Wet investor appetite greets gov’t’s 3-yr bond

The massive investor appetite that greeted government’s three year bond last Thursday could serve as welcoming news to the economy as it goes through an election year. Maxwell Adombila Akalaare writes





THE government last Thursday realised GH¢639 million in bids through the sale of its three year bond to both foreign and local investors.

The GH¢639 million is GH¢239 million above the government’s initial target of GH¢200 million prior to the auction last week. The raised funds are earmarked for infrastructural financing in the areas of road construction.

Despite the oversubscription to the tune of GH¢639 million, the Bank of Ghana (BoG), which acts for the government on the bond market, accepted only GH¢ 219 million.The accepted bids have been settled on Monday at a yield rate of 15 per cent per bid.

Out the GH¢ 639 million bids, GH¢355 million were from foreign investors giving proof of offshore investors’ confidence in the economy even as it goes through an election year.

The oversubscription of the bond further negates earlier fears by analysts and industry watchers that investor confidence in the economy had dwindled on the back of the cedi’s weak performance against its foreign counterparts.

Prior to Thursday’s auction, a senior rates strategist at Standard Chartered Bank Research for Africa based in London was quoted by Reuters as saying that the substantial exposure that investors have had to country’s economy may cause them to have less appetite for the offer.

Another Standard Chartered official said "I don't see offshore investors participating in a very big way, especially with the concerns for the currency.”

The oversubscription of the bond and the massive offshore investor confidence that the offer attracted on last Thursday has meanwhile calmed those fears.




Mr Kwesi Amissah-Arthur, Governor, BoG

 Although anxiety over fiscal instability and government’s posture in an election is persisting, the acting Head of Treasury at BoG, Mr Adams Nyinaku told the GRAPHIC BUSINESS on phone that the oversubscription shows that “investors still have a lot of confidence in the economy.

“We set out to raise just GH¢200 million but ended up having GH¢ 639 million at a rate of 14.5 to 22 per cent. That shows you how wet the economy is to investors.

“If investors, the foreigners in particular, do not have confidence in your economy, do you think they will express interest in your country’s bonds,” Mr Nyinaku asked.

He said his outfit was expecting the offer to be over subsbcribed due to the liquidity state of and investors’ keen interest the economy at the moment.

On the cedi’s performance vis-a-vis inesvetor confidence in the economy, the acting Head of BoG’s Treasury Department said “what is driving the depreciation of the cedi is the small inter-bank market and that is very insignificant to lower the confidence of investors in the country.”

He note that the rising foreign direct inbvestments was helping to stabilise the cedi’s performance against its foreign peers.

That notwithstanding, Mr Nyinaku said the country’s wet appetite for imports will continue to have a strain on the cedi’s performance.

He added that the oversubscription of the bond also shows that local investors are competing fiercely with their foreign counterparts. “The local investors came in their numbers for the bond and I think that is also good news to the economy,” he adedd.

Going forward, Mr Nyinaku said as far as liquidity continues to stay in the country government bonds will continue to be oversubscribed.

The government last year promised to intermittentedly issue bonds in the bond market on quarterly basis in a bid to raise more funds to support government expenditure. The Thursday aution is the first in the year and its oversubscription despite the fears that led to the auction could just motivate the government to auction more in the coming quarters.

Economy records 12 per cent growth

THE national economy recorded a 12 per cent growth rate in the third quarter of 2011.



The third quarter growth rate was mainly as a result of strong growth recorded in the industry sector of the economy.

The quarterly Gross Domestic Product (GDP) - a measure of the market value of goods and services produced in the third quarter - came down to GH¢6,912.3 million from the GH¢6,923.7 that was recorded in the second quarter of 2011.

The third quarter GDP represents a 0.2 per cent marginal decline from the second quarter’s value.

The acting Government Statistician, Dr Philomena Nyarko, said this in Accra last Wednesday at a press conference to simultaneously release the 2011 third quarter Gross Domestic Product (GDP) of the economy and the December 2011 Producer Price Inflation (PPI) .

Dr Nyarko said the industry sector recorded the highest growth rate of 37.2 per cent followed by the services sector which grew by 5.8 per cent. The agriculture sector, she said, witnessed the lowest growth rate, growing by 5.2 per cent in the third quarter of last year.

Dr Kwabena Duffuor, Minister, Finance and Economic Planning

“Within the industry sector, the influence of crude oil pushed the growth of the mining and quarrying sub-sector to 263.1 per cent,” she added.

In the crops sub-sector, which includes cocoa, Dr Nyarko said growth in crops and livestock production rose by 10.2 and 3.6 per cent while that of forestry and fishing declined by 11 and 29.9 per cent respectively.

She said the transport and storage, information and communication, business and other services among others were the main contributors to the increased economic activity in the services sector.”

Strangely, however, the financial and insurance sub-sector witnessed negative growth in the period under review as against the booming growth rates the sub-sector has been recording in the previous quarters.

On the producer inflation for December 2011, Dr Nyarko said the rate declined to 15.19 per cent from the November 2011 rate of 17.94 per cent. The December producer inflation rate represents a 0.17 per cent dip from the November one.

Producer inflation measures the monthly average change in the factory gate prices received by producers for their respective goods and services produced in the country.

The mining and quarrying sector recorded the highest year-on-year producer inflation price change of 18.23 per cent followed by the manufacturing sector with a 17.23 per cent. The utilities sector recorded the lowest price change rate of 9.07 per cent.

