Kofi Ahovi

United Bank for Africa (UBA) last week celebrated African Union’s African Day across its operations on the continent. In Ghana staff wore traditional attires depicting the true value of African culture. May 25 every year has been set aside as Africa Day in commemoration of the establishment of the Organisation of African Union (OAU) in 1963 except in Tanzania which has May 21st as its African Day. The objective of this celebration is to celebrate the achievements of African people and businesses that have brought pride to the continent, and inspire Africans globally to strive daily for distinction through ethics and diligence. According to a press statement from the bank, “The broad objectives of the Africa Day still hold true for us as an institution as we commit ourselves to the African continent. In line with our vision to become a leading financial institution in Africa, we have expanded our reach into 19 African countries namely Nigeria, Ghana, Cote d’Iviore, Sierra Leone, Uganda

By Kofi AHOVI Tullow Oil plc has entered into a conditional agreement to acquire the interests of EO Group Limited (EO), consisting of its entire interests offshore Ghana, for a combined share and cash consideration of $305 million, the company announced on its website last week. This acquisition will increase Tullow’s interest in the West Cape Three Points licence offshore Ghana by 3.5% to 26.4% and increase the Group’s interest in the world-class Jubilee Oil field, which Tullow operates, by 1.75% to 36.5%. Tullow is expected to issue 10,137,196 ordinary shares of GHc0.10 each in the share capital of the company to EO to satisfy approximately $216 million of the consideration. The balance, which will include certain working capital adjustments, will be paid in cash. The number of shares has been determined using an average of the closing share prices and exchange rates for the five business days up to and including May 24, 2011. The receipt of Tullow shares as part of the consideratio

Oil companies are prepared to do business in countries with high tax rates if the market they are entering also offers stability, according to Erik Solheim, Norway’s Minister for the Environment and International Development. Solheim, who was speaking exclusively to the global publishing, research and consultancy firm Oxford Business Group (OBG), would like to see Ghana adopt Norway’s format of putting a higher tax on oil and gas rather than taxing windfall profits. “The most important thing for oil companies is predictability,” he said. “In Norway’s case, investors still want to come and it will be the same for Ghana if companies feel confident that the taxation rate, though high, is consistent over time.” Norway has played a key role in assisting Ghana since its major oil discovery in 2007 by helping her draft its Revenue Petroleum Management Bill. It has also advised the government on a number of processes including taxation and negotiating with oil companies. Solheim believes that

The Savannah Accelerated Development Authority (SADA) is has launch a Post-Flood Recovery Programme at Kogle, avillage in the Lawra District, to support over 6,000 families who were adversely affected by the floods of 2010. The programme focuses on supporting about 6,000 families who lost crops and livelihoods during the recent floods of 2010. These comprise approximately 2,500 families in Northern Region, 1,200 in Upper East and Upper West Regions, 500 families each in the Northern Brong-Ahafo and Northern Volta Regions. The basic support package includes a fertilizer allocation to allow the farmers to cultivate at least 2 acres per family, plus improved maize seeds for at least 2 acres of farmland. SADA, through the Ministry of Food and Agriculture will provide technical guidance and training for the farmers to undertake their farming in a manner that will assure a reasonably good yield. NADMO, WFP and programme technical staff from the Regional Economic Planning Units will monitor i

By Ebenezer SABUTEY The head of Social and Environmental Impact Assessment at the Ghana Energy Commission, Eric Ofori Nyarko, has lauded government’s introduction of the renewable energy into the electric power generation sector. Nyarko, in an exclusive interview with BusinessWeek , indicated that renewable energy is a good source of energy if only an enabling environment gas been created for the nation to use it without any financial and power supply difficulties. He commented on how expensive the cost of solar panels is and its implications in terms of power generation, considering how electricity is consumed in the country. “Issues of renewable energy cannot be solved at ease, maybe ten or twenty years to come,” he said. He therefore recommended the use of renewable energy for future use when the nation’s economy is very strong and government can subsidize the electricity bills for its consumers at a higher percentage. “If the nation is ready to afford the use of renewable energy

