Tuesday, 31 March 2020

Social worker saddened with the ‘Kayeye’ situation


 Cargo drivers 'smuggling' head porters to the North forced to turn ...


Mike Owusu, Program Coordinator of Light for Children Ghana is saddened by the way the head porters (Kayaye) situation is being handled.



He called the bluff of the leadership National Disaster Management Organisation (NADMO) for not being proactive to put in measures to cushion the living condition of the less privileged who sleep and live on the streets in the major cities.



Part of the country are experiencing partial lockdown under executive orders which started, yesterday, 30/03/2020, for the next two weeks in attempt to help curb the spread of the pandemic COVID-19.  


“Whoever is in charge of NADMO must bow his head in shame”, he said. “In deciding the lockdown, we should have anticipated the homeless and our people in the streets, and how to handle them.”


However, Mr Owusu suggested some immediate measures to help solve the situation. “Ok I do not intend to rant. I wish to propose the following:


1. We must as a matter of urgency identify all the schools and churches available for use.


2. Convert Independent square, Accra sports Stadium, Elwark Sports Stadium and similar facilities into a temporary shelter.


3. Call and direct all homeless, Kayayees, misplaced people to such places.


4. Use the opportunity to screen and provide them with basic items such as tissues, sanitizer and other cleaning items.


5. Contract the school feeding caterers to provide them food. Or use the matrones in the secondary school to cook for them. We can also employ the hotels restaurants to cook for them. This way we can get the hotels to generate revenue at the same time.


6. Philanthropist and well-meaning Ghanaians can mobilized to support such effort by donating in kind and cash. Some of us can even volunteer our time in times like this.


“This way we can help achieve the goal of the lockdown with a human face.”


Samuel Okudzeto Ablakwa writes on gov’t’s intent to use Heritage Fund for COVID-19 fight ….suggests alternatives

MP for North Tongu Hon. Samuel Okudzeto Ablakwa writes: - PABMCGHNEWS




After listening to the Hon. Finance Minister in Parliament earlier today justify the need to use the heritage fund in the fight against COVID-19, I shall humbly submit that before the Akufo-Addo administration depletes the heritage fund reserved for the next generation, we first consider the following 10 suggestions:


1) 50% pay cut for all political office holders;


2) Reduce by 60% the number of Ministers and Presidential Staffers;


3) Close and realign many of the Ministries which would become redundant after the ministerial downsizing;


4) Lay off all Personal/Special Assistants to Ministers and Presidential Staffers;


5) Suspend all Ex-Gratia payments;


6) Interim closure of at least 50% of our diplomatic missions abroad and recall staff to Accra;


7) Cancel contracts of all consultants in the public sector;


8)Put a freeze on all prestige projects which can wait including the national cathedral, marine drive project, new passport office and the regional coordinating council offices for the six new regions;


9) Suspend the phenomenon of free fuel for the category of public servants who benefit;


10) Repeal all tax waivers granted in recent years for non-essential services and commodities with the view to abolishing the practice moving forward.


If we muster the political will to do these, the heritage fund will most likely be left intact for our children.


May the generation that will come after us not be disappointed that we bequeathed them with virtually nothing because we refused to sacrifice and consider other patriotic options in this watershed period of history.


Social distancing in public transports: reduce fuel price by 20%

GNPC Appoints Alexander Kofi-Mensah Mould as CEO - Executive ...


Adnan Adams Mohammed


Alexander K. Mould, a finance and energy expert, is calling on the government to effect a 20 percent reduction in fuel prices to help alleviate public transport social distancing losses as the commercial drivers are directed to reduce the number of passengers the buses take. 



In a press statement issued, yesterday, the former National Petroleum Authority Boss noted that increased transportation cost will worsen the anticipated effect of the global pandemic (COVID-19) on the general economy and the cost of living of ordinary citizens such as loss of income and businesses and increase in the costs of goods and services.



The challenges of the current season provide a responsibility to quickly visit “win-win” opportunities to alleviate some of the financial burdens on all Ghanaians as April 1st, 2020 presents a “no-brainer” opening to reduce the cost of petrol at the pump.



“Petrol is at its lowest price since the 1990s – $0.38/gallon wholesale from U.S refiners and Wholesalers. With this in mind, Ghana should expect a drastic drop of up to 20% in petrol prices on April 1st”, Mr Mould suggested. Adding that, “Petrol is currently imported into Ghana for less than $0.24/litre or GHS 1.40/litre (based on FX rate of GHS5.85 GHS/USD).”



