Budget and Economic Policy Statement increased corporate taxes for mining companies by 10 per cent, introduced a windfall profit tax of 10 per cent but gave a 20 per cent rebate on all capital allowances spanning five years.
Such taxes, according to the Finance and Economic Planning Minister, Dr Kwabena Duffuor, who read the budget last Wednesday, were premised on the fact that “the economic and social benefits that the sector provides (to Ghana) do not meet our expectations.”
The imposition of the taxes on the mining sector which formed part of the government’s wider aim of mobilising revenues to support infrastructural development and job creation trailed an earlier recommendation by the IMF team that the government considered innovative ways of raising more revenues from the country’s mining sector.
The Chief Executive Officer of the chamber, Dr Toni Aubynn, however, told the GRAPHIC BUSINESS in an interview that the present resorting to increasing corporate taxes and imposing a windfall profit tax on the companies will rather discourage growth in the sector.
“Imposing a 10 corporate tax on the industry and another 10 per cent of windfall profit will very likely have a rather uncomfortable impact on the industry.
“The jump from 25 per cent of corporate taxes to 35 per cent is huge and you can imagine the impact on the companies, the industry and the economy in general,” Dr Aubynn said adding that the result could possibility be a shrink in companies’ investments, growth and consequently job creation.
“The 2012 Budget’s objective is to create employment by spurring growth and so you would think that the government will want to be careful not to kill the hen that lays the golden egg. But once you impose 20 per cent of taxes on the sector at a go, then you indirectly tire the hands of the companies from expanding to create the jobs you want,” he said.
He has meanwhile indicated that the chamber was “not against government maximising revenues from its extractive industry but you also don’t have to do it such that the companies suffer at your expenses.”
On the 10 per cent windfall profit tax, Dr Aubynn said “the chamber is not even sure of how it will be calculated; what is a windfall profit and who determines that,” he asked noting that although windfall profits are normally determined by global prices vi-a-vis the price targets set by the company on the product concerned, “rising mineral prices in the global mineral market mean rising cost for mining companies and that impacts negatively on the revenues generated.”
The GCM CEO said his outfit would have wished to be part of the discussions that led to the fixing of the taxes, particulary the windfall profit tax.
He was thus hopeful that the government, through the MoFEP, will reconsider its decision on the taxes by meeting the chamber in the coming days “to atleast clarify issues on the taxes especially the calculations of the 10 per cent windfall profit tax.”
Dr Aubynn also wondered why Dr Duffuor intimated during the presentation of the budget to Parliament that there was lack of transparency in the country’s mining sector after the chamber was instrumental in getting Ghana to sign onto the Extractive Industries Transparency Initiative (EITI), a programme aimed at opening up extractive industries to public scrutiny.
“And if the government even has an issue with any company regarding transparency, cann’t they order such a company toopen up its books for checks by the government? So why this issue of lack of transparency,” he asked.
On the whole, Dr Aubynn said the country needed to change its mindset towards mining “as a sector that does not contribute to economic development.”
According to him, although Ghana has mined minerals for a long time, the country was yet “to understand how to use mining to develop the economy.
“It is not mining companies that will develop our economy for us,” he said noting that Ghana has over the years “thought that mining companies in the country should contribute to economic development through higher taxes. But that should not be the case.”GB
THE Ghana Chamber of Mines (GCM) has signaled to the government to consider relaxing the totalled 20 per cent taxes imposed on companies within the country’s mining sector or risk shrinking growth and job creation within that sector of the economy.
The chamber is of the view that the said taxes will tighten internal investments within the companies and the sector as a whole, suck deep into their margins and in effect limit them from expanding to spur growth and job creation in the coming years.
The government, through its 2012 Budget and Economic Policy Statement increased corporate taxes for mining companies by 10 per cent, introduced a windfall profit tax of 10 per cent but gave a 20 per cent rebate on all capital allowances spanning five years.
Such taxes, according to the Finance and Economic Planning Minister, Dr Kwabena Duffuor, who read the budget last Wednesday, were premised on the fact that “the economic and social benefits that the sector provides (to Ghana) do not meet our expectations.”
The imposition of the taxes on the mining sector which formed part of the government’s wider aim of mobilising revenues to support infrastructural development and job creation trailed an earlier recommendation by the IMF team that the government considered innovative ways of raising more revenues from the country’s mining sector.
|
| Dr Toni Aubynn, CEO, GCM |
The Chief Executive Officer of the chamber, Dr Toni Aubynn, however, told the GRAPHIC BUSINESS in an interview that the present resorting to increasing corporate taxes and imposing a windfall profit tax on the companies will rather discourage growth in the sector.
“Imposing a 10 corporate tax on the industry and another 10 per cent of windfall profit will very likely have a rather uncomfortable impact on the industry.
“The jump from 25 per cent of corporate taxes to 35 per cent is huge and you can imagine the impact on the companies, the industry and the economy in general,” Dr Aubynn said adding that the result could possibility be a shrink in companies’ investments, growth and consequently job creation.
“The 2012 Budget’s objective is to create employment by spurring growth and so you would think that the government will want to be careful not to kill the hen that lays the golden egg. But once you impose 20 per cent of taxes on the sector at a go, then you indirectly tire the hands of the companies from expanding to create the jobs you want,” he said.
He has meanwhile indicated that the chamber was “not against government maximising revenues from its extractive industry but you also don’t have to do it such that the companies suffer at your expenses.”
On the 10 per cent windfall profit tax, Dr Aubynn said “the chamber is not even sure of how it will be calculated; what is a windfall profit and who determines that,” he asked noting that although windfall profits are normally determined by global prices vi-a-vis the price targets set by the company on the product concerned, “rising mineral prices in the global mineral market mean rising cost for mining companies and that impacts negatively on the revenues generated.”
The GCM CEO said his outfit would have wished to be part of the discussions that led to the fixing of the taxes, particulary the windfall profit tax.
He was thus hopeful that the government, through the MoFEP, will reconsider its decision on the taxes by meeting the chamber in the coming days “to atleast clarify issues on the taxes especially the calculations of the 10 per cent windfall profit tax.”
Dr Aubynn also wondered why Dr Duffuor intimated during the presentation of the budget to Parliament that there was lack of transparency in the country’s mining sector after the chamber was instrumental in getting Ghana to sign onto the Extractive Industries Transparency Initiative (EITI), a programme aimed at opening up extractive industries to public scrutiny.
“And if the government even has an issue with any company regarding transparency, cann’t they order such a company toopen up its books for checks by the government? So why this issue of lack of transparency,” he asked.
On the whole, Dr Aubynn said the country needed to change its mindset towards mining “as a sector that does not contribute to economic development.”
According to him, although Ghana has mined minerals for a long time, the country was yet “to understand how to use mining to develop the economy.
“It is not mining companies that will develop our economy for us,” he said noting that Ghana has over the years “thought that mining companies in the country should contribute to economic development through higher taxes. But that should not be the case.”GB
Friday, November 18, 2011
CEPA kicks against debt ceiling
THE Center for Policy Analysis (CEPA) has kicked against suggestions from a section of policy analysts and civil society groups that Parliament should consider placing a ceiling on government borrowing, describing it as “an intention of the conservatives.”
The center has meanwhile called on the government to be responsible in its borrowing “to finance projects that will engineer investment and inure to job creation rather than borrowing to finance projects that do not generate revenue.”
The Executive Director of CEPA, Dr Joe Abbey, told the Daily Graphic on phone that any attempt “to place a ceiling on government borrowing will mean limiting public spending,” an action he said could consequently limit development and slow down economic growth in the long run.
Some policy watchers, economists and civil society groups had earlier suggested that Parliament should consider passing a bill that will put a ceiling on government borrowing and consequently do same to national debt, a suggestion they predicated on the country’s rising debt stock.
Ghana’s public debt increased from US$11.2 billion in September 2010 (representing 37.8 per cent of GDP) to US$14.8 billion (representing 39.0 per cent GDP) in September 2011.
Some policy watchers and civil society groups therefore fear the figure could surge, especially now that the country is entering an election year due to the tendency of the government to scale up spending in order to meet election promises.
One such group, the Progressive Nationalist Forum (PNF), requested Parliament to “as a matter of urgency consider a debt ceiling for the government” citing the government’s rising expenditure.
The Executive Director, however, disagreed. To him efforts to limit government borrowing by imposing a ceiling on public debt will have ripple effects on infrastructural development and economic growth in general.
“It is only the conservatives who think that government spending should be regulated by imposing a ceiling on borrowing and public debt,” Dr Abbey said such a move would prevent the government from embarking on projects that it lacked finances to undertake.
“Using debt ceiling as an instrument to curtail public spending is not the best, it slows down project financing in the long run and that consequently compresses the government expenditure which is not the best for an economy like ours.’’
“If you impose a limit on government borrowing, then laudable expenditures that the government will not get revenues to finance will not be embarked on and that is not good for the country,” he said.
That notwithstanding, Dr Abbey said “we Ghanaians would now have to be more vigilant, especially when it comes to contracting loans.
“We have to make sure that the loans they are contracting will be used to finance investment related projects that will generate revenue to finance the loan and not to be used to pay salaries and the likes,” he added.
He said current developments in Europe and the globe in general necessitated that Ghanaians gathered the courage and vigilance to question their leaders when it came to contracting loans.
“We should not only be happy that the government is contracting loans to build roads, schools and the rest. We should be bold enough to question our government that ‘yes, we need this road but how about the other road that was started and has not been completed,” Dr Abbey added.
He thus called on the government to focus on using loans contracted to finance growth related ventures such as opening up the economy for job creation, private sector growth and stimulating investment rather than engaging in activities that are one time investments and can therefore not refinance the loans by themselves.
The center has meanwhile called on the government to be responsible in its borrowing “to finance projects that will engineer investment and inure to job creation rather than borrowing to finance projects that do not generate revenue.”
The Executive Director of CEPA, Dr Joe Abbey, told the Daily Graphic on phone that any attempt “to place a ceiling on government borrowing will mean limiting public spending,” an action he said could consequently limit development and slow down economic growth in the long run.
Some policy watchers, economists and civil society groups had earlier suggested that Parliament should consider passing a bill that will put a ceiling on government borrowing and consequently do same to national debt, a suggestion they predicated on the country’s rising debt stock.
Ghana’s public debt increased from US$11.2 billion in September 2010 (representing 37.8 per cent of GDP) to US$14.8 billion (representing 39.0 per cent GDP) in September 2011.
Some policy watchers and civil society groups therefore fear the figure could surge, especially now that the country is entering an election year due to the tendency of the government to scale up spending in order to meet election promises.
One such group, the Progressive Nationalist Forum (PNF), requested Parliament to “as a matter of urgency consider a debt ceiling for the government” citing the government’s rising expenditure.
The Executive Director, however, disagreed. To him efforts to limit government borrowing by imposing a ceiling on public debt will have ripple effects on infrastructural development and economic growth in general.
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| Dr Joe Abbey, Executive secretary, CEPA |
“Using debt ceiling as an instrument to curtail public spending is not the best, it slows down project financing in the long run and that consequently compresses the government expenditure which is not the best for an economy like ours.’’
“If you impose a limit on government borrowing, then laudable expenditures that the government will not get revenues to finance will not be embarked on and that is not good for the country,” he said.
That notwithstanding, Dr Abbey said “we Ghanaians would now have to be more vigilant, especially when it comes to contracting loans.
“We have to make sure that the loans they are contracting will be used to finance investment related projects that will generate revenue to finance the loan and not to be used to pay salaries and the likes,” he added.
He said current developments in Europe and the globe in general necessitated that Ghanaians gathered the courage and vigilance to question their leaders when it came to contracting loans.
“We should not only be happy that the government is contracting loans to build roads, schools and the rest. We should be bold enough to question our government that ‘yes, we need this road but how about the other road that was started and has not been completed,” Dr Abbey added.
He thus called on the government to focus on using loans contracted to finance growth related ventures such as opening up the economy for job creation, private sector growth and stimulating investment rather than engaging in activities that are one time investments and can therefore not refinance the loans by themselves.
NIC wants insurance policy for SMEs
The National Insurance Commission (NIC), to devise a micro insurance policy to target micro and small scale enterprises (MSMEs) to help mitigate any risks in their operations
The micro insurance, according to the commission, “is to help address the growing nature of the micro insurance segment” while making it possible for low income earners to get insured against business related risks.
