Adnan Adams Mohammed

  

A management expert has urged micro and small business owners and entrepreneurs to do what is feasible and join hands with other entrepreneurs as a strategy to overcome the difficulties imposed on them by the coronavirus pandemic.

 

 

Dr Mavis Serwah Benneh- Mensah, Director of the Centre for Entrepreneurship and Small Enterprise Development at the School of Business, noted that even before COVID-19 SMEs are vulnerable and needed protection in terms of finances, markets, and business development processes.

 

 

Dr. Benneh - Mensah speaking at the University Of Cape Coast School Of Business 3rd session of the ‘e-seminar series’ on the topic:“Coronavirus Pandemic: Implications for Entrepreneurs and Enterprise Development”, expressed the willingness of the University of Cape Coast Incubator to assist entrepreneurs proving research based TIPS to survive. The mandate of CESED is to provide entrepreneurial training and strengthen SMEs to play a critical role in the economy.

 

 

“Small businesses must engage in cost restructuring and embrace continuous entrepreneurial education to survive and remain relevant, especially during this COVID-19 pandemic period”, Dr Benneh- Mensah advised

 

 

Prof. John Gatsi, the Dean of the University Of Cape Coast School Of Business, in his introductory statement acknowledged that, before the Coronavirus Pandemic, SMEs and Entrepreneurs were facing challenges in accessing finances including trade finance from various sources to finance their creativity, ideas and businesses”. He explained that, Some SMEs were not in position to meet their repayment obligations to financial institutions thereby contributing to non-performing loan profile of financial institutions.

 

 

However, Prof. Gatsi indicated that, the Coronavirus pandemic has increased the risk of access to finances by entrepreneurs and small businesses. He said “ Available and affordable access to different sources of finances to incentivize entrepreneurs and enterprises to scale up their activities to create new businesses and expand existing ones have become crucial demanding innovative and sustainable funding solutions.

 

 

Prof Gatsi believes entrepreneurs can reach their ultimate entrepreneurial potentials when the right environment is created. He therefore called for reshaping of the entrepreneurial environment to avoid temptation that this is not the time to invest in innovation, new ways of doing business and research and development. He encouraged all the state holders in the entrepreneurial space to reduce their risk aversion and increase investment in innovation and create opportunities.

 

 

On his part, Mr. Saka Addo-Mensah, who is an entrepreneur highlighted the challenges he and his colleagues in the property business are facing. He said rental properties are now empty because foreigners have lost money and cannot travel to the country as a result of closure of borders and airports coupled with social distancing protocols. He said before the coronavirus pandemic face-to face tour of the rental properties was the norm but now they have to invest in virtual tour of their properties to attract investors. He explained that he doesn’t want to participate in the interventions provided to business by the government because of politicization of such schemes and difficult inherent in the procedures.

 

 

He said he is more interested in identifying opportunities provided by the COVID-19 and not overly fixated about profits but safety as he has lost about 30% of business due to the pandemic. Mr. Saka Addo- Mensah explained that the nature of his business requires that he develops a new payment schedule and delivery date and re-negotiate with various stake holders to stay safe in business.

 

 

Professor Ogo Nzewi, the Head of Department of Public Administration from the University of Fort Hare, South Africa provided policy perspective to entrepreneurship and small enterprises. She explained that globally tax reliefs, social reliefs and small business fund have been provided as intervention.

 

 

Meanwhile, in many cases these interventions have been slow in coming and discriminate against the very people and businesses that are in dire need of the support. She said large businesses are now competing with micro and small businesses for such supports which crowd out micro and small businesses of the access. She explained further that, while so many businesses were dead before the pandemic all these businesses are in line competing with those that were destroyed by the pandemic and unfortunately adverse selection has taken place already.

 

 

Prof. Nzewi said the inequality in access to these interventions to especially the women who are in need could be traced from past policy structures or legacies where policy benefits are distributed based on factors such as political affiliation, what political authorities expect from groups that benefit from the intervention. She further advised businesses to seek for correct information from the right governmental and non-governmental institutions. She appealed to entrepreneurs and businesses to take TIPS from business associations and government institutions during the pandemic. 

 

 

Prof Nzewi advised businesses to have more open communications and re- evaluate their capacity to adapt quickly and embrace innovation.