Read below the full press release:




20% reduction in fuel prices will alleviate public transport social distancing losses - Alex Mould


As the lockdown to combat the spread of the Coronavirus is now in effect, Ghanaian families and businesses will have to reset. A domino effect on our economy caused by the pandemic is expected to bring about challenges such as loss of income and business, and increase in the costs for goods and services, and other factors impacted by increased transportation costs.


The challenges of the current season provide a responsibility to quickly visit “win-win” opportunities to alleviate some of the financial burdens on all Ghanaians – April 1st presents a “no-brainer” opening to reduce the cost of petrol at the pump.


Petrol is at its lowest price since the 1990s – $0.38/gallon wholesale from U.S refiners and Wholesalers. With this in mind, Ghana should expect a drastic drop of up to 20% in petrol prices on April 1st.


Petrol is currently imported into Ghana for less than $0.24/litre or GHS 1.40/litre (based on FX rate of GHS5.85 GHS/USD).


The daily price indicators used for the Petroleum Price Build-Up (PBU) as published by the National Petroleum Authority (NPA) are as follows:

- 1st March: $540/ton (t)

- 16th March: $434/ton (t)

- 1st April: $212/ton (t)


This translates to a drop of 50% from 16th March and a 60% drop from 1st March.


Going by these Price Build-Up (PBU) indicators and the methodology used to derive them, we expect petrol prices to go as low as GHS GHS4.00/litre. This price can go down even further with Government interventions in the form of tax breaks.


From the PBU, the taxes and distribution costs of petrol are GHS1.50/litre and GHS1.10/litre respectively (or GHS 2.60 combined); which represents about 65% of the pump price of petrol.


This makes Ghana one of the highest-taxed countries with respect to petrol.


I am reliably informed that Government is being advised to seriously contemplate removing the nuisance “Special Tax” (GHS0.46/litre) and the outdated “Price Stabilization” levy (GhS0.16/litre). If done, we could see prices fall even lower than the expected GHS 4.00/litre to below GHS 3.50/litre.


Enacting these very doable reductions would be a relief to so many – remembering that nearly 80% of our population constitutes key workers who, in serving the public will have to embark on alternate (and more expensive) transportation means to keep themselves safe, as per social distancing guidelines.  




·         Note: a US Gallon is 3.875 litres whereas a UK Imperial Gallon - what is used in Ghana - is 4.5 litres.

·         PBU is agreed to by all the players in the value chain - (Chamber of Bulk Distributors (CBOD), Association of Oil Marketing Companies (AOMC), Tanker Owners, and Tanker Drivers; collectively the sector players).





Alex Mould



Heritage Fund for COVID-19 fight: Experts speak against it, provide alternatives

PDS Fiasco: Finance Minister Fingered! | Nsemgh


Adnan Adams Mohammed


Some finance and extractive sector experts have called on the government to abort or reconsider its intention to seek for amendment of the Petroleum Revenue Management Act, 2011(ACT 815) as amended to allow it use the Heritage Fund for the COVID-19 emergency expenditure.



Professor John Gatsi, a finance and economics expert is suggesting the government rather utilize the Stabilization Fund and take its hands off the Heritage Fund. He expressed that, “Any use of majority strength in parliament to rope in the Heritage Fund defeats the fine arrangement which serves current fiscal interest, public expenditure interest in times of huge petroleum revenue loss and intergenerational protection.”



The Finance Minister, Ken Ofori-Atta, yesterday, requested Parliament to amend the Act to allow government to use monies from the Heritage Fund. Consequently, a researcher is calling on the government to cut some budgeted expenditure and use the funds for the COVID-19 emergency expenditure.



“There are ways to get funds to spend”, Obrempong Yaw Ampofo, Senior Research Fellow at Western Center for Extractive Research and Advocacy, a policy Think-thank base in the Western Region, has said in support of Prof Gatsi’s suggestions that the government stay off the Heritage Fund and look else for funding to fight the COVID-19.



“What strikes me is the president recognizing that we are not in normal times, but we still want to spend in other areas how we've known and done in the normal times”, he wondered.



“Except for critical infrastructure and spending, I think the "not normal times" should reflect in other facets of our public spending.



“The donation of three months of his salary is a good call, and I see others following similarly, except to say that, we needn't have to create a COVID-19 fund, but rather direct the funds to the National Contingency Fund that has been dissipated”, Mr Ampofo posited.


