Day: January 10, 2023

There is a new twist to why the local currency – cedi – depreciates against major trading currencies, especially the US dollar.

According to the former Chief Executive Officer of now-defunct UT Bank, Prince Kofi Amoabeng, corruption is one of the causes of the high demand for dollars in Ghana.

He further accused politicians of hoarding dollars, leading to the depreciation of the cedi.

Speaking at the maiden edition of the McDan Business Forum, Kofi Amoabeng said “Ghana exchange rate regime is a pathetic one. The so-called politicians are the ones hoarding the dollars, but it’s seen out there as if they are not the cause of all this. Corruption is part of our problem and we need to work on it”.

“One thing that causes big demand for dollars is corruption. All the money they are making and stealing are not in cedis but in dollars…They must change dollars. So they hide it under their beds and when they get the opportunity they put it outside”, myjoyonline quoted him to have said.

It would be recalled that on October 20, 2022, Bloomberg reported that the cedi had diminished in value by 9.6%.

The news portal said it makes the total loss of the cedi in 2022 almost 52%, the highest recorded in 22 years.

The free fall of the cedi now places the currency at the 148th position of worst-performing currencies in the world.

“The currency depreciated as much as 9.6% on Thursday, heading for its biggest decline in 22 years. That took losses in 2022 to nearly 52%, the worst performance among 148 currencies tracked by Bloomberg,” the news portal reported.

During the same period, a committee was formed to hold talks with domestic bond investors on debt management strategy and how to negotiate the deal with the International Monetary Fund (IMF).

Ghana is targeting an amount of $3 billion over a three-year period from the International Monetary Fund (IMF) once an agreement on a programme is reached.

The new amount requested as a loan is double the government’s initial target of $1.5 billion.

The IMF programme is aimed at restoring macroeconomic stability and safeguarding debt sustainability among many others.

Source: Ghana Web

The Ghana Gas Senior Staff Association has reiterated that they are against the plan by Genser Energy Ghana Limited, to build a Gas Processing Plant with its [Ghana Gas] raw gas source being Jubilee fields.

According to reports, the Energy Ministry is in talks with private energy company, Genser Energy Ghana Limited, over a gas supply agreement. Under the deal, 50 million standard cubic feet of raw gas will be supplied per day to Genser Energy.

But speaking in an interview on Joy News, Chairman of the Ghana Gas Senior Staff Association, Richmond Alamu, described the deal as a bad one adding that the move will hinder the growth of the nation’s gas processing plant.

He noted, “we don’t believe that it’s the best way for it to go. Apart from Ghana Gas, GRA, ECG workers have also expressed the same similar concern. For the workers of Ghana Gas, our point is simple. The issue about GENSER deal is very bad for the nation Ghana and in the long term, [it] will have a lot of financial consequences for the nation. Not talk alone about even going to collapse its own company like Ghana Gas, GRA, ECG”, the chairman noted in an interview on Joy News.

Speaking about the consequences should the GENSER deal go through, Mr Alamu mentioned that Ghana Gas lacked enough raw materials for production, “so having another private entity feed on the same raw materials will affect the state-owned company.”

Alamu thus called on President Nana Akufo-Addo to issue an order to reverse the deal.

He was of the view that an intervention by the president will prevent mishappenings such as ‘dumsor’ as well as cause a downturn of the economy.

“This intervention will come through because, you could imagine some years back, the issues that we used to have with ‘dumsor’ in the country. Since the inception of Ghana Gas, the issue has been resolved. And as a nation, we have no other option than to make sure that this GENSER deal is reversed. Ghana Gas contributes about 75% of the fuel for power generation so this issue, a blind eye cannot be turned on it.”

He added, “GENSER is a company that repatriates over 80% of its revenue outside Ghana. And if you look at what Ghana Gas brings to Ghanaians, it’s also provided indirect and direct jobs for over 1,200 Ghanaians.”

Meanwhile, the association had earlier issued a press statement stating their displeasure on how the Energy Minister, Matthew Opoku Prempeh managed affairs at the plant.

Source: Ghana Web

Member of Parliament for Tamale Central, Ibrahim Murtala Muhammed, has said the former Minister for Trade and Industry, Alan Kyerematen cannot insulate him from the economic mess created by the Akufo-Addo administration.

Mr. Alan Kyerematen tendered his resignation letter to President Akufo-Addo Thursday, January 5, 2023.

It is believed the decision by Mr. Kyerematen is to allow him to focus on his presidential ambition.