The Deputy Commissioner of the NIC, Mr S.N.K. Davo, who disclosed this to the Daily Graphic, said the initiative was part of a collection of new guidelines currently at the draft stage which when adopted by the Ministry of Finance and Economic Planning (MoFEP) would replace the existing one.
Although the existing insurance law does not make specific provision for micro insurance, some insurance companies have developed micro insurance related policies that caters for that segment of their clientele.
While admitting that some insurance companies in the country do have micro insurance policies targeted at the low income earner, Mr Davo said “we have realised that segment of the market is growing and a specific provision should be created to cater for it separately.”
As a result, he said the commission, together with its stakeholders in the insurance industry “are coming up with specific micro insurance provisions to cater for the insurance needs of low income earners in the country.
“That provision if adopted will then be taking care of low income earners such as airtime retailers and other petty traders whose insurance needs are smaller as compared to those of the bigger businesses,” the deputy commissioner added.
Should the provision come into effect, Mr Davo said “these low income earners will have the opportunity to take up insurance policies against unforeseen risks .”
Although the country’s SME sector is witnessing tremendous growth by way of more businesses springing up within that sector, businesses stand the risk of losing their hard earned revenues upon the striking of any business related risk.
The NIC is, however, confident that its new micro insurance policy will address that difficulty facing MSMEs by giving them the opportunity to take up insurance policies to indemnify themselves against such risks.
The commission, he said, was now awaiting the comments of the industry on the new guideline as well as the micro insurance provision to inform its next line of action.
“Should their recommendations and concerns be worthwhile, we will capture it in the proposed guideline before passing it on to the MoFEP and the Attorney General.
“We will, however, ignore those recommendations if we realise they are not worth factoring in,” Dr Davo added.
The micro insurance, according to the commission, “is to help address the growing nature of the micro insurance segment” while making it possible for low income earners to get insured against business related risks.
The Deputy Commissioner of the NIC, Mr S.N.K. Davo, who disclosed this to the Daily Graphic, said the initiative was part of a collection of new guidelines currently at the draft stage which when adopted by the Ministry of Finance and Economic Planning (MoFEP) would replace the existing one.
Although the existing insurance law does not make specific provision for micro insurance, some insurance companies have developed micro insurance related policies that caters for that segment of their clientele.
While admitting that some insurance companies in the country do have micro insurance policies targeted at the low income earner, Mr Davo said “we have realised that segment of the market is growing and a specific provision should be created to cater for it separately.”
As a result, he said the commission, together with its stakeholders in the insurance industry “are coming up with specific micro insurance provisions to cater for the insurance needs of low income earners in the country.
“That provision if adopted will then be taking care of low income earners such as airtime retailers and other petty traders whose insurance needs are smaller as compared to those of the bigger businesses,” the deputy commissioner added.
Should the provision come into effect, Mr Davo said “these low income earners will have the opportunity to take up insurance policies against unforeseen risks .”
Although the country’s SME sector is witnessing tremendous growth by way of more businesses springing up within that sector, businesses stand the risk of losing their hard earned revenues upon the striking of any business related risk.
The NIC is, however, confident that its new micro insurance policy will address that difficulty facing MSMEs by giving them the opportunity to take up insurance policies to indemnify themselves against such risks.
The commission, he said, was now awaiting the comments of the industry on the new guideline as well as the micro insurance provision to inform its next line of action.
“Should their recommendations and concerns be worthwhile, we will capture it in the proposed guideline before passing it on to the MoFEP and the Attorney General.
“We will, however, ignore those recommendations if we realise they are not worth factoring in,” Dr Davo added.
NIC wants solvency law, to deny weak insurers bigger businesses
THE National Insurance Commission (NIC) is pushing for a new solvency law which, when adopted, will deny insurance companies with weak financial standing the opportunity to undertake bigger business transactions.
The new regulation, which will be captured in the commission’s revised solvency and capital adequacy framework for insurance companies, is currently at the draft stage and when adopted and passed into law will compel insurers to do business according to their liquidity ratios - the amount of their assets that can easily be used to defray debts where necessary.
In effect, insurance companies nation-wide will not be allowed to write policies for their clients on credit bases as is mostly done under the existing regulation.
The Deputy Commissioner of the NIC, Mr S.N.K. Davo, who disclosed this to the Daily Graphic, said the commission was also aiming at using the said framework to address the debt crisis currently gaining ground in the industry.
“We want to use this new solvency framework to address the debt problem in the industry. The framework will not recognise premiums written to people on credit as assets to those insurance companies; it will treat them as liabilities and in turn make the company insolvent,” Mr Davo said.
Because the current regulation somewhat allows insurance companies to take up policies above their liquid financial abilities (with the hope that not all the insured will immediately come for their claims), most companies are sometimes found wanting in times of claim payment; an incident that has led to mounting outstanding claims in the industry.
The deputy commissioner was, however, confident that such a problem will be cured with the introduction of the new solvency and capital adequacy ratio.
“We want to use this new regulation to make the insurance industry sound and liquid,” he said, since a sound and liquid industry would protect policy holders against prolonged or even refused claim payments by their insurers due to the financial inability of the company to settle the said claim.
He also said the regulator was interested in “avoiding the situation where a policy holder has a genuine claim to collect yet the insurer cannot pay because the company in question is not solvent,” a trend that has led to the accumulation of debts in the financial books of some companies.
The new solvency and capital adequacy ratio is part of five new regulations being devised by the commission, a draft of which has been sent to the various companies for their inputs.
The NIC has meanwhile scheduled a stakeholder meeting on Wednesday (November 16) to collate the views and concerns of the companies on its proposed revised regulations for the sector.
Meanwhile some of the insurance companies have urged the commission to be tough in enforcing its own regulations, arguing that “the problem with the insurance industry in Ghana is not about reforms but with the enforcement of the laws made by the NIC.”
The new regulation, which will be captured in the commission’s revised solvency and capital adequacy framework for insurance companies, is currently at the draft stage and when adopted and passed into law will compel insurers to do business according to their liquidity ratios - the amount of their assets that can easily be used to defray debts where necessary.
In effect, insurance companies nation-wide will not be allowed to write policies for their clients on credit bases as is mostly done under the existing regulation.
The Deputy Commissioner of the NIC, Mr S.N.K. Davo, who disclosed this to the Daily Graphic, said the commission was also aiming at using the said framework to address the debt crisis currently gaining ground in the industry.
“We want to use this new solvency framework to address the debt problem in the industry. The framework will not recognise premiums written to people on credit as assets to those insurance companies; it will treat them as liabilities and in turn make the company insolvent,” Mr Davo said.
Because the current regulation somewhat allows insurance companies to take up policies above their liquid financial abilities (with the hope that not all the insured will immediately come for their claims), most companies are sometimes found wanting in times of claim payment; an incident that has led to mounting outstanding claims in the industry.
The deputy commissioner was, however, confident that such a problem will be cured with the introduction of the new solvency and capital adequacy ratio.
“We want to use this new regulation to make the insurance industry sound and liquid,” he said, since a sound and liquid industry would protect policy holders against prolonged or even refused claim payments by their insurers due to the financial inability of the company to settle the said claim.
He also said the regulator was interested in “avoiding the situation where a policy holder has a genuine claim to collect yet the insurer cannot pay because the company in question is not solvent,” a trend that has led to the accumulation of debts in the financial books of some companies.
The new solvency and capital adequacy ratio is part of five new regulations being devised by the commission, a draft of which has been sent to the various companies for their inputs.
The NIC has meanwhile scheduled a stakeholder meeting on Wednesday (November 16) to collate the views and concerns of the companies on its proposed revised regulations for the sector.
Meanwhile some of the insurance companies have urged the commission to be tough in enforcing its own regulations, arguing that “the problem with the insurance industry in Ghana is not about reforms but with the enforcement of the laws made by the NIC.”
2012 Budget: Gov't expected to focus on job creation
ANALYSTS and economic watchers expect the government to focus on measures that will help open up the private sector to growth to enhance and promote job creation in the coming year, ahead of the government’s 2012 Budget and Economic Policy Statement to be presented to Parliament today.
They also expect the policy statement to focus on key policy decisions that would help consolidate the various economic gains chalked up in 2011.
Two of such institutions, the Centre for Policy Analysis (CePA) and Imani Ghana, told the Daily Graphic that they expected the government to come up with stimulant economic policies in today’s budget that would help build on the various stable macro-economic policies achieved over the past year, “to enable it to engineer growth in the economy.”
Both institutions are, meanwhile, looking up to see how the government will contain the pay pressure exerted on the public purse as a result of the phased implementation of the Single Spine Salary Structure (SSSS).
Speaking on CePA’s expectations from the budget, the Executive Secretary of the centre, Dr Joe L. S. Abbey, said although 2011 was yet to end, “our analyses show that the government has met almost all its targets for the year and we expect the 2012 budget to build on those solid gains in the year ahead.”
Dr Abbey, however, expects the Finance and Economic Planning Minister, Dr Kwabena Duffuor, who will be reading the budget, to assure public sector workers of the government’s commitment to fully implement the SSSS pay policy which was currently ongoing.
Concerning employment, Dr Abbey said the centre did not expect a direct mention of job creation from the public sector, citing the bloated nature of the government’s pay purse and the limited opportunities for the public sector jobs.
That notwithstanding, CePA, he said, “will expect the government to use this budget to make mention of the government’s intention to engage more personnel in the police service”.
“One area the centre will be happy to see is a big call-up for more persons into the Ghana Police Service to help augment security on our highways,” he added.
The Budget and Economic Policy Statement is a policy document of the government presented to Parliament once every year stating in detail how the government had fared in the previous year, what it intends to do in the coming year and how it expects to finance those expenditures by way of revenue generation.
Concerning government’s proposed revenue generation, Dr Abbey said “CePA expects the old saying of spreading the tax net to raise more revenues for development” to be repeated.
He explained that although the rebasing of the economy saw the services sector overtaking the agricultural sector by way of sectorial contributions to the country’s Gross Domestic Product (GDP), taxing in the agricultural sector was yet to cover some of its key areas, a development Dr Abbey said had led to more revenues escaping the government.
“Growth in the services sector has been booming yet nobody seems to look at it as an area that can be taxed more. Areas such as consultancy, Information Technology (IT), financial services and the like are less turned to when it comes to tax,” he said.
But with a much enhanced revenue collecting agency - the Ghana Revenue Authority (GRA) - the CePA Executive Secretary expects the government to “now reach out to those areas” by way of taxing to meet its growing expenditure.
Dr Abbey urged the government “to be bold enough to scrap some of the tax exemptions granted to certain businesses”, especially those that had outlived their usefulness.
The Vice President of Imani Ghana, Mr Kofi Bentil, also expected a mention of how “the government is going to absorb the expenses of the SSSS and how it intends to deal with oil revenue.”
He, however, expressed the hope that the government would not say it was going to use the oil revenue to service the SSSS expenses or pay salaries in general.
They also expect the policy statement to focus on key policy decisions that would help consolidate the various economic gains chalked up in 2011.
Two of such institutions, the Centre for Policy Analysis (CePA) and Imani Ghana, told the Daily Graphic that they expected the government to come up with stimulant economic policies in today’s budget that would help build on the various stable macro-economic policies achieved over the past year, “to enable it to engineer growth in the economy.”
Both institutions are, meanwhile, looking up to see how the government will contain the pay pressure exerted on the public purse as a result of the phased implementation of the Single Spine Salary Structure (SSSS).
Speaking on CePA’s expectations from the budget, the Executive Secretary of the centre, Dr Joe L. S. Abbey, said although 2011 was yet to end, “our analyses show that the government has met almost all its targets for the year and we expect the 2012 budget to build on those solid gains in the year ahead.”
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| Dr Kwabena Duffuor, Minister of Finance |
Concerning employment, Dr Abbey said the centre did not expect a direct mention of job creation from the public sector, citing the bloated nature of the government’s pay purse and the limited opportunities for the public sector jobs.
That notwithstanding, CePA, he said, “will expect the government to use this budget to make mention of the government’s intention to engage more personnel in the police service”.
“One area the centre will be happy to see is a big call-up for more persons into the Ghana Police Service to help augment security on our highways,” he added.
The Budget and Economic Policy Statement is a policy document of the government presented to Parliament once every year stating in detail how the government had fared in the previous year, what it intends to do in the coming year and how it expects to finance those expenditures by way of revenue generation.
