Day: February 12, 2023

Amid concerns regarding the potential onset of an economic downturn in Egypt, the country’s wealthiest billionaires have demonstrated their resilience and fortitude by surpassing the odds and significantly increasing their personal fortunes since the start of the year.

Despite the uncertain and volatile economic conditions that threaten to erode the financial stability of the country, these elite individuals have proven their business savvy and adeptness in navigating the market, amassing even greater wealth in the face of adversity.

With a combined fortune of $17.2 billion, the top five richest Egyptian billionaires hold 6.1 percent of the country’s total private wealth, which stands at $282 billion, placing Egypt in a coveted position as one of the top five African countries that account for more than half of the continent’s total private wealth.

Despite the recent depreciation of the Egyptian dollar and the macroeconomic difficulties faced by the country’s economy, some Egyptian billionaires have managed to record an impressive increase in their net worth since the start of the year.

One of these individuals is Nassef Sawiris, who is ranked as Egypt’s richest man. According to Forbes, Sawiris’ net worth has increased by $300 million, from $7.1 billion to $7.4 billion, in just a few months.

As reported by Forbes, the following are the top five wealthiest Egyptian billionaires, based on the collected data:

#1 Nassef Sawiris

Net worth: $7.4 billion

With a net worth of an astounding $7.4 billion, Nassef Sawiris is not only Egypt’s wealthiest businessman, but he also holds the title of the richest individual in the Arab world.

His impressive wealth was accumulated through his strategic investments, specifically in Adidas, one of the world’s leading sportswear brands, and OCI N.V., a renowned nitrogen fertilizer producer with facilities in Texas and Iowa.

Sawiris holds a significant portion of both companies, as he is the largest shareholder in Adidas with a 6 percent stake and a majority shareholder in OCI N.V. with a 38.8-percent stake.

Additionally, he holds a 28.97-percent stake in Orascom Construction, a multinational engineering and construction firm founded by his late father Onsi Sawiris.

#2 Naguib Sawiris

Net worth: $3.3 billion

Naguib Sawiris, the eldest of three sons of the late Onsi Sawiris, is known for his successful business ventures. As the elder brother of Egypt’s richest man Nassef Sawiris, Naguib made a significant portion of his wealth through the sale of Orascom Telecom to Russian telecom firm VimpelCom (now Veon) in 2011, which was a multibillion-dollar transaction.

He holds investments in various companies, including Orascom TMT Investments and Ora Developers, a real estate operator. Since the beginning of the year, his net worth has increased from $3.1 billion to $3.3 billion.

With his eye on new opportunities, Naguib is reportedly looking to expand into the Pakistani market through his subsidiary investment firm, Eighteen Elite Real Estate. He has also recently announced plans to invest $100 million in Morocco’s technology sector.

#3 Mohamed Mansour

Net worth: $2.9 billion

Mohamed Mansour, a highly successful businessman who oversees his family’s conglomerate Mansour Group, is one of the richest billionaires in Egypt boasting a staggering fortune of $2.9 billion. Alongside his brothers Yasseen and Youssef, who are also billionaires and co-owners of the family group, Mohamed has driven the growth and success of the conglomerate, establishing it as one of the leading groups in Egypt.

The conglomerate’s subsidiary, Al Mansour Automotive Co., operates as the largest GM dealer in the world and the fifth-largest distributor of Caterpillar Inc.

In partnership with Africa Finance Corporation (AFC) through Infinity Group, Mohamed is looking to raise capital from market participants with the aim of scaling operations and expanding their reach across Africa. The target range for this capital raise is set at $2.5 billion to $4 billion.

#4 Mohamed Al Fayed

Net worth: $2 billion

Mohammed Al Fayed, a successful Egyptian businessman and retail magnate boasts a net worth of $2 billion as reported by Forbes. Fayed’s residence and primary business dealings have been based in the United Kingdom since the late 1960s.

He solidified his wealth through the sale of his shares in the iconic London department store Harrods, which earned him a staggering $2.4 billion in 2010. Additionally, he received a substantial $300 million payout from American billionaire Shahid Khan following the sale of Fulham Football Club in 2013.

