Saturday, 30 May 2020

Cedi losing value against foreign currencies, in spite of IMF US$1.0bn injection

 Cedi falls by 1.18% to dollar, trades at GH¢5.93 at forex bureau ...



Adnan Adams Mohammed


The Ghanaian local currency (cedi), after showing resilient against the major foreign currencies for over a month in the past two months, has started losing value in spite of the International Monetary Fund (IMF) disbursement of SDR 738 million (about US$1 billion) last month under the Rapid Credit Facility (RCF).


The IMF facility disbursement was to help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.


IGS Financial Services data shows that, the US dollar last week made a weekly gain of 0.05 percent to trade at GH¢5.62 on the interbank currency market with the year-to-date depreciation of the cedi consequently rose to 1.45 percent. The British Pound recovered from a seven-year low against major trading peers sustained by improving risk sentiments.


The Financial Services firm explained that, the resurgence of demand on the trading market has led to the cyclical depreciation of the Ghana cedi against three major trading currencies on the interbank currency market.


"The Pound’s surge was driven by emerging reports of a successful COVID-19 vaccine trial by Moderna Inc. and the reopening of some global economies in the wake of the coronavirus lockdowns", IGS reported in its last week release.


Additionally, the British Pound appreciated by 0.59 percent to sell at GH¢6.85 on the interbank currency market with the year-to-date appreciation of cedi therefore easing to 6.50 percent.


For the Euro, it firmed on account of the release of upbeat economic data and proposals of a euro-recovery fund.


The Euro appreciated by 0.76 percent to trade at GH¢6.12 with its year-to-date appreciation of the cedi also declined to 1.54 percent.


On April 13, 2020, the IMF Executive Board approved the disbursement of US$1 billion to be drawn under the Rapid Credit Facility.


However, the IMF has noted that, it continues to monitor Ghana’s situation closely and stands ready to provide policy advice and further support as needed.


Following the Executive Board’s discussion of Ghana, Mr. Zhang, Deputy Managing Director and Chair, issued the following statement:


“The COVID-19 pandemic is impacting Ghana severely. Growth is projected to slow down, financial conditions have tightened, and the exchange rate is under pressure. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic. The Fund’s emergency financial assistance under the Rapid Credit Facility will help address the country’s urgent financing needs, improve confidence, and catalyze support from other international partners.


“The authorities’ response has been timely, targeted, and proactive, focused on increasing health and social spending to support affected households and firms. The Central Bank has recently taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic, while allowing for exchange rate flexibility to preserve external buffers.


“The uncertain dynamics of the pandemic creates significant risks to the macroeconomic outlook. Ghana continues to be classified at high risk of debt distress. The authorities remain committed to policies consistent with strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term.


“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”


COVID-19 exposes liquidity challenge of Ghana’s economy as BoG saves gov’t with GHC10bn

 Bank of Ghana Supports gov't with GHC10bn to Close Fiscal gap



Adnan Adams Mohammed


A renowned economist has indicated that, Ghana’s existing economic and liquidity challenges which hitherto were being suppressed by government from exploding have been exposed badly by the Coronavirus (COVID-19) pandemic.


Fortnight ago, the Finance Minister, Ken Ofori-Atta reported to parliament as required by (section 30) of Bank of Ghana Act, 2002(Act 612) as amended by Act 918 (2016) requesting a GHC10 billion financing from Bank of Ghana.


This is clear indication that, the economy is been illiquid and the printing of new money is needed as an immediate intervention to help ensure there is enough currency at the banks for withdrawals to aid business and household purchasing and consumption. This comes with inflationary consequences. Before the outbreak of the COVID-19, many economists and financial analyst had challenged the government’s much touted assertion that, the economy was liquid after the two years period of clean-up exercise of the banking and non-banking financial institutions sectors of the economy. Already, some Ghanaians are of the view that the government is using COVID-19 to add on to the already burdensome debt levels from any available source,


“COVID-19 is indeed a revealer. It has revealed that the economy of Ghana has inadequate liquidity buffers”, Professor John Gatsi, Dean of the University of Cape Coast School of Business has said in his latest article.

Prof John Gatsi writes: ¢10bln BoG cash to gov't and the ...
Professor John Gatsi


However, Mr Ofori-Atta, last Friday, briefed Parliament about government’s decision to borrow GH¢10 billion from the Bank of Ghana.