Concerning government’s proposed revenue generation, Dr Abbey said “CePA expects the old saying of spreading the tax net to raise more revenues for development” to be repeated.
He explained that although the rebasing of the economy saw the services sector overtaking the agricultural sector by way of sectorial contributions to the country’s Gross Domestic Product (GDP), taxing in the agricultural sector was yet to cover some of its key areas, a development Dr Abbey said had led to more revenues escaping the government.
“Growth in the services sector has been booming yet nobody seems to look at it as an area that can be taxed more. Areas such as consultancy, Information Technology (IT), financial services and the like are less turned to when it comes to tax,” he said.
But with a much enhanced revenue collecting agency - the Ghana Revenue Authority (GRA) - the CePA Executive Secretary expects the government to “now reach out to those areas” by way of taxing to meet its growing expenditure.
Dr Abbey urged the government “to be bold enough to scrap some of the tax exemptions granted to certain businesses”, especially those that had outlived their usefulness.
The Vice President of Imani Ghana, Mr Kofi Bentil, also expected a mention of how “the government is going to absorb the expenses of the SSSS and how it intends to deal with oil revenue.”
He, however, expressed the hope that the government would not say it was going to use the oil revenue to service the SSSS expenses or pay salaries in general.
Such an action, he said, could push inflation up and further destabilise other macro-economic laurels.
Sunday, November 6, 2011
Can State Housing be revived? As thousands of depositors await their houses
As pressure mounts on the country to close the widening housing deficit, the government would have to up its investments into the sector including bailing out the debt-ridden and staggering State Housing Company from its current state. But will the government do just that, asks Maxwell Adombila Akalaare
THOUSANDS of red-eyed prospective home owners in the country are currently on the neck of the nation’s state-runned housing and real estate developer, the State Housing Company (SHC), to deliver them their houses - decades after these individuals - most of whom are now retired civil and public servants, had deposited various sums of monies with the company to enable it construct them houses of various specifications.
The pile-up of undelivered houses at state housing followed the company’s inability to deliver to its depositors their booked houses despite receiving either part time or full payments for the houses.
SHC’s housing indebtedness to some of its old depositors had subsequently messed-up its end-year financial standings, causing it to record consecutive losses for over a decade.
The company’s current board and management are, however hoping to fashion out strategic policies that will help address its current indebtedness while shelving it from such challenges in the future.
GRAPHIC BUSINESS checks in the company revealed that the number of people who made full payments to SHC for houses of various specifications are in their hundreds while part payers run into thousands. The company’s Managing Director, Mr Mark Nii Akwei Ankrah will, however not confirm nor deny the information except to say state housing was currently facing some challenges of which his outfit was confident of solving.
He has, meanwhile admitted that the company’s board and management were fashioning out policies that would bail the company out of its current state but refused to go into details on the said policies.
According to sources within state housing, thousands of Ghanaians, most of whom are now retired public and civil servants, had for the past years deposited monies with the company to enable it construct houses of various specifications for them.
But several years into the depository of those monies with SHC to that effect, state housing is yet to live up to its side of the bargain.
Insider sources also have it that the timeline for the construction and delivery of those houses was not defined, a loophole that is currently insulating the now staggering SHC from possible agitations by its age-long depositors.
Should that have being the case, SHC would have at the moment been literally indebted to over a thousand people and also breached its own agreement of providing its clients with houses within a certain time frame.
With the current arrangement, however, “state housing is literally in debt but technically, it is not,” the source said but added that such a loophole will soon be addressed by the company’s new policy directive currently being fashioned by the board and management.
Although the lack of time frame is now giving state housing a breathing space especially with regards to agitations from disappointed depositors, sources within the company told the GRAPHIC BUSINESS that the company is literally in a fix as it is virtually torn between advertising its now lean services and risk being rushed on by the old depositors or remaining tight-lipped about its activities (as it has always done) thereby giving the now buoyant private real estate sector fertile grounds to continue thriving.
Mr Ankrah would, however not comment on why the company could not provide its old depositors their houses and how his outfit plans to handle the situation but said the matter was currently receiving appropriate attentions from management and the board.
Insider sources have meanwhile pointed to lack of finance and technical expertise as the factors that partly prevented the company from fulfilling its side of the bargain.
Prior to being grounded to its current state, SHC had won the hearts of many Ghanaian with its high quality houses, most of which were built before its ‘premature weaning’ from government subventiosn in the early 1990s. Most good residential areas in the Greater Accra Region were construted by SHC in addition to sites developed in the other regional capitals. These houses tell the better story of state housing. But despites its enviable records in the past, the company is now a pale shadow of itself, struggling to build houses for Ghanaian.
SHC needs massive investment
Real estate observers in the country have often attributed state housing’s current challenges to its inability to capitalise on the numerous opportunities that it had prior to being weaned of governemnt subventions in the early 1990s, an assertion the current MD shares. When the subventions came to an end, it would have been better to re-capitalise the company either through through private placement or going public.
For now though, he said what the company currently needed was a practical shift in its internal policies and practices, an initiative he said his outfit was currently pursuing.
He would, however, not rule out any public private partnership (PPP) initiative with state housing that would help inject fresh capital into the company and help improve its internal management practices.
“Looking for PPP will not be bad. It depends on the government’s objective in doing that,” he said agreeing that public institutions such as the SSNIT and SIC Insurance Company could be made to inject capital into the company.
GRAPHIC BUSINESS sources have even indicated that the company is currently monitoring some investors that expressed interest in investing in the company. It is, however not clear if the government will allow for such an investment and in what capacity it will take.
THOUSANDS of red-eyed prospective home owners in the country are currently on the neck of the nation’s state-runned housing and real estate developer, the State Housing Company (SHC), to deliver them their houses - decades after these individuals - most of whom are now retired civil and public servants, had deposited various sums of monies with the company to enable it construct them houses of various specifications.
The pile-up of undelivered houses at state housing followed the company’s inability to deliver to its depositors their booked houses despite receiving either part time or full payments for the houses.
SHC’s housing indebtedness to some of its old depositors had subsequently messed-up its end-year financial standings, causing it to record consecutive losses for over a decade.
The company’s current board and management are, however hoping to fashion out strategic policies that will help address its current indebtedness while shelving it from such challenges in the future.
GRAPHIC BUSINESS checks in the company revealed that the number of people who made full payments to SHC for houses of various specifications are in their hundreds while part payers run into thousands. The company’s Managing Director, Mr Mark Nii Akwei Ankrah will, however not confirm nor deny the information except to say state housing was currently facing some challenges of which his outfit was confident of solving.
He has, meanwhile admitted that the company’s board and management were fashioning out policies that would bail the company out of its current state but refused to go into details on the said policies.
According to sources within state housing, thousands of Ghanaians, most of whom are now retired public and civil servants, had for the past years deposited monies with the company to enable it construct houses of various specifications for them.
But several years into the depository of those monies with SHC to that effect, state housing is yet to live up to its side of the bargain.
Insider sources also have it that the timeline for the construction and delivery of those houses was not defined, a loophole that is currently insulating the now staggering SHC from possible agitations by its age-long depositors.
Should that have being the case, SHC would have at the moment been literally indebted to over a thousand people and also breached its own agreement of providing its clients with houses within a certain time frame.
With the current arrangement, however, “state housing is literally in debt but technically, it is not,” the source said but added that such a loophole will soon be addressed by the company’s new policy directive currently being fashioned by the board and management.
Although the lack of time frame is now giving state housing a breathing space especially with regards to agitations from disappointed depositors, sources within the company told the GRAPHIC BUSINESS that the company is literally in a fix as it is virtually torn between advertising its now lean services and risk being rushed on by the old depositors or remaining tight-lipped about its activities (as it has always done) thereby giving the now buoyant private real estate sector fertile grounds to continue thriving.
Mr Ankrah would, however not comment on why the company could not provide its old depositors their houses and how his outfit plans to handle the situation but said the matter was currently receiving appropriate attentions from management and the board.
Insider sources have meanwhile pointed to lack of finance and technical expertise as the factors that partly prevented the company from fulfilling its side of the bargain.
Prior to being grounded to its current state, SHC had won the hearts of many Ghanaian with its high quality houses, most of which were built before its ‘premature weaning’ from government subventiosn in the early 1990s. Most good residential areas in the Greater Accra Region were construted by SHC in addition to sites developed in the other regional capitals. These houses tell the better story of state housing. But despites its enviable records in the past, the company is now a pale shadow of itself, struggling to build houses for Ghanaian.
SHC needs massive investment
Real estate observers in the country have often attributed state housing’s current challenges to its inability to capitalise on the numerous opportunities that it had prior to being weaned of governemnt subventions in the early 1990s, an assertion the current MD shares. When the subventions came to an end, it would have been better to re-capitalise the company either through through private placement or going public.
For now though, he said what the company currently needed was a practical shift in its internal policies and practices, an initiative he said his outfit was currently pursuing.
He would, however, not rule out any public private partnership (PPP) initiative with state housing that would help inject fresh capital into the company and help improve its internal management practices.
“Looking for PPP will not be bad. It depends on the government’s objective in doing that,” he said agreeing that public institutions such as the SSNIT and SIC Insurance Company could be made to inject capital into the company.
GRAPHIC BUSINESS sources have even indicated that the company is currently monitoring some investors that expressed interest in investing in the company. It is, however not clear if the government will allow for such an investment and in what capacity it will take.
Ghana Re seeks more capital
As insurance companies in the country race to double their capital or even resort to syndications to enable them reap fully from an expanded and oil drilling economy, reinsurance companies would have to more-than triple theirs or risk loosing contracts, reports Maxwell Adombila Akalaare.
THE Ghana Reinsurance Company Limited (Ghana Re) is seeking an approval from the Ministry of Finance and Economic Planning (MoFEP), to enable it undertake a private placement aimed at soaring up the company’s capital base.
The company is of the view that its current capital base of a little above GH¢28 million makes it financially weak to compete effectively with colleague reinsurance companies in the country and the sub-region at large.
Competing reinsurance companies in Ghana and the sub-region have a capital base of about GH¢100 million, the industry standard for reinsurance companies.
Presenting a GH¢1.5million cheque as dividend for 2010 to the Ministry of Finance and Economic Planning in Accra, the board chairman of Ghana Re, Mr Lionel Molbila said that “the board has decided to seek the ministry’s approval to raise additional capital through private placement to enable the company to compete effectively with its competitors.
The Ministry of Finance and Economic Planning is the sole shareholder of Ghana Re.
He said a recapitalised Ghana Re would also be empowered to carry on with its expansion programme into “viable African insurance markets.
“This expansion is becoming necessary because the potential growth area identified is inward businesses from African insurance markets,” Mr Molbila noted and mentioned that the company has currently opened a branch in Cameroon while plans were underway to do same in other African countries.
The Acting Managing Director of the company, Mr Gustav W. K. Siale was confident that the request for a private placement will meet the ministry’s approval.
He was, however, not certain on how much equity stake the ministry will be willing to give out to the private investor.
“How much we will raise from that private placement will depend on the level of dilution the shareholder will be willing to allow,” Mr Siale said but added that the capital worth of the company could also inform how much should be raised from that private placement. Ghana Re is yet to be valued with respect to the private placement.
Director of Public Investment at the MoFEP, Mrs Magdalene Ewuraesi Apenteng has, meanwhile hinted of the ministry’s willingness to allow for a private placement “to enable them compete effectively.”
Lamenting the consequences of the Ghana Re’s weak capital base to its sole shareholder, the board chairman said “the level of capitalisation of the company made it extremely difficult for the retention of larger share of business written during the 2010 business year.”
The situation, he said was even worsen by the unexpectantly high values emanating from the country’s oil and gas business.
Ghana Re’s weak financial woes are even deepened by most ceding companies’ resort to increaseing their retention capital which consequently reduces their need for reinsurance protection, a situation the Ghana Re board chair said was putting the company in a difficult position.
Other ceding companies, according to Mr Molbila also have the habit of passing on reinsurance deals to foreign companies without first satisfying local capacity, a clear contravention of the National Insurance Commission’s regulatory guideline on when and how a local ceding company can pass on a reinsurance deal to a foreign reinsurance company. The act is even said to have contributed significantly to a 9.21 per cent dip in Ghana Re’s gross premium income from the 2009 figure of GH¢50.16million to GH¢45.83 million in 2010.