Speaking on the development on GHOne TV Tuesday, January 10, 2023, Mr. Murtala stated that the former Minister for Trade and Industry is part of this current administration hence he cannot separate himself from the prevailing economic challenges.

“There is also a subtle attempt to insulate Mr. Alan Kyerematen from the mess created by this government. No amount of perfume can be used to wash Honorable Alan Kyerematen from the mess created by this government. That is the narrative that they are trying to push that he resigns so that we can insulate him from the mess? He cannot,” Mr. Mohammed stated.

“As a matter of fact he is a member of the Economic Management Team. On the day that Dr. Bawumia said that they have an Economic Management Team, he mentioned Professor John Baffuor, Alan Kyerematen. When he mentioned Alan Kyerematen he was so happy and has always acknowledged the fact that he is a member of the Economic Management Team,” the Tamale Central MP stated.

The lawmaker further added that Vice President, Mahamudu Bawumia cannot win the impending Presidential primaries of the New Patriotic Party (NPP).

“Clearly the agenda of President Nana Addo and the Ofori-Attas is to get someone who will come and plunder the resources of Ghana. Dr. Bawumia is an active participant of how they have plundered the resources of this nation and they would want to protect him.”

“The disaster that is happening, he is the Chairman for the Economic Management Team. And trust me I will never be surprised that what they did to my father Aliu Mahama is the same thing they will do to Dr. Bawumia,” he reiterated.

Source: Ghana Web

Minister for Lands and Natural Resources, Samuel Abu Jinapor, has underscored the importance of the Ghana Chamber of Mines in the attainment of President Nana Addo Dankwa Akufo-Addo’s vision of making Ghana a mining hub of Africa.

According to him, as the body that represents the interest of mining companies in the country, the Ministry recognizes that the Ghana Chamber of Mines is arguably the most important partner in the mining industry.

Speaking during a working visit to the Chamber on Tuesday, January 10, 2022, Samuel Abu Jinapor emphasized the need for conscious, constant and fruitful deliberations between the Ministry and the Chamber so as to achieve the aim of making Ghana a Mining hub of Africa.

The Lands Minister also sought the enhanced support of the Chamber in the fight against illegal mining.

He explained that the Chamber needs to take a leading role in the regulation of the Mining industry and that the Ministry with its open-door policy will welcome all proposals and assistance from the Chamber and all other stakeholders.

“You are one of, if not the most important partner, for the ministry in mining industry. You control an overwhelming stake in the industry and contribute overwhelmingly to the national economy. As partners, we have to find proper platform for engagements and I believe that, that is the spirit with which we’ve been working for the past two years. It is important that we see ourselves as partners”, the Minister said.

“For us to be able to derive the needed benefit from the sector, we must continue to see each other as partners. As partners, it is important that we have these kinds of constructive engagements”, he added.

“We are going to engage on how we can build the mining industry of our country to realize the vision of the president of making Ghana a mining hub of Africa,” he reiterated.

President of the Ghana Chamber of Mines, Mr. Joshua Mortoti lauded the Government for its plan to make Ghana a mining hub of Africa and assured of the total support of the Chamber in actualizing that vision.

He highlighted the immense contribution of the Chamber to the country’s economy.

The Deputy Minister of Lands and Natural Resources responsible for Mining, George Mireku Duker in an interview with the media mentioned local content and taxes as some of the major challenges raised by the Chamber of Mines.

He disclosed that the Sector Minister, in response, requested that they furnish his outfit with further details of the above-mentioned and recommended ways they can be addressed.

Duker said it was important for the Ministry and the Chamber to work together for the growth of the sector and the Ghanaian economy.

The meeting with the Chamber of Mines forms part of the Sector Minister’s continuous agenda to engage key stakeholders and partners.

Source: Ghana Web

The sale of electric cars is growing. Globally, some 2 million electric vehicles were sold in the first quarter of 2022 – 75% more than in the first three months of 2021. Most, though, are sold in high income countries.

As transport electrification takes hold in rich countries to reduce emissions that lead to climate change and air pollution, increasing numbers of internal combustion engine vehicles are likely to land in used vehicle markets.

Africa is already one of the main destinations for used vehicles. Between 2015 and 2018, the European Union, Japan, and the United States exported 14 million used vehicles worldwide. Forty percent of these went to African countries.

Used vehicles serve real needs in the continent by supporting mobility and generating livelihoods for millions of people, including mechanics, sprayers, and other garage operators. But they also contribute to its public health and environmental problems through crashes and pollution.

