Day: April 3, 2024

Fresh data from the Bank of Ghana (BoG) shows banks still favour investments in government securities over and above extending credit to the private sector, meaning that businesses have access to less purchasing power in real terms.

Governor Ernest Addison, in a press briefing for the 117th Monetary Policy Committee (MPC) meetings, revealed that compared to February 2023, credit extended to businesses and individuals has plummeted from 29.5 to 5.1 percent in February 2024.

This translates to a significant decrease in the availability of funds for businesses to invest, expand and create jobs.

It is further supported by the data which reveals a surge in bank investments in short-term Treasury and BoG instruments.

For instance, year-on-year growth in these investments reached 67.6 percent in February 2024 – with a value of GHS53.6billion – compared to a much lower 36.9 increase the previous year.

‘Credit to the private sector by banks continued to remain weak’, the BoG Governor indicated.

Analysts remain c
oncerned about the potential ramifications of this credit crunch stating that limited access to credit can act as a handbrake on economic growth as businesses struggle to expand, invest and create jobs.

Indeed, banks might be exhibiting risk aversion due to economic uncertainty and rising non-performing loans ratio – which reached 24.6 percent in February 2024. That said, the high-interest rate regime remains a cause for concern.

Nonetheless, the central bank said its surveys indicate moderate improvements in business sentiments.

‘While the consumer confidence index remained broadly unchanged from the January survey, business confidence sentiments improved further as firms indicated meeting their short-term targets and expressed optimism about company and industry prospects.

Results from the confidence surveys were broadly aligned with the observed trend in Ghana’s PMI, which also signaled an improvement in business conditions. The PMI rose marginally above the 50.0 benchmark to 50.2 in February 2024, and
from 48.4 in January,’ Dr. Addison stated.

Decrease in lending hinders business expansion, investment, and economic development. It can also limit job creation and hinder the growth potential of small and medium-sized enterprises. Steps thus have to be taken to reverse this worrying trend.

Source: Ghana Web

Mrs Gloria Cabutey-Adodoadji, the Sector Head, of SME and Retail Banking at Zenith Bank, has urged businesswomen to leverage the golden opportunities of the African Continental Free Trade Area (AfCFTA) agreement to expand their reach and grow their businesses and ensure their products meet export standards.

‘With the arrangement, a free trade zone encompassing 54 nations with a combined GDP of US$3.4 trillion and a market of 1.3 billion people, offers a superhighway for Ghanaian businesswomen to expand their reach,’ she said.

Mrs Cabutey-Adodoadji was speaking at the maiden edition of the Women in Business Dialogue series organised by the Business and Financial Times and held in Accra.

To leverage the AfCFTA, however, she urged businesswomen to ensure their products meet export standards, form partnerships to reduce costs, and seek guidance, all of which Zenith Bank ranks high in the industry for facilitating.

She explained that while women take advantage of the AfCFTA and the many opportunities availab
le to them, it is also important for women to be technologically inclined to enable them to reach a wider audience through online sales and marketing channels.

‘As you leverage on the benefits of AfCFTA, it is imperative for businesswomen to also leverage on technology. Technology empowers women entrepreneurs by providing them with the tools needed to sell online, manage finances, and keep track of business activities,’ she added.

Financial literacy

Mrs Cabutey-Adodoadji said it was also essential for women entrepreneurs to have proper

bookkeeping practices and maintain separate business and personal transactions which she said was key to securing funding from banks.

‘Businesses with viable products and strong revenue streams are more likely to get loans from Banks. With proper bookkeeping practices, Banks are more willing to offer various solutions to help women entrepreneurs grow their businesses,’ she said.

She highlighted Zenith Bank’s business solutions, including discounted onboarding packages, tr
aining programmes, and financial products tailored to the needs of SMEs, adding that the bank also encourages entrepreneurs to focus on product viability and have a clear expansion plan.

Support

Zenith Bank’s SME account, she said, was a prime example of a product which offers support for women’s businesses.

She said the account offered women entrepreneurs training, mentorship, and resources to help them navigate the challenges of formalization and growth.

Also, the Zenith SME Business Card, which is a must-have for all women entrepreneurs, along with the SME account, equips women with tools that would enable them to manage finances, access working capital, and earn rewards.

