All-Time Capital launches bond fund for investors

ALL-Time Capital, an investment advisory service, established three years ago, has launched a mutual bond fund targeted at corporate and individual investors who are conscious of the risks associated with investments in the country.

The fund, the All-Time Bond Fund (ABF), is a medium to long-term fund investment instrument that will invest mainly in government and corporate bonds as well as in stable but high yielding money market instruments.

It has Stanbic Bank as its custodians and will be regulated by the Security and Exchange Commission (SEC).

The Chief Executive Officer of All-Time Capital, Mr Peter A. Iliasu, said at the launch in Accra that the introduction of the ABF was part of the company's desire to bring well class investment banking services to its clients nationwide.

He said although All-Time Capital started as small company, about three years ago, its high caliber of service delivery had won it big clients in the industry within the short pace of time.

"Our staff know the market well, we have invested in state-the-art technology and that is reflecting in the service delivery," Mr Iliasu, formerly with the Export Development and Agricultural Fund (EDAIF), said.

The Manager of the ABF, Mr Aseye Akotia, explained at the launch that about 60 per cent of the fund's net assets would be invested in bonds and the remaining 40 in money market instruments.

Mr Akotia (left) and Mr Iliasu after the launch in Accra.

This categorisation, he said, is, however, not definite as prevailing circumstances can cause his outfit tot alter the amount of assets earmarked for each category.

Although there are promising returns on real estate sector, given the current yawning housing deficit, Mr Akotia said the fund will be investing a maximum of 10 per cent of its assets in that area due to the associated risks.

The initial public offer (IPO) of the fund is expected to run from July 31 to August 28 when individuals, fund managers and the investing public will have the opportunity to buy into it.

The IPO has five million shares and interested individuals and institutions can buy a minimum of GHC100 shares after which they qualify to buy in multiples of GHC50.

The expected average return on yields on the fund will be around 28 per cent, according to its Manager, and yields will can be redeemed without a fee charged.

TECNO launches Phantom PAD

TECNO Ghana has Phantom PAD to the range of devices it currently distributes in the country.

 The Phantom PAD offers is a combination of a phone and tablet with its features made to suit the customers.

It has a one slot for a SIM card device was unveiled at season two of the MTN Spoons Competition held at the Celebrity Golf Club in Sakumono.

The outgoing CEO of MTN Ghana, Mr Michael Ikpoki, and TECNO Ghana CEO, Mr Maxwell Techie, jointly launched the device.

It is equipped with 4.2 Android Jellybean OS and a Quad Core 1.2 GHz CPU and supports both 2G and 3G networks.

It also comes with an 8.0 XGA Touchscreen, 5.0 MP Back Camera/2.0 MP Front Camera, Dual Camera and speakers, and has a 16GB ROM and 16 GB RAM, among other exciting features.

The Phantom PAD would be available in TECNO and Mobile Zone retail outlets, according to TECNO Ghana's CEO, and comes with a free 1200 MB worth of Data, spread across 6 months.

Techie added.

The launch of the new device comes months after the successful unveiling of the Phantom A earlier this year.

Tourism Authority targets GH₵ 8million from Tourism Levy

Although the implementation of theTourism Levy is still in the bud, MaxwellAdombila Akalaare reports that the levy could serve as a cash cow for the development of the local tourism industry if implemented properly