 

 

Mr. Nii Kpani, Deputy Director of the Sekondi - Takoradi Chamber of Commerce explained that the coronavirus pandemic is affecting demand of many businesses but indicated that those involve in poultry especially egg production are experiencing over supply because they planned their production and invested in it using demand forecasts from schools across the country to do their investment but now the schools are not in session to buy the eggs. He also explained that demand for some food items, Personal Protective Equipments (PPEs) and medicines are inevitable so the demand is going up. Mr. Kpani explained that businesses that embraced virtual tools for their work are able to cope whiles those who are not able to embrace virtual tools are finding it difficult. 

 

 

On the GHC6.0 million government intervention for SMEs, Mr. Kpani encouraged small businesses who are facing challenges completing the forms to contact the Chamber of Commerce to support them to complete the forms. He said given the number of businesses interested in the intervention the amount is not sufficient.

 

He advised entrepreneurs to incorporate technology into their business processes and build financial buffers to lower liquidity risk during times of difficulties. He further asked small business and enterprise owners to focus on business sustainability through innovations, creativity and quickly adapting to new ways of doing business.

 

Economic analysts at Standard Bank, the parent company of Stanbic Bank Ghana, have indicated that Ghana’s economy is likely to see a full recovery in 2024 due to the impact of COVID-19. This was contained in the May 2020 edition of the bank’s African Monthly Report (AMR).

 

According to the report, the 6–8 percent year-on-year growth that seemed reasonable at the beginning of the year is no longer likely.

 

“COVID-19 undoubtedly will affect economic growth meaningfully. Whereas growth of 6% – 8% y/y in the next 2 – 3 years seemed reasonable before, now 1.0% y/y seems likely this year, with a recovery only next year. In our base case, we see economic growth topping 5.0% y/y only by 2022,” the report said.

 

The report further indicated that the economic situation will make it difficult for the government to control the fiscal gap, which will in turn affect the strength of the local currency.

 

The report noted that “Our bear scenario sees an economic contraction this year, then recovering to over 5.0% y/y growth by 2024. In this scenario, the government would find it hard to arrest a widening fiscal deficit, triggering significant portfolio outflows that would lead to faster depreciation of the Ghana Cedi than in our base scenario”.

 

Furthermore, the report indicated that the fall in oil prices will further undermine long-term economic growth particularly because oil revenues are a significant part of government revenue.

 

According to the report “Naturally, given the oil price collapse, and the flux in that market, Ghana’s oil production will be restrained too. A significant source of uncertainty is how long oil prices will remain as depressed. The longer so, the greater the likelihood that investment in the oil sector will dwindle, undermining long-term growth”.

 

The report continued that “Oil revenues are a significant source of government revenue, at 5.5% of total revenue, with dividends from oil accounting for an additional 6.8% of revenue. Also, consider the service suppliers to the oil industry. Were oil prices to remain depressed for long, overall economic activity would suffer”.

 

These conditions notwithstanding, the report predicts less pressure on inflation this year and foresees the Central Bank’s Monetary Policy Committee easing its policy stance in a bid to boost economic activity. The report also sees strong official financial inflows, which will likely leave the country’s balance of payment in a healthy position this year despite pressure on the current account.

 

The African Markets Report is a monthly report issued by the Standard Bank Group, the parent company of Stanbic Bank Ghana and focuses on the economic and financial outlook of African countries. The report also reviews current economic situations and makes short to medium-term predictions about the economies of African countries.

 

 

Adnan Adams Mohammed

 

Ghana’s banking sector, for the few years, have been experiencing operational restructuring as the sector is strategically and aggressively catching up with peers in developed economies with technological innovations to improve on their services while cutting down labor cost.

 

This is evident in the President of the Chartered Institute of Bankers (CIB) Ghana, Patricia Sappor’s recent comment which suggested that, banks in Ghana aggressively driving their digital products and service to help government move the economy from a cash-based system into one that is near cashless or at least, cash-lite.

 

In recent times, we have witnessed many launching ceremonies by banks collaborating with Financial Technology (Fintech)companies and other technological entities to develop more convenient and user friendly digital platforms to enhance their operations as well as the numerous adverts from the banks encouraging customers to jump onto the digital train with the use of the digital channels such as mobile apps, USSDs, internet banking, ATMs to facilitate banking transactions among others.