The amount is to finance the gap in the 2020 budget which has been thrown out of gear as a result of the COVID-19 pandemic.


Chairman for the finance committee, Dr Mark Assibey-Yeboah explained that several countries including even developed ones have had to fall on their central banks for respite from the impact of the pandemic.


The minority, however, disagrees with the Central Bank’s support to the government, despite the threat posed by the pandemic.


Minority Spokesperson on finance, Cassiel Ato Forson who had accused the BoG of engaging in illegality argued government must rather cut down on needless expenditure and re-prioritize instead of hiding behind the pandemic to compound the public debt.


The former deputy finance minister indicated government’s insatiable appetite for borrowing under the cloak of COVID-19 was as a result of election 2020.


Central Bank’s support for government’s budget has been halted for almost four years as part of the requirements imposed by IMF after the country went to the Fund for a bailout.


Meanwhile, Prof Gatsi throws more light on the economy, liquidity situation, debt levels amidst COVID-19.


Read below answers to pressing questions he shared with Economy Times on Ghana’s economy to help the ordinary Ghanaian get the understanding clearer:


Question 1:

Does COVID-19 period mean anything requested by government is correct?



No. Where the request is not in line with the rules the request is inappropriate. Some people create the impression that we are not in normal times and that government needs money so government is right in asking anything. Some even explain that some laws should be shelved for now to allow the government executes its programs. The truth is the emergency powers granted the president does not overthrow our democracy nor the requirements of the public financial management framework and debt management objectives. 


Whatever government requests for must be within the rules. Because if the misconception that we are in a crisis, we are not in normal times is the reason why government would like to deplete the heritage fund and can ask BoG for whatever amount even when is outside the rules then very soon when public institutions are asked to surrender all their funds because we are not in normal times such people will have no problem perhaps until government asks them to surrender their personal savings because we are not in normal times.


Question 2:

What is the meaning of BoG financing government?



According to section 30 of Act612 as amended , it is a short term loan to government by BoG and the interest on this loan is to be determined by the Board of BoG and the Minister of Finance as an over- the- counter transaction. For the avoidance of doubt the heading of section 30 is temporal advances and subsection 3 requires the repayment within three months.

Any money taken or to be received that has the obligation of repayment either with or without interest is called a loan.


Question 3:

What is the limit or amount allowed by law to be borrowed by government from the BoG?



According to Act 918 which amended Act 612 by introducing subsection 7, total loans, advances, treasury bills and other securities MUST not be more than 5% of previous year’s revenue. Any borrowing more than this requirement is illegal and the explanation that we are not in normal times does make it legal.


In 2019, the total revenue was approximately GHC52 billion and 5% of this is equal to GHC2.6 billion. The BoG has already provided GHC4.5 billion to government which is a violation.


Question 4:

What happens in an emergency?



Section 6 of Act 612 authorizes the Minister of Finance, the Governor of the Bank of Ghana and the Controller and Accountant-General to meet and determine the limit or the amount to be borrowed above the earlier 5% of previous year’s revenue rule. It means in an emergency government can borrow from BoG more than the GHC2.6 billion but only after the amount determined by the three parties is submitted to parliament for approval.


The approval rules in article 181 and section 56 of the public financial management Act requires prior approval by parliament before borrowing takes place especially when government already received funding from the Stabilization fund($219million), World Bank ($100million) and IMF ($1billion).


Question 5:

So what is wrong with the GHC10 billion loan?



1. Because BoG has disbursed above the 5% rule before reporting to parliament for approval

2. The entire section 30 is about short term loans to government to be repaid in three months but BoG is lending this money through a ten - year bond in which repayment of interest and principal starts after two years. This means it is no more a short term loan. Section 30 does not give such authority to the parties to convert the short term arrangement to a long term loan agreement.


Question 6:

Why the limitation to short term loan?



The general rule is government does not borrow from itself through short term loan.  Also to avoid what Fiscal management experts called fiscal dominance which may undermine the monetary policy role of BoG with contagion effects.


In exercise the authority granted the trio to determine the amount to borrow from BoG in an emergency, they should not overlook the risk to the economy if excessive amounts are borrowed from the BoG.


Section 30 is therefore a special arrangement with clear conditions.

That is the reason why the public financial management Act prohibits public institutions from buying treasury bills.