REVENUES from the Tourism Levy would amount to over GH₵ 8million by October this year,estimates from the Ghana Tourism Authority (GTA) has shown.
The estimated amount is expected to come from some 457 star-rated hotels – hotelswith exceptional services and facilities beyond the normal bed and breakfast – identifiednation-wide.
Thedeputy CEO of the Tourism Authority, Mr Samson Donkor disclosed this in aninterview.
He told the GRAPHIC BUSINESS in Accra that the authority has since October 1, 2012– when the levy took off – to January 8 this year collected GH₵240,254 from 38of such hotels.
Those hotels have so far complied with the collection and payment requirements of thelevy, Mr Donkor added.
The Tourism Levy is one per cent of a person’s total expenditure at a tourismenterprise such as a hotel, conference center, beach, drinking spot amongothers. It is to be collected by the operators of the enterprise in questionand later forwarded to the GTA, the regulator of the local tourism industry.
Although 273 star-rated hotels have so far registered to collect the levy, the deputyCEO at the Tourism Authority said only 38 of them have dully complied with thecollection.
Theauthority is currently using persuasion and dialogue to get the rest to complydespite having the power to prosecute the defaulters, Mr Donkor said.
“Itis early days yet and we don’t want to rush into applying sanctions. We want toproceed with the implementation gradually so that we can get every stakeholderto buy into it,” he explained.
“But if we are able to get the rest on board, our estimates show that in three months’time, we should be able to get GH₵ 3million.”
“And by October this year – one year into the implementation – that figure should rise to GH₵ 8million or GH₵ 9million,” he added.
Further estimates, he said, showed that the star-rated facilities would account for morethan 80 per cent of the total amount to be collected from the levy hence theauthority’s resolve to deal with them first and tactically.
Hospitalityservice providers such as hotels, conference centers, beach operators andrestaurants which are affected by the levy are to register with the GTA toenable them deduct the necessary amount from their patrons’ expenses and later payit into a common account, the Tourism Levy Account.
Thedeputy CEO explained that the authority selected the Agriculture DevelopmentBank (ADB) as the receiving bank to receive all payments arising from the levy.
Consequently,Mr Donkor said the that special account at the ADB has been shared with allfacilities registered to collect the levy on GTA’s behalf.
Eachregistered facility is, however, given a distinct number with which it uses tomake payments into the account, the deputy CEO said.
“Thesystem is such that we can sit here (referring to GTA’s offices) and monitorwho is making payments and who is not,” Mr Donkor said.
Onif the authority intends bringing more banks to receive the levy on its behalf,the deputy CEO answered in the negative, explaining that “we have been advised thatif we spread it, it will not accumulate enough interest for us.”
Thelevy is one of the sources of funding to the newly created Tourism DevelopmentFund captured in the revised Tourism Act, 2011, (Act 817).
According to the act, monies from the fund would beused for the marketing, promotion and development of tourist sites and relatedinfrastructure, building the capacity of stakeholders in the sector and fundingof research works in tourism among others.
Although the implementation of the levy wasenvisaged to come with some resistance from hospitality service providers andthe general public, the deputy CEO of the Tourism Authority said the affectedinstitutions have so far cooperated fully.
“Response wise, I don’t think we’ve had a lot ofdifficulty. The hotels are familiar with a levy like this because it is done inadvance countries where branches of these hotels are located.”
“It is the lower market that will have a problemwith it,” Mr Donkor said, in reference drinking spots, restaurants, beaches andthe likes.
He called on the relevant stakeholders to cooperatewith the authority in easing the challenges associated with the implementationand collection process, noting that “this levy could not have come at a bettertime.”
“If we are able to make it work, it will helpdevelop the sector and all will benefit,” Dr Donkor said.
While commending the logic behind the introductionof the levy, the General Manager of the Coconut Grove Regency Hotel in Accra,Mr Ralph Ayitey, said the Tourism Authority ought to use money accruing fromthe levy to develop the sector instead of limiting it to the institution.
“For me as a manager, I’m ok with it. The problem,however, is what will the money be used for?”
“The Tourism Authority should not see it as a fundfor them to use in developing themselves to the neglect of key things such ashuman resource development, provision of access roads to tourist sites andconstant electricity and water supply to hotels,” Mr Ayitey said.GB

Thirst in the midst of abundance?

This water has been gushing out of a burst pipeline at Kwashieman in Accra for more than a week now.
Attempts by the residents, including this reporter, to get officials of the Ghana Urban Water Company Limited (GUWCL) to patch the leakage failed as they would either not answer the calls or promise to come only to fail.
And this is not the first time. Similar leakages and bursts in the present and nearby pipelines have occurred more than five separate times only in this year.
But while this treated water waste into gutters and subsequently muddy nearby areas, thousands of people, including some neighbours of the burst pipelines, continue to live without water.
Some of those neighbours are now relying on the bubbling water from the ground to meet their individual water needs as they still struggle to cope with life in the national capital without a stable source of water for domestic consumption.
Is this not a clear sign of thirst in the midst of abundance?
There could be enough water for all if only the authorities in charge of this life-anchor resource acted with a sense of responsiveness.
Picture: MAXWELL ADOMBILA AKALAARE

Sachet water production - A thriving business with health implications

The sachet water business is growing in leaps and bounds but the issue of quality and regulation still remain unresolved. Maxwell Adombila Akalaare writes.

On a daily basis, 16-year-old Mary Azane criss-crosses vehicles, motorbikes and her colleague street hawkers and pedestrians on the Kwashieman stretch of the N1Highway in Accra, selling sachet water to a variety of road users.

She has been doing that for the past three years to cater for part of her expenses in school.

To Mary, a form two student of the St Luke Anglican Junior High School at Kwashieman, sachet water, popularly called pure water, has been a blessing.

“Because I sell it, I have been able to buy some books and dresses for myself and that reduces the burden on my parents,” she said.

Mary is one of the many young and grown up people across the country whom sachet water production has helped, by way of employment.

The sources of employment – the production, packaging, distribution, retailing and selling process – however hectic they might be, have helped cushion the burden of many while easing the rising unemployment burden on the country.

The water needs of many have also lessened.

Thanks to the 500 millilitre bagged sachet water, many people are now able to access and drink filtered and packaged water even in cars just by offering 10 Ghana pesewas in return for one.

The product has also grown many businesses and nurtured many more entrepreneurs, with some taking it as a stepping stone to venture into related areas such as commercial bottling and manufacturing of water dispensers for sale.

“Sachet water production is currently one of the biggest small and medium enterprises (SMEs) in the country,” Mr Kofi Essel, Head of Inspectorate Department at the Food and Drugs Board (FDB), said in an interview.

These notwithstanding, issues of consumer safety and disposal of the sachet after drinking still remain unresolved.

CONSUMER SAFETY

Ever since sachet water was innovated to replace iced water, which was then packaged in plain oblong plastics for sale, many people have rushed into its production and distribution.

Unfortunately however, majority of such people have little or no knowledge and experience in the production of water on commercial quantities.

"Sachet water production is becoming more of pensioners' job," Mr Essel told the GRAPHIC BUSINESS.

"You see, because the job requires simple equipment such as water filter machines and source of water, people think they can easily go into it but that shouldn't be the case. Sachet water production goes beyond that," he said.

Although all sachet water producers are, by law, required to obtain and constantly renew operational certificates from the Ghana Standards Authority (GSA) and the FDB, majority of them have not lived up to that expectation, making it difficult for the two institutions to determine the quality or otherwise of their products.