 

“One of the key impacts of the current pandemic is the emphasis on social/physical distancing and contactless payment options. The situation presents financial institutions with the opportunity for digital transformation both at the front and back office levels,” Patricia Sappor said during a webinar organised by Krif Media Limited, publishers of Integrity Magazine last week, adding that, “if banks would undertake this initiative effectively, it could result in efficient service delivery, quicker turn-around time and improvement in the overall service experience for bank customers.”

 

In this regard, staff of banks and financial institutions have been urged to adapt to the rapid developments in digitisation in order to stay relevant in the industry.

 

The Head of Channels at UMB Bank, Myles Hagan in his interaction on the subject cautioned that, any banker who wants to remain employed would need to enhance their education and skills in digital banking operations.

 

“Presently, certain institutions have adopted working from home, which means you do not necessarily have to come to the office but can use digital tools to execute your functions. Moving forward, in terms of workforce and digital adoption, staff who can equip themselves with knowledge to use technology are in a better position to remain in their jobs, as against those that may find challenges in adopting digital tools,” he said.

 

Making the technological advancement in the banking sector and other sectors of the economy is the onset of COVID-19 which has spurred growth in digital adoption, with most entities in the ecosystem (banks, Fintechs and allied services like telcos) reengineering their existing portfolio have affected processes.

 

Several major technological trends are converging and transforming digital banking services for businesses. The result is that banks across the country and beyond are waking up to growing competition and the changing demands of their clients.

 

Companies of all sizes across the globe are embarking on their own digital transformations. Businesses want faster and more convenient methods to transfer funds and analyse their financial data. This means shifting away from manual paper-based processes and adopting electronic, increasingly automated payment processes that also allow more sophisticated, data-driven decisions.

 

“For example, if there was patronage initially of a mobile app, customers now want a little bit more than what used to be on the app. Most banks will be recording about 90 percent uptake in digital services—and that is very good. It helps us drive more uptake by advising customers and putting up educative materials so most customers will move towards digital rather than analogue”, Mr Hagan emphasized.

 

He added that, banks need to provide a better, more relevant service, and invest in products that meet the changing customer needs of real-time, mobile, frictionless and simple banking. For Instance, UMB presently has pushed digital uptake to 90 percent, and for the future they plan to ensure that all banking services are done digitally, Mr. Hagan indicated.

 

On how well banks are prepared to meet the dynamics of customer expectations, he stated: “Most banks are enhancing their levels of investments in the adoption of predictive analysis, artificial intelligence and business analytical tools, which can help us preempt customer expectations. So what is going to happen is most banks can forecast that this customer per his strength may need this.”

 

Also, Deputy CEO of Ghana Association of Bankers, John Awuah, noted that credit expansion to productive sectors such as the manufacturing and SME financing, banks investing heavily to enhance fintechs capabilities, government introducing policy initiatives to redirect trajectory of credit expansion and the banking regulator proactively balancing the need for regulatory prudence and inertia post COVID-19 would revive the economy faster.

 

“We will be seeing the beginning of the end of the palace-style bank branches in the glamour we currently have them, as most banking services, in our estimation, will transition onto self-service platforms in the near-term.

 

This is certain to happen because the overwhelming convenience that is afforded by the alternate channels for delivering banking services far outweighs the trappings of flashy banking premises.”

 

A central bank-initiated clean-up has seen the total number of banks reduced from 30 in 2018 to 23 presently. This has also led to a shrinking of the number of physical bank branches.

 

A recent study by Deloitte on the potential implications of COVID-19 on banking and capital markets revealed that the number of physical bank branches in Ghana has reduced from 1,342 in 2016, when there were 33 banks in operation, to 1,145 branches as at end-2019.

 

This, Mr. Awuah believes, is a foretaste of what is to come where technology will not just be an enabler but will become the business of banking.

 

“What was missing that COVID-19 has helped propel forward is the acceptance and adoption of digital banking channels. For instance, customers who once resisted digital banking are fast realising that they are treading on lonely grounds in this period.

 

Our projections from the association’s perspective are that, as they experience more and more of the digital channels made available by banks, the less likely it is that they will want to go back to visiting brick-and-mortar bank facilities in the future.”

 

Mr. Awuah noted that likely areas of banking operations to be affected include: customer on-boarding activities, product and service origination, bank performance assessment, and work environment design.

