AI vital in transforming Africa’s digital economy – Prof. Dickson

Professor Mrs. Rita Akosua Dickson, Vice-Chancellor of the Kwame Nkrumah University of Science and Technology (KNUST) says it is imperative that Africa takes the investment in Artificial Intelligence (AI) technology and its responsible use seriously.

“AI holds much promise and is seen as a game changer in transforming the digital economy.

“Therefore, institutions of higher learning in the sub-Region should focus on programmes that are directed at equipping the next generation with the requisite tools to lead the digital revolution,” the Vice-Chancellor advised.

Prof. Mrs. Dickson was addressing a conference dubbed: “Responsible AI and Ethics – A Panacea to Digital Transformation in Sub-Saharan Africa”, held at the Great Hall, Kumasi.

The programme was held under the auspices of the Responsible Artificial Intelligence Lab (RAIL), KNUST, and the Responsible Artificial Intelligence Network (RAIN) Africa, which seeks to promote the responsible adaptation and use of AI in sub-Saharan Africa.

It discussed topics ranging from AI in Healthcare, AI and Human Rights, and AI Applications to the Role of Afrocentric Datasets in Promoting Responsible AI in Africa.

There were also presentations on the normative issues of AI from a business and human rights perspective, AI ethics and machine learning for identifying teenage patients at risk of gestation hypertension.

The role of ‘Afrocentric’ datasets in promoting responsible AI in Africa, as well as AI ethics in finance were also looked at.

The two-day Conference comes in the wake of the varied challenges confronting the continent in developing AI such as a dearth of investment, a paucity of specialised talent and lack of access to the latest global research.

Researchers argue that these hurdles are being whittled down, albeit slowly, thanks to African ingenuity and to investments by multinational companies such as IBM Research, Google, Microsoft, and Amazon, which have all opened AI labs in Africa.

Innovative forms of trans-continental collaboration such as Deep Learning Indaba (a Zulu word for gathering), which is fostering a community of AI researchers in Africa, and Zindi, a platform that challenges African data scientists to solve the continent’s toughest challenges, are gaining ground.

This is buoyed by the recent influx of several globally-trained African experts in AI.

“Digital development tools are the key enablers to drive economic transformation,” Prof. Dickson stated, stressing the need for AI solutions to be developed and deployed responsibly.

The rights and privileges of the human person must not be trampled upon in deploying AI solutions, the Vice-Chancellor cautioned, adding that datasets based on which models were trained should not be biased.

Prof. Kwabena Biritwum Nyarko, Provost of the College of Engineering, KNUST, said the theme for the conference was relevant and timely, because AI was transforming the way “we live and work and we are only beginning to scratch the surface of the potential of AI”.

According to the Provost, AI was making significant strides in various fields and expected to transform many industries in the coming years.

Due to that, the challenges of AI in data privacy, bias and ethical concerns must be addressed, he said.

He said the College of Engineering was committed to ensuring the success of the RAIN and RAIL activities, noting that that was clearly demonstrated by the KNUST College of Engineering hosting the first RAIL and RAIN Conference.

Prof. Jerry John Kponyo, Principal Investigator and Scientific Director, RAIL and RAIN Cofounder, RAIN Africa, said the RAIL and RAIN Conference was the fruit of five years of collaboration between the Faculty of Electrical and Computer Engineering, College of Engineering KNUST, and the Institute of Ethics in Artificial Intelligence (IEAI), Technical University of Munich (TUM), Germany.

“Like the biblical mustard seed, what began as a collaboration between two institutions to serve as a voice of advocacy for the responsible use of Artificial Intelligence has grown to become a robust network of at least thirteen universities and organizations in the sub-Region,” he said.

Through the experience drawn from working in RAIN, the KNUST team, through funding from the International Development Research Centre (IDRC) and German Agency for International Cooperation (GIZ), set up a Responsible Artificial Intelligence Lab (RAIL) to serve as a vehicle for building capacity in the responsible use of AI in the sub-Region, Prof. Kponyo said.