“They rather hide and produce. Some people have this habit of turning their boy’s quarters into sachet water production factories and are producing only in the night.”

“Now, tell me, how do you expect FDB to trace these people,” Mr Essel asked, wrinkling his eye browns in apparent disappointment.

The Head of the Public Relations Department at the GSA, Mr Kofi Amposah-Bediako, said in an interview that such goods are only seen “when they are brought to the market. When that happens, we confiscate and destroy the water,” he added.

In 2011 for instance, over 100 sachet water production factories were closed down by a team of FDB and GSA officials for operating illegally.

And many more could have followed if the two institutions continued with the exercise.

To Mr Amposah-Bediako, however, his outfit and the FDB are doing their best under the current circumstances. But more still needed to be done, he admitted.

THE GHANAIAN PROBLEM

A sizeable number of the sachet water brands in the country, especially those in the hinterlands, are produced, distributed and consumed on the blind side of the GSA and the FDB – the institutions mandated to protect consumers against shoddy goods.

Such brands are normally without the GSA and FDB labels. The said labels, consisting of numbers and symbols, are meant to show approval of the product in question by the two.

Three of those ‘illegally produced’ sachet waters were seen by this reporter at Kantamanto, a slum in Accra and Nsawam. Their sachets had neither FDB nor Standards Authority labels.

Attempts to trace the sources failed as there were no contact numbers on the respective sachets. The sellers could not also help matters. They only pointed to kiosks and stores retailing a variety of sachet water in bags.

“In cases like these, what can you do,” Mr Amposah-Bediako asked in apparent loss of hope.

“You see, people are just not cooperative. Most of these products are produced by people who are known in their communities yet nobody is ready to volunteer information on their actions,” he said.

Beyond the hide and seek that has characterised the production and distribution of the sachet water country-wide, both the FDB and GSA officials said people also needed to be more health conscious with regards to ‘pure water’ consumption.

“Ghanaians are not health conscious. If we were, we would have stopped drinking water that is not approved by the authority and if we do that, producers will have no option than to stop,” Mr Amposah-Bediako said.

THE CONSEQUENCES

Early last year, the country awoke to news of a cholera outbreak in the national capital, Accra. That was unprecedented, given that Ghana is thought to have come of age to be attacked by diseases emanating from improper hygienic conditions.

But it happened. As at the middle of 2012, the outbreak had spread nation-wide, claiming over 60 lives and threatening over 4,000 more people, according to reports from the Ghana Health Service at the time.

Many health officers, including the Public Health Director of the Accra Metropolitan Assembly (AMA), blamed the outbreak partly on the production and sale of pure water.

“Nobody knows how wholesome their source of water is. We don’t also know the health status of the producers and the sellers and that is a problem,” the Director, Dr Simpson Boateng, said in a recent interview.

The department sometimes undertakes unannounced visits to sachet water production sites and according to Dr Boateng, “there are interesting stories from such visits.”

“Some of these sachet waters are produced under very unhygienic conditions” he stressed, declining to give details.

He also faulted sachet water vendors, including hawkers like Mary, for helping spread unwholesome water that results in cholera outbreaks.

“The vendors expose the water to several unhygienic conditions. When they visit the toilet or urinal, do they wash their hands before using their bare hands to give the water to customers,” he asked.




Although Mary, the sachet water hawker at Kwashieman, said she washes her hands with soap and water after visiting the toilet and urinal, she failed to show where she stored the soap and water while she sold the water.

When pressed harder, she pointed to her house, about 100 meters from the street, as the place she washes her hands at.

BEST QUALITY CHECK

The FDB and the Standards Authority are overwhelmed as far as the regulation of sachet water production is concerned and their officials, Mr Essel and Amposah-Bediako admitted to that.

But while they struggle to bring sanity into the business, the two are also calling for a conscious effort from the populace towards their individual health needs.

“If you don’t patronise these sub-standard waters, they won’t produce again. In fact, the best quality check is boycott by consumers,” Mr Amposah-Bediako said.

Until that best quality check is implemented by all, many sub-standard sachet water factories will spring up and flourish to the detriment of people’s health.

This investigation was sponsored by Programme For African Investigation Reporting ( PAIR)

Air transport still safest – GCAA

THE Ghana Civil Aviation Authority (GCAA) has called on the travelling public, especially patrons of air transport, not to be discouraged by the recent plane crashes that killed 10 people in the country and several others in other countries recently.

The Director-General of the authority, Air Cadre Kwame Mamphey (Rtd), who gave the appeal in an interview, said despite the happenings, air transport still remained the safest among all the other means of transport in the country

“That crash was an unfortunate incident and the GCAA grieves with the victims’ families and friends.

Air Cdre Kwame Mamphey, DG, GCAA

“But it should not discourage our country men and women from travelling by air because air transport is still the safest means among the rest,” the DG said.

On Saturday, June 2, ten persons died on the spot when a cargo flight belonging to Nigeria-based Allied Airlines crashed into a passenger vehicle near the El-Wal Sports Stadium in Accra while struggling to land.

Although all four crew members of the Boeing 727-200 were reported to have sustained some injuries, all persons on board the commercial vehicle died.

Barely a day after Ghana’s crash, reports had it that a Boeing MD-83 also operated by Dana Air in Nigeria ploughed into a printing works and residential building in neighbouring Nigeria killing about 153 people including the crew members, all passengers on the plane and others in the buildings at the time of the incident.