The increasing resort to syndications by local insurance companies to enable them raise required amounts to take up bigger deals is also not helping matters at Ghana Re.
Continuing with the challenges facing Ghana Re resulting from its current lean financial standing, Mr Molbila said “there is also the phenomenon of direct companies trading among themselves” to the neglect of reinsurers.
LEVEL PLAYING FIELD
Prior to the coming into force of the new Insurance Act, Act 742 in 2009, compulsory cessions to Ghana Re amounted to about 20 per cent of premiums in the country’s insurance industry, contributing to about 60 per cent of Ghana Re’s end-year gross premium incomes.
The new act which was aimed at providing a level playing field in the industry has, however stripped off this mandatory ceding to Ghana Re causing it to loose 60 per cent of its income outrightly.
Consequently, the company’s gross premium income has been struggling to pick-up, inching from GH¢49.22 million in 2008 to GH¢50.16 million in 2009 to currently record a 9.21 dip in 2010, a development company’s sole shareholder was not impressed of.
The board chairman has, meanwhile affirmed the board and management’s commitment to finding alternative sources of funds to replace the 60 per cent lost and consequently cause its gross premium income to rise.
Despite the marginal dip in its gross premium and investment income for 2010, Ghana Re’s net profit for 2010 stood at GH¢11.24 million, representing a 37.2 per cent growth from the previous year’s.
But with competition in the insurance sector virtually at high gear following insurance companies’ focused attention on an oil drilling economy, resort to syndications and an influx of foreign reinsurance companies into the Ghanaian insurance market, Ghana Re would have to quickly up its stance, including raising at least GH#$100 million to enable it attract juicy deals that may escape it to foreign companies.
THE Ghana Reinsurance Company Limited (Ghana Re) is seeking an approval from the Ministry of Finance and Economic Planning (MoFEP), to enable it undertake a private placement aimed at soaring up the company’s capital base.
The company is of the view that its current capital base of a little above GH¢28 million makes it financially weak to compete effectively with colleague reinsurance companies in the country and the sub-region at large.
Competing reinsurance companies in Ghana and the sub-region have a capital base of about GH¢100 million, the industry standard for reinsurance companies.
Presenting a GH¢1.5million cheque as dividend for 2010 to the Ministry of Finance and Economic Planning in Accra, the board chairman of Ghana Re, Mr Lionel Molbila said that “the board has decided to seek the ministry’s approval to raise additional capital through private placement to enable the company to compete effectively with its competitors.
The Ministry of Finance and Economic Planning is the sole shareholder of Ghana Re.
He said a recapitalised Ghana Re would also be empowered to carry on with its expansion programme into “viable African insurance markets.
“This expansion is becoming necessary because the potential growth area identified is inward businesses from African insurance markets,” Mr Molbila noted and mentioned that the company has currently opened a branch in Cameroon while plans were underway to do same in other African countries.
The Acting Managing Director of the company, Mr Gustav W. K. Siale was confident that the request for a private placement will meet the ministry’s approval.
He was, however, not certain on how much equity stake the ministry will be willing to give out to the private investor.
“How much we will raise from that private placement will depend on the level of dilution the shareholder will be willing to allow,” Mr Siale said but added that the capital worth of the company could also inform how much should be raised from that private placement. Ghana Re is yet to be valued with respect to the private placement.
Director of Public Investment at the MoFEP, Mrs Magdalene Ewuraesi Apenteng has, meanwhile hinted of the ministry’s willingness to allow for a private placement “to enable them compete effectively.”
Lamenting the consequences of the Ghana Re’s weak capital base to its sole shareholder, the board chairman said “the level of capitalisation of the company made it extremely difficult for the retention of larger share of business written during the 2010 business year.”
The situation, he said was even worsen by the unexpectantly high values emanating from the country’s oil and gas business.
Ghana Re’s weak financial woes are even deepened by most ceding companies’ resort to increaseing their retention capital which consequently reduces their need for reinsurance protection, a situation the Ghana Re board chair said was putting the company in a difficult position.
Other ceding companies, according to Mr Molbila also have the habit of passing on reinsurance deals to foreign companies without first satisfying local capacity, a clear contravention of the National Insurance Commission’s regulatory guideline on when and how a local ceding company can pass on a reinsurance deal to a foreign reinsurance company. The act is even said to have contributed significantly to a 9.21 per cent dip in Ghana Re’s gross premium income from the 2009 figure of GH¢50.16million to GH¢45.83 million in 2010.
The increasing resort to syndications by local insurance companies to enable them raise required amounts to take up bigger deals is also not helping matters at Ghana Re.
Continuing with the challenges facing Ghana Re resulting from its current lean financial standing, Mr Molbila said “there is also the phenomenon of direct companies trading among themselves” to the neglect of reinsurers.
LEVEL PLAYING FIELD
Prior to the coming into force of the new Insurance Act, Act 742 in 2009, compulsory cessions to Ghana Re amounted to about 20 per cent of premiums in the country’s insurance industry, contributing to about 60 per cent of Ghana Re’s end-year gross premium incomes.
The new act which was aimed at providing a level playing field in the industry has, however stripped off this mandatory ceding to Ghana Re causing it to loose 60 per cent of its income outrightly.
Consequently, the company’s gross premium income has been struggling to pick-up, inching from GH¢49.22 million in 2008 to GH¢50.16 million in 2009 to currently record a 9.21 dip in 2010, a development company’s sole shareholder was not impressed of.
The board chairman has, meanwhile affirmed the board and management’s commitment to finding alternative sources of funds to replace the 60 per cent lost and consequently cause its gross premium income to rise.
Despite the marginal dip in its gross premium and investment income for 2010, Ghana Re’s net profit for 2010 stood at GH¢11.24 million, representing a 37.2 per cent growth from the previous year’s.
But with competition in the insurance sector virtually at high gear following insurance companies’ focused attention on an oil drilling economy, resort to syndications and an influx of foreign reinsurance companies into the Ghanaian insurance market, Ghana Re would have to quickly up its stance, including raising at least GH#$100 million to enable it attract juicy deals that may escape it to foreign companies.
Labour disputes; Is the labour commission on top of issues?
For the National Labour Commission (NLC) to effectively live-up to its core duty of stemming industrial disturbances and creating a harmonious working environment for workers in the country, the commission would first have to address the lean nature of its staff strength resulting from low renumerations. Maxwell Adombila Akalaare reports
THE umbrella body of labour in the country, the Ghana Trade Unions Congress (TUC) has identified “excessive delay and poor renumerations for staff of the National Labour Commission (NLC)” as the two most critical factors leading to the pile-up of labour-related disputes at the commission.
TUC has meanwhile admitted it’s reluctance in getting the government to ratify an International Labour Organisation’s (ILO) Convention 158, even as the labour commission grapples with these labour related disputes, most of which are as a result of improper terminations by private employers.
He said the convention adopted by ILO nearly 30 years ago which the country is yet to ratify was to, among other things limit the powers of private employers from terminating the contracts of their employees “without giving meaningful reasons.”
Speaking to the GRAPHIC BUSINESS on the continuous rise in labour disputes in the country despite the existence of the labour commission, the Legal Officer of TUC, Mr Charles Bawaduah said “there is excessive delay in the handling of cases at the commission” as a result of the commission’s understaffed nature.
Explaining further, Mr Bawaduah said “there are even instances where some people employed at the commission leave after sometime due to poor renumerations.
“So clearly, the conditions of services at the commission are not even motivating enough to get the workers stay and work or do more,” an observation the NLC has discounted.
Mr Bawaduah’s assertions trail an earlier observation by the Ghana Employers Association (GEA) that “the NLC lacks the human and financial resources to ensure effective adjudication of labour disputes which are on the increase since its creation.”
The association also expressed “serious concern” over the dispute settlement process at the commission “especially regarding delays and adjournments” emphasising that “the number of complaints received by the commission is on the increase especially in the last three years.”
The setting up of the commission in 2005 was, to among other things reduce the rising number of labour disturbances in the country and in so doing, create a harmonious working environment for employers and employees alike.
Six years on, however such a vision seem to be in limbo following the upsurge of industrial disturbances.
Checks by the GRAPHIC BUSINESS at the NLC revealed an upsurge in labour-related cases received by the commission’s only office in Accra as they rose from 618 cases in 2008 to 740 in 2009 and 904 last year.
“I think the NLC has been doing its best but it can still do more; it has the potential to resolve more labour problems,” Mr Bawaduah observed.
While noting that the NLC needed to up its current stance in handling cases, Mr Bawaduah also took issue with private employers, especially those who do not permit the formation of unions to negotiate on workers’ behalf.
Most of the cases, according to him “emanate from privately owned institutions that do not have unions to negotiate on workers behalf during some of these matters.”
While the country’s constitution bares the government from dismissing public sector workers “without just cause”, private employers in the country are virtually at ease in terminating contracts of their employees, provided they give a one month notice to the employee. Such, is a loophole that has been cash-on by private employers to the detriment of employees.
Out of the 2,262 labour dispute related cases accumulated at the NLC over a three year period, unfair termination of employees, mostly by private employers top the list with 523 cases, a situation that could have been addressed if Ghana had ratify the ILO Convention 158 which advocates equal working rights for all.
“A lot of the labour disputes are often perpetrated by the employer, the private ones I should say because of this their erroneous feeling of ‘my business and if you don’t want, you can go,’” Mr Bawaduah observed but admitted that the TUC had not done enough to get the government ratify the ILO Convention 158.
COURTS NOT HELPING MATTERS
Although the Labour Act, Act 651 (2003) stipulates the opening up of regional and district branches of the NLC to help resolve labour disputes in those areas, the commssion is yet to live-up to that requirement, six years after its establishment.
“We are aware of the need for NLC to make its services accessible to anyone with grievances,” Mr Affum, Head of Public Affairs at the commission said but noted that the labour commission has been submitting budgets to the government to enable it open up regional offices “but that has not yet being approved.
Consequently, labour disputes in the regions all travel to Accra thereby compounding the volume of work to be handled by the commission’s five commissioners with some of them finding their ways into the courts.
Some of the courts, according to the TUC Legal Officer are, however not helping matters.
A case in point, he said was a recent supreme court ruling that compels the commission to exhibit its tripartite nature in resolving all cases brought before it.
“What this means is that all the five commissioners at the commission and at least, one representative each from labour, employers and government should be present before the commission can legally qualify to handle any case brought before it for redress. But that is a near impossibly,” Mr Bawaduah noted.
He added that the said ruling was even indirectly threatening the opening up of regional offices “since that will mean that the commissioners would also have to go to the regions to handle cases.”
THE umbrella body of labour in the country, the Ghana Trade Unions Congress (TUC) has identified “excessive delay and poor renumerations for staff of the National Labour Commission (NLC)” as the two most critical factors leading to the pile-up of labour-related disputes at the commission.
TUC has meanwhile admitted it’s reluctance in getting the government to ratify an International Labour Organisation’s (ILO) Convention 158, even as the labour commission grapples with these labour related disputes, most of which are as a result of improper terminations by private employers.
He said the convention adopted by ILO nearly 30 years ago which the country is yet to ratify was to, among other things limit the powers of private employers from terminating the contracts of their employees “without giving meaningful reasons.”
Speaking to the GRAPHIC BUSINESS on the continuous rise in labour disputes in the country despite the existence of the labour commission, the Legal Officer of TUC, Mr Charles Bawaduah said “there is excessive delay in the handling of cases at the commission” as a result of the commission’s understaffed nature.
Explaining further, Mr Bawaduah said “there are even instances where some people employed at the commission leave after sometime due to poor renumerations.
“So clearly, the conditions of services at the commission are not even motivating enough to get the workers stay and work or do more,” an observation the NLC has discounted.
Mr Bawaduah’s assertions trail an earlier observation by the Ghana Employers Association (GEA) that “the NLC lacks the human and financial resources to ensure effective adjudication of labour disputes which are on the increase since its creation.”
The association also expressed “serious concern” over the dispute settlement process at the commission “especially regarding delays and adjournments” emphasising that “the number of complaints received by the commission is on the increase especially in the last three years.”
The setting up of the commission in 2005 was, to among other things reduce the rising number of labour disturbances in the country and in so doing, create a harmonious working environment for employers and employees alike.
Six years on, however such a vision seem to be in limbo following the upsurge of industrial disturbances.