 

Other critical areas are staffing requirement in banks and the fluid opportunity for customers to compare and contrast banking services.

 

Consequently, on improving banking services to customers and stakeholders in this COVID-19 era, former Deputy Managing Director of Prudential Bank, Mary Brown, has suggested that, banks must set up a Special Credit Coordinating Room that will be responsible for selling and operationalizing the bank’s credit strategy in response to the crisis. This is to ensure a consistent and coherent response across all aspects of the bank’s lending operating model.

 

He stressed that banks have a duty to anchor the economy by cautiously continuing with credit expansion to productive sectors among others.

 

 

Adnan Adams Mohammed

 

Human resource experts are calling on organizations and individuals to invest in virtual infrastructure and assets that will make employees deliver in the new work environment brought about by the Coronavirus Pandemic as it poses as a strong trigger for reforms to embrace technology intensive workplaces globally.

 

Dr Vivian Osei, a senior Lecturer at the Department of Human Resource and Organizational Development at KNUST noted that, the workplace for some employees have moved to the home with inappropriate set up for work coupled with destructive surroundings. 

 

According to the International Labour Organisation (ILO) statistics; only 10.7% of households in Africa have computers in 2019 and internet use was just about 28% when Europe was 83%. This inherently does not support the current situation where most workloads at workplaces are to be done at home to reduce the human-to-human contact hours at workplaces due to the COVID-19 pandemic.

 

“With technology and proper capacity building, everywhere could become the workplace”, Dr Osei posited during her presentation at the University Of Cape Coast School Of Business fourth session of the E-seminar organized on the topic: “Coronavirus Pandemic: implications for workplace reforms and employee wellbeing.”

 

In this pandemic era with attendant downsizing actions by many organizations to cut cost as part of organizations operational cost management decisions, Dr. Osei advised organizations to place a premium on human dignity, pain and empathy to inform any employee who out of extreme consideration and with regards to the law has to be laid off.

 

Some HR experts have noted that the pandemic has placed much attention on health and safety measures at workplaces unlike before which a positive point to sustain post-COVID-19 era, but a little more efforts are needed in terms of investments into office layouts to sustain the benefits to employees.

 

 

Labour experts, therefore, are calling on Governments in Africa to invest in ICT to enhance inclusion of employees and potential employees in the new workplace because access to the internet and ownership of computers in households are abysmal and that this should attract attention. Whilst, employees to protect data and information of their organizations with upscale sensitivity saying flexible workplace and working hours should not increase the risk of organizational secrets and information.

 

The Dean of the Business School at UCC, Prof. John Gatsi in his introductory comments supported the call for increase investment in ICT to enhance the correction of disruptions to work.

 

He asked Human Resource experts to unearth other critical challenges that the pandemic has brought apart from job losses such as health and safety, illnesses related to COVID-19 but not through infections to establish a basis for comprehensive solutions.

 

Mr. Francis Eduku, the Vice President and Human Resource Director of Goldfields Ghana Limited in his opinion believes that, one of the issues labour unions and leaders are silent about is the effect of the pandemic on a psychological contract which is about the unwritten contracts which cannot be found in the collective bargaining agreements but have become part of the work culture, motivation and recognition.

 

He emphasized that all these things have been eroded such that all the unwritten promises made by management and employers to employees for which performance was good could not be fulfilled. He explained that with a situation where people work from home and virtually in many cases nobody is providing workplace socialization, acknowledging and recognizing as before. In some cases, no employer is interested in whether the home setting provides a conducive environment to work.

 

Mr. Eduku noted that some workers are isolated and filled with anxiety and therefore called for collaborative, caring and engaging relationship between employees and employers.

 

In this regard, academia, especially the Department of Human Resource Management of the School of Business is being charged to conduct a survey into the impact of the pandemic on psychological contracts to provide a balanced perspective of the effect on employees.

 

The Executive Director of the Institute of Human Resource Practitioners Ghana, Dr. Agbettor encouraged employers not to live in fear that the multiple work locations and flexibility being experienced will expose their vital information to the wrong people. He rather asked employers to build such capabilities for their employees to improve trust. Stressing that COVID-19 has increased socialization risk for both employers and employees because their source of joy, sharing of experiences for a long time is the interaction at fixed workplace.