So borrowing from BoG is meant to address short term financial needs even under emergencies.


Question 7:

 What is the conclusion?



The conclusion is that there is a 5% rule of borrowing from BoG by government.  The borrowing is short term and not long term as the government is seeking to do.


There should be prior approval of any amount determined by parliament. Also this arrangement is not an ordinary support, it is a loan. The interest rate on the loan is the BoG policy rate and is a floating interest rate meaning if the policy rate goes up the repayment burden goes up.


Judgement Debt: GCNet to demand over US$100m for wrongful termination of contract

Ghana Community Network Services Limited (GCNeT) - SIGA : State ...

By Elorm Desewu

The government is likely to pay a judgment debt of over US$100 million for wrongful termination of Ghana Community Network Services Limited, (GCNet) the contract last week.

GCNet is poised to seek redress in court over what its terms wrongful termination of service agreement by the government, Economy Times has learnt.

The government has officially written to GCNet to shut down its system by the end of last month and handover all documents to UNIPASS.

GCNet is revoking article 13 point 2 of the original service agreement between GCNet and the government by seeking redress in court. This is because GCNet says it has a valid contract with the government which would end in December 2023.

Economy Times has learnt that there is the likelihood of a legal tussle in the coming months between the government and GCNet, as the latter is considering filing a lawsuit against the government to vindicate its right over the issue.

The original service agreement between the GCNet and government came to an end on April 28, 2020, according to a directive issued by the Senior Minister, Yaw Osafo Marfo dated April 16th, 2020 on the termination of the agreement.

Upon the termination of GCNet’s agreement on 16th April 2020 by the Senior Minister, the Trade Minister through the Commissioner –General of the Ghana Revenue Authority, (GRA), requested GCNet to continue its operation to 31st May 2020. This new arrangement has since been determined. 

In March 2018, Ghana Link Network Services Limited, in collaboration with Customs UNI-PASS International Agency (CUPIA) of Korea Customs Services were through sole-sourcing contracted by the Ministry of Trade and Industry to introduce UNI-PASS system at Ghana’s ports for ten years at a cost of US$40million.

In the contract, the government would have to cough out an amount of $93 million that would be paid to Ghana Link and its overseas partner CUPIA Korea owning UNIPASS if the company is allowed to start operating Ghana’s National Single Window platform and asked to stop in the first year in the event of any anomaly whatsoever detected.

Despite this termination clause, caution has been thrown to the wind in ensuring that before Ghana Link and UNIPASS are allowed to start work, all uncertainties would have been cleared.

UNI-PASS is a total customs administration solution, customizable to fit any environment by integrating the know-how and experience accumulated throughout the history of its development.

Based on international standards, UNI-PASS system is divided into 3 major components:  Business processing (Procedural business modules and Non-procedural business modules);  Support to the business processing components; and Infrastructure. 


Thursday, 28 May 2020

Consider 'Household Financial Anxiety and Well-being' in Coronavirus impact assessment - Prof Gatsi

Video: Full Speech of Prof. John Gatsi at the 1st West Africa ...



Adnan Adams Mohammed


A seasoned economist has called on governmental agencies and international groups to consider assessing the impact of novel Coronavirus (COVID-19) on household financial anxiety and well-being as well.



During a recent E- Seminar organized by the University of Cape Coast School of Business in the College of Humanities and Legal Studies on the topic, Coronavirus Pandemic, Household Financial Anxiety and Well-being, Professor John Gatsi, the Dean of the School of Business at UCC in his introductory comment explained that, it was apt the topic for the discussion by renowned personalities in the acadmia on personal finance which also involves family finance, retirement finance, and household savings.



Since the outbreak of the pandemic many surveys and discussions about the effects of Coronavirus pandemic are focused on macro level issues such as fiscal policy, monetary police, general job losses and disruption in global supply chain without paying attention to broader financial issues affecting Households which has broader effect on individual anxiety and psychological problems and health challenges. According to the Professor in economics and finance, household anxiety is a function of the uncertainty of maintaining one’s job, income stream and support from external sources such as government social protection schemes.



“Issues of financial therapy and financial literacy are critical at a time when the pandemic has deepened vulnerability and inequality in many economies including Ghana”, Prof. Gatsi indicated, emphasizing that, less attention to personal financial education has led to little or no savings and investments by households to fall on during the pandemic.