Checks by the GRAPHIC BUSINESS at the NLC revealed an upsurge in labour-related cases received by the commission’s only office in Accra as they rose from 618 cases in 2008 to 740 in 2009 and 904 last year.
“I think the NLC has been doing its best but it can still do more; it has the potential to resolve more labour problems,” Mr Bawaduah observed.
While noting that the NLC needed to up its current stance in handling cases, Mr Bawaduah also took issue with private employers, especially those who do not permit the formation of unions to negotiate on workers’ behalf.
Most of the cases, according to him “emanate from privately owned institutions that do not have unions to negotiate on workers behalf during some of these matters.”
While the country’s constitution bares the government from dismissing public sector workers “without just cause”, private employers in the country are virtually at ease in terminating contracts of their employees, provided they give a one month notice to the employee. Such, is a loophole that has been cash-on by private employers to the detriment of employees.
Out of the 2,262 labour dispute related cases accumulated at the NLC over a three year period, unfair termination of employees, mostly by private employers top the list with 523 cases, a situation that could have been addressed if Ghana had ratify the ILO Convention 158 which advocates equal working rights for all.
“A lot of the labour disputes are often perpetrated by the employer, the private ones I should say because of this their erroneous feeling of ‘my business and if you don’t want, you can go,’” Mr Bawaduah observed but admitted that the TUC had not done enough to get the government ratify the ILO Convention 158.
COURTS NOT HELPING MATTERS
Although the Labour Act, Act 651 (2003) stipulates the opening up of regional and district branches of the NLC to help resolve labour disputes in those areas, the commssion is yet to live-up to that requirement, six years after its establishment.
“We are aware of the need for NLC to make its services accessible to anyone with grievances,” Mr Affum, Head of Public Affairs at the commission said but noted that the labour commission has been submitting budgets to the government to enable it open up regional offices “but that has not yet being approved.
Consequently, labour disputes in the regions all travel to Accra thereby compounding the volume of work to be handled by the commission’s five commissioners with some of them finding their ways into the courts.
Some of the courts, according to the TUC Legal Officer are, however not helping matters.
A case in point, he said was a recent supreme court ruling that compels the commission to exhibit its tripartite nature in resolving all cases brought before it.
“What this means is that all the five commissioners at the commission and at least, one representative each from labour, employers and government should be present before the commission can legally qualify to handle any case brought before it for redress. But that is a near impossibly,” Mr Bawaduah noted.
He added that the said ruling was even indirectly threatening the opening up of regional offices “since that will mean that the commissioners would also have to go to the regions to handle cases.”
Finance ministry launches forecasting model
THE Ministry of Finance and Economic Planning (MoFEP) is optimistic that the country’s development partners will soon express their confidence in the country’s macroeconomic policy statistics, following the launch of a multi-sectorial macroeconomic policy model for forecasting and analysing of the government’s economic policy decisions.
The Technical Advisor on Macroeconomics at the MoFEP, Dr Said Boakye, who made the observation during the launch of the model in Accra, said the interconnected and scientifically-based nature of the model should make its use authentic in the eyes of policy analysts and development partners.
The model which is titled: “A macroeconometric model of the Ghanaian economic for policy scenario analysis and macroeconomic forecasting”, will replace the inter-sectorial macroeconomic policy models that existed and were used prior to the model’s coming into being.
The 27-page model was developed by the MoFEP’s Technical Advisor on Macroeconomics, Dr Said Boakye, in collaboration with the German Development Cooperation (GIZ).
Presenting the model to policy analysts, economists and some of Ghana’s development partners as part of its launch, Dr Boakye said the interconnected nature of the current model in analysing and forecasting government policies made it a credible tool for forecasting.
He explained that unlike recent developments in the country’s economy such as the rebasing which saw services overtaking the agricultural sector, the emergence of oil production and the now inter-connected nature of the various sectors, macroeconomic forecasting and analysing models had failed to catch up with the trend, a situation he said was causing Ghana’s development partners to cast doubts on her macroeconomic statistics.
He said though other models existed prior to this current model, “those models were developed on sectorial bases and were basically not scientific” thereby adding to doubts over the authenticity or otherwise of data compiled from them.
He was thus hopeful that the current scientific nature of the macroeconomic model of the Ghanaian economic for policy scenario analysis and macroeconomic forecasting will serve as a mutual benefit to Ghana and her development partners.
“We also think the model will help minimise the incidence of our development partners imposing their policies on Ghana,” the MoFEP Technical Advisor on Macroeconomics added.
Macroeconomic forecasting and analysing models are benchmarks used as bases for analysing and predicting the effects of major government policies and economic decisions.
Ghana, until now, had been relying on inter-sectorial models developed by various local economists, many of which Dr Boakye said were unscientific and unreliable.
He described the model as one focused on policy issues and “reflects the most current developments in our economy”, therefore it will endear the model to policy analysts and development partners.
On why the model omitted the labour market despite the area’s increasing importance in policy issues (due to hiking unemployment), Dr Boakye said “it was my plan to include that sector in the model. Sadly, however, statistics on that sector does not exist and that made it impossible capturing it.”
He thus charged on the Ghana Statistical Service to compile statistics on the said areas to help research and the formulation of policies.
The model used the country’s economic policy data and statistics compiled from 1983 to 2010.
The Technical Advisor on Macroeconomics at the MoFEP, Dr Said Boakye, who made the observation during the launch of the model in Accra, said the interconnected and scientifically-based nature of the model should make its use authentic in the eyes of policy analysts and development partners.
The model which is titled: “A macroeconometric model of the Ghanaian economic for policy scenario analysis and macroeconomic forecasting”, will replace the inter-sectorial macroeconomic policy models that existed and were used prior to the model’s coming into being.
The 27-page model was developed by the MoFEP’s Technical Advisor on Macroeconomics, Dr Said Boakye, in collaboration with the German Development Cooperation (GIZ).
Presenting the model to policy analysts, economists and some of Ghana’s development partners as part of its launch, Dr Boakye said the interconnected nature of the current model in analysing and forecasting government policies made it a credible tool for forecasting.
He explained that unlike recent developments in the country’s economy such as the rebasing which saw services overtaking the agricultural sector, the emergence of oil production and the now inter-connected nature of the various sectors, macroeconomic forecasting and analysing models had failed to catch up with the trend, a situation he said was causing Ghana’s development partners to cast doubts on her macroeconomic statistics.
He said though other models existed prior to this current model, “those models were developed on sectorial bases and were basically not scientific” thereby adding to doubts over the authenticity or otherwise of data compiled from them.
He was thus hopeful that the current scientific nature of the macroeconomic model of the Ghanaian economic for policy scenario analysis and macroeconomic forecasting will serve as a mutual benefit to Ghana and her development partners.
“We also think the model will help minimise the incidence of our development partners imposing their policies on Ghana,” the MoFEP Technical Advisor on Macroeconomics added.
Macroeconomic forecasting and analysing models are benchmarks used as bases for analysing and predicting the effects of major government policies and economic decisions.
Ghana, until now, had been relying on inter-sectorial models developed by various local economists, many of which Dr Boakye said were unscientific and unreliable.
He described the model as one focused on policy issues and “reflects the most current developments in our economy”, therefore it will endear the model to policy analysts and development partners.
On why the model omitted the labour market despite the area’s increasing importance in policy issues (due to hiking unemployment), Dr Boakye said “it was my plan to include that sector in the model. Sadly, however, statistics on that sector does not exist and that made it impossible capturing it.”
He thus charged on the Ghana Statistical Service to compile statistics on the said areas to help research and the formulation of policies.
The model used the country’s economic policy data and statistics compiled from 1983 to 2010.
Bagbin admits government’s frustration in STX deal
THE Minister of Water Resources, Works and Housing, Mr Alban Bagbin, has publicly admitted government’s frustrations over the stalled commencement of the STX Housing Project.
In spite of government’s disappointment over the delay, Mr Bagbin said the government was still committed to the project “and will do all it takes to let the project take off.”
He has, meanwhile, intimated of a possible “redesigning” of the entire project, should the president so desire.
He said the committee setup to look into the disagreements among the STX partners, which was partly delaying the project would present its report to the President next week.
Mr Bagbin made these remarks when he addressed the German business community on the government’s projects on as part of the West Africa Infrastructure Conference currently underway in Accra.
The four-day conference, which brings together infrastructure oriented businesses, particularly those with German origin, is at the instance of the German Industry and Commerce in Ghana, in association with the Ghanaian-German Economic Association (GGEA).
“We may be facing frustrations in our quest to commence the construction of the 30,000 housing units but the larger war we have declared as a government is to ensure that both the public and private sectors combine forces to bridge the 1.5 million housing deficit within the shortest possible time,” the minister said.
Mr Bagbin observed that the country’s housing deficit was currently worsening, a situation he said needed realistic approaches both from the government and private sector participants to meet the increasing demand.
“The Ghana National Housing Project and the Savannah Accelerated Development Authority (SADA) are the NDC government’s bold response to this housing deficit,” Mr Bagbin said and explained that the stalled STX project was but just a portion of that commitment.
On water, Mr Bagbin said the government’s efforts to provide potable water for rural and urban folks was currently paying off, following the increase of urban water access from 58.7 per cent in 2008 to 63.9 per cent in the first quarter of 2011.
Access to water in the rural areas, according to Mr Bagbin, was also on the increase, rising from 57.4 per cent in 2008 to 63 per cent in the first quarter of this year.
He expressed optimism that Ghana will “surely achieve more than the Millennium Development Goal of 76 per cent rural water coverage.”
He also mentioned government’s plans to invest in the construction of sea defence walls in the country’s coastal towns to avert the eminent threat posed by the sea.
“The truth of the matter is that as lofty as our ideals and intentions may be, the government has very limited resources to meet all of the country’s infrastructure needs,” Mr Bagbin said and called on private investors, including those from Germany, to help in that regard.
In spite of government’s disappointment over the delay, Mr Bagbin said the government was still committed to the project “and will do all it takes to let the project take off.”
He has, meanwhile, intimated of a possible “redesigning” of the entire project, should the president so desire.
He said the committee setup to look into the disagreements among the STX partners, which was partly delaying the project would present its report to the President next week.
Mr Bagbin made these remarks when he addressed the German business community on the government’s projects on as part of the West Africa Infrastructure Conference currently underway in Accra.
The four-day conference, which brings together infrastructure oriented businesses, particularly those with German origin, is at the instance of the German Industry and Commerce in Ghana, in association with the Ghanaian-German Economic Association (GGEA).
“We may be facing frustrations in our quest to commence the construction of the 30,000 housing units but the larger war we have declared as a government is to ensure that both the public and private sectors combine forces to bridge the 1.5 million housing deficit within the shortest possible time,” the minister said.
Mr Bagbin observed that the country’s housing deficit was currently worsening, a situation he said needed realistic approaches both from the government and private sector participants to meet the increasing demand.
“The Ghana National Housing Project and the Savannah Accelerated Development Authority (SADA) are the NDC government’s bold response to this housing deficit,” Mr Bagbin said and explained that the stalled STX project was but just a portion of that commitment.
On water, Mr Bagbin said the government’s efforts to provide potable water for rural and urban folks was currently paying off, following the increase of urban water access from 58.7 per cent in 2008 to 63.9 per cent in the first quarter of 2011.
Access to water in the rural areas, according to Mr Bagbin, was also on the increase, rising from 57.4 per cent in 2008 to 63 per cent in the first quarter of this year.
He expressed optimism that Ghana will “surely achieve more than the Millennium Development Goal of 76 per cent rural water coverage.”
He also mentioned government’s plans to invest in the construction of sea defence walls in the country’s coastal towns to avert the eminent threat posed by the sea.
“The truth of the matter is that as lofty as our ideals and intentions may be, the government has very limited resources to meet all of the country’s infrastructure needs,” Mr Bagbin said and called on private investors, including those from Germany, to help in that regard.
“Unregulated sectors can lead to money laundering”
THE Financial Intelligence Center (FIC) has admitted that the lack of a regulatory body for certain sectors of the national economy can serve as a breeding ground for money laundering.
THE centre is also of the view that the unmanned borders of Ghana pose serious challenges to the fight against money laundering but is confident that a national strategy on an action plan currently awaiting approval by the Ministry of Finance and Economic Planning (MoFEP) will help plug these loopholes and tighten the screws against the money laundering.