Similar crashes have also been reported in other countries of late where causalities are said to have been recorded.

An air transport patron and staff of the Graphic Communications Group Limited said of the crashes that “these incidents are really worrying. They raise questions over one’s safety while up in the flight.”

However genuine those fears may be, the DG of the GCAA said travelling by air still remains the safest, fastest and most comfortable means of transport.

“I don’t want to compare this crash to other incidents on the road or even compare the two because people already know what happens on our roads almost every day,” Air Cadre Mamphey said.

He further assured the travelling public of the authority’s resolve to ensure passenger and crew safety at all times.

“Safety has been our hallmark and that is what we will be working at achieving. The public should be rest assured that the GCAA is up to the task as it has always being in ensuring that there is safety in the air always,” he added.

Read more insightful aviation stories and articles on a special supplement on the aviation industry in our June 26 edition.

                                                                                                      

Evoque celebrates Queen Elizabeth’s Diamond Jubilee

PHC MOTORS, local distributors of Range Rover and other prestige branded vehicles in the country, have launched a 30-day campaign aimed at luring more people to patronise and be abreast with the Range Rover Evoque currently on sale at the company’s showroom in Accra.

The promotion which begun on June 1, is to, among other things, enable the company and the Evoque in particular share in Queen Elizabeth’s 60^th years reign as queen of England.

The Deputy Sales Manager at PHC Motors, Mr Anthony Torsu, said in an interview that the move would also give the brand the opportunity to relish in its image as a British car.

“Range Rover is essentially a British car. That is why we came out with this special promotion for our clients to coincide with the Queen’s Silver Jubilee,” he said.

As part of the promotion, patrons of the Evoque vehicle, a smaller make-up of the Range Rover Suv, will be offered a 20,000 kilometer free service, including parts and services, within the 30-day period that the campaign will run.

The Range Rover Evoque

“We are also offering the car to people at a competitive price as long as the promotion runs,” Mr Torson said but declined to mention the price.

“It is obviously a downward review in line with the Queen’s Diamond Jubilee but it’s a competitive price compared to the ones offered in the market,” he added.

The Range Rover Evogue was unveiled in 2011 as a smaller make of the Range Rover Suv. It has since received favourable patronage in the country and globally.

PHC Motors for instance sold about 20 of them in the country in 2011 and is now aiming at selling 40 to 50 in 2012.

“Evoque is doing just well. It seems to be holding on to its name and the patronage from clients has been impressive too,” the Divisional Manager of PHC Motors, Mr Leslie Ephson, said in a separate interview.

He added that the company intended to adopt more customer-centered initiatives and intensify after sales services in a bit to achieve its target of wining more clients for the numerous brands of vehicles that it currently distributes in the country.

Ghana could miss MDGs on hunger – Report

Story: Maxwell Adombila Akalaare

GHANA’s failure to halve poverty and reduce hunger in the three northern regions, as in the case of the other regions, could prevent the country from meeting the United Nation’s Millennium Development Goal (MDG on hunger, a new report on the MDGs has showed.

The report which written by the National Development Planning Commission (NDPC) and the United Nations System in the country further found that the three regions accounted for more than 55 per cent of the nation’s poor as of 2006.

“On the contrary, only one out of every 10 poor people in Ghana comes from the Ashanti Region. Four regions – the Western, Central, Greater Accra and Eastern regions – account for less than 5 per cent each of national poverty while the Volta and Brong Ahafo regions contribute 6 per cent and 8 per cent respectively to national poverty,” the report which was published this month added.

It observed that although Ghana has over the years managed to halve extreme poverty from 36.5 per cent to 18.2 per cent between 1991 and 2006, “the three northern savannah regions and food crop farmers have not benefited from this.”

Poverty levels in these areas have ranged between 52 and 88 per cent – far higher than the national average of 18.2 per cent, the report said.

The findings would, among other things, constitute the subject of discussion at the 2012 Consultative Group Meeting and Multi-Donor Budget Support (MDBS) Annual Review which begins in Accra today to Wednesday.

The report which was published under the theme: ‘Achieving the MDGs with Equity in Ghana: Unmasking the Issues Behind the Averages’ looked at the country’s progress towards attaining the MDGs on or before the 2015 deadline.

The MDGS are a set of eight targets that was devised and adopted by the United Nations and majority of its member countries in 2000 as progress benchmarks for developing countries in the areas of poverty and hunger reduction, health, education, access to water among others.

Since their take-off in September 2000, various countries, their development partners and the UN in particular have often mooted development policies towards them as each country is tasked to meet all the eight goals by 2015.

With the 2015 deadline now inching closer, concerns are that the widening socio-economic gaps between Northern Ghana and rural farmers in general and the wealthy southern dwellers could derail the nation’s efforts at achieving the goals, especially in the area of eradicating extreme poverty and hunger.

“Ghana’s performance in eradicating poverty has been quite remarkable at the national level and urban areas,” the report stated.

It however said the socio-economic inequalities, poverty incidence and its depth across the 10 regions “are worrying.”

According to the report, the incidence of poverty in the three northern regions remained “very high and far above the national average.

Mr Kwesi Ahwoi, Minister of Food and Agriculture

“The Northern Region managed to reduce upper poverty incidence from 63 per cent in 1991 to 52 per cent in 2006 while Upper East recorded an increase from 67 per cent to 70 per cent over the same period,” it said.