By Fred SARPONG Ghana Statistical Service (GSS) Producer Price Index (PPI) report for April 2011 has indicated that producers of goods and services increased their cost to wholesalers by about 25.22%, as compared to 23.46% recorded in March, for all industries. The utilities sector, which has a major influence on the index, recorded an inflation rate of 71.98% in April, this year, as against 71.96% in March. The sector increased by 0.02% last month, which was a significant figure to the overall industries index as it recorded the highest rate of inflation as at April 2011. Within the sector, electricity and water supply recorded 77.05% in April, as compared to 77.02% in March 2011. Production, transmission and distribution of electricity also recorded 77.05%, as compared to 77.02% in March 2011. Collection, purification and distribution of water maintained its rate of 13.86%. Government Statistician, Dr. Grace Bediako, who announced this in Accra, said the performance of the utilities

By Fred SARPONG Ghana Statistical Service (GSS) Producer Price Index (PPI) report for April 2011 has indicated that producers of goods and services increased their cost to wholesalers by about 25.22%, as compared to 23.46% recorded in March, for all industries. The utilities sector, which has a major influence on the index, recorded an inflation rate of 71.98% in April, this year, as against 71.96% in March. The sector increased by 0.02% last month, which was a significant figure to the overall industries index as it recorded the highest rate of inflation as at April 2011. Within the sector, electricity and water supply recorded 77.05% in April, as compared to 77.02% in March 2011. Production, transmission and distribution of electricity also recorded 77.05%, as compared to 77.02% in March 2011. Collection, purification and distribution of water maintained its rate of 13.86%. Government Statistician, Dr. Grace Bediako, who announced this in Accra, said the performance of the utilities

As government introduces a medium term investment plan for Ghana’s under-resourced agricultural sector, a new public and private sector initiatives covering debt financing, private equity and agricultural insurance could unlock some of the sector’s huge still untapped potential reports TOMA IMIRHE The latest revision of Ghana’s real Gross Domestic Product (GDP) growth rate for 2010 has put agricultural sector growth at 5.3% up from 4.8% as originally estimated based on the one year up to September last year. According to the revised figures, the crops subsector thus was less than half of the 10.2% growth achieved in 2009. Conversely though, fishing, in value terms grew by 1.5% last year, reversing a 5.7% contraction suffered in the previous year. Forestry, logging and related activities rose by 10% while livestock grew by 4.1% in value terms. The Mills administration has, since taking up the reins of government in January 2009, shown a strong commitment to using agriculture to propel

By Jeorge Wilson KINGSON The Association of Ghana Industries (AGI) last week released its Business Barometer Survey for first quarter of 2011. The survey, which is conducted quarterly since 2010, measures the level of business confidence and predicts short-term business trends. The first quarter report, which covered the period January to March, puts high cost of raw materials as the major challenge facing businesses in the country, followed by high level of taxation, and access to credit respectively. High utility prices, low purchasing power, cost of credit, and lack of market for products also featured prominently in the result, with competition from imported goods, lack of finance and delayed payments completing the overall top ten challenges of businesses in Ghana for the period. AGI president, Nana Owusu-Afari, described the situation as disturbing and called on government to immediately address these challenges to prevent loss of market share of local businesses to foreign comp

The Ghana National Petroleum Corporation (GNPC) has successfully lifted a total of 994,691 barrels of Jubilee crude oil from the FPSO Kwame Nkrumah using a Belgian flagged vessel MT "FELICITY". The GNPC lifted the crude oil on behalf of the Ghana Group, comprising Government of Ghana (GoG) and GNPC, The 994,691 barrels of oil lifted is made up of accumulated government royalty of 275,346 barrels and accumulated GNPC's 13.75 per cent participating interest entitlement of 719,345 barrels. A statement issued in Accra, last week said the vessel has since set sail to deliver the cargo to a Total Refinery, in the port of Fos, France. GNPC with the assistance of Vitol and Woodfields Energy Resources (formerly Cirrus Energy Services) successfully marketed the cargo on the best available commercial terms. The premium achieved over Dated Brent obtained was an improvement over previous Jubilee crude oil lifting. "This sale brings us closer to achieving our obje