Source: Ghana Web

$20 million Atlantic Shopping Mall opens in Accra

Atlantic Mall, Accra’s newest shopping mall constructed for $20 million, today March 31, 2023, officially opened for business.

Located at the Atomic Junction Roundabout in the North Legon area near the University of Ghana, the Atlantic Shopping Mall is expected to attract thousands of shoppers daily both far and near.

The mall, which is owned by Medco, houses over 40 shops. The shopping mall features a wide range of local and international brands such as The Outlet, Palace, and Mabel Kids Shop among others.

Official Launch

At the official opening ceremony, Mr. Kifle Hampton, Director of Medco, said the Atlantic Mall journey began with a simple idea – to create a shopping experience unlike any other in Ghana. “And now, here we stand, with a 20 million investment, a state-of-the-art facility that will serve a wide class of people.” According to Mr. Hampton, the Atlantic Mall is strategically located to provide a wide array of services and an unbeatable shopping experience.

He added that the mall will provide job opportunities for young people and also contribute to the growth of the Ghanaian economy. “This mall will provide employment opportunities for hundreds of people, both directly and indirectly. We believe in the importance of contributing to the local economy, and we are committed to doing our part.”

In a speech read on his behalf, the Minister for Works and Housing, Hon. Francis Asenso-Boakye said the opening of the Atlantic Mall as a hub of commerce will be a catalyst for economic growth in the region.

“The opening of this magnificent shopping mall promises to be a hub of commerce and a catalyst for economic growth in the region. It represents a significant milestone in the growth and development of Ghana’s retail industry,” said Hon. Asenso-Boakye.

According to the Minister, the government recognizes the important role of the mall in creating jobs and generating revenue for the local economy.

The Atlantic Mall project which sits on approximately 13,000m2 of retail space was completed within 24 months. It has a spacious and secured parking bay for customers.

The project financial partners were Oasis Capital and Republic Bank Ghana with Broll Ghana being the property managers.

Source: Ghana Web

Excessive tax policies may highten cost of living – GFL

The Ghana Federation of Labour (GFL) has cautioned the Government to be mindful of overburdening the manufacturing sector with tax policies as that may result in widespread unemployment, increased cost of living, and endanger national security.

Mr. Abraham Koomson, the GFL Secretary, in a statement issued to the Ghana News Agency, said with the current financial crisis and taking into account the plight of workers, any additional tax burden would collapse the industrial sector.

He urged Parliament, pursuant to its constitutional mandate, to guarantee good governance for the benefit of the ordinary person by monitoring the Executive’s spending.

He said a petition was submitted to the Speaker of Parliament on February 3, 2023, drawing his attention to the numerous taxes that already distressed companies were paying and the damage additional taxes would cause to investments.

He said organized labor considered it appropriate to draw Parliament’s attention to the economic challenges the poor and vulnerable faced and the need to avert that as well as any social upheavals in the country.

The Association of Ghana Industries, Ghana Union of Traders Association, Food and Beverage Association of Ghana, and Importers and Exporters Association have expressed similar concerns about the tax imposed on businesses by the government.

Source: Ghana Web

Small US banks lose $109 billion in deposits in a single week

Bank customers shifted their deposits to large firms from smaller ones amid a banking crisis that led regulators to seize two regional lenders in quick succession.

Weekly data collected by the Federal Reserve showed that large banks gained $120 billion in deposits while their smaller counterparts lost $109 billion, Moody’s Corp. said in a research report, citing figures released Friday.

Small banks’ total deposits fell 1.5% in the week through March 15 from a year earlier, the first annual decline since 1986.

The latest figures “are of particular interest as they include developments in the balance sheet of the U.S. banking system” in a period marked by “very significant funding strains and deposit runs at some banks following the failures of Silicon Valley Bank and Signature Bank,” Moody’s analysts led by Jill Cetina and David Fanger said in the report.