The Chief Executive Officer (CEO) of the FIC, Mr Samuel Thompson Essel, told the Daily Graphic in an interview that the loose nature of the country’s real estate and car dealing industry, for example, can create the ground for money laundering.
The Deputy Governor of the Bank of Ghana, Dr H.A.K. Wampah, said at the Institute of Chartered Accountants Ghana (ICAG’s) luncheon in Accra last week that “the lax regulation of certain segments of the economy such as real estate industry, car dealers and non-governmental organisations also present themselves as fertile grounds for ‘sanitising’ laundered money.”
Speaking to the Daily Graphic in reaction to the FIC’s claim of being prepared to deal with such loopholes, Mr Essel said “some illicit monies, proceeds of crime and ill-gotten properties are in most cases easily used to acquire mansions, cars or even given as donations to some NGOs.”
He explained that unlike the financial, capital and non-financial sectors of the economy that individually come under regulatory bodies such as the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC), the transport business, car dealings and NGOs were yet to have such a regulatory body, a loophole that he said “makes it easy for people to launder their ill-gotten monies in those areas.
“If someone uses crime money to acquire a house, buy a luxurious car or donates it to an NGO, who is going to question him? Who even knows or monitors the amount of investments that go into that sector,” the FIC CEO asked.
He noted that the regulated nature of the country’s financial and non-financial institutions as well as the securities market made it easier for the centre and anti-money laundering institutions to “track the amount of money that comes in, which money is suspicious and who owns those monies.”
THE centre is also of the view that the unmanned borders of Ghana pose serious challenges to the fight against money laundering but is confident that a national strategy on an action plan currently awaiting approval by the Ministry of Finance and Economic Planning (MoFEP) will help plug these loopholes and tighten the screws against the money laundering.
The Chief Executive Officer (CEO) of the FIC, Mr Samuel Thompson Essel, told the Daily Graphic in an interview that the loose nature of the country’s real estate and car dealing industry, for example, can create the ground for money laundering.
The Deputy Governor of the Bank of Ghana, Dr H.A.K. Wampah, said at the Institute of Chartered Accountants Ghana (ICAG’s) luncheon in Accra last week that “the lax regulation of certain segments of the economy such as real estate industry, car dealers and non-governmental organisations also present themselves as fertile grounds for ‘sanitising’ laundered money.”
Speaking to the Daily Graphic in reaction to the FIC’s claim of being prepared to deal with such loopholes, Mr Essel said “some illicit monies, proceeds of crime and ill-gotten properties are in most cases easily used to acquire mansions, cars or even given as donations to some NGOs.”
He explained that unlike the financial, capital and non-financial sectors of the economy that individually come under regulatory bodies such as the Bank of Ghana (BoG) and the Securities and Exchange Commission (SEC), the transport business, car dealings and NGOs were yet to have such a regulatory body, a loophole that he said “makes it easy for people to launder their ill-gotten monies in those areas.
“If someone uses crime money to acquire a house, buy a luxurious car or donates it to an NGO, who is going to question him? Who even knows or monitors the amount of investments that go into that sector,” the FIC CEO asked.
He noted that the regulated nature of the country’s financial and non-financial institutions as well as the securities market made it easier for the centre and anti-money laundering institutions to “track the amount of money that comes in, which money is suspicious and who owns those monies.”
Set up international arbitration centre - Shippers Authority
THE Ghana Shippers Authority (GSA) has suggested the establishment of an international arbitration centre to settle commercial disputes emanating from increasing sea-borne trade litigations in the country.
It said the absence of such an arbitration centre in the country often led disputants to resort to the commercial courts or seek arbitration outside the country, with its attendant delays, frustration and high cost.
Speaking during the launch of the GSA’s seventh maritime law seminar for judges of Superior courts in Accra, its Chief Executive Officer, Dr Kofi Mbiah, observed that players in international business transactions “have a preference for resolving their cases through arbitration”.
“With the increases in international commercial activity, including the emergence of the oil and gas industry, Ghana would need to put in place appropriate structures, as well as the necessary framework, and build capacity to establish Accra as an important centre for arbitration,” he said.
He said total volume of goods shipped through the country’s seaports had been increasing, rising from 12 million tonnes in 2009 to 13.9 million tonnes last year.
As of September this year, “total throughput — the amount of goods shipped — has again increased to 11.5 million tonnes, compared with 9.3 million tonnes as oft September 2010”.
He was confident that a projected 14 per cent end-year Gross Domestic Product (GDP), coming at the back of commenced drilling of oil and increased cocoa yields, would help increase the volume to the 15-million tonne mark by the end of 2011.
The Transport Minister, Alhaji Collins Dauda, who graced the occasion, called on the Judiciary to repose confidence in its systems.
He asked judges to constantly update their knowledge “in this dynamic and specialised area of law as it evolves”.
He said his ministry had taken the requisite steps towards equipping the Ghana Maritime Authority and other relevant institutions to enable them to deal with issues of piracy, as the incident was currently gaining ground in neighbouring Togo.
According to Alhaji Dauda, the government’s take-over of the Tema Shipyard and Drydock was aimed at giving it the opportunity to reap fully from the increased vessel repair activity brought about by the increase in trade and the exploitation of Ghana’s oil and gas resources.
The maritime law seminar is an annual initiative of the GSA aimed at updating superior court judges on developments in the maritime sector and has since been addressed by resource persons from around the world.
This year’s event was a two-day seminar that took participants through laws relating to the sale and purchase of ships, the legal and upstream regime in the oil and gas industry using Ghana’s Jubilee fields as a case study, among others.
It said the absence of such an arbitration centre in the country often led disputants to resort to the commercial courts or seek arbitration outside the country, with its attendant delays, frustration and high cost.
Speaking during the launch of the GSA’s seventh maritime law seminar for judges of Superior courts in Accra, its Chief Executive Officer, Dr Kofi Mbiah, observed that players in international business transactions “have a preference for resolving their cases through arbitration”.
“With the increases in international commercial activity, including the emergence of the oil and gas industry, Ghana would need to put in place appropriate structures, as well as the necessary framework, and build capacity to establish Accra as an important centre for arbitration,” he said.
He said total volume of goods shipped through the country’s seaports had been increasing, rising from 12 million tonnes in 2009 to 13.9 million tonnes last year.
As of September this year, “total throughput — the amount of goods shipped — has again increased to 11.5 million tonnes, compared with 9.3 million tonnes as oft September 2010”.
He was confident that a projected 14 per cent end-year Gross Domestic Product (GDP), coming at the back of commenced drilling of oil and increased cocoa yields, would help increase the volume to the 15-million tonne mark by the end of 2011.
The Transport Minister, Alhaji Collins Dauda, who graced the occasion, called on the Judiciary to repose confidence in its systems.
He asked judges to constantly update their knowledge “in this dynamic and specialised area of law as it evolves”.
He said his ministry had taken the requisite steps towards equipping the Ghana Maritime Authority and other relevant institutions to enable them to deal with issues of piracy, as the incident was currently gaining ground in neighbouring Togo.
According to Alhaji Dauda, the government’s take-over of the Tema Shipyard and Drydock was aimed at giving it the opportunity to reap fully from the increased vessel repair activity brought about by the increase in trade and the exploitation of Ghana’s oil and gas resources.
The maritime law seminar is an annual initiative of the GSA aimed at updating superior court judges on developments in the maritime sector and has since been addressed by resource persons from around the world.
This year’s event was a two-day seminar that took participants through laws relating to the sale and purchase of ships, the legal and upstream regime in the oil and gas industry using Ghana’s Jubilee fields as a case study, among others.
Ministry to prescribe new emission levels
INDUSTRIES and manufacturing companies in the country will soon be compelled to cut their individual emissions to levels to be prescribed by the Ministry of Environment, Science and Technology.
This follows moves by the ministry to specify the amount of gas that a manufacturing company in the country can emit into the environment.
The Environment Science and Technology Minister, Ms Sherry Ayitey, who gave the hint in Accra when she chaired the Association of Ghana Industries (AGI)-Unilever Business Luncheon said, “The ministry will soon be setting standards for gas emissions by industries operating in the country.”
The luncheon, which is an initiative by both the AGI and Unilever, had the theme: ‘Growing sustainably, living sustainably’ and was aimed a throwing more light on the need for industries to adopt sustainable business models in their respective dealings.
According to Ms Ayitey, the setting of standards for gas emission was expected to help address the reckless nature in which some manufacturing industries in the country were emitting gases despite the negative consequences on the environment and climate change in general.
Ms Ayitey also called on industries, particularly manufacturing companies whose activities involve gas emissions, to adopt modern technologies that had the tendency of reducing gas emissions while they await the ministry’s standards on gas emissions.
She gave hints of the ministry’s intentions to submit before Parliament a Land Use Planning Bill that would ensure proper planning of cities and buildings in the country.
All these, she said, were aimed at sustaining the environment so as to preserve it for future generations.
Meanwhile, the AGI has welcomed the introduction of the gas emission standards.
This is a laudable idea that should be supported by all,” the Vice-president of the AGI’s large-scale sector, Dr George Dawson-Ahmoah, told the Daily Graphic in an interview.
“We are wondering what additional standards the ministry is going to set since we already have a lot of these standards in place. The problem is not about the laws or standards, but it is about enforcement,” he said. He, however, admitted that industries were not complying with all regulations by the Environmental Protection Agency (EPA).
The Managing Director of Unilever West Africa, Mr David Mureithi, who presented a paper on ‘Environmental Sustainability, A must or a nice to have?’ noted that issues of corporate responsibilities had gone beyond “giving small amounts of companies’ profits to communities in the name of CSR.
“We all have to adopt sustainable measures that will save the environment from any dangers,” he added.
According to him, efforts by Unilever Global to reduce plastics in its products were giving the company about 15 million euros a year. He, therefore, called on corporate Ghana “not to see issues of environmental sustainability as being costly to practise. It saves money in the long run.”
He also said Unilever Ghana was currently investing in a gas plant as it intended to switch from its current oil manufacturing plant to a gas one.
The programme also had presentations from the Minister of Water Resources, Works and Housing; Zoomlion Ghana Limited, the Environmental Protection Agency and the AGI’s President.
This follows moves by the ministry to specify the amount of gas that a manufacturing company in the country can emit into the environment.
The Environment Science and Technology Minister, Ms Sherry Ayitey, who gave the hint in Accra when she chaired the Association of Ghana Industries (AGI)-Unilever Business Luncheon said, “The ministry will soon be setting standards for gas emissions by industries operating in the country.”
The luncheon, which is an initiative by both the AGI and Unilever, had the theme: ‘Growing sustainably, living sustainably’ and was aimed a throwing more light on the need for industries to adopt sustainable business models in their respective dealings.
According to Ms Ayitey, the setting of standards for gas emission was expected to help address the reckless nature in which some manufacturing industries in the country were emitting gases despite the negative consequences on the environment and climate change in general.
Ms Ayitey also called on industries, particularly manufacturing companies whose activities involve gas emissions, to adopt modern technologies that had the tendency of reducing gas emissions while they await the ministry’s standards on gas emissions.
She gave hints of the ministry’s intentions to submit before Parliament a Land Use Planning Bill that would ensure proper planning of cities and buildings in the country.
All these, she said, were aimed at sustaining the environment so as to preserve it for future generations.
Meanwhile, the AGI has welcomed the introduction of the gas emission standards.
This is a laudable idea that should be supported by all,” the Vice-president of the AGI’s large-scale sector, Dr George Dawson-Ahmoah, told the Daily Graphic in an interview.
“We are wondering what additional standards the ministry is going to set since we already have a lot of these standards in place. The problem is not about the laws or standards, but it is about enforcement,” he said. He, however, admitted that industries were not complying with all regulations by the Environmental Protection Agency (EPA).
The Managing Director of Unilever West Africa, Mr David Mureithi, who presented a paper on ‘Environmental Sustainability, A must or a nice to have?’ noted that issues of corporate responsibilities had gone beyond “giving small amounts of companies’ profits to communities in the name of CSR.
“We all have to adopt sustainable measures that will save the environment from any dangers,” he added.
According to him, efforts by Unilever Global to reduce plastics in its products were giving the company about 15 million euros a year. He, therefore, called on corporate Ghana “not to see issues of environmental sustainability as being costly to practise. It saves money in the long run.”
He also said Unilever Ghana was currently investing in a gas plant as it intended to switch from its current oil manufacturing plant to a gas one.