Although poverty incidence in the Upper West had declined from 88 per cent in 1991 to 84 per cent in 1999, the report found that the rate rose again to 88 per cent in 2006, thus raising concerns over the sustainability and depth of poverty reduction strategies in these areas.           

Given that poverty and hunger has rippling implications on the country’s ability to meet the other MDGs, the report recommended that strategies aimed at reducing poverty and hunger be tailored towards the areas lagging behind.

“The high incidence of poverty in the three northern regions and among food crop farmers at the national level and in rural areas should engage the attention of policy makers and relevant stakeholders.

“Strategies to further reduce poverty therefore need to account for geographical, gender and socio-economic disparities in poverty incidence,” it further recommended.

T'di Port expansion will reduce shipping cost – Shippers

THE Ghana Shippers’ Authority (GSA) –the umbrella body of shippers in the country – has welcomed moves by the government to expand the Takoradi Port in response to the rising volumes of number of vessel and cargo traffic.

The authority is hoping that the expansion works, if completed successfully, will help ease traffic congestions, fast track loading and offloading activities at the port and consequently lessen the cost of shipping which has been linked to congestion and pressure on limited port facilities.

The Chief Executive Officer (CEO) of GSA, Dr Kofi Mbiah said in an interview that “shippers are happy to hear that the government has secured funds to expand the port.  We are keenly interested in seeing the expansion take place,” he added.

Concerns from shippers and port authorities over limited facilities at the Takoradi Port despite increasing volumes of business there prompted the government to allocate part of the US$3 billion loan contracted from China last year to the GPHA to, among other things, deepen the draft, extend the port’s seawall to about 1,000 metres and separate containerised cargo from bulk cargo operations.

The move is expected to lessen pressure on the port while upgrade its facilities to the levels of an international port capable of handling all kinds of trade including oil exports.

Although the Takoradi Port was constructed in the late 1920s mainly as a shipment destination for cocoa beans abroad, continuous pressure on the Tema Port has caused it to undertake other maritime activities either than cocoa shipment.

 Data from the Ghana Ports and Highway Authority (GHPA) also indicate that trading activities at the port have been rising over the past few years. Container traffic to the port rose from about 47,828 in 2009 to 56,598 in 2011 with cargo vessel traffic also moving from 956 vessels in 2009 to 1,798 in 2011 on the back of oil production at the Jubilee Field and the general rise in shipment to and from the country.

“The port is really congested,” Dr Mbiah said explaining that cargo vessels and containers at the port had often swelled into the land and coastline leading to unusual delays in clearing and shipment of goods.

“We the commercial shippers are always competing with oil vessels for space,” the CEO added.

The result, he said has been a rise in the cost of shipping given that “the more days a hired commercial container or vessel stays at the port, the more cost the shipper in question incurs.”

Thus, shippers in the country are hoping that the successful completion of the expansion works will help ease these frustrations and lower the cost of shipping to the benefit of the industry and the country as a whole, Dr Mbiah said.

Economy reels under imports

As imports into the country surge, growth in key sectors of industry slows, reports Maxwell Adombila Akalaare

IMPORTS into the country within the first three months of 2012 overran exports by 2.5 million metric tons, further exposing the dull state of the country’s industrial sector and the import-dependent nature of the national economy.

The items imported within the period included furniture, used clothes, manufacturing equipment and raw materials, beverages, foodstuffs among others.

Statistics from the Ghana Shippers’ Authority (GSA) showed that out of the over 4.9 million metric tons of goods registered at the ports in the first quarter, about 3.7 million metric tons were imports. That represented 76 per cent of the period’s total trade compared to about 1.2 million tons, representing 24 per cent, which were exports.

The data indicates that the drop in exports over imports within the first quarter of 2012 is three per centage points higher than the one recorded in the first quarter of 2011. Imports in the first quarter of 2011 constituted about 73 per cent (3.5 million tons) of total throughput which was about 4.2 million tons at the time.

“The trend is worrying,” bemoaned the Chief Executive Officer (CEO) of the GSA, Dr Kofi Mbiah. “We need to implement tunnel initiatives; specialised economic policies that are focused and directed towards stimulating growth in selected areas of the manufacturing sector while limiting imports in the long term,” Dr Mbiah said.

Dr Kofi Mbiah, CEO, GSA

Although less patronage for local fabrics is currently crashing local textile companies out of business, imports of foreign textiles, cloths, yarn and second hand clothing has over the years been on a consistent rise.

Statistics on the country’s trade pattern showed that a total of 199,331 metric tons of second hand clothing, foreign textiles, yarn and cloth were imported into the country in 2010 alone. That figure meanwhile jumped to 263,986 metric tons in 2011, a year that witnessed massive employee layouts in most local textile companies nation-wide as the industry struggled to contain the effects of less patronage of their products.

The General Secretary of the Textiles, Garment and Leather Employees Union (TEGLEU), Mr Abraham Koomson, once told the GRAPHIC BUSINESS that “the influx of pirated textiles into the country is killing the local textile industry.

“That trend is denying the state of revenues and employment opportunities,” he said.

Local textile companies which were employing about 25,000 people are now employing less than 3,000 people, a development the Shippers’ Authority CEO said was a signal of how a country’s high taste for imports could be injurious to its local economy.

“Encouraging imports kill the economy slowly. It makes the country and the manufacturing sector in particular worse off,” he said.