Parliament is only allowed per the ACT to pass a resolution of MAJORITY of parliamentarians only after 15 years from 2011 (which can only happen from 2026) to withdraw a portion of the accumulated interest and not the principal. It is therefore clear that the object and timing of the Heritage Fund does not allow for any utilization under the present circumstances.  The object of the Heritage Fund is to serve as an endowment for future generations of Ghana citizens who will be alive at the time when all petroleum activities come to an end.   



Readers should note that the government has factored both the Stabilization and Heritage Funds into the foreign reserves and any undue withdrawal may undermine their role in the reserve position of the country.



“Parliament is hereby called upon to maintain fiscal discipline principles by ensuring that we do not consume all we have just because of the Coronavirus”, Prof Gatsi noted.



Mr Ofori-Atta in his presentation made to Parliament on the economic impact of the Coronavirus pandemic suggests that the targeted surplus primary balance and lower than 6% budget deficit are not to be expected by end of the fiscal year. The deficit target now is 6.6% of GDP implying that the Fiscal Responsibility Act not in control. This is not strange because of the strength and multi-dimensional effects of the pandemic on agriculture, trade, services, imports and petroleum receipts.



He also requested parliament to approve GHC1 billion from the Stabilization Fund as required by sections 9 &12 of the Petroleum Revenue Management Act, 2011(ACT 815) as amended.



The object of the Stabilization Fund is to serve as cushion for the finances of the country in times of massive unanticipated shortfall in petroleum revenue. This request by the minister is appropriate as it is in line with the object of the Act.



Here, Prof Gatsi again is suggesting that, the amount requested must be granted on quarterly basis and in line with a withdrawal formula in section 12 in which: Parliament considers 75% of the estimated quarterly shortfall of the ABFA; Parliament considers 25% of the balance standing in the Stabilization fund at the beginning of the fiscal year; and Parliament is to grant to the Finance Minister, an amount considered to be lesser of (1) and (2) above.


“This shows a deliberate attempt to protect the Stabilization Fund from being dissipated even when there is reason to withdraw.


“Though the Minister is acting within the law to request for a withdrawal from the Stabilization Fund, parliament must adhere to the rule in line with the wisdom of Act 815”, he added.


Saturday, 28 March 2020

Coronavirus Alleviation Program (CAP): The Applause and Questions

John Gatsi | Home | Goldstreet Business

By: Prof. John Gatsi 

Restrictions on movement of people affect livelihoods. Reduction in hardships, protection of economic activities and  general support for the vulnerable have been the issues for which Ghanaians were calling on the President and the government to consider a package that may address these concerns to make a lockdown limit the transmission of the Coronavirus.

The President, in response to these calls that have been made by Ghanaians for almost a week, finally announced in his late-night address the establishment of the CAP to address economic disruptions to businesses and households, hardships, and job losses occasioned by the pandemic and the measures to contain it.

Ghanaians appreciate the president's response to the calls they have made in recent days. The announcement, however, should be clarified further.

The details of the CAP and its application are not known as it must first be presented to and approved by parliament. As a result, the total amount of money being requested by the Finance Minister to establish the CAP is not known. The subtotal for the support of households, businesses and the modalities to access are not known.

The creation of the CAP is very easy and welcome news but managing it in a transparent and satisfactory manner to demonstrate equity and fairness is the main task. The next consideration is that the CAP is just a name until funds are raised to make it work. We recall the earlier announcement, about two weeks ago, in which the President indicated that at his prompting, the Minister in Charge of Finance was to release the cedi equivalent of $100M, a week later the minister said that money was not available.

Given that the equivalence of the earlier $100M partly being sought from the IMF is lower than the minimum GhC1.0 Billion to be made available immediately by the Finance Minister  under the CAP vehicle, some explanation is needed as to the source of this money. 

Also, the Finance Minister cannot release this money even if it is available because the line of disbursement and its appropriateness, bearing in mind qualifications to benefit, must be satisfactory to parliament. 

It may therefore take sometime for a concrete fundraising and disbursement in line with approved criteria. It is, however, to switch funds approved in the budget.

The president has shown leadership by contributing all of his salary for three months into the Coronavirus Management Fund but Ghanaians do not know what his numerous appointees are to contribute. It is important for appointees to also contribute portions of their salaries to the fund. It has been done before. We will appreciate if it is even 3% of their salaries are sacrificed for the next  three months.

Banks are to be appreciated for accepting to sacrifice to defer repayment of loans for 6months but must explain if the 2% interest rate cut is affecting existing loans or new loans only.