However, Prof. Gatsi suggested that, in the absence of elaborate formal savings, the development of financial products to improve access to credits could help. Lamenting that, formal savings by households in Ghana as presented by the Statistical Service since 2014 was 35% and the situation has not changed significantly.



He advised government to look at data as an asset and invest in general data for development because post- economic management demands data driven policies and advocated for conservative investments and conservative expenditures by households.


“The good lesson about the pandemic is that Ghanaians are naturally creative and innovative inclusive empowerment is required to promote enhanced Ghanaian participation in the economy. He said if in the midst of the pandemic we are able to set aside Ghc600 million, it means we have what it takes to revisit strategies to support creativity”, Prof. Gatsi said.



The UCC E-Seminar featured Dr. Megan  McCoy , a professor of practice in the area of financial therapy,  from Kansas State University, Mr. Kwabena Gyan, an Economist with the World Bank, Accra and Dr. Anokye Mohammed Adam, the Head, department of Finance in the School of Business, UCC.



Dr. McCoy, in his presentation, explored the importance of financial therapy for households in times of difficulty to reduce stress and other psychological challenges. When people are not sure of maintaining their jobs due to the pandemic, they show instability and fear always. She advised that financial therapy during the Coronavirus pandemic should not be overlooked. She advocated for personal finance principles should be part of training for children and adults alike.  Dr. Pledge her support to help the department of finance develop solution oriented financial therapy programs to benefit students and the catchment areas of the University of Cape Coast. She said personal finance and financial therapy should be as practical as possible to serve as a clinic for households to seek advice, guidance and plans towards expenditure containment measures.


On his part, Dr Adam discussed the importance of planning and spending on only important things because one cannot tell when the pandemic will be over. He promised to propose personal finance as part of the basket of courses to engage students. He advised government to allow small businesses to register free as an incentive. Dr. advised that households should pursue savings as a religious duty to protect the future needs just as they pay tithes and offering in Church. He further advised that households should be open to financial planning principles because their many people irrespective of their level of education are financially ill and need financial clinic. He advised government to use its support schemes to further generate data from households and micro and small businesses arguing that technology alone is not enough to formalize the informal sector. Dr. Adam appeal to all to take financial anxiety and wellbeing issues serious because the effects of the pandemic at the macro level will definitely translate to household levels.


Mr Gyan explained that the World Bank has supported the government of Ghana with $100million as credit facility to fight Coronavirus pandemic geared toward households and small businesses. He said the bank has worked at policy levels with government in the financial sector interventions. He explained that the bank cannot control government in the way it manages Coronavirus Alleviation Program and hope that the disbursement of the funds will not discriminate against qualified businesses. He further stated that the World Bank only controls fully direct interventions which are not in the hands of government. Mr Gyan assured the public that the bank has experience in reducing household poverty and will continue to support Ghana. He asked for improve data collection to better develop programs that will solve household problems.





EU Money Laundering Blacklist: Ghana defends its regime

Finance Ministry disagrees with EC for including Ghana on money ...


Adnan Adams Mohammed


The government through the Ministry of Finance has responded to  the European Union (EU) decision to include Ghana in the blacklisted countries with deficiencies in Anti-Money Laundering regime.


The government noted that, it was always ready to engage with the European Commission (EC) about the true status of the country’s AML/CFT regime and efforts being made to strengthen same.


The EU, earlier this month, added Ghana and 11 other countries to its money-laundering blacklist, putting their financial transactions under greater scrutiny. The countries are Botswana, Ghana, Mauritius, Zimbabwe, Bahamas, Barbados, Jamaica, Nicaragua, Panama, Cambodia, Mongolia and Myanmar.


“The European Commission’s proposal to include Ghana in the list of high risk jurisdictions with strategic deficiencies, therefore, does not reflect exactly the current status of Ghana’s AML/CFT regime”, a statement released by the Finance Ministry, last week, said.


Below is the full statement…


Ghana regrets 7th May, 2020 publication by the European Commission (EC) proposing to the European Union Parliament to add Ghana to its list of high risk third countries with strategic deficiencies in their Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regimes on 1st October, 2020. Ghana over the years has demonstrated a strong commitment to strengthening its AML/CFT regime.