By Fred SARPONG The Chief Executive Officer (CEO) of the Ghana Interbank Payment and Settlement System (GhIPSS), Fred France, has told BusinessWeek that the introduction of a National Switch system across the country will take effect from August, this year. He indicated that the rollout of the National Switch system will create a common platform for all banks and is expected to improve the performance of the financial sector. Speaking in an interview, the GhIPSS Chief Executive said this new system will allow bank customers use any Automated Teller Machine (ATM) cards on any of its system. Hitherto, a uniBank Ghana ATM card, for example, cannot be used on a Ghana Commercial Bank ATM because the system has not been configured for such purposes. “This new system allows a CAL Bank customer with his ATM card to withdraw money from an Ecobank ATM machine, without necessarily using an Ecobank ATM card,” he stated. BusinessWeek learnt that currently it is only the Visa card holders who enjoy

By Kofi AHOVI The Executive Board of the International Monetary Fund (IMF) last week completed the third and fourth reviews of Ghana’s performance under the economic programme supported by the Extended Credit Facility (ECF). The completion of the reviews will enable an immediate disbursement of an amount equivalent to SDR 59.58 million (about US$94.3 million), bringing total disbursements under the arrangement to SDR 208.73million (about US$330.3 million). In completing the reviews, the Board also approved a waiver for the non-observance of the end-December 2010 performance criteria on the overall fiscal deficit and on the net change in the stock of domestic arrears. The Board also approved a re-phasing of disbursements. The three-year ECF arrangement was approved on July 15, 2009, with access of SDR 387.45 million (about US$613.1 million or 105 percent of quota). Following the Executive Board’s discussion on Ghana, Naoyuki Shinohara, Deputy Managing Director and Acting Chair, said, “G

Deputy Minister of Information, Samuel Okudzeto Ablakwa, last week stated that as per the latest World Bank report Ghana is the best country to transact business in the West Africa sub-region. The report moved Ghana from the 77th position to 67th as a country for business reform and also voted the country to the 44th position out of 183 as the best country for protecting businesses. The Deputy Minister, who was inaugurating Smayak Hotel, a modern hospitality facility, at Gomoa Ankamu near Apam in the Central Region, said the government of President Mills is on course and that the country is gaining a lot of confidence from the international business community. He urged Ghanaians to take advantage of the business friendly environment created by government to invest more in the economy. According to him, government is making major transformations in the economy with the oil find. Ablakwa said Ghana cannot be said to be industrialized without good hospitality services as he ex

By Sheila BOTWE The mining industry in Ghana performed quite well in 2010, as stated in the 2010 Annual Report and Financial Highlights of the Ghana Chamber of Mines (GCM). The mining sub-sector grew remarkably by 11.2%, as compared to the 6.8% it recorded in 2009. By this growth performance, the industry came second behind the electricity sub-sector which grew by 16.7% in 2010. The report indicated that, the 6.8% of Gross Domestic Product (GDP) growth recorded by the economy was in no small measure on account of the impressive performance of the mining industry in terms of its fiscal contribution to the state. According to the Gold Fields Mineral Survey, Ghana was the 8th leading producer of gold in the world as output increased by 2% to 92 tonnes. It was an improvement on the 9th position it attained in 2009. These figures were contained in the GCM 2010 annual report released last week by the Chamber at its 83rd Annual Report and Financial Highlights, under the theme, “Building Partn

The European Union and the G20 should promptly press for new rules for greater public disclosure of payments by oil, gas and mining companies to governments, following the G8’s endorsement today of mandatory as well as voluntary steps toward greater transparency. “The G8 wants oil, gas and mining companies to report the payments they make to each and every government,” said Vanessa Herringshaw, director of RWI’s London office. “That is real progress toward allowing citizens to track how their governments use that money.” “More and more governments realize that transparency is vital to cutting corruption and ensuring the stability of supply of these vital resources, and this cannot be left to voluntary approaches alone,” Herringshaw said. The G8 comprises Canada, France, Germany, Great Britain, Italy, Japan, Russia and the United States. The G8 announcement reinforces steps taken by the U.S. Congress, which in 2010 passed legislation requiring companies registered with the Securities