Beyond all the fiscal and monetary measures at the macro and micro levels of our society, there is the need to encourage forbearance among people. Pay those you owe if you have the money, give to support if you can, accommodate your tenants if you are a landlord and above all do not take undue advantage of people during the period. After all, Coronavirus has taught us that a strong and progressive society is built when we appreciate the value, needs and supplies of one another.

This is the time to enjoy continuous power supply and electricity rebate because power consumption will naturally increase for average households. This is the time disruption to water supply should be minimal. This is the time sanitation service providers under the private sector and Ministry in charge of sanitation must be efficient as more waste will be generated in many homes. 

Above all, this is the time telecommunication service providers and data services providers should provide rebate for users and provide more efficient services across the country.


Debt relief for the poorest countries amidst COVID-19 spread

World Bank, IMF urge debt relief for poorest countries hit by ...

Adnan Adams Mohammed

Two Bretton Woods institution have called on all official bilateral creditors to suspend debt payments from International Development Assistance (IDA) countries that request forbearance.

The World Bank Group and International Monetary Fund (IMF) decision have become necessary due the Coronavirus outbreak, which is likely to have severe economic and social consequences for IDA countries to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.

The call for suspension is expected to be consistent with national laws of the creditor countries.

“This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country”, the institutions said in a joint statement issued last week.

“We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries,” the statement indicated.

The International financing institutions will seek endorsement for the proposal at the Development Committee during the Spring Meetings, which will be due from April 16 to April 17, 2020.

The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets. The international community would welcome G20 support for this Call to Action.

Finance Ministers across Africa in a statement, recently, called for a $100 billion stimulus package, including a suspension of debt service payments, to help the continent combat coronavirus.

Some US$44 billion would come from not servicing debt and they would also tap existing facilities in the World Bank, International Monetary Fund (IMF), African Development Bank (AfDB) and other regional institutions.

Africa is facing the combined shock of coronavirus, which threatens to strain under-funded health systems, as well as a sharp drop in revenues due to plunging oil and commodities prices.


COVID-19 LOCKDOWN: experts speak on possibilities and measures to put in place

Covid-19: Kwahu Traditional Council declares local lockdown | Starr Fm

Adnan Adams Mohammed

Pressure is being mounted on the government by several keys groupings including; Ghana Medical Association, Minority in Parliament, traders among others, to consider a total or partial lockdown of the country amidst the growing cases of COVID-19 in the country.

A research fellow and doctoral candidate at the New York University College of Global Public Health has, however, advised that before a lockdown is implemented, the government needs to consider the socio-economic conditions of its citizens.

Ghana already has announced over 150 confirmed cases within a period of two weeks of recording the first two confirmed cases. The sudden spike in case incidence is as a result of the mandatory quarantine and compulsory testing for all travellers entering Ghana, as directed by the President. But the substantial number of the cases have been reported in the general population. As of 24 March, a total of 1,030 persons are under mandatory quarantine; samples from 863 of them have been tested, the Ghana Health Service explained.

Covid-19: Akufo-Addo goes for lockdown; Accra, Tema, Kumasi ...

“Before a lockdown is implemented you need to consider the socio-economic conditions that exist in the country. A lockdown without any social intervention policy to cushion the people is basically a starvation order” Kofi Quakyi stated.

Mr Quakyi also advised authorities to intensify contact-tracing which involves recruitment, training and cooperation with communication companies.

“Each person that's not identified early could risk infecting many others if they've got the disease. We really should be thinking about the people who got into Ghana before we started mandatory quarantining, who might not have shown symptoms” he cautioned.

Meanwhile, some experts say it is imperative that government must allow a lockdown that is defined and matches our context.

An International Law and Governance analyst, Kwame Mfodwo said a lockdown is inevitable but the country cannot afford the situation considering the living standards of its citizens.

He also proposed that it can be maintained for more than three days or a week.

Also, the President for the Institute of Liberty and Policy Innovation (ILAPI), Mr Peter Bismark in a statement released, last week, stated that Ghana requires GH¢15 billion for 28 days’ total lockdown to sustain the economy and protect the lives of its citizens.

He said those who are calling for a total lockdown should note, that was not the best option for Ghana because should that happen, a the stimulus package of over GH¢15 billion would be needed for a 28-day lockdown.

“If it happens like that, it means that registered businesses and firms would have to shut down operations with employees going home, and go with salaries,” he said.

The president of ILAPI said the government would still have to ensure the continuation of salaries of public sector employment and provision of basic needs and other services, including electricity, essential services, water and food.