Additionally, she elaborated on the Bank’s Z-Woman service which is a unique lifestyle service dedicated to increasing financial inclusion, improving entrepreneurial skills, and enhancing the lifestyle of every woman.

She said as a Z-Woman, women who own or lead businesses are provided with loans, overdrafts, working capital online
and mobile banking applications, budgeting tools and workshops to build financial literacy.

Only recently, Zenith Bank entered a strategic risk-sharing partnership with the African Guarantee Fund to provide access to funding for Micro, Small and Medium Enterprises here in Ghana with a particular focus on women-owned/led businesses as well as green businesses.

With these initiatives, Zenith Bank continues to reaffirm its commitment to empowering women-owned and women-led businesses in Ghana for business growth success.

Source: Ghana News Agency

President Nana Addo Dankwa Akufo-Addo has called for an immediate halt in the exportation of electricity to neighbouring countries as Ghana is grappling with power outages, Chairman of the Energy Committee of Parliament, Samuel Atta Akyea has indicated.

According to him, the directive given to the Volta River Authority (VRA) shows that President Akufo-Addo was keen on resolving the intermittent power supply changes rather than making profits from the exportation of electricity.

Speaking on Joy News’ PM Express on Tuesday, April 2, 2024, Samuel Atta Akyea said, ‘The President is on top of the issues and I am even being educated that there is a command that our export of electricity to other countries should be curtailed. The President has an acute sense of the national need than making profits abroad so that is a factor that would come and help.’.

In his view, the power generated for export should be fed to the national grid for Ghanaians to enjoy a stable power supply.

President Akufo-Addo’s directive com
es after the Chief Executive Officer of the Independent Power Generators, Ghana (IPGG), Dr. Elikplim Kwabla Apetorgbor entreated the Volta River Authority (VRA) to focus on meeting domestic demands instead of concentrating on electricity exports.

Ghanaians have in the past weeks been experiencing erratic power supply causing disruptions across various sectors including health.

Some businesses have also taken a nosedive because they depend heavily on electricity for their operations.

Source: Ghana Web

Founder and Chief Executive Officer, QuantizedFT, Kwabena Boateng, is to launch Tech Hub and Youth Training programme in Tema.

The launch set for today, April 3, is a pioneering initiative to propel Ghana’s tech landscape forward.

A release issued to the Ghana News Agency said the Tech Innovation Hub would provide invaluable resources, mentorship, and global connectivity essential for success in the digital age.

‘Serving as a catalyst for innovation and economic growth, the hub offers Ghanaians opportunities to excel in the ever-evolving tech industry.’

Mr Boateng said, ‘innovation and the tech ecosystem is moving quickly, and it is our duty to ensure that every Ghanaian, regardless of background, has the opportunity to contribute to and benefit from the technological advancements shaping our future.’

He said in line with its mission to empower Ghana’s youth, the hub will host a special training program.

It also aims to equip Ghanaian youth with essential tech skills, preparing them for future challenge
s and opportunities.

Source: Ghana News Agency

The Treasury suffered a pullback last week as investors’ demand for Treasury bills (T-bills) fell by 43 percent, the market’s first under subscription in 17 consecutive weeks.

This marked a shift from the strong investor demand that had characterised the market throughout 2024, particularly by banks seeking safety at the shorter end of the market, following the domestic debt exchange programme (DDEP) and elevated lending risks due to the prevailing macroeconomic situation.

Analysts point to a recent Bank of Ghana (BoG) policy adjustment – the three-layered Cash Reserve Requirement (CRR) for banks – as the key culprit. Analysis of the directive showed that approximately GHS16.2billion (US$1.2billion) could flow from banks to the BoG on the back of the new requirement policy effective yesterday, resulting in a tightening of cedi liquidity and a potential appreciation of the cedi in the short-term.

Last week’s increase in metric for banks appears to have dampened their appetite for Treasury bills.

Banks, fac
ed with the need to bolster their reserves to comply with the new CRR levels, appear to be prioritising shoring up their liquidity over investing in Treasury bills.