TicketGhana.com launches e-ticket for events

PREMIER online ticket distribution company, TicketGhana.com, has partnered with Black Star Line (BSL) Ghana Limited/SOFT tribe Limited to introduce a re-loadable and re-usable electronic ticket (e-ticket) payment card to replace the cash-for-event tickets that is currently in place.


The e-ticket card, which will serve as a pass for event patrons to events in the country, is expected to revolutionise the ticket distribution industry in the country by offering prospective clients with a comprehensive one-stop solution for all their ticketing and computer-controlled event access requirements.

A statement jointly signed by the Executive Chairman of TicketGhana.com, Mr Herman Chinery-Hesse and the Chief Executive Officer of BSL/theSOFTtribe Limited, Mr Tetteh Antonio and released in Accra said the e-ticket would operate on BSL's secure Mx platform.

“This product provides programme organisers with a world-class solution that gives event patrons real time updates of upcoming events throughout Ghana, access to entry statistics from all gates at the event venue and reports on user demographics to aid targeted marketing as well as accounting,” the statement quoted the Executive Chairman of TicketGhana.com as saying.

Mr Herman Chinery-Hesse said the introduction of the e-ticket card would give customers greater convenience by allowing them to buy tickets and advanced tickets from multiple locations in the country.

The statement added that the facility was also expected to help eliminate the cost of ticket printings and the various frustrations that event patrons undergo in their bid to buy tickets for their favourite events.

It mentioned concerts, award ceremonies, film premieres, sports events, launch/release parties, fashion shows and conferences as some of the events that the e-ticket card would be used for.

Ghana in the midst of an ICT era

Despite Ghana’s pioneering role in Internet usage and Information Communication Technology (ICT) resources on the African continent, the county’s prospects from the sector are still more on paper than on the ground


NOT quite long, the usage of the Internet and other ICT infrastructure such as mobile phones, computers and the likes were seen as a preserve of the privileged few in society. It was seen as a plus to the basic necessities of life, such that the folk in the village saw little connection between a mobile phone, computer and Internet services to his/her daily jostlings for a living.


As a result, nobody cared to invest in ICT infrastructure and policies that will help widen Internet or mobile phone coverage to areas off the cities and towns, where usage of these things were fast gaining momentum.

Such perceptions and actions are, however, changing for the better; thanks to globalisation and the emergence of an ICT era which has linked individuals’ basic needs to luxurious assets world-wide.

The emergence and widespread patronage f ICT has made it possible for many people to communicate easily, access basic health, educational, and life changing information.

Its usage has lessen people’s over dependence on human resources, freed more hands for extra jobs, widen people’s access to quality information and aided many businesses to grow at enviable rates.

Unlike before, most farmers and manufacturers in the villages are spared the hustles of having to cart their produce to markets in search for buyers. With access to a mobile phone or a switch of a button, a farmer can now connect with buyers, find prices for his produce or even find treatment for the unfamiliar disease that had attacked the crops or animals.

All these go a long way to fast track the overall transformation of the national economy for the overall good of the populace

Yet not much is done to enable the country reap fully from this emerging resource.

Despite the much thwarted prospects of ICT resources and broadband (the system on which highest Internet services work) to the development of the national economy, only a little over ten per cent broadband penetration has so far been achieved as against the about 30 per cent Internet usage recorded in Kenya. That of Nigeria, Tanzania, Libya and most of the country’s peers in the African continent are enviable higher. And that is a shame to stakeholders in the country’s ICT sector, especially given the fact that Ghana is said to be one of the country’s in the continent to have pioneered Internet usage.

While addressing the national ICT Policy Review Forum in Accra mid last year, Dr Nii Narku Quaynor, Chairman of the National Information Technology Agency (NITA) said the country’s Internet penetration on the African continent “is no longer competitive, ” conclusion he said was anchored by an earlier report released by the UN Secretary General's Multi Stakeholder Advisory Group on Internet Governance Forum (UN IGF MAG) on Internet usage in Africa.

Dr Quaynor explained that the country lost the competitive urge because of past policies which he said had succeeded in dragging the attention of the various stakeholders from the Internet or broadband infrastructure in general to the telecommunication industry. That, he added led to the closure of many Internet Service Providers in the country as telecommunication services picked up.

Discussants and panellists at last week’s Third GRAPHIC BUSINESS Forum in Accra held similar views. While admitting that the Internet usage or broadband penetration and economic development go hand in hand, some of the panellists said the country had failed to realise its goals from the Internet, a situation they said could pull development backward.

According to the Head of Vodafone Business Solutions, Mr Derek Appiah the world is on its “way to an ICT era where broadband penetration, data access and Internet usage will determine the pace at which a country will develop.”

That notwithstanding, Mr Appiah said Ghana was yet to catch-up with the speed at which an ICT powered economy develops.

For the guest speaker, Vice President John Dramani Mahama, “ICT affects every sector and industry of the economy.”

As a result, Mr Mahama called on the youth to take-up ICT courses that relate to their profession rather than learning Microsoft Word and the likes which will add less to your profession and life. “Use ICT as a plus to job,” he advised.

In all, one thing stood up key; the need for the country to integrate ICT into the newly found oil and gas industry so as to reap fully from the sector.

It thus requires the Ministry of Communication to totally review the nation’s ICT Policy to capture the strategies the country will adopt to integrate ICT into the sector without side-stepping the much talked about Local Content Policy.

Anything short of that will mean the oil and gas sector of the econonomy will equally ride the path on which the agriculture, industry and services sectors rode.