SVB Financial Group’s Silicon Valley Bank collapsed into Federal Deposit Insurance Corp. receivership on March 10, 2023 Two days later, Midtown-based based Signature Bank became the third-largest bank failure in U.S. history, and its deposits and some of its loans were later taken over by New York Community Bancorp’s Flagstar Bank.

On Sunday, First Citizens BancShares Inc. agreed to buy Silicon Valley Bank, transforming the Raleigh, North Carolina-based firm into one of the top 15 U.S. banks.

Across lenders, deposits appear not only to have shifted from smaller banks to their larger peers, but also to have left the country’s banking system for money-market mutual funds, when foreign branches and agencies are included, according to the Moody’s report. The big firms encompass the 25 largest banks, while small domestically chartered banks include all those ranked lower.

The non-seasonally adjusted Fed figures suggest a decline in banking system deposits of $53 billion for the week, while Investment Company Institute data on U.S. money-market mutual fund balances for the period show growth of $121 billion, Moody’s said.

Source: Ghana Web

Overview of determining the arm’s length price (4)

As explained in my previous publications on Transfer Pricing (TP), to determine a desirable price for the exchange, sale, or transfer of goods or services between and among persons in a controlled relationship that meets the arm’s length principle, there are series of activities that a taxpayer is required to undertake to price its controlled transactions.

This article sets out the broad activities and processes required in the determination of a transfer price that satisfy the arm’s length principle.

1. Identifying the commercial or financial relations

To commence the whole analysis, one must understand the commercial or financial relationship between the associated enterprises and the conditions and economically relevant circumstances attached to those relations.

A broad-based understanding of the industry and sector in which the Multination Enterprise (MNE) group operates (e.g. mining, pharmaceutical, telecom, banking) and of the factors affecting the performance of any business operating in that sector.

The understanding is derived from an overview of the particular MNE group which outlines how the MNE group responds to the factors affecting performance in the sector, including its business strategies, markets, products, its supply chain, critical success factor, and the key functions performed, assets employed, and important risks assumed.

The process then narrows to identify how each entity within that MNE group operates and provides an analysis of what each entity does (e.g. production, marketing, sales, procurement, RandD) and identifies its commercial or financial relations with associated enterprises as expressed in the transactions between them.

The analysis seeks to identify the commercial or financial relations between the associated enterprises and the conditions and economically relevant circumstances attached to those relations for the controlled transaction to be accurately delineated and to compare the conditions and the economically relevant circumstances of the controlled transaction as accurately delineated with the conditions and the economically relevant circumstances of comparable transactions between independent enterprises.

2. Functional analysis

In transactions between two independent enterprises, compensation will usually reflect the functions that each enterprise performs, considering assets used and risks assumed. Therefore, in delineating the controlled transaction and determining comparability between controlled and uncontrolled transactions, a functional analysis is necessary.

The functional analysis seeks to identify the economically significant activities and responsibilities undertaken, assets used or contributed, and risks assumed by the parties to the transactions. Allocation of cost or revenue from the arrangement should be done in accordance with the functions performed by the parties to the arrangement.

While one party may provide a large number of functions relative to that of the other parties to the transaction, it is the economic significance of those functions in terms of their frequency, nature, and value to the respective parties to the transactions that are important.

Analysis of risk in commercial or financial relations is a key activity required to determine the appropriate reward for the material risk assumed by parties in arrangements. There are many definitions of risk, but in a transfer pricing context, it is appropriate to consider risk as the effect of uncertainty on the objectives of the business.

Controlled transactions should be accurately delineated during the functional analysis to identify the substance of the commercial or financial relations between the parties and will have accurately delineated the actual transaction by analyzing the economically relevant characteristics.