This is largely because the vehicles that are exported to African countries run mainly on fossil fuel and tend to be over-aged, highly polluting and prone to malfunctioning. Sometimes, modifications to these vehicles – such as the removal of catalytic converters to source precious metals – make them even more polluting.

Africa’s dependency on used vehicles is often attributed to low incomes and weak regulation. The cost of new vehicles and limited access to loans put new vehicles beyond the financial reach of the majority. Environmental and public health protection standards against used vehicle harms are weak and poorly enforced in many African countries. The cost of repairing old vehicles, too, is relatively low.

Together, these factors tend to elevate demand for used vehicles. And supply is ready because wealthy countries have stringent recycling policies. However, this is not the full picture.

Our recent paper explores Ghana’s dependence on used vehicles. We found that low incomes and poor regulation tell us only so much about it. This explanation also tends to limit the policy tools to bans and import restrictions. We argue that a more holistic view reveals more at play and opens up more policy options.

Used vehicles in Ghana

Ghana has revised some planning laws inherited from its colonial experience. Nevertheless, as with their counterparts in other African countries, the attitudes and practices of Ghanaian politicians and professionals around planning, transport and land use still reflect colonial frameworks and mentalities.

These practices continue to promote the spatial separation of work and other activities like shopping for food far from home. This compels or encourages people to travel more. Road construction gets priority over public transport provision. Roads have huge political value in Ghana. Voters love roads, and constructing them generates great opportunities for kickbacks and profiteering.

These dynamics create incentives for investing ever more in roads. Indeed, the Ghanaian Ministry of Transport reports that over 80% of the government’s annual transport budget goes into road projects. Roads induce more spread-out land use – requiring more travel.

The roads are primarily designed for cars – they often lack pedestrian pathways, crossovers and bicycle lanes.

The construction of more and more roads, coupled with under-investment in public and non-motorised transport and the high social status attached to car ownership, encourages higher income individuals to import vehicles for their personal use.

The demand for private vehicles is easily met by importers focused on the cheaper used vehicles in abundant supply. Well-documented corruption in the Customs Service also undermines effective enforcement of regulations for importing used vehicles. Benefits accrue to powerful actors connected to the sector, and this is a very regressive approach.

The minibus (popularly called “tro-tro”) sector has stepped in to meet the high public transport demand. Some studies suggest that the sector serves about 60% of Ghana’s travelling public. The operators, however, remain highly fragmented and largely focused on individual short-term profits. Service improvements – like more efficient operations, fleet renewal or electrification – that require more capital are neglected.

The government of Ghana and its “development partners” direct their high quality bus investments into Bus Rapid Transit projects which do not always work as planned, leaving gaps. These conditions encourage the continuing purchase and use of second-hand minibuses, which are often poorly maintained and kept on the roads even as they get older and more dangerous. Their regular use means that large numbers of people are exposed to discomfort, air pollution, poor safety and other problems. Research shows that poor minibus (tro-tro) transport experience adds to the factors that push people towards used private car consumption in Ghana.

Big picture view of the problem

Currently, a focus on weak regulation and poverty leads to bans and penalties on used vehicle imports as the primary policy response to Africa’s used vehicle dependency. A broader view, incorporating land-use patterns, and investment in public transport, provides new policy options for reducing used vehicle and vehicle consumption generally.

The options could include:

• changing town and city planning to allow people to live, work and shop in the same area and therefore travel less

• investments to make public transport as well as walking and cycling cleaner, safer, efficient, affordable and attractive

• investments in public transport infrastructure like dedicated bus lanes and proper bus stops, stations and passenger information

• tax relief and financial support for new public transport vehicles – minibus recapitalisation programmes like South Africa’s can introduce higher occupancy, low emissions and safer vehicles

• minibus electrification and investment in emerging local electrification initiatives.

Overall, there is a need for policy shifts from just banning used vehicle imports, and building more and more expensive roads. A broader range of interventions exists that can shift Ghana and other countries away from automobile dependency and all the socio-environmental harms that this brings.

Source: The Conversation

The Ghana Union of Traders Association has asked President Nana Addo Dankwa Akufo-Addo to appoint a minister whose calibre is like Alan Kyerematen.

According to GUTA, the former trade minister performed his duties properly, therefore his replacement should be someone of similar character.

In a release dated January 6, 2023, GUTA acknowledged the minister’s role at the Trade Ministry and praised him for his service.

“The Ghana Union of Traders’ Associations (GUTA) is deeply saddened by the news of the sudden resignation of the Trade and Industry Minister, Hon. Alan Kyerematen.