The Ministry of Energy has advanced a stimulus package for selected community and rural banks to provide loans and subsidies to remote rural households so as to facilitate the purchase of solar home systems and lanterns. The solar systems are from accredited companies in the country. Dr. Joe Oteng Adjei, Minister of Energy, announced this last week at the launch of the Christian Rural Aid Network (CRAN) energy project at Hohoe in the Volta Region. It is aimed at providing 144 remote communities in Northern Volta with solar lighting products. He explained that the project is towards bridging the energy gap between the rural and urban communities and to ensure a universal access to electricity by 2020. Energy in Common and Impact in Energies, an American firm and Women and Youth Survival Foundation Programme (WAYSFOP), a local organization are partnering CRAN in the solar project to sell 20,000 lighting systems through micro loan facility to off-grid remote communities. A

WHY INCREASED FOCUS ON AGRICULTURE IS MORE IMPERATIVE THAN EVER Even in the best of times, Ghana’s agricultural sector has been undersourced, both by the public and the private sectors; by the public sector because it is not given the priority level it deserves in the allocation of government’s funds and by the private sector because it is perceived as too risky to lend to by financial institutions and invest in by entrepreneurs and equity investors. Now the recent rebasing of the country’s Gross Domestic Product has inadvertently worsened the situation. In revising the relative contributions of various areas of activity to the GDP, agriculture’s contribution has fallen to an all-time low of 32.37% for 2010, which for the first time has been eclipsed by the 32.82% contribution of the services sector, which even before the GDP rebasing, was more attractive to public policy makers and private sector investors alike. The lowering of agriculture’s contribution to GDP means that government,

By Kofi AHOVI The Bank of Ghana (BoG) has announced its intention to raise a total of GH¢300 million through a three-year bond to be auctioned on Tuesday June 2, this year. This would the third exercise for this year. The instrument, which will be issued at par, would be cedi-denominated and will have a face value ofGH¢1.00 and would be available to both resident and non-resident investors. The minimum bid is set at GH¢500,000 and multiples of GH¢10,000 thereafter. According to a release on the website of the central bank, the coupon, which will be paid semi-annually, will be determined at the auction to be held. The amount of interest paid on every coupon payment date will be equal to the principal amount at the coupon rate for half-year. The Bank of Ghana in February and April, this year, held a tender for 3-Year Fixed Rate Government of Ghana Bond to raise about GH¢320 million and GH¢400 million respectively. The funds from these exercises were expected to be used to re-finance matu

Anglogold Ashanti Limited (AGA) has announced an increase in its share capital. The issued ordinary shares of AGA increased from 381,403,955 as at March 31, 2011 to 381,466,610 as at April 30, 2011. This was as a result of the issue and listing of additional ordinary shares in April on the Johannesburg Securities Exchange, South Africa. By this arrangements AGA share capital has also been increased from 45,878,824,462.62 to 45,897,127,740.09 at April, 2011. The shares were issued under the AGA Share Incentive Scheme.

Catherine Ashton, EU High Representative for Foreign Affairs and Security Policy/Commission Vice-President, and Štefan Füle, EU Commissioner for Enlargement and Neighbourhood Policy, last week launched a new and ambitious European Neighbourhood Policy (ENP), confirming the EU’s determined and reinforced engagement with its neighbours. The proposal by the European External Action Service and European Commission to Member States and the European Parliament, sets out the main priorities and directions of a revitalised ENP strategy which seeks to strengthen individual and regional relationships between the EU and countries in its neighbourhood through a ‘more funds for more reform’ approach -- making more additional funds available, but with more mutual accountability. On top of the EUR 5.7 billion already allocated for the period 2011-2013, additional funding of €1.24 billion has been transferred from other existing resources, and will now be made available in support of the ENP. In addit

By Jeorge Wilson KINGSON About 25 new legislations are ready for presentation to Parliament by the various Ministries, Departments and Agencies of government before the end of the ongoing Third Session of the Fifth Parliament in August, this year. Key bills include the much-talked-about and controversial Public Health Bill, which contains the Tobacco Control Bill, Companies Bill, Minerals Development Fund Bill, Integrated Aluminum Authority Bill, Maritime Boundary and Delineation Bill, Chartered Institute of Taxation Bill and the Renewable Energy Bill. The rest are Non-Tax Revenue Bill, Maritime Pollution Bill, Film Development Bill, Enforcement of Foreign Judgment Bill, Colleges of Education Bill, Offshore Petroleum (Health and Safety Bill) and the Public Officers (Code of Conduct) Bill among others. There are also a number of bills which are scheduled to come before the House for amendment. They include the National Health Insurance Bill, Forestry Commission Bill, Road Traffic Bill,