He said the informal economy would suffer from the lockdown because of loss of daily sales and income. The sector, he said, may not directly benefit from the emergency financial response but would reduce individual income and purchasing power.

According to him, since Ghana’s economy thrives on small and medium-scale enterprises, the government must spend more to support local businesses with some tax rebates, financial reliefs, refunds and social assistance.

“As the market activities continue to drop and many Ghanaians are calling for a total lockdown, forward-looking fiscal and monetary measures are necessary to save the economy from impacts of the Coronavirus pandemic,” he stated

Mr Bismark said the exponential growth of the number of cases are already causing a progressive lockdown.

“With this development, businesses would close and physical activities would cease. Because of inexplicable barriers that the coronavirus crisis brings, people may be prevented from doing useful things for income and wealth creation.”

Consequently, The Vice-President of ILAPI, Mr Evans Badu Boampong has proposed some measures that the government need to put in place before considering a lockdown.
Among the measures are that the government must meet all the relevant business associations, including the manufacturing firms, to deliberate consciously on production capacity and job loss.

Insurance companies could not remain the same as our insurance premiums during lockdowns so the government again must meet the Insurance Commission as early as possible to make a readily available partial payment to their clients to support them in times of the panic.

“They should also provide exclusive premiums to their clients to support government health interventions,” Mr. Boampong said.

Salaries of workers should not be subjected to full tax deductions, suggesting that at least 50% tax refund should be given workers while Ghana Water Company should consider opening taps for those who are even owing bills to ensure there is a free flow of water to aid hand washing.

The Ministry of Food and Agriculture, through the Buffer Food Stock, Mr. Boampong said, should develop an outline system to supply food to underprivileged homes and also support companies in Ghana (both local and foreign) to change their structure of production to produce some essential goods to avoid shortages during the lockdown,” he stated.

Mr Boampong further suggested that, Ghana Grid Company Limited, Volta River Authority and Electricity Company of Ghana must ensure there was a continuous supply of power since most institutions would be working from home and that tariffs should be reduced.

With regards to the people who don’t even have a place to get locked inside, as Ghana’s housing deficit stands over 1.5 million, the government must advance plans to shelter some millions of Ghanaians in hotels, motels, and guest houses among others.

“As a policy analysis organisation, we make these proposals based on a careful study of other nations which have implemented lockdowns due to COVID19. And we believe that these measures should suffice, though not completely, in helping manage the situation of a lockdown,” Mr Boampong said.


Ghana to go back to IMF sooner

Don't exit IMF completely - Seth Terkper - GrabGhana.com

Adnan Adams Mohammed

As Ghana and the world battles with the severity of the impact of COVID-1, the former Finance Minister, Seth Terkper is predicting that countries that exited the IMF may go back to the Bretton Woods institution if the outbreak of the coronavirus lasts longer.

The consultant at the International Monetary Fund (IMF) indicated that the COVID-19 outbreak is having a negative effect on the economy globally, a situation that may compel some countries that had exited the IMF to return to seek for help from the same body.

It could be recalled that after Ghana exited the IMF under the Akufo-Addo administration, Finance Minister Ken Ofori Atta said the country won’t go back to the institution because sufficient macroeconomic gains have been made.

“The expectation of all of this is that we are consistently on top of the macroeconomics of the country, and making sure that we work within the budget, Parliament will have approved.

He indicated that the gains made have resulted in a rising and broad-based GDP growth momentum, with the economy growing by 6.1% (end Q3 2018 average); 8.1% in 2017; and 3.4% in 2016.

On what occasioned the IMF programme, he explained that in 2012 before the general elections, Ghana recorded a deficit of 11.5% of GDP – the highest deficit on record in the fourth republic – with the IMF calling for urgent measures to restore macroeconomic stability.

But Mr Terkper under whose watch Ghana went to the IMF, told Randy Abbey host of the Good Morning Ghana programme on Metro TV, Wednesday March 25, 2020 that: “We may see some of these countries going back to the IMF if the coronavirus continues.”

He further advised that Ghana needs to “Build our own basket through the petroleum revenue. That is the only way we can be a truly middle-income country.”

Meanwhile, Mr Ofori-Atta has told Parliament that the $100 million announced by President Akufo-Addo to fight coronavirus is not ready.

President Akufo-Addo in an address said the finance minister has been directed to make the funds available to respond to the deadly virus.
The amount, according to the President “is to fund the expansion of infrastructure, purchase of materials and equipment, and public education.”