 

The challenge now, he said, is how to build into the new work models the workplace socialization. He appealed to employees to provide interest-free loans to employees if they have the means and alternatively negotiate with financial institutions for flexible loans to their employees to minimize financial anxiety.

 

Dr. Nana Yaw Oppong, a Senior Lecturer at the Department of Human Resource Management, University of Cape Coast School of Business, in his interaction discussed the challenges the pandemic poses to collective bargaining agreements especially post-COVID-19  and call on labour unions to start discussing the issues.

 

He advised employers to follow redundancy procedures and negotiations and advised that redundancy reason as provided by the law is critical. He cautioned employers should not treat employees as victims of the pandemic that should be laid off at the will of the employers without following the redundancy process.

 

 

 

 

Adnan Adams Mohammed

 

A new market survey report released by IHS Markit Ghana PMI has indicated that business confidence has rebounded some few weeks after the restrictions were eased.

 

 

Ghana’s Purchasing Managers’ Index rose by 15 index points in May, registering 46.7 from the record low of 31.7 posted in April representing a leap jump in business confidence to all time high levels since November 2018, according the report.

 

 

Although, the private sector moved towards stabilisation in May as a loosening of coronavirus disease (COVID-19) lockdown measures resulted in much softer reductions in output and new orders than the unprecedented declines recorded in April. An economist with HIS Markit has said, the rebound in confidence does not necessarily mean business activities have picked up and come back to normal, but simply suggests, the rate of contraction slowed substantially from that seen in April as some firms restarted operations following a loosening of COVID-19 lockdown measures.

 

 

“While still signaling a private sector in decline, the May PMI data for Ghana provide cause for encouragement. Rates of contraction in output and new orders eased markedly following the loosening of lockdown restrictions, with both nearing stabilisation”,Economics Director at IHS Markit, Andrew Harker said in the report.

 

 

That notwithstanding, the report adds, there were still marked job cuts recorded in May, only the pace of reduction was slightly softer than that seen in April. Some business owners said they had to cut down on staff due to social distancing rules.

 

 

Mr. Harker said the job cuts situation raises a cause for concern, especially, the fact that most of them are as a result of social distancing rules. He maintains this could potentially delay any return to net hiring, even if new order volumes improve.

 

 

He added that the data raise hopes that a return to growth in the economy may even be seen in June as President Akufo-Addo has further eased the restrictions he imposed in March to contain the spread of the disease.

 

 

Despite the number of recorded cases hitting more than 8,000, President Akufo-Addo says it is time for some important activities to resume, at least partially, in order to reduce the socio-economic impact the restrictions have brought on people.

 

 

Some of the businesses and gatherings that have been given green light to come back from hibernation are restaurants, schools, religious events, among others, but under the condition that they will respect and follow the laid down rules outlined.

 

For example, restaurants can now open, but those providing seated services must operate under appropriate social distancing arrangements and hygiene protocols. Again, conferences, workshops, weddings, and political activities, except rallies, are allowed to take place but with limited numbers not exceeding 100 persons present, with the appropriate social distancing and hygiene protocols.

 

 

Then, schools, were only open to final year students in the university, senior high, and junior high but with limited numbers in each classroom, along with observing all the preventive protocols outlined by the Ministry of Health.

 

 

 

 

Adnan Adams Mohammed

 

In spite of Cabinet’s approval of Park Agrotech Limited, a Ghanaian company in the agribusiness sector, as the preferred strategic investor for the Komenda Sugar Factory, the contract is not yet to be in force as its awaits the government to put in place a sugar policy to guide the operations of the factory.

 

 

As the defunct factory is expected to begin operations later this month, the Trade Minister, Alan Kyerematen has informed Parliament that, there is the need for all stakeholders to exercise patience as the sugar policy is being drafted to enable the concessionaire take over fully.

 

 

The Komenda Sugar Factory, which was built at a cost of $35 million from an Indian EXIM Bank facility, was inaugurated by then President John Mahama in May 2016, amid pomp and pageantry but was locked after a few test runs. The factory was also expected to generate energy for its production activities and produce by-products such as molasses for the alcohol industry.But many challenges, including the unreliable supply of sugarcane for continuous processing after the preliminary test run, hampered the operations of the company. However, in November 2017, the Akufo-Addo government initiated processes to revive operations of the factory.