‘Investors’ demand for T-bills fell below the treasury’s target in last week’s money market auction, as banks with loan-to-deposit ratios below 55 percent prepared to increase cash reserves to the respective required levels,’ the research arm of Databank said in a note.

This was corroborated by analysts at Apakan Securities, which added: ‘We believe the three-level CRR adjustment by the Central Bank last week triggered the pullback in demand conditions as banks mull over the policy action’.

Despite the decline in demand, the treasury accepted all bids placed, raising GHS2.35billion. This fell short of the intended target of GHS4.16billion, with the shortfall impacting the maturity coverage ratio, which dipped to 0.60x – a level last seen in April 2022.

This brought the total value successfully raised by the Treasury to GHS19.9billion in March
2024 through its issuance of T-bills. This was 17 percent lower than the previous month – February 2024.

These funds were used for a combination of budgetary support and the refinancing of maturing bills with a total face value of approximately GHS14.47billion

Despite the under subscription, there was a silver lining for the government as the cost of borrowing dipped marginally.

Even with the under-subscription, yields on the treasury bills continued their downward trend, albeit at a slower pace than previously observed.

The 91-day bill dipped by 25 basis points (bps) to 25.75 percent, while the 182-day and 364-day bills also saw decreases of 25 bps each to settle at 28.25 percent and 28.85 percent respectively.

Analysts anticipate a continuation of this trend, albeit at a slower pace, in the upcoming auction scheduled for Friday, April 5, 2024.

The Treasury aims to raise GHS2.81billion through this auction to refinance maturing obligations valued at GHS2.58billion.

For context, yields maintained a dow
nward trajectory in March 2024, with the 91-day, 182-day and 364-day bills closing at 26 percent (down 128bps), 28.5 percent (down 125bps), and 29.1 percent (down 120bps), respectively.

While the treasury bill auction under-subscription indicates a potential challenge in the short term, the continued decline in yields suggests a cautious optimism in the market.

The recent policy adjustments by the central bank come amid ongoing battle with inflation.

Analysts predict a slower pace of yield decline in the coming months due to the CRR adjustment and a potential slowdown in the disinflation process.

The next auction on April 5 will be closely watched to gauge investor sentiment and assess the full impact of the apex bank’s tightening measures on the nation’s short-term financing efforts.

‘We expect the CRR adjustment to drain GHS liquidity in the market and soften demand for T-bills. However, we still foresee yields on T-bills declining this week, albeit at a slower pace,’ Apakan remarked.

On the secondary
market, analysts also perceive a net-offered position on the market this week as the CRR amendment takes effect.

Last week, the holiday-shortened trading period and the subdued investor sentiment towards bonds weighed heavily on trading activity, causing trading volume to shrink to the third lowest level this year.

Total traded volume tumbled to GHS355million last week from GHS564million the previous week. Market activity hovered around the medium to long-term papers. The new bonds dominated market activity, accounting for approximately 99 percent of the total traded volume. Feb-2037 (CPN:9.85 percent) and Feb-2036 (CPN:9.7 percent) were the most actively traded papers, settling at 14.63 percent and 13.54 percent, respectively.

‘Moving ahead, we expect market activity to remain tepid as bond yields continue to pale in comparison to treasury bill rates, deterring investors from engaging in significant trading activities,’ Apakan Securities projected.

Source: Ghana Web

Ghana is keeping pace with the rapid global transition to digital technologies, including in the realm of e-government where the country is regarded as a leader in Africa.

Ghana received high scores on the 2022 United Nations E-Participation Index, which assesses the extent to which governments use online platforms and technologies to involve citizens in decision-making processes and policy development.

The 2022 World Bank GovTech Maturity Index also finds Ghana outperforming regional peers.

Digital service delivery is strengthening governance and providing efficiencies for the public and private sectors.

Ghana’s Business Regulatory Reform unit (BRR), established in 2017 within the Ministry of Trade and Industry, provides a strong example.

Under the Ghana Economic Transformation Project (GETP) and with technical assistance from the ACP-Business Friendly Program funded by the EU, the World Bank is supporting the BRR in boosting increased citizen engagement through e-portals.

Technology tools are ensuring
that the private sector is aware of regulations, allowing the BRR to better engage companies in the regulatory process and identify regulatory bottlenecks.