The programme also had presentations from the Minister of Water Resources, Works and Housing; Zoomlion Ghana Limited, the Environmental Protection Agency and the AGI’s President.
GGBL launches rights issue, Seeks to raise GH¢70 million
GUINNESS Ghana Breweries Limited (GGBL), a lead beverage producing company in the country, has launched a rights issue seeking to raise GH#¢70million, out of which more than half will go into servicing the company’s trade and interest bearing debt and investment in capital expenditure.
The offer which is renounceable and limited to GGBL’s existing shareholders as of September 30, 2011, is issuing about 46.67 million shares at GH#¢1.50 per share.
Per the offer, every one new share will be equated to 3.5287 existing shares held as of September 30, 2011.
The Managing Director of GGBL, Mr Ekumife Okoli, explained during a media launch in Accra that the rights issue was part of the company’s strategies to position the company to take advantage of the robust nature of the country’s economy.
“Ghana is going through a very strong economic environment and growth in the beverage industry is normally linked to growth in the economic. “We at Guinness are, therefore, positioning the company to reap from that growth,” Mr Okoli said.
According to the Finance Director of GGBL, Mr Rob Pilkington, GH¢40 million of the expected GH¢70million to be raised from the issue will be used to “reduce GGBL’s trade and interest bearing debt and invest in capital expenditure in order to take advantage of the opportunities Guinness sees in Ghana.”
The company’s trade bearing debt as of June this year stood at GH¢60million, an amount the finance director said was mainly as a result of the devaluation of the Cedi in 2009 “which had a major impact on our interest bearing.”
He was, however, optimistic that the current position taken by the company will help clear the debt and pave the way for GGBL to reap fully from the current economic growth.
But should the offer not be successful, Mr Pilkington said “the management team of the company will reconvene to find ways to service the debt.”
“We had even serviced it downward using other methods but we realise that the debt was now impacting negatively on our profit and not allowing the company to invest, hence the resort to the renounceable rights issue,” he added.
The Managing Director was confident that GGBL’s strong brands built over the years would help make the offer successful
The offer, which has IC Securities as the financial advisors and sponsoring brokers, will run till November 14.
The offer which is renounceable and limited to GGBL’s existing shareholders as of September 30, 2011, is issuing about 46.67 million shares at GH#¢1.50 per share.
Per the offer, every one new share will be equated to 3.5287 existing shares held as of September 30, 2011.
The Managing Director of GGBL, Mr Ekumife Okoli, explained during a media launch in Accra that the rights issue was part of the company’s strategies to position the company to take advantage of the robust nature of the country’s economy.
“Ghana is going through a very strong economic environment and growth in the beverage industry is normally linked to growth in the economic. “We at Guinness are, therefore, positioning the company to reap from that growth,” Mr Okoli said.
According to the Finance Director of GGBL, Mr Rob Pilkington, GH¢40 million of the expected GH¢70million to be raised from the issue will be used to “reduce GGBL’s trade and interest bearing debt and invest in capital expenditure in order to take advantage of the opportunities Guinness sees in Ghana.”
The company’s trade bearing debt as of June this year stood at GH¢60million, an amount the finance director said was mainly as a result of the devaluation of the Cedi in 2009 “which had a major impact on our interest bearing.”
He was, however, optimistic that the current position taken by the company will help clear the debt and pave the way for GGBL to reap fully from the current economic growth.
But should the offer not be successful, Mr Pilkington said “the management team of the company will reconvene to find ways to service the debt.”
“We had even serviced it downward using other methods but we realise that the debt was now impacting negatively on our profit and not allowing the company to invest, hence the resort to the renounceable rights issue,” he added.
The Managing Director was confident that GGBL’s strong brands built over the years would help make the offer successful
The offer, which has IC Securities as the financial advisors and sponsoring brokers, will run till November 14.
AGI angry over 'plethopra
MEMBERS of the Association of Ghana Industries (AGI) today (18/10/11) let loose their individual frsutartions over what they described as the Accra Metropolitan Assembly’s “plethora of taxes” imposed on businesses operating within the assembly’s catchment area.
The members’ frutrations ranged from AMA’s bye-laws regarding payment of levies such as postage, business operating permits (BOP), property rates to the frequency and levels at which these fees are increased on annual bases.
The members registered their frustrations against the metro’s revenue generation policies at a question and answer session during the AGI’s Implementation of the Regional Action Plan for small, medium scale enterprises (SMEs) in the Greater Accra region. The programme had the MCE of the AMA, Dr Alfred Vanderpuiye as the guest speaker.
While contending that payment of levies to assemblies within which businesses operate was the duty of business entities, some of the members argued that the assembly’s taxing regime was “now becoming unbecoming.
“Why should I pay tax for putting an advert on my own wall? The wall is my wall; the very wall I got permit from the AMA to build to operate my buiness and so why would the AMA want me to to them a specific amount just because I kept a poster of my product there,” one member of the association who later pleaded for anonymity said during the discussion.
According him AMA’s policies on revenue generation “is crippling businesses rather than growing them” and thus called on the assembly to craft strategies that will motivate the springing up of businesses within the metropolis.
Some o fthe discussants furchallenged the AGI to test the legitimacy of the AMA to charge businesses for using their own walls to advertise their products.
On eo fthe discussants said “I think the AMA must be clear on what revenue it can collect and the ones it cannot. The AGI must test that in court,” a plea the association’s Vice President (small scale), Mr Samuel Agyapong Appenteng said was worth considering.
Some of the discussants also wondered the sort of criteria the assembly was using to arrive at its 10 per cent yearly increase in the amount charged as BOP fee.
According to them, the AMA ought to be transparent in its dealings with the business community.
Mr Appenteng later observed that “there has been a plethora of taxes introduced by the AMA in an attempt to generate revenue. But instead of making it a win-win situation for the business community and the AMA, the assembly is just working to its own good,” and thsu called on the AMA revenue geretaing team to devise strategies that will help put less burden on businesses.
Mrs Lydia Sackey Addy, the Director if Budgeting and a Rating Officer at the AMA who represented the mayor called on business persons to dialogue with the aseembly in issues regarding taxes.
The members’ frutrations ranged from AMA’s bye-laws regarding payment of levies such as postage, business operating permits (BOP), property rates to the frequency and levels at which these fees are increased on annual bases.
The members registered their frustrations against the metro’s revenue generation policies at a question and answer session during the AGI’s Implementation of the Regional Action Plan for small, medium scale enterprises (SMEs) in the Greater Accra region. The programme had the MCE of the AMA, Dr Alfred Vanderpuiye as the guest speaker.
While contending that payment of levies to assemblies within which businesses operate was the duty of business entities, some of the members argued that the assembly’s taxing regime was “now becoming unbecoming.
“Why should I pay tax for putting an advert on my own wall? The wall is my wall; the very wall I got permit from the AMA to build to operate my buiness and so why would the AMA want me to to them a specific amount just because I kept a poster of my product there,” one member of the association who later pleaded for anonymity said during the discussion.
According him AMA’s policies on revenue generation “is crippling businesses rather than growing them” and thus called on the assembly to craft strategies that will motivate the springing up of businesses within the metropolis.
Some o fthe discussants furchallenged the AGI to test the legitimacy of the AMA to charge businesses for using their own walls to advertise their products.
On eo fthe discussants said “I think the AMA must be clear on what revenue it can collect and the ones it cannot. The AGI must test that in court,” a plea the association’s Vice President (small scale), Mr Samuel Agyapong Appenteng said was worth considering.
Some of the discussants also wondered the sort of criteria the assembly was using to arrive at its 10 per cent yearly increase in the amount charged as BOP fee.
According to them, the AMA ought to be transparent in its dealings with the business community.
Mr Appenteng later observed that “there has been a plethora of taxes introduced by the AMA in an attempt to generate revenue. But instead of making it a win-win situation for the business community and the AMA, the assembly is just working to its own good,” and thsu called on the AMA revenue geretaing team to devise strategies that will help put less burden on businesses.
Mrs Lydia Sackey Addy, the Director if Budgeting and a Rating Officer at the AMA who represented the mayor called on business persons to dialogue with the aseembly in issues regarding taxes.
Producer Inflation inshes to 19.59%
FIRMING prices of gold and other related goods and services within the country’s mining and quarrying sector last September helped push the Ghana Statistical Services’ (GSS) producer price index (PPI) upward from 2.34 per cent to 19.59 per cent in the month under review.
The current September rate of 19.59 (year-on-year) is the third consecutive rise in the PPI for this year after it had briefly resumed a declining trend in June. PPI for year-on-year measures the rate at which shop floor prices of goods and services in the country change over a one year period.
Mrs Philomena Nyarko, the Deputy Government Statistician who announced the September 2011 PPI in Accra noted that the month-on-month rate, however, declined to 2.12 per cent after increasing by 2.37 per cent in August this year.
She said the mining and quarrying sector recorded the highest rate of 50.74 per cent in September, indicating a 3.81 per cent jump from the August rate of 46.93 per cent followed by the manufacturing sector’s 16.52 per cent rate.
The utilities sector, she said witnessed the least increase in prices having recorded a September PPI of 7.67 per cent.
Year-on-year inflation from the producer’s perspective has over the past 12 months been ranging between 24.29 per cent (the highest in the 12-month period) and 16.90 per cent (the lowest within the period).
The highest rate of 24.29 per cent over the 12 month period was recorded in April after which the figure resumed a mixed trend over the period under review.
On the effects of global oil price changes on the PPI basket particularly, now that the country has assumed the status of an oil producing nation, the Deputy Government Statistician explained that although the service had factored in price changes at that sub-sector into the PPI, “GSS was looking to restructure its PPI basket to capture the oil sub-sector under the mining and quarrying sector instead of its present location in the manufacturing sector.”
The current September rate of 19.59 (year-on-year) is the third consecutive rise in the PPI for this year after it had briefly resumed a declining trend in June. PPI for year-on-year measures the rate at which shop floor prices of goods and services in the country change over a one year period.
Mrs Philomena Nyarko, the Deputy Government Statistician who announced the September 2011 PPI in Accra noted that the month-on-month rate, however, declined to 2.12 per cent after increasing by 2.37 per cent in August this year.
She said the mining and quarrying sector recorded the highest rate of 50.74 per cent in September, indicating a 3.81 per cent jump from the August rate of 46.93 per cent followed by the manufacturing sector’s 16.52 per cent rate.
The utilities sector, she said witnessed the least increase in prices having recorded a September PPI of 7.67 per cent.
Year-on-year inflation from the producer’s perspective has over the past 12 months been ranging between 24.29 per cent (the highest in the 12-month period) and 16.90 per cent (the lowest within the period).
The highest rate of 24.29 per cent over the 12 month period was recorded in April after which the figure resumed a mixed trend over the period under review.
On the effects of global oil price changes on the PPI basket particularly, now that the country has assumed the status of an oil producing nation, the Deputy Government Statistician explained that although the service had factored in price changes at that sub-sector into the PPI, “GSS was looking to restructure its PPI basket to capture the oil sub-sector under the mining and quarrying sector instead of its present location in the manufacturing sector.”
Tullow launches HIV/AIDS workplace policy
TULLOW Ghana Limited, a lead partner in the Jubilee Oil Field, has launched an HIV/AIDS workplace policy aimed at equipping its workforce with information regarding the deadly disease.
The policy which was launched during a brief ceremony held at the company’s main office in Accra formed part of Tullow’s commitment to creating awareness among its staff on the necessary details to be learnt about the disease and how society can help in making Ghana an HIV/AIDS-free country.
The occasion was attended to by officials of the Ghana Aids Commission, the Ghana Business Coalition on HIV/AIDS and officials of Standard Chartered Bank as well as staff of Tullow Ghana.
A Manager at the company, Mr Caesar Molina indicated during the launch that Tullow had recognised that its employees were its key resource “for which reason the workplace policy on HIV/AIDS is introduced to help improve their way of living in and outside the office.”
Mr Molina insisted Tullow’s workplace policy on HIV/AIDS would not discriminate against carriers irrespective of their status. The policy is thus expected to provide guidance for the management of HIV/AIDS in the workplace to ensure that employees affected, work in an environment that promotes dignity, and a free access to counseling and compassion without discrimination.
Mr Molina also expressed government’s commitment to fighting the disease in any possible way adding that the spirit exhibited so far by Tullow Ghana’s employees “is representative of what the company stands for.”