But briefing Parliament about the fiscal impact of Covid-19 which has crushed the international capital market, Mr. Ofori-Atta disclosed Ghana has applied to the World Bank to tap into a $12 billion fast track Covid-19 facility and the IMF $10 billion facility to address the deadly virus.

According to the minister, the government will augment allocations from the two institutions with local resources.


US$1.0bn needed to put Ghana economy in shape - Mould


Adnan Adams Mohammed

Standard Chartered Bank former Executive Director, Alex K. Mould has indicated that, the country needs not less than US$1.0 billion to hold the economy in shape amidst the devastating impact of the global pandemic, COVID-19.

He said, there is a very short window of opportunity now if the government is to creatively manage this public health crisis while concurrently reducing its impact on the economy, and plan for a quick bounce back.

President Nana Akufo-Addo in his address to unionised groups, last week, stated that government was not considering a lockdown currently because of the implications, it will have on many people and the economy at large.

“If you lockdown Accra, what are the consequences? If we lockdown the country, what are the consequences? A responsible government is required to look at all this before decisions are made and that is the exercise on which we are currently engaged”, the president said when he met members of the Ghana Union of Traders Association (GUTA) leadership.

But, Mr Mould noted the President was fully aware of the dire consequence lockdown will impact the economy that is he is being careful declaring a lockdown.

"I will reiterate that we have to learn fast from other countries handling COVID-19 and  adapt what has worked to slow down the its spread to suit our environment in Ghana", the former GNPC Boss stated in article shared with the public.

He, however, outlined some possible way out to sustain the economy.

Read below his full article:

There is a very short window of opportunity now if we are to creatively manage this public health crisis while concurrently reducing its impact on the economy, and plan for a quick bounce back.

I will reiterate that we have to learn fast from other countries handling COVID-19 and  adapt what has worked to slow down the its spread to suit our environment in Ghana.

We are told President Nana Akufo-Addo stated government was not considering a lockdown currently because of the implications it will have on many people and the economy at large.

But why not?

Well, his stance was attributed to a meeting he had with the leadership of the Trade Union Congress in Accra yesterday.
And he has been quoted to have argued “If you lockdown Accra, what are the consequences? If we lockdown the country, what are the consequences? A responsible government is required to look at all this before decisions are made and that is the exercise on which we are currently engaged."

The above comment indicates that the President is fully aware of the implications of both mitigation and suppression strategies in addressing the COVID-19GH; yet he has chosen the mitigation route for reasons only known to him!

Watching as things have unfolded in more affected countries and the daily increase in the number of those affected in Ghana, many of us have pushed for a mandatory lockdown alongside current recommendations by the authorities. Especially, considering the fact that our healthcare system is not advanced enough to accommodate massive numbers of infected cases; all the while continuing to meet the health needs of the Ghanaian populace. 

There is no doubt that our hospitals will certainly be overwhelmed and medical practitioners will be unable to cope.

A lockdown will in effect slow down the spread of the virus i.e. reduce the number of people each confirmed case infects and subsequent mortality rates; as well as ultimately avert a crisis.

To do this, the question has been – Do we as a nation have the ability to successfully exist in a lockdown and manage the economic, operational, and even psychological impact of such a measure? Can our infrastructure, economy, and general way of life manage the restrictive measures we have seen play out around the world?

Economically, we are already seeing a gradual slow down as more people take time off work, reduce their daily spending, and children remain home from school. This reality may be masked by the quick surge in panic buying and stocking up we experienced in the past weeks as Ghanaians braced for the full impact of COVID-19; but the economic impact will start to be more apparent as things level off, and people stay home with increased cases.

The current strategy of managing the crisis in Ghana will very likely lead to an emergency lockdown – causing the impact on our economy to be even more disruptively abrupt than in other nations with higher usage rates of e-commerce and more advanced supply chain channels for existence. Should the economy shut down suddenly, small businesses will experience challenges in avoiding payment defaults on bank loans and overdraft payments, paying salaries, an increase in non-performing loans will be observed in the banking sector, a plunge in consumer spending - which powers a bulk of our economy, and we can expect abysmally performance of the stock market.

Success in managing the economy during this time will be measured on how many SMEs and even large corporations avoid going under in Ghana and more importantly, how many Ghanaians will have jobs to return to eventually?