The Trust Bank Limited (TTB) has outdoored a new product specifically designed for churches that want to invest and take advantage of loans simultaneously. The product - 'Nhyira' Account, was officially launched last week in Accra by Naomi Kwetey, Business Manager, Institutional Banking, TTB aided by Nathan Akainyan, General Manager, Operations & Systems, where the bank met with church administrators. The TTB Nhyira Account is a composite package with a normal operational account (i.e. current account or TTB Gold Account) and a special savings account into which 40 percent of all weekly receipts from churches would be channeled for a fund build-up. This will qualify any church that patronizes the product for credit facilities to undertake projects. According to Kwetey, the special savings would be compulsory for all churches and it will attract higher interest rates. She revealed that “the special savings account would be used as collateral for securing part of the loans an

By Kofi AHOVI Some universal banks in the country have slashed down their base rates to in response to the policy rate cut by the Bank of Ghana (BOG) last week. The BoG reduced the policy rate, the rate at which it does overnight lending to universal banks in the country which serves as a basis for the banks in setting their respective base lending rates, as well as lend to their most favoured customers, from 13.5% to 13%. In response to this, some universal banks including Agricultural Development Bank, (ADB), Unibank, Zenith Bank and UT Bank have all reduced their base lending rates. ADB reduced its by 1.95% to 20.00%, Unibank reduced its rate from 25.95% to 24.95% representing 1% reduction, UT Bank marginally reduced its rate from 25.95% to 25.90%. Zenith bank on the other hand slashed its rate by 155 percentage points, being the highest so far, to 23.95% from 25.50%. More banks are expected to follow this trend in the coming weeks. This is the second round of base rates cuts so far

By Kofi AHOVI The banking sector has shown a positive growth, compared to the same period last year, according to the latest Monetary Policy Committee report of the Bank of Ghana (BoG) Total assets of the banking industry grew by 25.2% to GH¢17.9 billion or 33.5% GDP at the end of February 2011 on top of the 29.6% growth achieved during the corresponding period of 2010. “Overall developments in the banking system through February 2011 show strong asset growth and improvement in financial soundness indicators,” the report stated. The Capital Adequacy Ratio (CAR) of the banking industry, which measures the banking system’s capacity to withstand unexpected losses, stood at 18.5% as at February 2011, well above the statutory threshold of 10%. Currently, all the banks have satisfied the minimum capital requirement. In a special exercise, according to the report, two banks were approved to transfer some of their impaired assets to debt recovery companies to accelerate the pace of debt recov

Anator Holding Company Limited has commissioned a new head office building in Accra, with the pledge to expand its strategic business units to create job opportunities for 100,000 professionals and contribute to the development of the country's economy. The company, which was incorporated in 2006, has since been operating businesses in several sectors such as construction and transportation, giving employment to over 200 Ghanaians. The CEO of Anator Holding Company Ltd, Kojo Mattah, said the new office facility underscored the company's vision to become a market leader in its areas of operations, impact positively on the lives of people while achieving a return on investment higher than the market rate. Mattah said the company had plans to expand its business units to include operations in finance, water and beverage, media, and real estates, among others in order to create job opportunities for growing number of professionals. He said Anator Holding was set to revolutionise th

Government has secured another $250 million to support the construction of the Eastern Corridor road that will link the Northern parts of the country to the South, through the Volta Region. This follows the decision of the Brazilian Government to review the terms of a $250 million loan facility already granted to the country but for a different project. With this approval, government can now access the facility for road infrastructural development on the eastern corridor road project. This is the outcome of meetings held between Vice President John Dramani Mahama and his Brazilian counterpart, Michel Miguel Elias Temer Lulia. Also present were Roads and Highways Minister Joe Gidisu, Deputy Minister for Foreign Affairs Chris Kpodo, Deputy Finance Minister Seth Terkper and Brazilian Minister for Development, Industry and Commerce, Fernando Pimentel. Mahama, who was on a working visit at the invitation of the Brazilian Government, delivered a special congratulatory message from Presiden