 

 

“Mr Speaker, following the approval by Cabinet as required by conventional practice, the Transaction Advisors entered into final negotiations with the successful bidder with the view to entering into concession agreement for the operations of the Komenda Sugar Factory,” Mr Kyerematen told Parliament last week. Adding that, “The factory was not handed over to the concessionaire for commencement of operation after the farmers negation with the concessionaire.”

 

 

He further explained that, “It became obvious that unless there is a sugar policy which will provide the strategic framework for the work of the concessionaire it wasn’t going to be possible for us to complete the process of handing over the factory to the concessionaire. So, it only stands to reason that we go through the process.”

 

 

The Minister said over the first three years of the agreement, Agrotech would invest $28 million in capital expenditure and working capital, including paying an annual concession fee of US$3.3 million for a period of 15 years.

 

Also, a $24.5million Indian EXIM Bank credit facility was being sourced to develop and implement a plantation and out-grower scheme in a bid to provide raw materials for the factory.

 

 

Under the scheme, some 14,100 acres of sugar cane would be cultivated to feed the plant.

 

 

Agrotech is expected to work with STM Projects Limited, an Indian company with extensive experience in the management and operation of Sugar Mills and plantations both in India and other parts of the world.

 

 

The Agreement would be effective upon completion of Condition Precedent, which includes the approval of the Agreement by Parliament, adding that the required documentation would be brought to the House in due course.

 

 

The Minister said during the final negotiations it became necessary for action on the implementation of the project to be delayed until the finalization of the National Sugar Policy, which was intended to provide the strategic policy framework for the implementation of the project.

 

He explained that after series of extensive stakeholders’ consultations, the National Sugar Policy was finally approved by Cabinet in 2019”.

 

Mr Kyerematen also stated that the approval of the Sugar Policy paved the way for the Concessionaire to be formally introduced to the Chiefs and Elders of the Komenda Traditional area in November, 2019.

 

He informed the House that the formal agreement between Park Agrotech Limited and Komenda Sugar Development Company Limited had now been executed.

 

He assured the legislature that as soon as the restrictions on foreign travels arising from the Covid-19 pandemic is lifted and the necessary protocols and approvals have been secured, the technical partners of Park Agrotech would begin a comprehensive programme to bring the sugar factory back to life.

 

“I wish to assure this august house that as soon as the restrictions on foreign travels arising from the Covid-19 pandemic is lifted and after all the necessary and relevant protocols and approvals have been secured, the technical partners of Park Agrotech will begin a comprehensive programme action to bring the Komenda sugar factory back to life,” he said.

 

 

 

Adnan Adams Mohammed

 

Ghana’s electricity access for all by 2020 has been marked as a failure as the current electrification rate is pegged around 85 percent.

 

This shows a 15% off the target, leaving no hope of achieving the agenda soon as the annual growth rate slows for the past four years, an energy expert has said.

 

Some 31 years after the establishment of a 30-year National Electrification Scheme (NES), there still exists a substantial deficit in electricity access in Ghana. The 30-year National Electrification Scheme (NES) was instituted in 1989 to achieve universal access to reliable electricity supply by 2020. The baseline at the time the policy was rolled out, showed national electricity access of about 25 percent, with only 5 percent rural penetration.

 

“It is evidently clear that with the current growth rate, it is practically impossible to achieve universal access by end 2020”, Paa Kwasi Anamua Sakyi (Nana Amoasi VII), Executive Director of the Institute of Energy Security recounted in a write-up on the need for Ghana to deploy renewables to achieve universal electricity access by 2025.

 

“And the admission of this fact is what has led to the government of Ghana revising its target, and seeking to develop new strategies to push the boundaries to achieve the goal of universal access by year 2025.

 

“Thirty-one years after the policy was instituted, there still exists a substantial deficit in electricity access in Ghana. The current electrification rate is about 85 percent, a bit far off the target, with no improvement in sight”, Mr Sakyi has said.

 

Data from the Energy Commission of Ghana also showed that at the end of 2000, electricity access rate stood at 45 percent, suggesting an annual growth rate of approximately 2 percent.

 

By the end of 2010, the country had achieved an access rate of 67 percent; indicating an annual growth rate of 2.2 percent.

 

Also, the annual growth rate between the next six years that followed (2010 and 2016) as recorded by the Energy Commission, was 2.7 percent.

  

The trajectory shows an incremental annual growth in electricity access.