There are great opportunities to harness, and if executed effectively, will ensure a robust recovery with positive effects post-COVID-19. To do this, government will have to quickly decide on spending relative to our GDP and available funding - Ghana’s economy is a $60Bn economy (unlike the US’s $22Tn) may result in a spend of about US$1bn which is about 1.5% of our GDP. The spending government puts in place has a main function of preserving the economy’s ability to bounce back, while fighting the virus and supporting our healthcare frontline. Bank of Ghana will also need to cut interest rates to unprecedented levels and cannot avoid an intervention with the full power of its balance sheets to maintain our functional credit mark. Banks will have to freeze repayment of interest and principal on loans.

Overall we expect to see the creative engagement of activities such as:
·         Establish partnerships to quickly drive capacity to improve in-country logistics and supply chain mediums for food and essential items
·         Employ the use of the Buffer Stock Company, as well as other privately owned silos and warehouses, to enhance storage and supply (Fund farmers and agriculture landscape to buy and store feed, produce, and essentials in these storage facilities)
·         Review possible fiscal measures i.e. suspension of port fees, government levies, and taxes on all food-related imports
·         Plan exportation-industry strategy post-Covid19 – as the global economy awakens and demand begins to rise, Ghana should be able to respond 
·         Ensure we have a robust economic preservation package to raise the probability for businesses and employees to survive and tide-over the near-term from our already slowly hibernating economy

We are certain that the economy cannot be revived until this public health issue is resolved. Emergent and mandatory shutdowns are unavoidable now as the opportunity to control the Covid-19 outbreak has been lost in Ghana.

We therefore have to handle this challenge promptly and creatively, so that we not only protect and save Ghanaians lives, but also ensure our economy is able to withstand and bounce back quickly in support of the Ghanaian people.


Sunday, 22 March 2020

Cashew business losing value as earnings likely to fall amidst COVID-19 impact

Adnan Adams Mohammed

Ghana cashew nut production and farmers are likely to be hit with low sells as the coronavirus pandemic impacts severely on the economy of main buyers.

China, which imports around 10 percent of global cashew nut production for consumption from Ghana, Ivory Coast and some other countries through Vietnam, is facing challenges of getting access to the nuts as Vietnam delays in selling off its existing cashew nuts stock to China due to the impact of the novel coronavirus infections.

If the situation persists, then Ghana’s Non-Traditional Export (NTEs) earnings are likely to reduce significantly this year as cashew is the largest NTEs earner after processed cocoa. Ghana’s 2018 NTEs statistics which saw a significant growth performance of 10 percent over 2017 was largely due to a 43.84 percent increase in exports of cashew nuts, mainly exported to Vietnam, from US$262.95 million in 2017 to US$378.21 million in 2018. The increase in the value of cashew exports alone to Vietnam amounted to US$115.26 million.

“Since Vietnam processes cashew to the tertiary level, some of the impact will be felt in the sector. However, measures are being looked at in order to curtail any possible major impact”, Director of Projects at Ghana Export Promotion Authority (GEPA), Mr. Alexandar Dadzawa has indicated, adding that, “It wouldn’t be immediate, but it also depends on the intensity in the respective countries.”

The price of cashew has witnessed a sharp dive for the past few months on the world market as producers and traders rush to sell existing stocks as results of the devastating coronavirus pandemic. This has resulted in the slowdown of cashew trade as Vietnam begins looking for alternative markets aside China, since this year’s crop was ready for bulk shipments in February from both Ghana and the Ivory Coast.

In effect, trade experts have insisted that if Vietnam expects a slow market in China, the country will also be slow to buy raw cashew from Ghana. Vietnam has recorded more than 35 cases of the coronavirus after new infections from Europe.

Since Ghana’s NTEs sector recorded a blip in 2016, recording earnings of US$2.46 billion as compared to 2015 figure of US$2.52 billion, earnings in every year since then have seen a marginal increase over the previous year. For instance, the sector recorded US$2.56 billion, US$2.813 billion in 2017 and 2018 respectively.

With the impact of the coronavirus disease that has impacted heavily on international trade forcing many countries to issue business and trade restrictions, it is anticipated that the entire earnings in the NTEs sector will seriously be affected, most especially goods meant for export outside the continent.

Producers of cashew nut in West Africa are poised to become a dominant force in the global cashew value chain. In recent years, there have been a significant increase in the number of domestic processors investing in mechanized processing to improve quality, reduce costs of production and reduce the export of raw cashew, which currently stands at 90 percent of total export.

Consequently, cashew nut has been experiencing unfavourable market price, losing about 75 percent of its market price from 2018 till date.

Currently, a bag of raw cashew nuts (100kg) which was quoted at GH¢800 during the peak period in the 2018 season, has lost significant value to GH¢200 per the same bag, this is about 75% reduction in price.