“All those who know him and happen to have come in contact with this affable gentleman will attest to the fact that he is an astute politician, a very humble public servant, versed in his area of duty, coupled with excellent human relations which have endeared him to all who have happened to meet him on matters of trade and industry, especially, those of us in the private sector,” the release said.

The associaiton added that “We can confidently say that he has performed excellently and left an indelible footprint that will ever remain in our memories. So we see him as an asset not only to Ghana but also to the sub-regional and continental blocs, as well as the entire globe.”

Meanwhile, after his resignation, the president has appointed the Finance minister, Ken Ofori-Atta as the caretaker of the Trade Ministry in the interim.

Source: Ghana Web

When it comes to teaching young children about the world, parents may feel that some topics – like politics and religion – are too tough to broach. Money is another. Parents may not feel like they know how to approach the subject, or worry that they don’t set a good financial example for their kids.

But money talk shouldn’t be avoided. Talking about it is the first stepping stone towards financial knowledge and, ultimately, to financial independence. Holding off the conversations for too long can leave your children in the lurch later in life. For instance, in South Africa, only 42% of adults are financially literate. In Ghana the figure is 32% and in Nigeria it’s 26%. This means a large number of adults in these countries do not know or understand financial concepts.

This highlights the importance of starting the money talk conversation early to ensure individuals possess the knowledge, skills and confidence to successfully manage their finances.

Perhaps your child receives an allowance and you feel this is enough to familiarise them with the concept of saving or about the value of money. But studies have found that an allowance is most beneficial when it’s paired with guidance on savings and budgeting.

Children learn through numerous sources of influence, including school, friends and the media. But the greatest influence of their financial socialisation – that is, the values, knowledge, attitudes and behaviours that promote financial well-being – are their parents or primary caregivers. The earlier you start the conversation the better; the majority of children between the ages of 11 and 17 lack confidence in managing money.

If you’ve wondered how you can teach your children about savings and budgeting, here are five ideas to explore for children aged 10 and above.

Setting goals

Setting financial goals is an important part of learning how to manage money because it requires you to prioritise your financial needs. It also requires systems. Studies have shown that people perform better when they have written down what they need to do.

There are several free and printable online goal charts that kids can use to either tick off or colour in how much they’ve accumulated in the kitty. Goal charts or clear jars are particularly helpful for children who are visual learners as they get to “see their savings grow” over time. And just like ticking off a to-do list, it’s satisfying to measure progress and have proof that you’ve worked towards achieving your goals.

Savings

The motivation to accumulate savings becomes stronger when it’s coupled with a financial goal. As adults, we understand the need to save for a rainy day, but this concept may be foreign to a child. Instead, consider teaching the importance of saving in relation to an event a child can understand and relate to, such as a birthday or Christmas Day.

This not only gives children an incentive to save towards something they are interested in. It also teaches them financial discipline (not to dip into the kitty prematurely) and delayed gratification (they can access the money in the kitty now but will miss the opportunity to have more money available from it in future).

Savings aren’t always driven by the need to spend. It’s also important to teach kids to save for the sake of it, because we never know what tomorrow will bring and this lesson may be better understood and appreciated as a child’s financial knowledge matures.

Saving vs investment

For older children, or at an age-appropriate level (research suggests this is between the ages of 12 and 17), the conversation on savings can be elevated to introduce the concept of investing.

While saving refers to the accumulation of funds by intentionally spending less, investing is the purchasing of an asset that provides income from the asset itself. Engaging with children about knowing when to save versus when to invest can instil an important financial lesson they will benefit from in future.

Budgeting

The concept of budgeting can be taught in a child-friendly way. Take, for example, an upcoming birthday party: you can use straws (or anything similar) to illustrate that all the straws represent the total budget for the birthday party. The idea is to teach children how to work within the confines of the budget. Create a list of what is needed for the party and allow the child to allocate the straws according to the items on the list. This can be a teachable moment to show that allocating too much for one item will come at the expense of something else. If you consider it appropriate, actual money can be used in place of the straws.

You can play with this until you’ve both come to an agreement on the budget (also bearing in mind that the entire budget does not have to be spent, and what is unspent can form part of their savings). After the party, look back at the budget to reflect on what the child has learnt about the process, including their likes and dislikes. This also teaches that even a fun event involves planning and responsible spending.

Helping others

Children are often taught the importance of sharing. This lesson can extend into the realm of financial education. Money is not just a resource for spending or buying things – it can also be used to help others. By donating or contributing towards a cause that a child cares about, they’ll learn to be financially generous and empathise with those who do not have the same privileges they have.

Source: The Conversation