A statement issued by the latest IMF mission to the country said in part that “despite buoyant exports, the (country’s) current account deficits exceeded 9 percent of GDP in 2011 on account of high import growth.”

According to the statement, the “rapid depreciation of the cedi in the first five months of this year has begun to feed into domestic prices, a development Dr Mbiah of the GSA said could be blamed on high imports.

“People normally argue that importing used items does not take away foreign exchange but limiting those imports also stimulates industrialisation, stabilises the local currency and generates job opportunities in the long run,” Dr Mbiah observed.

Most people, he said “just have taste for foreign goods, be them furniture or clothing and once you allow that taste to fester, then you can expect the economy to suffer in the long run.

Dr Mbiah recommended the implementation of “selective tariff regimes that will help discourage the importation of particular items so as to promote growth in local businesses.

“We must initiate tunnel-like policies; those that are directed and focused on specific sectors of the economic. We could even use tariffs to discourage imports of items that fall within those sectors.

“Once we do that, then we can give ourselves some targets that indigenous businesses must have a firm control over those areas by a certain time and work towards achieving those targets. If we do that, then we can be sure of achieving a longer aim of limiting imports to save local industries,” the GSA CEO added.

He, however, admitted that the economy at its current state was not “resilient enough” to manufacture to feed its populace.

But added that “that is why we must set targets for ourselves. We can start from somewhere. It doesn’t have to be an overnight thing.”

TOR debt still haunting GCB

The Ghana Commercial Bank (GCB) is still recovering from series of negative impacts that the Tema Oil Refinery (TOR) inflicted on its operations. Maxwell Adombila Akalaare reports 

THE government’s decision to convert a GHC572 million-loan owed the Ghana Commercial Bank (GCB) by the Tema Oil Refinery (TOR) into a bond has returned to hurt the bank, causing its profits to jump down by 65 per cent in the 2011 financial year.

That is because the conversion of the loan into a bond caused the bank to lose more than half of the 25 per cent annual interest it enjoyed on the loan prior to the conversion. That consequently pulled GCB’s profits down from GHC48.0 million in 2010 to GHC16.7 million in 2011.

The 2011 financial results of the bank also showed that an almost GHC60 million rise in the bank’s operational costs in 2011 added to GCB’s record high loss in the year.

Managing Director of the bank, Mr Simon Dornoo, admitted during a media interaction in Accra that the dip in the bank’s 2011 profits was “a combination of a sharp decline in revenues and a rise in operational costs.

“Total income is a function of the loan and investment portfolios. In 2011, income from our loan book was down by more than half because the bond that government issued to pay the loan became an investment to us. However, the yield on that investment was lower than the yield on the loan and that obviously had a knock on effect on our loan portfolio,” he explained.

The government in 2010 and 2011 issued bonds to defray a total GHC572 million-loan owed to GCB by the TOR, much of which was accumulated to the stated-owed commercial bank as a result of years of under recovery of production and operation costs at the refinery.

Although the decision to pay off the loan through bonds was hailed as a breather to GCB due to the crippling effect the loan had on the bank’s operations, the bonds’ annual yield of 12 per cent has now limited interest income to the bank leading to the substantial dip in yearly profit.

“The loss was simply because of TOR,” the MD said but admitted that the bank’s decision to set aside some money to cater for some long-outstanding balances also played a part.

“In actual sense, we made gains in 2011 over the previous year but the impact of the TOR debt on our loan portfolio together with other non-credit related costs resulting from our restructuring significantly cancelled those gains,” he said.

He was, however, confident that the situation will normalise into the year.

The bank’s performance in the first quarter of 2012 has already showed some significant improvements in profit and net interest income. Interest income in the first quarter of 2012 rose to GHC58.4 million from the GHC54.3 million it was in the first quarter of 2011.

The bank’s first quarter profit after tax also jumped by about 18 per cent to GHC23.4 million, developments Mr Dornoo said were clear testimonies of GCB’s readiness to redeem its image in the banking sector.

GCB, he said was currently restructuring its operations to enable it operate “like an institution” so as to reduce cost while boosting revenues.

“We have invested massively in restructuring our governance criteria and our risk management systems. We are confident these measures will bring returns in the coming years,” he said.

On the issue of the restructured Ecobank Ghana Limited now becoming the biggest bank in the country following its successful acquisition of The Trust Bank Limited (TTB), Mr Dornoo said “we will see who will be the biggest in the industry.

“They (Ecobank) have chosen to grow through acquisitions, we will do it organically and in the long run, we will all see who is going where,” the MD added.

The bank’s Chief Transformation Officer, Mr. Samuel Sarpong, also disagreed with suggestions that GCB under its current state needed to be downsized, arguing that such an action was not an end in itself.

“That theory is even floored because you can downsize and still operate at a loss,” he said stressing that the bank was currently aiming at improving efficiency in its operations rather that considering a downsize.

Listing not a priority yet– Tullow Uganda

TULLOW Uganda Limited, the lead operator in Uganda’s onshore oil find, says floating part of its stake in the Uganda Stock Exchange (USE) is currently not its priority.
The company’s Corporate Communications Manager, Ms Cathy Adengo, said in an interview with the GRAPHIC BUSINESS in Hoima, Uganda, that “we do not have a plan to list on the USE now because listing is not our priority at the moment.

“At the moment, our priority is to develop the wells, do well appraisals and test-drillings,” she said.

Cathy Adengo

The company is currently undertaking well appraisals and developments in some of the 46 wells that it has explorative and drilling rights in.