An official of the Ghana Aids Commission, Madam Angela Adams, lauded Tullow Ghana’s initiative and called on other corporate bodies to also form work site HIV/AIDS policies to shield their employees from its effects.
Tullow Ghana’s initiative, she said “is in line with the National HIV/AIDS workplace policy,” noting that efforts at creating and achieving a healthy environment to encourage and improve productivity should be seen as the concern of all and just health officials.
Tullow Ghana’s launch of the workplace policy comes on the back of a recent visit by the company to people living with HIV/AIDS at Abofu near Achimota in Accra.
The launch of the workshop is expected to trail a workshop to be organised by Tullow in the second week of November.
The policy which was launched during a brief ceremony held at the company’s main office in Accra formed part of Tullow’s commitment to creating awareness among its staff on the necessary details to be learnt about the disease and how society can help in making Ghana an HIV/AIDS-free country.
The occasion was attended to by officials of the Ghana Aids Commission, the Ghana Business Coalition on HIV/AIDS and officials of Standard Chartered Bank as well as staff of Tullow Ghana.
A Manager at the company, Mr Caesar Molina indicated during the launch that Tullow had recognised that its employees were its key resource “for which reason the workplace policy on HIV/AIDS is introduced to help improve their way of living in and outside the office.”
Mr Molina insisted Tullow’s workplace policy on HIV/AIDS would not discriminate against carriers irrespective of their status. The policy is thus expected to provide guidance for the management of HIV/AIDS in the workplace to ensure that employees affected, work in an environment that promotes dignity, and a free access to counseling and compassion without discrimination.
Mr Molina also expressed government’s commitment to fighting the disease in any possible way adding that the spirit exhibited so far by Tullow Ghana’s employees “is representative of what the company stands for.”
An official of the Ghana Aids Commission, Madam Angela Adams, lauded Tullow Ghana’s initiative and called on other corporate bodies to also form work site HIV/AIDS policies to shield their employees from its effects.
Tullow Ghana’s initiative, she said “is in line with the National HIV/AIDS workplace policy,” noting that efforts at creating and achieving a healthy environment to encourage and improve productivity should be seen as the concern of all and just health officials.
Tullow Ghana’s launch of the workplace policy comes on the back of a recent visit by the company to people living with HIV/AIDS at Abofu near Achimota in Accra.
The launch of the workshop is expected to trail a workshop to be organised by Tullow in the second week of November.
Graphic to explore international markets
THE new Managing Director (MD) of the Graphic Communication Group Limited (GCGL), Mr Kenneth Ashighey, took office yesterday with a promise “to look outside Ghana” in his quest to attract a wider market for the company’s seven newspapers and its publishing and packaging services.
Speaking during a short ceremony at the company’s head office in Accra to be formally introduced to the executive management of the company, Mr Ashighey said “the market in Ghana is very small and we at Graphic would have to be looking outside if we want to grow the business.
“It is not going to be difficult conquering West Africa,” he said adding that what the company needed to do in that regard was to build on its current laurels chalked up both in Ghana and the West African sub-region.
The new MD also hinted of his intentions to diversify the company’s current portfolios from print to cover other areas of the media.
“I think it is not for nothing that the word communications was added to the name of the company,” he said, noting that the addition thus makes it possible for GCGL to go into other areas of media work other than remaining in the publishing and printing of newspapers as is currently the case.
Mr Ashighey thanked the National Media Commission (NMC) — the appointing body — for the confidence reposed in him and pledged to work hard to the benefit of the commission, the company and the country Ghana at large.
“I consider this job as a service to mother Ghana and I’m taking it with all humility,” he said, adding that his outfit was going to work hard to achieve all targets within the four-year period that he had been given.
While commending the past the acting MD, Mr Kwesi Adjei Kersi, for successfully co-ordinating the migration onto the company’s new printing machine, Mr Ashighey said “my role as the MD is not to come and tell the hardworking staff of Graphic how to do what they already do best.
“Mine is about leadership and providing vision for the company,” he said and thus called on the company’s staff to continue working as a team as had been the case in the past.
The Chairman o of the NMC, Mr Kabral Blay-Amihere, who chaired the ceremony, thanked Mr Ashighey for accepting to take up the role but reminded him of the constitutional provision that enjoined state-owned media in the country to provide equal coverage to all divergent views expressed by the citizenry.
He said although the company was expected to strive for financial sufficiency to enable it to cater for the needs of its staff and operations, “you (Mr Ashighey) should also ensure that all publications of the company meet constitutional regulations.
“You should also be reminded that Graphic is the flagship of the media in Ghana and whoever comes to work here only adds to its credibility but does not subtract from it,” Mr Blair-Amihere added.
The NMC Chairman also thanked Mr Kersi “for holding the fort for almost a year” pending the appointment of a substantive MD.
The appointment of Mr Ashighey as MD of GCGL was necessitated by the resignation of the company’s former MD, Mr Mohammed Ibrahim Awal, earlier this year for which reason Mr Kersi was asked to act.
Per the current appointment, Mr Ashighey will serve as GCGL MD for four years after which both sides (the appointing authority and Mr Ashighey) would have the right to a renewal of mandate.
Present at the ceremony were some board members, executive managers of GCGL and the media.
Speaking during a short ceremony at the company’s head office in Accra to be formally introduced to the executive management of the company, Mr Ashighey said “the market in Ghana is very small and we at Graphic would have to be looking outside if we want to grow the business.
“It is not going to be difficult conquering West Africa,” he said adding that what the company needed to do in that regard was to build on its current laurels chalked up both in Ghana and the West African sub-region.
The new MD also hinted of his intentions to diversify the company’s current portfolios from print to cover other areas of the media.
“I think it is not for nothing that the word communications was added to the name of the company,” he said, noting that the addition thus makes it possible for GCGL to go into other areas of media work other than remaining in the publishing and printing of newspapers as is currently the case.
Mr Ashighey thanked the National Media Commission (NMC) — the appointing body — for the confidence reposed in him and pledged to work hard to the benefit of the commission, the company and the country Ghana at large.
“I consider this job as a service to mother Ghana and I’m taking it with all humility,” he said, adding that his outfit was going to work hard to achieve all targets within the four-year period that he had been given.
While commending the past the acting MD, Mr Kwesi Adjei Kersi, for successfully co-ordinating the migration onto the company’s new printing machine, Mr Ashighey said “my role as the MD is not to come and tell the hardworking staff of Graphic how to do what they already do best.
“Mine is about leadership and providing vision for the company,” he said and thus called on the company’s staff to continue working as a team as had been the case in the past.
The Chairman o of the NMC, Mr Kabral Blay-Amihere, who chaired the ceremony, thanked Mr Ashighey for accepting to take up the role but reminded him of the constitutional provision that enjoined state-owned media in the country to provide equal coverage to all divergent views expressed by the citizenry.
He said although the company was expected to strive for financial sufficiency to enable it to cater for the needs of its staff and operations, “you (Mr Ashighey) should also ensure that all publications of the company meet constitutional regulations.
“You should also be reminded that Graphic is the flagship of the media in Ghana and whoever comes to work here only adds to its credibility but does not subtract from it,” Mr Blair-Amihere added.
The NMC Chairman also thanked Mr Kersi “for holding the fort for almost a year” pending the appointment of a substantive MD.
The appointment of Mr Ashighey as MD of GCGL was necessitated by the resignation of the company’s former MD, Mr Mohammed Ibrahim Awal, earlier this year for which reason Mr Kersi was asked to act.
Per the current appointment, Mr Ashighey will serve as GCGL MD for four years after which both sides (the appointing authority and Mr Ashighey) would have the right to a renewal of mandate.
Present at the ceremony were some board members, executive managers of GCGL and the media.
BoG to help develop insurance scheme for susu collectors
THE Bank of Ghana (BoG) is in talks with members of the Ghana Cooperative Susu Collectors Association (GCSCA), the umbrella body of ‘susu’ collectors, to develop an insurance scheme for clients of susu businesses throughout the country.
The move, according to the Central Bank, forms part of regulatory mechanisms being devised for the group and the country’s microfinance sector in general.
The Head of Banking Supervision Department (BSD) at the Central Bank, Mr Franklin Bengle, who disclosed this to the Daily Graphic in an interview, explained that the mechanism was to “help insulate clients of the ‘susu’ service against risks of losing their money to unscrupulous collectors.
“We are in talks with the GCSCA to set up an insurance fund for their members so that if people loss their money through this business (the ‘susu’ collection), then the victims can easily be catered for by funds from the insurance fund,” Mr Bengle added.
The said insurance scheme would thus provide claims for ‘susu’ contributors who fall victim to fraudulent collectors. The successful implementation of the fund could possibly endear the ‘susu’ business to many individuals and business institutions in the country by helping to erase the present fear among many people that a collector may run away with their collections.
Mr Bengle, however, noted that the Central Bank was “not comfortable with allowing the collectors to give out loans to interested clients” because they do not have liquidity ratios.
Liquidity ration is the amount of money held by a financial institution, in most cases a bank, as a proportion to its deposits and is normally measured by the extent to which the said institution or another entity can quickly liquidate assets to cover short-term liabilities.
“You know these collectors don’t have a liquidity ratio that they can easily fall on to defray their debts,” the head of BSD at the BoG said, adding that the bank was thinking of “allowing them to do concessionary lending by using the GCSCA as an institution to secure funds from other bigger financial service providers.
“And when that happens, GCSCA will guarantee for those funds and then monitor the disbursements, usage and retrieval those funds,” he noted.
On regulations for the microfinance sector so far, Mr Bengle said the bank had started receiving some applications from some of the institutions that were given the six-month period to re-register or cease operations.
He said BoG was “trying to encourage self regulation of these institutions,” explaining that although the bank will at the end act as the overseeing body of these institutions, the BoG was “trying to get the umbrella bodies to enforce these regulations among their respective members.”
“We want to get the umbrella bodies of these microfinance institutions to self regulate themselves. We want to put some peer pressure on them to want to make sure that their members do not go contrary to the guidelines of the bank.”
“With this, the BoG can now also extend its influence as the overall regulator of the entire process,” Mr Bengle added.
The move, according to the Central Bank, forms part of regulatory mechanisms being devised for the group and the country’s microfinance sector in general.
The Head of Banking Supervision Department (BSD) at the Central Bank, Mr Franklin Bengle, who disclosed this to the Daily Graphic in an interview, explained that the mechanism was to “help insulate clients of the ‘susu’ service against risks of losing their money to unscrupulous collectors.
“We are in talks with the GCSCA to set up an insurance fund for their members so that if people loss their money through this business (the ‘susu’ collection), then the victims can easily be catered for by funds from the insurance fund,” Mr Bengle added.
The said insurance scheme would thus provide claims for ‘susu’ contributors who fall victim to fraudulent collectors. The successful implementation of the fund could possibly endear the ‘susu’ business to many individuals and business institutions in the country by helping to erase the present fear among many people that a collector may run away with their collections.
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| Arthur-Amissah is Governor of teh Central Bank |
Mr Bengle, however, noted that the Central Bank was “not comfortable with allowing the collectors to give out loans to interested clients” because they do not have liquidity ratios.
Liquidity ration is the amount of money held by a financial institution, in most cases a bank, as a proportion to its deposits and is normally measured by the extent to which the said institution or another entity can quickly liquidate assets to cover short-term liabilities.
“You know these collectors don’t have a liquidity ratio that they can easily fall on to defray their debts,” the head of BSD at the BoG said, adding that the bank was thinking of “allowing them to do concessionary lending by using the GCSCA as an institution to secure funds from other bigger financial service providers.
“And when that happens, GCSCA will guarantee for those funds and then monitor the disbursements, usage and retrieval those funds,” he noted.
On regulations for the microfinance sector so far, Mr Bengle said the bank had started receiving some applications from some of the institutions that were given the six-month period to re-register or cease operations.
He said BoG was “trying to encourage self regulation of these institutions,” explaining that although the bank will at the end act as the overseeing body of these institutions, the BoG was “trying to get the umbrella bodies to enforce these regulations among their respective members.”
“We want to get the umbrella bodies of these microfinance institutions to self regulate themselves. We want to put some peer pressure on them to want to make sure that their members do not go contrary to the guidelines of the bank.”
“With this, the BoG can now also extend its influence as the overall regulator of the entire process,” Mr Bengle added.
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