In performing the analysis, the actual transaction between the parties will have been deduced from written contracts, email exchanges, and the conduct of the parties. Formal conditions recognized in contracts will have been clarified and supplemented by an analysis of the conduct of the parties and the other economically relevant characteristics of the transaction.

Where the characteristics of the transaction that are economically significant are inconsistent with the written contract, then the actual transaction will have been delineated in accordance with the characteristics of the transaction reflected in the conduct of the parties.

3. Transfer pricing methods

There are five generally accepted TP methods recognized by OECD, and the UN, as adopted by our local legislation (LI 2412). Any of the five methods are appropriate and no method is superior to the other, however, we are enjoined to choose the method which provides the most appropriate outcome in the circumstances under consideration.

The methods have been classified into two main categories as “Traditional transaction methods” and “Transactional profit methods”. Traditional transaction methods are the Comparable Uncontrolled Price Method (CUP method), the Resale Price Method, and the Cost-Plus Method whilst the transactional profit methods are the Transactional Net Margin Method (TNMM), and the Transactional Profit Split Method. By the permission of the Commissioner-General, any other method can be used if it gives a better outcome than any of the five methods above.

The method selection process should take into account, the respective strengths and weaknesses of the five recognized methods; the appropriateness of the method considered in view of the nature of the controlled transaction, determined in particular through a functional analysis; the availability of reliable information (in particular on uncontrolled comparables) needed to apply the selected method and/or other methods; and the degree of comparability between controlled and uncontrolled transactions, including the reliability of comparability adjustments that may be needed to eliminate material differences between them.

4. Comparability analysis

In the comparability analysis, a distinction is made between internal and external comparables. Internal comparables are comparable transactions that the investigated entity (tested party) enters into with unrelated parties whilst external comparables are comparable transactions that are entered into between two unrelated parties.

In internal comparables, the information is present in the administration of the tested party, whereas, for external comparables, data in the public domain should be sought for comparison with the tested party. External comparables are usually found in commercial databases, which collect a lot of corporate financial data.

For the identification of external comparables, two main types of identification are recognized in the OECD guidelines. The first method is the additive approach; this consists of drawing up a list of potentially comparable companies, such as the taxpayer’s competitors.

And the second method is the deductive approach; which starts with a wide set of companies operating in the same sector, using domestic or international databases. The main criteria when creating the list of potentially comparable companies from the database in the benchmarking studies of companies are independence, date of incorporation, available financial statements in the last 3 – 5 years, activities, geographic market, industry screening, revenues, number of employees, etc.

Despite the search process carried out, the conclusion must sometimes be drawn that not enough reliable comparables can be found. It then depends on the facts and circumstances to guide what should be done. Sometimes it may be decided to broaden the search by also looking at, for example, slightly different geographical markets or searching for activities in a comparable industry or sector.

In doing so, the effects on the reliability of the data must always be considered and a very critical attitude is necessary.

5. Comparability adjustments and arm’s-length range

Rarely will it be possible, based on the comparability analysis, to set a single price that is reliable enough to be considered the arm’s-length price. If the reliability of the various comparables differs, the less reliable comparables should be eliminated. The remaining comparables should have comparable reliability.

The OECD Guidelines note that, in principle, any value within the range satisfies the arm’s-length principle. If, on the other hand, it is possible to identify a point within the range that best matches the facts and circumstances of the controlled transaction in question, the adjustment should be made up to that point.

If there are imperfections in the construction of the range, the OECD considers that there is a case for using a statistical method to establish the point. For example, the median, the mean, the weighted average, or the Interquartile range can be employed.

Since it’s practically difficult to find a party that is totally comparable to the tested party in every aspect of measurement, adjustments are sometimes required to align areas where the material deviation is identified between the comparable parties through the use of comparability adjustments to restore either party to the same level with the tested party. Different comparability adjustments can be made.