His net worth since the start of this year has increased from $1.8 billion to $2 billion. Beyond his interests in Harrods and Fulham FC, Fayed is also the proud owner of the prestigious Ritz Paris hotel.

#5 Youssef Mansour

Net worth: $1.6 billion

Youssef Mansour, a renowned Egyptian billionaire businessman and the chairman of the family-led Mansour Group, boasts a net worth of $1.6 billion. His net worth since the start of the year has increased from $1.5 billion to $1.6 billion.

In his capacity as chairman and part owner of Mansour Group, he effectively manages the consumer goods division, which encompasses the renowned supermarket chain Metro and holds exclusive distribution rights for the world-renowned cosmetics brand, L’Oréal in Egypt.

Source: Ghana Web

Word on the street is that Ghana’s drama-filled debt restructuring/exchange program (“DDE”) saw between 60% and 65% of all eligible extant marketable government securities (simply, “bonds”) tendered in by their holders in exchange for new bonds offering lower average interest and longer average repayment tenures.

Investors accepted losses of between 19% and 47% instead of the 55% to 88% (depending on inflation & discount rate assumptions) they would have suffered under the government’s original December 5th 2022 plan.

Whilst the outcome is perfectly in line with analysts’ expectations, the government had held out hopes of hitting its 80% non-binding target, and postponed the program 5 times to increase chances of doing so. Deniable leaks from government sources to selected media in Accra pegging participation at 70% are considered less credible, and at any rate don’t change much by way of effect.

After a week that saw pensioners, some in wheelchairs, accost Finance Ministry officials and a former Chief Justice declare the entire exercise a complete illegality, the DDE architects can breathe a sigh of relief even if the participation rate and debt relief outcomes, the worst in modern world history, are not exactly stellar.

Source: Ghana Web

American economist Prof. Steve Hanke has issued yet another stinging verdict on the Ghanaian economy citing the depreciating of its currency, the Ghanaian cedi.

He alleged via Twitter that the economy was in shambles blaming same on President Nana Addo Dankwa Akufo-Addo.

He described the cedi as ‘rubbish’ citing his personal depreciation meter which said the currency had depreciated by close to 50% since January 1, 2023.

“In #Ghana, the #cedi is rubbish. By my measure, the cedi has depreciated ~49.31% against the USD since Jan. 1, 2022. Thanks to Pres. Akufo-Addo, Ghana’s economy is in shambles,” his tweet of February 11, 2023 read. Cedi sells at GH¢12.50 to $1, GH¢10.80 on interbank market as of February 10

The Interbank forex rates from the Bank of Ghana as of Friday, February 10, 2023; showed that the Ghana Cedi was trading against the dollar at a buying price of GH¢10.7929 and a selling price of GH¢10.8037.

24-hours earlier, it had a buying price of 10.7930 and a selling price of 10.8038.

Meanwhile, at forex bureaux in Accra, the dollar was being bought at a rate of 12.00 and sold at a rate of 12.50.

GhanaWeb’s forex bureau rates are provided by Afriswap Bureau De Change in Osu, Accra.

Source: Ghana Web

If you were a banker or familiar with what happened in Ghana’s financial sector when the sector clean-up happened in 2018, then you can relate to Jemima’s plight when her bank collapsed.

13 years as a banker came to an abrupt end when Capital Bank, where Jemima Mensa worked to help take care of her family, was among the banks that were affected by the clean-up exercise.

Jemima recounted that even though her husband was very supportive, staying home without a job for four years was no joke.

She just could not take it anymore, she had to do something.

“It hasn’t been easy. For the past four years, I’ve been home without a job, and the challenges are more than words could explain for me, because for working for 13 years in the banking sector and all of a sudden, you come home with nothing, with kids and life must go on. How do I pick the pieces?”

She said that she had to resort to cleaning people’s houses, and also do their laundry on the blind side of her husband.

“I wasn’t working, so how do I pay my fees, and how do I finance the catering service? Today, my husband will know what I do when he goes to work because I felt that if I tell him that I’m going to clean somebody’s house to support the house, he wouldn’t encourage me to do that… so when my husband goes to work, I scarf my head and go from house to house to ask if people want to wash or clean.