Indeed, the Financial Action Task Force (FATF), the global standard setting on AML/CFT has always acknowledged Ghana’s efforts in enhancing its AML/CFT regime at various platforms of which the EC is always represented.


Just as the methodology used to publish a similar list on 13th February, 2019, which was eventually withdrawn due to lack of clarity and transparency in the process of identifying third countries, we consider the methodology used to come up with this new list once again unfortunate.


It is instructive to state that, the European Commission has not engaged Ghana concerning any shortcomings that needed to be addressed nor was the country given the opportunity to implement corrective measures. On the contrary, when Ghana’s progress report was being discussed at the last FATF Plenary meetings held in Paris, France on 19th to 21st February, 2020, no adverse comment came from the EC. It is, therefore, a surprise for the EC to mention Ghana as one of the countries to be added to her list of high risk third countries barely three months afterwards.


You may recall that, following the discussion of Ghana’s Mutual Evaluation Report by FATF during their plenary meetings in October 2018, FATF identified some strategic deficiencies in the country’s AML/CFT framework, and has worked with Ghana to draw up a two year Action Plan (2019 -2020) to address same.


The country has since been having periodic face-to-face meetings with the ICRG to assess the progress of implementation of the Action Plan. The last face-to-face meeting was from 15th to 17th January, 2020 in Rabat, Morocco. It is worth mentioning that, since the action plan was adopted, Ghana has consistently demonstrated a high-level political commitment to implementing the action plan and has always received positive commendations from the FATF.


Indeed, the International Country Risk Guide (ICRG) in their report to the FATF Plenary meetings in February, 2020 acknowledged that all timelines due have been met and some action items addressed even ahead of their timelines.


The European Commission’s proposal to include Ghana in the list of high risk jurisdictions with strategic deficiencies, therefore, does not reflect exactly the current status of Ghana’s AML/CFT regime. This is unfortunate, and the Government of Ghana is always ready to engage with the EC about the true status of the country’s AML/CFT regime and efforts being made to strengthen same.


Sunday, 17 May 2020

Almost 8000 ‘ghosts’ on payroll – AG's report

 CLOGSAG advises Auditor-General's Department to stick to its main ...


Adnan Adams Mohammed


The Auditor-General’s Department has disclosed that, a total of 7,823 remain unaccounted-for at the end of an enumeration exercise.


This shows that out of the about 522,478 active public servants in Ghana, almost 8000 names of ‘supposed government workers’ are not real. 


The AG’s Department has among other actions pending, recommended that, the Controller and Accountant General’s Department should ensure the termination of the unaccounted-for employees on the payroll



“We recommended that the Controller and Accountant General’s Department should ensure the termination of the unaccounted-for employees on the payroll."


“The heads of MDAs should also ensure the full recovery of the unearned salaries from the affected persons”, the report said.


The report added that a review of the records of the personnel during the enumeration exercise showed mismatches in the salary grades of some 1,200 employees when compared with their actual grades on their appointment/promotion letters.


To ensure that salaries earned by employees are commensurate with their current position or grade, the report recommended that the heads of ministries, departments and agencies as well as metropolitan, municipal and district assemblies, together with the Controller and Accountant General’s Department (CAGD), ensure that the affected employees are appropriately placed.



Owing to failure by CAGD to act on feedback from respective management heads, some 6,307 employees declared as “discontinued” through the ESPV system, continued to receive unearned salaries.


The report urged the CAGD to terminate the records of all the discontinued employees on the payroll and ensure the full recovery of all the unearned salaries.


For efficiency, it also recommended a seamless integration of the ESPV system with the payroll system thus resulting in prompt update of employee records.


Debt stock rises to GH¢236.1bn

KickNanaOut: Ghanaians descend heavily on Nana Addo for lying ...



Adnan Adams Mohammed


Ghana’s total debt stock now stand at GHC236.1 billion as at end of March 2020 (first quarter of 2020) from GHC219.2 billion, according to data from the Bank of Ghana.

This means that about GHC16.9 billion of debt has been contracted by the government from January to March of 2020.

According to the report, the domestic component of the debt now stands at GHC111.3 billion, while the foreign debt has inched up to GHC124.8 billion.

The 2020 debt strategy focuses on an appropriate financing mix to mitigate the costs and risks to achieve the desired composition of the public debt portfolio with respect to borrowing from external and domestic sources.