Three examples stand out:

Business Regulations E-Registry

After its inception, the BRR quickly adopted ICT tools to serve its constituents.

One of the most significant developments is the launch of an e-registry in 2020, which allows users to access and download regulations relevant to the business environment. The e-registry includes user-friendly features like keyword searchability and filters to locate relevant regulations.

The e-registry not only streamlines the process for companies to establish and operate legally but also strengthens their adherence to legal regulations.

Consultation Platform on Draft Laws and Regulatory Proposals

BRR’s commitment to promoting regulatory transparency through technology-enabled services extends to participatory governance.

The Public Consultation Portal enables civil society to access draft laws while BRR off
icials review feedback, including comments and poll results.

For example, the MSME (Micro, Small and Medium Enterprises) Classification Regulation (2021) garnered over 1,000 views and received valuable suggestions.

A notable one is to use employment numbers to categorise firms (e.g., micro, small, medium, and large).

This criterion was incorporated in the final regulation adopted by Parliament.

An online ‘suggestion box’

The BRR seeks to engage citizens and firms through the ‘Have Your Say’ platform that allows companies to voice complaints on regulatory bottlenecks and suggest improvements.

Users can submit their recommendations for review by BRR personnel.

This feature, inspired by the Singapore’s Pro-Enterprise Panel suggestion window, aims to identify and address procedural bottlenecks and implementation gaps on regulatory reform implementation.

The feedback platform, still in the initial stages of implementation, promises to provide an efficient means of reaching officials to improve business con
ditions.

Looking ahead: Is Ghana a new regulatory service model for Africa?

The BRR is committed to sharing knowledge with peers across the continent.

In March 2023, with support provided under the ACP Business Friendly Program funding by the European Union, BRR representatives introduced digital solutions and lessons learned to a delegation from Madagascar.

Following this exchange, the country is now looking to implement similar tools to better engage its private sector in the regulatory reform process.

While e-service tools are starting to make their mark in Ghana, the BRR continuously seeks to enhance its digital services.

Improvements include building awareness about these online solutions and strengthening constituents’ trust in these tools.

As countries on the continent strive for sustainable growth, enhancing service delivery efficiency and involving the private sector and citizens in governance are crucial steps.

Developing targeted technology solutions will help African nations leverage gover
nance improvements and operational efficiencies, and thereby better support their populations and foster development.

The next time you think of getting access to business-related regulations in Ghana, kindly visit www.brr.gov.gh for help.

Source: Ghana News Agency

Former World Bank Vice President for Africa, Hafez Ghanem, in April 2019 bemoaned the high cost of internet in Ghana.

He urged the Minister for Communications and Digitalisation, Ursula Owusu-Ekuful, to reduce costs to enable many Ghanaians or residents to use the internet at affordable prices.

Read the full story originally published on April 1, 2019, by atinkaonline

The World Bank has lamented the high cost of the internet in low-to-middle-income countries, including Ghana.

The Bank’s Vice President for Africa, Hafez Ghanem, made this observation when he paid a courtesy call to the Minister of Communications, Ursula Owusu-Ekuful.

As cited on Celebritiesbuzz, he urged the Minister to adopt measures to bring the cost down to enable a lot of Ghanaians or residents to use the internet at affordable prices.

Research findings released in October 2018 by the Alliance for Affordable Internet (A4AI) showed that more than 2.3 billion people live in countries where just 1GB of mobile data is not affordable.

In
her response, Mrs. Owusu-Ekuful said the government of Ghana has already begun processes aimed at pushing the cost of internet down in the country

She said there will be an industry forum early next month to force a consensus on the way forward.

Mrs. Owusu-Ekuful also stated a high-level engagement with the regulator and the industry operators had been ongoing for some time now to promote greater infrastructure sharing and competition with the aim of forcing the internet cost to fall.

‘There’s a huge appetite for data in this country which we are not being able to meet and so we see that there’s an opportunity, there’s a commercial opportunity for the private sector to also take advantage of.