“And then I’d go to corporate ladies in my area to ask and I’d do the laundry. Sometimes GH¢100, GH¢150. Other times, I got GH¢50 for the cleaning and all that so, I did it for a while without my husband knowing because I’d take my kids to school and come and do it,” she said.

With time, Jemima said, she took up the job of driving because of two principal things: the need to ensure her family does not go hungry and the fact that she could just get lucky with a job offer on one of her rides.

“Actually, taking the decision was not too difficult because the motivation here is that I have to feed my kids, and my family and take care of my dad. So, when you look around, that was the encouragement. When I took the decision two months ago, the main focus was to meet my daily economic needs, and then maybe, perhaps, God would permit my helper to sit in my car one day and get me the job that I’ve been looking for, but when I’m at home, who will notice me? Nobody,” she explained in a December 24, 2022 engagement.

Jemima also narrated how she got the announcement of her job loss.

“The whole thing started in 2017, on 14th August. I used to work at Capital Bank, and our license was revoked from there; we were now working for GCB as they had taken over our company. We worked for them for almost 8 months from August 2017 until they gave us an appointment letter on February 4, 2018,” Jemima said in an exclusive interaction with GhanaWeb.

“So, we worked for them, and then along the line, we were employed by GCB in 2018. I was transferred to Circle, and I worked for them for roughly 9 months. After that, I was never confirmed, so it meant that after 6 months, my confirmation was extended for another 3 months,” she continued.

Jemima Mensa also explained that after a while, she got to work one day and got the shock of her life when her termination was handed over to her.

She added that although the letter did not state what reasons prompted the termination, she found out later that it had to do with her educational experience.

“Then, nothing happened, I went to work one day, and I was told to go home with a letter saying that they don’t need my services anymore. There was no reason on the termination letter but from the background; what I heard was that of you don’t have SS, 3 credits, as in English, Maths and Science, you are out.

“And some of us, we don’t even have the SS; we did matured entrance, so we went first. That was their policy and even if you have a Masters and you don’t have the English, Science and Maths – the 3 credits, you are out. It doesn’t matter how your higher level of education is. I was a teller and at the time, I was in school – I was in my second year at PUC.

“I can remember that day, how I felt because how do I feed my kids, the family, how was I going to tell my family and all that? I applied to various places, but nothing was happening… So, I registered my catering company, and with the help of friends and family… it took me two years to build and register the company,” she said.

Source: Ghana Web

Ghana’s attempt to bring in hundreds of millions of dollars from some of its biggest investors for alleged unpaid taxes may have backfired.

With the country struggling to service about $47 billion of public debt and with a $3 billion rescue package from the International Monetary Fund yet to be finalized, the government is desperate to boost revenue. The methods it used, though, are risky — harming its standing with investors and the nations they come from.

It all started last month with a demand that South Africa’s MTN Group hand over around $700 million in back taxes, penalties and interest. Gold Fields, Tullow Oil and Kosmos Energy were also hit with charges. All the companies disputed the claims.

The demand on MTN, the continent’s biggest mobile-phone operator, drew a rare rebuke from South Africa.

Naledi Pandor, the foreign minister, wrote in a Friday evening statement that the dispute should be resolved amicably. She pointed out that more than 100 South African companies do business in Ghana and have invested over $1.4 billion over the past decade, providing jobs for more than 19,000 Ghanaians.

Pandor warned Ghana that in other African countries where South African companies had faced “challenges,” they had disinvested, damaging their economies. A few days later, the West African nation’s tax authority withdrew the claim against MTN.

The strategy is not unprecedented — Nigeria’s demand for $4.4 billion in back taxes from pay TV service Multichoice last year led to an acrimonious fight and an out-of-court settlement. It had also previously targeted MTN.

Ghana is desperate for cash with the spiraling debt crisis almost halving the value of its national currency over the past year and driving inflation to 54%.

Still, it might find the short-term gains of fuller tax coffers may deter the investors that made it Africa’s biggest gold producer and built an oil industry.

Source: Ghana Web

Former Chief Justice Sophia Akuffo has said she is no longer a government employee and, thus, she is free to air her opinion.