Although the issue of Tullow Uganda floating a part of its stake in the Ugandan exchange was initially proposed, the company’s Corporate Communications Manager said it has been shelved for the time being to enable the company focus more on pressing needs. Those needs, she said included well appraisals, developments and test-drillings.

She could, however, not say if the company will reconsider the possibilities of Tullow Uganda joining the USE anytime soon given that “such a decision will have to be taken by the group – Tullow Plc.”

 A successful floatation of Tullow’s stake on the USE will make Uganda the second African country in which the company’s shares are traded in.

Although Tullow produces oil in six countries across the continent, it is listed only in Ghana, the country that accounts for the group’s largest productions figures in Africa. It is also listed on the London Stock Exchange (LSE) and the Irish Stock Exchange (ISE).

Meanwhile, 16 Ghanaian and Ugandan journalists have completed a 10-day training course in oil, gas and mining (OGM) in Kampala, Uganda.

The course which was interfaced with field trips to oil appraisal and drilling sites in Ugandan’s oil rich basin, the Lake Albert, was aimed at strengthening the quality and quantity of media reportage on the extractive sector in Africa, particular Ghana and Uganda.

It was organised by the Revenue Watch Institute (RWI) and supported by the Thompson Reuters Foundation, Pensplusbytes in Accra, Ghana, and the African Center for Media Excellence (ACME), based in Kampala, Uganda. 

All Pure Nature sells Ghana abroad Through sheabutter based cosmetics

All Pure Nature Limited, a local cosmetics enterprise in Osu, Accra, is selling Ghana’s image abroad through naturally handmade body, skin and hair care products from sheabutter. Maxwell Adombila Akalaare takes an insight into her business.




WHILE studying Political Science at the University of Ghana, Legon, in 1998, young Ms Gladys Amorkor Commey, now the Chief Executive (CE) of All Pure Nature Limited in Osu, Accra, decided to nurture her passion for natural cosmetics into a door to door business.

She thus combined her studies with the trade of moving from one hall to the other, selling and marketing her handmade sheabutter packaged in a customised African Pot.

Her brand name then was Sheabutter in an African Pot.

But even before sellilng at the campus, Ms Commey said she had used her natural tallent and hobby in cosmetic makings to process some skin and body care products for her family.

That passion and hobby for naturally handmade cosmetics has lived on 14 years down the line. That flame has consequently flourished into cosmetics manufacturing enterprise that has its history deeply rooted in sheabutter.

The company currently suppliess bathing soaps to 15 hotels in the country, including the Movenpick Ambassador Hotel in Accra, exports some of her products to the European, American and African markets while selling some in the local market.

Ms Commey told the GRAPHIC BUSINESS in an interview that her All Pure Nature, which she founded and currently manages also does labelling of gifts for companies and in addtion to making candles from soybeans and bees wax.

In all these, Ms Commey said her All Pure Nature pays a resounding tribute and respect to all sheabutter women in the Northern, Upper West and East regions of the country “for their due deligence and hardwork in handpicking the sheanuts and processing them into butter for us as raw materials.”

Ms Gladys Commey, CEO, All Pure Nature limited

The company, she said has a women association in these regions who use traditional methods to process the sheanut into butter. That naturally processed butter then forms the core ingredient of her All Pure Nature’s cosmetics.

She mentioned bathing soaps, massage oils made from all natural ingredients like sheabutter, cocoa and coconut butter, facial and body care scrubs and washes, hair care soaps and beeswax candles as some of the products manufactured and distributed by the company. Those products, she said are marketed under the brand name, Pure Essence.



HOW ALL PURE NATURE SURVIVES

No business venture in Ghana survives without having to summount various challenges ranging from access to and cost of finance to lack of raw materials and motivation from the relevant financial and regulatory institutions.

But with real commitments from the businessmen and women powered by a passion to move on, most of the nation’s micro, small and medium enterprises are beginning to blossom into big time businesses that will forever stand the test of time. All Pure Nature is one of those.

Its CEO told the GRAPHIC BUSINESS that the company has been riding on her enomous love for nature and zeal to market Ghana abroad through products made and raw materials that are only sourced from natural resources.

“I started making cosmetics from sheabutter when I was 19 years old and the challenges have always been there. But if you love something and do it with all your heart, then you can always expect God to help you succeed no matter how difficult that success may come with,
” Ms Commey said.

She also mentioned the niche market nature of her clientele base in the country and abroad as a key challenge that inhibits the progress of the All Pure Nature cosmetics enterprise. She said few Ghanaians are coming to terms with the fact that cosmetics made from artificial sythetics can, at times, be harmful to their health despite their luxurious looks and scents.

“We have a particular niche market and that is a challenge to us,” she said but added that her outfit was hopeful that “all Ghanaians will begin to aprreciate the distinct essence of natural cosmetics, particular, the Pure Essence brand to their skin and body care needs.

She also dared other hotels and recreational resorts in the country to take up the challenge of suppling their clients with natural cosmetics instead of the artificial ones which she said come with inherent challenges to their users.

With the dull patronage of indegenes to her Pure Essence cosmetics, Ms Commey said the company would focus on increasing supply to the foreign markes, particularly the USA, while consolidating its customer base in the country.

“We will be opening a new sales outlet at the Mariama Mall in the Airport City in June to make our products readily available to locals and tourists around that area,” she hinted. That outlet will add to the Osu sales outlet, making two the number of wholesale and retail shops that sells her company’s Pure Essence brand of cosmetics.