‘So we have begun having meetings around several issues including; sim registration, and equipment identity registration among others to clean up that space and make it more secure and less easy for people to use their devices for formulating criminal activities. We are going to have an industry forum early next mont
h to put all these conversations forward and force a consensus on the way to go,’ she added.

Source: Ghana Web

The National Democratic Congress (NDC) Parliamentary Minority is demanding an immediate increase in the cocoa farm-gate price by the Government.

Mr Eric Opoku, the Ranking Member on the Parliamentary Select Committee on Food, Agriculture and Cocoa Affairs, in a statement copied to the Ghana News Agency, said the Minority had taken notice of recent developments on the international market relative to the prices of cocoa.

‘We have observed that global cocoa prices have been soaring in recent time, hitting an all-time high of US$10,000 per ton,’ he said.

He noted that the recent increase in cocoa prices on the world market had been occasioned by the global shortage of cocoa, owing to a significant decline in cocoa output in Ghana and Cote D’Ivoire, who contribute approximately 70 per cent of the total volume of cocoa produced globally.

He said the NDC was deeply concerned about the sharp decline in Ghana’s cocoa production volumes under the New Patriotic Party (NPP) Government.

He said the situation was set
to get even worse, as Ghana’s cocoa production for the 2023/2024 crop season was reported to be about 450,000mt; the lowest in the past two decades.

Mr Opoku said this was fast-eroding the incomes and purchasing power of the already-impoverished cocoa farmers.

He said the living conditions of Ghanaian cocoa farmers keep worsening by the day due to the sharp decline in cocoa output.

‘Clearly, this negative trend will persist if the farm-gate price of cocoa is not significantly increased, to compensate for the loss in income of farmers,’ Mr Opoku stated.

‘It is instructive to note, that the average international market price of cocoa currently stands at US$10,000 per ton 16 bags of cocoa.’

The Ranking Member, who is also the NDC Member of Parliament for Asunafo South, said the current world market price was equivalent to GHS130,000.00 per ton, at a conservative exchange rate of $1.00 to GHS13.00.

He said this means that a bag of cocoa was currently being sold on the world market at about GHS8,125, while t
he Ghanaian farmer was being paid a paltry GHS1,308.

He reiterated that this was a clear rip-off of the nation’s hard-working cocoa farmers by the NPP Government who continue to mismanage the cocoa sector.

He said the NDC Caucus in Parliament was urging the government to immediately increases the farm-gate price of cocoa to reflect the recent unprecedented hike in the world market prices of cocoa.

‘We are appalled by the continuous mismanagement of the cocoa sector and the shortchanging of our hard-working Ghanaian cocoa farmers by the ruling NPP government.’

Mr Opoku said last year, Ghana lost about 150,000mt of cocoa valued at almost $400,000,000 to smuggling.

He said this was occasioned by the fact that the nation’s hardworking cocoa farmers were not offered competitive prices.

He said the recurrence of this situation this year would have dire consequences for the cocoa industry, which was on the verge of collapse due to gross mismanagement and corruption.

Mr Opoku said it was sad to note, that whil
e the nation’s hard working cocoa farmers continue to be shortchanged, COCOBOD’s administrative expenses which stood at less than GHS500 million in 2016, increased to GHS1.7 billion in 2020, and ballooned further to GHS2.5 billion in 2021.

‘Only this week, we sighted an official document in which the Management of COCOBOD has granted approval for the purchase of 15 ipad keyboards for its Board of Directors at a staggering cost of GHS4,500.00 per unit.’

He said this was the clearest evidence yet, that the Management of COCOBOD had prioritised waste and the comfort of their offices at the expense of hard-working cocoa farmers.

He said in addition, it was symptomatic of the recklessness and mismanagement that have plagued COCOBOD for the past seven years which accounted for the cumulative losses of GHS13.62 billion, recorded by COCOBOD since 2017.

He said it was the considered view of the Minority Caucus, that urgent steps be taken to save the nation’s dying cocoa sector now.

He said it was therefore impera
tive that the Government significantly increases the farm-gate price of cocoa, in consonance with the current world market price of cocoa.

‘This we believe will incentivise our farmers and discourage the smuggling of cocoa beans amid all the challenges bedeviling the industry,’ Mr Opoku said.

Source: Ghana News Agency