In her view, the government has failed and must show some respect to the elderly.

A very unhappy Sophia Akuffo, who joined Pensioner Bondholders on day 5 of picketing the Finance Ministry to drive home their demands that their investments be exempted from the government’s Domestic Debt Exchange Programme, said it was disrespectful and unlawful to include pension bondholders in the DDEP.

Speaking to journalists at the forecourt of the Finance Ministry, the former chief justice said “We are over 70 years now, I am no longer government employed, my mouth has been unguarded, and I am talking, and I am saying that we have failed, and it is important that the elderly should be respected. I find this wicked, I find it disrespectful, I find it unlawful, I find it totally wrong.”

“Quite a number of people here today, when they retired two years ago, they put everything into government bonds, it is a contract and now all of a sudden, you virtually want to force them to agree with you that the repayment of the yield of their investment should be as you dictate it. Why?” she quizzed.

Ms Akuffo wants the government to be transparent and accountable to Ghanaians.

“Why are we in the mess? Nobody has fully explained to us, yes we took debt, what was it used for? And where is the accountability? Exactly what was it used for?

“You are not telling us about how you are going to be able to make things better but just that ‘help me and I help you’, no, you help yourself first, let me see you doing something serious because we have seen these sorts of things too many times,” she added.

The government has proposed a 15 percent coupon rate for bondholders but the pensioners’ group has said it will not accept any haircuts on investments.

According to the group, it will not accept the haircuts on investments because the livelihood of its members depends on the proceeds.

Just like the former CJ, some members of the group have indicated they buy their medications and other essentials from the proceeds made from their investments and hence want the government to totally exempt the investments.

“We deserve total exemption; we have earned it.

“Total exemption,” the pensioner bondholders told Class News on Day 4 of their picketing on Thursday, February 9.

Source: Ghana Web

Credit analysis is a complete analysis of the client’s overall performance and the specific project to be financed with a loan in order to assess the credit risk, i.e. the creditworthiness of the loan applicant.

The credit analysis is a component of the credit process, during which the bank must undertake a detailed examination of the enterprise’s operations and the reason for the loan-financed project. Moreover, the processing of the loan application consists of a variety of qualitative and quantitative factors.

The first concern is the borrower’s previous work, legal standing, management, loan security, competition, etc.

The quantitative analysis includes analysis of the financial statements of the company, as well as analysis of certain financial indicators. The ultimate purpose of the bank’s credit analysis is to evaluate the credit risk, or creditworthiness, of the loan applicant.

For qualitative analysis, banks have a variety of tools at their disposal, including CAMPARI, PEST, SWOT, etc.

Lending is a constant worry for banks and financial institutions because it is the primary operation that permits them to invest their resources and it is also their most profitable endeavour.

Through lending, banks assist, on the one hand, to the production of resources for businesses that need to finance investment initiatives, and, on the other, they encourage fund holders to invest for profit (interest).

To attain a high rate of profitability, banks must take on some risks. In recent years, particularly following the global financial crisis, and the banking sector clean-up in Ghana, the focus has been on changing business models to enable financial institutions to build an effective risk assessment methodology without compromising profitability.

Consequently, performance and risk in loan activities become essential market mechanism, especially given Basel II requirements.

Credit risk is one of the primary risks a bank faces, and it is generated through client lending (individual or corporate). Investors are reimbursed by the borrower or issuer of a debt obligation in the form of interest payments for incurring credit risk.

Credit risk is strongly related to the prospective return of an investment, therefore, the rate of interest that investors will demand in exchange for loaning their capital is proportionate to the perceived credit risk.

Developing and applying credit risk management techniques has been a concern for many years, and it has progressed from traditional techniques, such as exposure assessment, to limiting excessive concentration on the debtor, business sector or industry level, to new management techniques, such as transactions with swaps and options, tailored to this type of risk.

Credit Evaluation or Analysis

The credit analysis is a method that evaluates the client’s or the borrower’s, creditworthiness. A creditworthiness refers to the borrower’s ability to get cash, i.e. credit, to utilise it, and to repay it under precisely and stringently outlined circumstances.