By Toma IMIRHE This month, the first ever specialized agricultural insurance on the Ghanaian market is expected to be unveiled. Known as Drought Index Insurance, it will provide insurance for maize products against the ill-effects of unfavourable weather and will be available to farmers across the three northern regions – Northern, Upper East and Upper West. The innovative product will serve as a major step towards ameliorating risk in the country’s very important agricultural sector, which has found it hard to attract financing because of the high level of risk attributed to extreme weather conditions. The impending launch of the product was revealed last week in Accra by Dr. Ken Appenteng of GTZ, the German international cooperation and development assistance agency, which is one of the three institutions promoting the product. The others are the National Insurance Commission (NIC) and the Ghana Insurers Association, (GIA). The product was designed between November 2010 and April

By Kofi AHOVI Ghana’s fiscal operations during the first quarter of this year resulted in a narrow deficit of GH¢819.2 million or 1.5% of the rebased Gross Domestic Product (GDP) compared with a deficit of GH¢621.4 million or 1.4% of GDP for the corresponding period in 2010. According to data released last week from the Bank of Ghana (BoG), the narrow deficit excluding arrears clearance of GH¢209.9 million, declined to GH¢552.4 million or one per cent of GDP. This is significantly lower than the rate of deficit build up during the first half of 2010 when government incurred a deficit on cash basis, excluding arrears clearance, of 3.2% of GDP (translating to a quarterly average of 1.6% of GDP). However, the apparent slowdown in fiscal deficit build up expressed as a proportion of GDP, so far this year, when compared with last year, is partly because of the rebasing of Ghana’s GDP in November last year which increased the size of the GDP by some 60%. However, there have been real gains;

By Kofi AHOVI The rebasing of Ghana’s economy in November, last year, has resulted in increases in the country’s Gross Domestic Product (GDP) growth rate to 7.7% for 2010, 1.1% more than the estimated 6.5% for the year prior to the rebasing. This is the second upward revision of the GDP growth rate for 2010, the original estimate based on the year up to September 2010 and announced in the 2011 budget was 5.9%. According to the revised GDP figures released by the Ghana Statistical Services last week, the economy in 2010 outpaced the final growth estimate of 4% in 2009 by 3.7 percentage points. In real terms the GDP estimate stood at GH¢24.187 billion up from GH¢22.454 billion in 2009. Ghana's GDP increased significantly, after a statistical re-basing of the economy to capture new sectors, such as oil exploration, forestation and telecommunications, and moving the country into the middle income bracket. The re-based index of the economy saw the base year changed to 2006 instead of 19

By Kofi AHOVI Ghana’s trade position improved considerably in the first quarter of this year in part on account of petroleum exports according to provisional data from Bank of Ghana’s (BoG) Monitory Policy Committee report. The merchandise trade deficit of US$584.2 million for the first quarter of 2010 significantly narrowed to US$248.6 million in the first quarter of 2011, resulting in a lower current account deficit of US$220.2 million compared to the deficit of US$565.8 million in 2010. Total merchandise exports, estimated at US$3 billion, enjoyed a growth of 61.7% year-on-year and was boosted mainly by petroleum exports, higher commodity prices and larger export volumes. Export earnings in the first quarter of 2010 were US$1.9 billion. Export receipts of cocoa beans and products amounted to US$859.4 million compared with US$682.5 million for 2010. The export value of gold was US$1.2 billion, compared to US$787 million in 2010, while exports of crude oil were estimated at US$484.2 m

By Kofi AHOVI Shareholders of HFC Bank, last week approved a resolution to allow the bank to buy back up to 5% of issued share capital to support the share price. The approval also authorizes directors to open share deals account for the purpose. Asare Akuffo, managing director of the bank, explained at the bank’s Annual General Meeting held in Accra, that the move would help the financial institution to intervene at the appropriate time, to prop up the share price when it declines below its fair market value. “The bank would also sell some of its holdings when share prices are good,” he added. Earlier speaking at the facts behind the figures on the Ghana Stock Exchange (GSE), a platform created by the exchange for listed companies to interact with analyst, brokers among others, Akuffo expressed dissatisfaction with the current price of the bank’s stock on the GSE. HFC’s share price stayed flat from 2008 to 2009 at GH¢0.62 after rising from GH¢0.54 in 2007. Currently the share is goin