THE FUTURE DREAM OF MS COMMEY

Ms Commey’s All Pure Nature Limited has worn the hearts of many customers and business-minded institutions, both in and outside Ghana, with its distincted services and products sourced only from natural ingredients. That feat has consequently worn the company numerous international and local awards at the various stages of its operations.

Building on those laurels, Ms Commey says she sees “All Pure Nature in the near future growing from stregthen to strength,” an objective she rightly said will not be realised on a silver plate.

But with a wider dream of using her cosmetic brand name, Pure Essence, “to market Ghana to the outside world,” Ms Commey said such an ambition is acheivable, however gradual it may take.

That, she said will be acheived through concerted efforts by the company to gain more roots into the foreign markets by improving on the quality and style of its numerous sheabutter sourced products.

In addition, Ms Commey says she intends to create more employeable opportunities for the youth through adjoining businesses in her cosmetics manufacturing enterprise.

Currently, All Pure Nature Limited employs 12 people in its maufacturing plant aside the four groups of artisans it has engaged in sheabutter making, bamboo designs among others.



ADVISE TO THE YOUTH

Ms Commey is an Executive Board member of the Association of Ghana Industries’ cosmetics sector. And her advsie to the youth is simple: “Do what you love and turn your hobbies into businesses.

“For if you are happy with your business or whatever that you do for a living, then you will always be able to please your customers with it and the returns will benefit you and the business more,” she added.

But in doing all these, Ms Commey said “rely on God for guidance in whatever situation you find yourself in.”

Ms Commey is on info@allpurenature.com

To contact the reporter on this story:

Interest rates to remain stable - Banks

Current developments in the financial sector suggest that the problems of limited funding from financial institutions to businesses could worsen into the year. Maxwell Adombila Akalaare writes




INTEREST rates charged on loans taken from commercial banks are unlikely to climb up despite the Bank of Ghana (BoG) pulling its policy rate up by a 100 per cent basis points.

That is as a result of most commercial banks’ less reliance on BoG funds to support their individual loan portfolios.

The president of the Ghana Association of Bankers (GAB), Mr Asare Akuffo, who confirmed this to the GRAPHIC BUSINESS in an interview, however, added that the rates could firm up in the long run.

His comments trail an earlier decision by the Monetary Policy Committee (MPC) of the BoG to hike its policy rate from 12.50 per cent to 13.50 per cent, citing pressures on inflation and its long term effects on the economy.

The policy rate is the rate at which BoG lend cash to financial institutions in the country to enable them (the financial institutions) carry on with their respective financial intermediations with the business community and individuals.

A high policy rate, in most cases, always correspond to hiking cost of credit to businesses as more banks will very likely pass on the extra cost incurred on the BoG funds to their loan customers.

The hike in BoG’s policy rate came at the back of a harsher credit regime as revealed by the 2011 quarter four findings of the Association of Ghana Industries (AGI) Business Barometer Survey (BBS) which was released last month. As result, many business executives feared the difficulties in accessing credit could worsen as interest rates will quicken up.

The Executive Secretary of the AGI, Mr Seth Twum-Akwaboah said in an interview that the association was “not very happy with the BoG decision to increase the policy rate.”

He said his outfit rather expected the bank to have reduced the rate to ease the various credit issues facing businesses in the country

With the policy rate now hiked by a 100 basis points, Mr Twum-Akwaboah said anxiety among the business community that interest rates will go up could heighten as Central Bank funds to banks get costly.

For now, the AGI Executive Secretary said the association was “cautiously looking at BoG’s current action on cost of credit” saying that previous trends suggest that the policy rate has “some implications on the cost of and access to credit in the country.”

President of the GAB however said the situation in the country was different as a few banks relied on BoG funds to loan to prospective loan seekers.

He explained that while the base rate (the rates at which banks are supposed to charge all loan customers) of small banks are calculated base on the cost of their individual funds and a customer’s assessed risk, those of the bigger banks with large pool of funds is heavily influenced by treasury (T) bill rates.

Thus, should T-bill rates be pegged higher, bigger banks will very likely pull their base rates up vice versa.

Consequently, Mr Akuffo said “the base rates of some banks are unlikely to go up” in line with the upward adjustment of the policy rate.

“We would have to wait a little longer to see what the effect will be on the cost of borrowing to the banks first,” he said.

Unless the hike in the policy rate filters into the cost of bank’s funds, the GAB president said businesses can be expected to borrow at the current rates from their banks.

Mr Asare Akuffo, President, GAB

In the long run however, Mr Akuffo who doubles as the Managing Director of HFC Bank Limited and president of the Private Enterprise Foundation (PEF) said interest rates will pull up in response to the various economic challenges that an election year like this comes with.

“It is true that interest rates will go up but not in the short run. The rates may start going up after two or three months time when all these factors have started causing ripples to banks’ operations and cost of funds in particular,” he said.

Despite the unexpected short term rise in cost of credit to businesses as assured by the GAB president, the issue of banks charging higher rates to make astronomical profits still remains.

The AGI, the umbrella body of businesses in the country, last month accused the country’s financial sector of inefficiency; a trait the association said is heavily influencing the cost of credit to businesses nation-wide.

If banks were efficient, the association said they would have mobilised more funds at cheaper costs and lent them back to businesses at competitive rates.

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.