This definition of credit analysis and creditworthiness demonstrates the necessity of completing a thorough and impartial credit analysis, which will provide a realistic picture of the borrower’s creditworthiness and allow the bank to avoid potentially problematic loans.

The credit analysis of a client who is a legal entity includes an evaluation of past business success, the current market position, the available human resources, the industry in which the client operates, the financial statements, the justification for the project (to be financed), and information regarding the borrower’s credit history. This is in the direction of evaluating the borrower’s financial readiness and capacity to meet the responsibilities that would result from the approval of the proposed loan amount.

A shallow and insufficient review of the borrower’s creditworthiness exposes the bank to a greater credit risk than was anticipated in its credit policy.

Credit analysis requires further information and data analysis. Given that some of them have a quantitative nature and others a qualitative one, credit analysis can be viewed from two perspectives, such as:

• Qualitative analysis – includes an analysis of information related to the industry in which the company operates, its market position, its management, the manner in which the loan is secured, etc.

• Quantitative analysis – comprises an examination of the data extracted from the company’s financial statements.

Qualitative analysis

The qualitative study provides a clearer picture of the company in terms of its historical evolution, its primary business, the situation of the market in which it operates, the condition of the branch, and its customers and suppliers.

The advantage of this study is that it provides a chance with the qualitative components to uncover the potential risks of the business in the future.

Each type of credit analysis addresses the same challenges. In this regard, the qualitative analysis of the loan application can be characterised by the abbreviation 5C or 6C (5Cs, 6Cs), which is derived from the initial letters of the regions considered during the study:

• character, which reveals whether the debtor is responsible, honest, and whether there is a serious purpose to repay the loan in time.

• capacity; assessment of the financial status of the borrower and its ability to adequately repay the loan.

• capital or cash, i.e., the borrower’s ability to earn sufficient funds to repay the loan.

• collateral, as a true cover for the loan.

• Macroeconomic conditions, i.e., the macroeconomic or sectorial situations that impact the borrower’s capacity to timely repay the loan.

• Quality control, i.e., evaluation of whether changes in legal and regulatory rules may have a negative impact on the creditworthiness of the borrower and whether the loan application meets the quality criteria established by the regulatory body, Bank of Ghana.

The credit analysis also considers external elements over which the company has no control, but which might have a significant impact on the loan’s timely repayment. In actuality, this is about studying the borrower’s business environment.

The following would be evaluated: developments in the borrower’s industry, technical trends in the industry, the borrower’s market position, the stability of his relationships with suppliers and customers, the phase of the economic cycle, and the future movement of interest rates. Long-term lending places a premium on an analysis of the borrower’s industry’s features, as well as its strengths and weaknesses in relation to the competitors.

Analysis of Qualitative Factors

Structure of the company’s ownership

During his visit to the company, the credit officer would examine the borrower’s ownership structure to detect any probable relationships with other businesses. “statement of connection and credit obligations.” The finding of a possible relationship with other businesses is an indication that they should also undergo a financial analysis in order to form a complete picture of the borrower.

Source: Ghana Web

New Patriotic Party(NPP) Flagbearer hopeful, Engineer Francis Addai-Nimoh has revealed that he rejected a nomination by President Akufo-Addo to become the Administrator of Ghana Road Fund.

According to him, this is because the position was not backed by law.

The former Member of Parliament for Mampong-Ashanti in an interview with Francis Abban on State of Affairs on GHOne TV said the President approached him to lead the Fund but he turned down that portfolio because no law granted the President those powers.

“There was a discussion that Francis, can you look at Road Fund? and I said the Road Fund governance structure is quite different from the governance structure for the GETFund, Common Fund. Because there are statutory funds one is tempted to believe that because the President has the mandate to appoint an Administrator for the GETFund, and then appoint an Administrator for the Common Fund, there’s that temptation that can I appoint an Administrator for the Road Fund. But the Road Fund governance structure places the Road Fund Secretariat under the Chief Director of the Ministry of Rods and Highways.

The former Senior Manager of the Ministry of Roads and Highways said this is a problem for him

“What will be my quo warranto, because they are all Civil Servants who are working there, but I’m not a Civil Servant. There must be a law to back that position.”

Source: Ghana Web