 

However, over the last three years (between 2016 and 2019) the annual electricity access growth rate has seen substantial decline from 2.7 percent to a paltry 0.6 percent.

 

As of the end of 2019, the country had obtained a national electricity access rate of 85 percent.

 

If the country had maintained just the annual rate of roughly 2.7 percent, electricity access rate would have been somewhere around 92 percent today; comparable to other countries outside the sub-Saharan African and Asian band.

 

 

By Elorm Desewu

The Bank of Ghana’s (BoG) maiden on-site market conduct examinations of the banking sector reveals many infractions and breaches with regard to the operations of the banks in the country.

The market conduct examinations by the BoG show that some borrowers were not provided with pre-agreement disclosure statements prior to the signing of loan agreements. Borrowers were not clearly informed of the requirement to submit their credit data to credit bureaus and to conduct credit search on them when taking loans.

Also the maximum penalty of 0.25% for early repayment of loans was breached. Prior to pursuing enforcement actions on loan defaulters, the minimum prescribed notice period of 30 days was not given some borrowers.

According to the BoG, personal details taken from remittance customers were subsequently used for telemarketing promotional activities without the consent of the affected persons.  Abandoned forms or slips used by customers for balance enquiries and other transactions were not properly disposed of, thereby exposing customer personal details to third parties.

Additionally, customers’ savings accounts were charged for over-the-counter withdrawals below stipulated minimum amounts. Customers were automatically signed onto E-banking products and services and consequently charged without their explicit consent.

It is instructive to note that, changes in terms and conditions of loan agreements were made and implemented without the required period of prior notification of customers. Ambience Access to most banking facilities such as banking halls and ATMs were not friendly to physically-challenged persons. There were instances where hawking activities were allowed in front of some banking halls.

It was revealed that some banks were not able to deliver on marketing promise of disbursing certain loan facilities within 24 hours. Inadequate training of staff especially frontline/customer service officers and loan officers on the two consumer protection directives issued by the Bank of Ghana and other conduct related topics.

 Area of Examination Findings Channels provided by banks to enable customers to lodge complaints such as SMS, Website portal and dedicated telephone lines, did not function.

The Bank of Ghana’s current market conduct regulatory regime is underpinned by the Banks and Specialized Deposits-Taking Institutions Act, 2016 (Act 930), the Borrowers and Lenders Act, 2008 (Act 773), and the Credit Reporting Act, 2007 (Act 726), among others.

Section 3 of Act 930 mandates the Bank of Ghana to, among other things, regulate and supervise the conduct of banks and SDIs. In pursuance of section 3(2)(d) and section 92(2)(a)(xi) of Act 930, the Bank of Ghana issued the Consumer Recourse Mechanism Guidelines for Financial Service Providers in 2017 to provide customers of institutions licensed by the Bank of Ghana (banks, Savings & Loans Companies, Finance Houses, Rural and Community Banks, Micro Finance Institutions and Forex Bureaus) with access to adequate redress that is fair, efficient, timely, and without cost to the complainant.

Specifically, the Guidelines require licensed institutions to display notices in all branches, informing their customers of the processes in place at that institution for lodging and addressing customer complaints, the timelines for resolving such complaints, and how unresolved complaints may be escalated to the Bank of Ghana. The Guidelines also provide for how customers may lodge complaints with the Bank of Ghana if they are unsatisfied with the manner in which their complaints have been dealt with by the licensed institution, after which they may proceed to court for redress if they remain unsatisfied.

In pursuance of section 7 of the Borrowers and Lenders Act, (2008), the Bank of Ghana also issued the Disclosure and Product Transparency Rules for Credit Products and Services in 2017, to help ensure that borrowers are able to make informed decisions before signing up for credit products or facilities. The Rules also seek to promote fair and equitable credit practices by lenders by:

 Prohibiting discriminatory lending practices for reasons that are noncommercial in nature (i.e. lenders cannot discriminate on the basis of tribe, religion, political affiliation, etc.);

 Requiring lenders to strictly ensure the suitability of credit products for various types of consumers;

 Requiring mandatory disclosure of all fees, interest rates, charges, and other terms and conditions prior to loan approvals and disbursements, and the signing of a Truth-in Lending Agreement with each borrower;

 Limiting loan prepayment penalty fees which were previously set at the discretion of licensed institutions, to 0.25%.