Adjustments can be made because of the different reporting rules. In addition, adjustments regularly occur as a result of differences in functions, assets, and risks. The OECD explicitly warns that comparability adjustments should not be applied automatically if it remains uncertain whether the adjustments would lead to a better comparable outcome.

6. TP documentation and reporting

The crown jewelry activity of taxpayers and tax practitioners on TP activity is the compilation of documentation on activities leading to the determination of the transfer price to prove that the price chosen meets the arm’s length principle. TP documentation requirements can differ per jurisdiction but in general, the keeping of contemporaneous documentation is required and serves the importance outlined below:

a. To ensure that taxpayers consider transfer pricing requirements in establishing prices and other conditions for transactions between associated enterprises and in reporting the income derived from such transactions in their tax returns.

b. To provide tax administrations with the information necessary to conduct an informed transfer pricing risk assessment.

c. To provide tax administrations with useful information to employ in conducting an appropriately thorough audit of the transfer pricing practices of entities subject to tax in their jurisdiction, although it may be necessary to supplement the documentation with additional information as the audit progresses.

Various documents on TP are expected to be filed by taxpayers with tax authorities. In Ghana, taxpayers who are subject to TP are expected to file on an annual basis a TP return, Local file, and Master file. In addition to the three returns aforementioned, when the total annual revenue of the MNE group exceeds Ghs2.9 Billion, then the ultimate parent entity is expected to file a Country-by-country report (CbCr).

Conclusion

From the foregoing, it’s evidenced that the process of arriving at the arm’s length price requires highly methodical activities which MNEs and parties in controlled relationships are expected to follow to ensure that their controlled transactions satisfy the ALP, and they ultimately meet the TP legislative requirements of their jurisdiction.

This series of articles is my contribution to tax literacy in Ghana as a professional tax practitioner in the discharge of my duties as a GHANAIAN CITIZEN who seeks the success of Ghana. The next edition will be on function, assets, and risk (FAR) analysis.

Reference is made from the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, local laws, and other sources.

Source: Ghana Web

ECG owes Bui Power Authority US$612 million – CEO

The Electricity Company of Ghana owes Bui Power Authority (BPA), the managers of the Bui Generating Station more than US$612 million, Mr Samuel Kofi Dzamesi, the Chief Executive Officer has revealed.

?He expressed his disappointment in the inability of the ECG to pay the authority as the power produced and supplied to the company remained the only problem confronting the operations of the 404 Megawatts (MW) dam, situated in the Banda District of the Bono Region.

Speaking in an interview with the media during a visit by Madam Justina Owusu-Banahene, the Bono Regional Minister to the dam’s plant site at Bui, Mr Dzamesi said almost 99 per cent of the power produced was sold to the ECG.

?Accompanied by some members of the Bono Regional Security Council, as well as the District and Municipal Chief Executives, the Regional Minister was at the site to acquaint herself with hydropower generation and other operations of the authority.

Mr Dzamesi said,?“I can assure you since the inception of the BPA, the ECG has never, ever been able to pay more than 30 per cent of what we generate. What I mean is for every 100 units of power generated, the ECG pays 30 units”, he regretted.

“If the ECG can pay all the money, I think by this time we could do much more than what we are doing on the solar,” he stated.

?In 2022, he said the Authority raked in a US$74 million-dollar profit, the highest generated so far since the dam started actual production, but added the amount was inclusive in the ECG’s debt.

“Last year, by the grace of God we had rainfall that was able to fill to the highest capacity of the dam’s level of 183 and we got little more over the 183-capacity level. So, we were able to make 1,554 gigawatts per hour last year,” Mr Dzamesi stated.

The Chief Executive Officer said BPA had the biggest solar plant in the West Africa sub-region, saying it had targeted to construct a 250MW solar plant to augment power generation at the Bui Generating Station.

?Mr Dzamesi explained the authority was currently undertaking feasibility studies on the Western Rivers, and he was hopeful “by the end of the year, we will get contractors who would start very serious hydropower plant either on Rivers Pra, Ankobra or Tano.”