The market situation is causing dissatisfaction among farmers in the main cashew growing areas of the country’s middle belt as it is not prudent for them to trade at the current price considering the high labour cost of picking the nuts as well as carting it to sales points.

“Buyers have expressed concern about the high moisture content of the raw cashew nut (RCN) and ‘low’ grade of the nuts”, Solomon Ameyaw, Secretary of Tain Cashew Union said to journalists at Seikwa in the Tain district of Bono Region. He noted that the buyers always hide behind flimsy reasons to manipulate the market.

“They raised these issues last year and farmers have taken it upon themselves to dry the nuts before selling, but it has not changed the posture of buyers,” Ameyaw said.

He said the buyers, mostly exporters, have the leeway to skew prices to the disadvantage of ‘helpless farmers’ due to the free market system. He attributed the cashew market manipulation to lack of a regulatory body to ensure fairness in the commodity trade, urging the government to fast-track establishment of the Tree and Industrial Crops Development Authority to salvage the situation.

Cashew cultivation in Ghana is largely a smallholder activity with the majority of farmers having an average farm size of between 0.8 – 2.5ha. More than 60,000 smallholder farmers are engaged in cashew cultivation in the country.

The government's major objective in the crops sector project is to enhance the competitiveness and profitability of crops through access to improved technological packages for increased productivity and ensure sustainable management of the environment in crop production systems.

President Akufo-Addo, during his tour of the Ahafo and Bono East Regions, announced that the Ministry of Food and Agriculture (MoFA) has completed its framing of the much-awaited tree and Industrial Crops Development Authority. The draft bill, he said, is expected to be laid in Parliament soon.

The proposed Authority will among others have the mandate to accelerate the production and marketing of tree crops including cashew, mango, rubber, oil palm and coffee. This is expected to enhance the country’s earnings from non-traditional exports.

Mr. Ameyaw also appealed to the government to ensure thorough implementation of the 10-year cashew development plan. According to him, implementers of the cashew blueprint “are sleeping on the job. Not much is happening in the area of grafting and distribution of seedlings to farmers so as to expand production”.

Cashews are in demand the world over and the market is growing. In days gone by, African countries used to export their raw cashew nuts and so forego the substantial income that can be generated by processing them. Nowadays there is more and more local processing going on.


Gov’t told to utilize Contingency fund for COVID-19 emergency funding

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Adnan Adams Mohammed

A member of parliament has challenged the government’s intent to go to the World Bank (WB) and International Monetary Fund (IMF) for funding to fight the Coronavirus (COVID-19) as he draws the government’s attention to the use of the Contingency Fund allocated in the budget.

Finance Minister, Ken Ofori-Atta briefing Parliament last week on the nation’s preparedness for the pandemic noted that the government was yet to write to the World Bank (WB) and International Monetary Fund (IMF) for a grant.

The minister indicated that the country has no funds available as at now for the emergency preparation in the wake of COVID-19 spreading rapidly with 16 confirmed cases as at press time on Friday, last week. He said, “We have not set aside US$100 million. In fact, we don't have a US$100 million to set aside, we are now trying to source some money from the IMF and World Bank.”

His statement was a sharp contradictory to what President Nana Akufo Addo told the nation in his second televised address on the government’s preparedness to contain the pandemic. President emphatically stated that US$100 million has been made available to be used as an emergency fund.  He said, “at my prompting, the minister for finance has made available cedi equivalent of US$100 million to enhance our Coronavirus preparedness and response plan".

“Has the Minister of Finance based on Article 177 of the Constitution made provision in the 2020 Budget for Contingency Fund? If the answer is yes, how much is currently the amount in the Contingency Fund?”, James Klutse Avedzi quizzed in a short write-up shared on social media platforms, last week, right after the finance minister appeared before them.

The MP further asked, “Why has the Minister not brought any request to Parliament for approval to use the Contingency Fund to fight the Coronavirus?

“If the answer to the initial question above is NO, why didn’t the Minister comply with article 177 of the Constitution?

“Finally, in the event that the World Bank and the IMF fail to support Ghana with the US$100 million, how is the government of Ghana going to fight the Coronavirus pandemic?

Article 177 (1) of the Constitution of Ghana states: ‘There shall be paid into the Contingency Fund monies voted for the purpose by Parliament; and advances may be made from that Fund which is authorized by the committee responsible for financial measures in Parliament whenever that the committee is satisfied that there has arisen an urgent or unforeseen need for expenditure for which no other provision exists to meet the need.’