“The BPA is the first company to hybridize solar power and hydropower. When I say hybridization, it means a smooth transition from hydro to solar or from solar to hydro or the two of them moving together,” he said.

?Mr Dzamesi commended President Nana Addo Dankwa Akufo-Addo’s government for the support in making the authority to achieve its 250MW solar project.

He said the BPA was undertaking serious expansion work on its solar project indicating “under his leadership, we have added 50MW of solar and by the end of the year we are adding additional 40MW on-land here, 50MW in Yendi, and 5MW on the dam’s reservoir here.”

Source: Ghana Web

World Bank’s reform plan to boost lending by US$5 billion annually

The World Bank on Thursday submitted a long-awaited reform plan that would boost annual lending to middle-income countries to fight climate change and other global crises by about US$5 billion annually while protecting the bank’s top-tier credit rating.

The bank said the “evolution road map” would be discussed with its Development Committee steering body on 12 April, during the spring meetings of the World Bank and International Monetary Fund (IMF), but discussions would continue on further measures to boost lending, including to the world’s poorest countries.

“The World Bank Group (WBG) must evolve in response to the unprecedented confluence of global crises that has upended development progress and threatens people and the planet,” the document said.

It said action was urgently needed to meet poverty reduction goals and respond to accelerating global challenges such as climate change, pandemic risk and conflict.

The paper, which includes changes since a draft reviewed in January, lays out short-term actions and some points to be considered after the April meetings, the bank said.

The World Bank estimates that governments in developing countries and the private sector would need to spend US$2.4 trillion a year on average through 2030 to address climate change, conflict and pandemics, or about 6% of the total economic output of developing countries.

The United States, which is the bank’s largest shareholder and has been pressing the World Bank to take bolder action, had no immediate comment on the road map.

U.S. Treasury Secretary Janet Yellen on Wednesday said the U.S. nominee to succeed World Bank President David Malpass would be charged with accelerating progress on the reforms.

Malpass, who announced in February that he would leave his post by 30 June, flagged the proposed boost in the financing capacity of the bank’s middle-income lending arm, the International Bank for Reconstruction and Development (IBRD), in a speech in Niamey, Niger, earlier on Thursday.

He said the World Bank had doubled its financing for global public goods during his presidency, reaching US$100 billion from 2020-2022, and underscored his concerns about “unsustainable levels” of public debt in many developing countries.

More than half of the world’s poorest countries were in or at high risk of debt distress, and their problems were mounting given higher interest rates and inflation that were leading to capital shortages, Malpass said.

As a result, governments needed to “plan for continued financial stress,” Malpass said, calling for further efforts by developing countries to remove wasteful subsidies, improve public procurement and broaden their tax base.

Malpass told Reuters last month the bank could change its internal lending guidelines to free up $4 billion in lending capacity for the IBRD each year – or US$40 billion over 10 years, a sum that falls far short of recommendations made by an independent panel to the Group of 20 major economies last year.

The IBRD in December also raised its sustainable annual lending limit by US$2 billion, beginning in fiscal 2024. Its lending ceiling for fiscal 2022 was US$37.5 billion.

Source: Ghana Web

‘Don Jazzy is the brain behind my album name’ – Davido

Afrobeats star, Davido Adeleke known popularly known as Davido has revealed how he landed the ideal name for his new album ‘Timeless’.

Speaking in an interview to promote his album, he said that, record producer, Don Jazzy suggested the title he should give his fourth studio album.

He clarified that Jazzy made the suggestion in his direct message (DM) about a year ago, and he followed it up.

Davido said he almost chose a different album name but eventually settled on ‘Timeless’, as suggested by the Mavin boss.

In his words: “Funny enough, Jazzy actually DMed me like a year ago and suggested that I named my album Timeless. In the end, I changed it like two months ago and changed it back.”

Source: Ghana Web