 The financing strategy for 2020 proposes issuances of Government securities on the domestic market and create cash buffers on top of the programmed net domestic financing for active liability management and cash management purposes.

The strategy is to issue / re-open medium to long-term instruments (2-year, 3-year, 5-year, 7-year, 10-year, 15-year and 20 Year bonds) and refinance some of the maturing Treasury bills and Bonds. The strategy also plans to issue marketable and non-marketable debt against possible contingent liabilities arising from the financial and energy sectors in 2020.

On the external front, the strategy proposes the issuances on the International Capital Market provided market conditions are favourable and additional external borrowing for priority development projects, which cannot be financed on concessional terms.


New Taxes on Electricity bill… Ghanaians to pay 17.5% more


 DisCos need to recapitalise - The Nation Nigeria


Adnan Adams Mohammed


Consumers of electricity power will from next month pay extra 17.5 percent on their bills as new taxes are added to the billing elements.



The Ghana Revenue Authority (GRA), last week, tasked the Electricity Company of Ghana (ECG) to charge Value Added Tax, (VAT) and others on domestic consumers. The new tax and levies include; VAT of 12.5%, GETFUND Levy of 2.5% and NHIL Levy of 2.5%.



This has been a surprise to many Ghanaians including financial, tax and economic experts as this is the first time VAT is to be charged on a basic necessity like electricity. Also, this comes at a time government has promised to take part of electricity consumption bill from Ghanaians to ameliorate the hardship impact of the COVID-19 lockdown.



"This is absolutely cold blooded, insensitive, and ill-considered", financial expert, Alex Mould has fumed. He expatiated that, "On one hand you (government) claim to have given the Ghanaian people a 3-month 50% tariff waiver; and then you slap us at the same time with new taxes to increase our bills."



Consequently, the Minority in Parliament is demanding the immediate withdrawal of the new tax and levies on electricity as it warns of dire consequences on domestic consumers.



Addressing the media in Parliament, the minority spokesperson on Mines and Energy, Adam Mutawakilu, accused the president of giving 50 perfect rebates to consumers with one hand and taking it back with another.



The Damango MP warned that both consumers and ECG will be worse off with the move.



“That means that you will pay more for electricity, it will deny you from the food that you buy because you have to do your scale of preference and consumers will be burdened the more…so this 50 per cent was just to deceive Ghanaians, so you gave it to Ghanaians with one hand and then you take it with another hand.”



The decision to impose VAT on electricity for consumers comes a month after the President reduced electricity consumption by 50 per cent to commercial and domestic consumers and free lifeline consumers.


Disbursing SMES Relief Fund through NBSSI Could Become Political Slush Fund – Financial expert

 Covid-19: Lessons from Ghana on how to cushion effect on people ...

Former Executive Director of Standard Chartered Bank, Mr Alex Mould is urging government to discontinue the decision to use National Board for Small Scale Industries (NBSSI) to disburse the GHS600million soft Loan stimulus package for Small Medium Enterprises (SMEs).


The soft loans which is under the Coronavirus Alleviation Programme (CAP) is intended to mitigate the effects of COVID-19 on the operations SMEs.


The government this week, announced NBSSI will have access to the fund this month and begin with the disbursement to SMEs in the country. But the Energy and Finance Expert, Mr Mould believes NBSSI is not qualified to disburse the loans.


According to him, unlike financial institutions that are regulated, have credit underwriting standards and credit approval procedures, "the NBSSI is a bureaucratic institution controlled by politicians.


 "Financial institutions should be the channel for disbursing the GHS600m earmarked for the SMEs under the CAP, or it could become a political slush fund otherwise" the immediate past Chief Executive of Ghana National Petroleum Corporation stressed.


Read full statement below:




Government should be crystal clear on the terms of GHS600m loan fund allocated to SMEs under Coronavirus Alleviation Programme.


The National Board for Small Scale Industries (NBSSI) will, from this month, have access to government’s GHS 600 million soft loan stimulus package for SMEs.


The loan, which comes with a one-year moratorium and a two-year repayment period is intended to mitigate the effects of COVID-19 on the operations of micro, small and medium-sized businesses.


I want to highlight some of the potential challenges with this model.

Firstly, I can emphatically state the NBSSI is not qualified to disburse loans. Unlike Financial institutions that are regulated,  have credit underwriting standards and credit approval procedures, the NBSSI is a bureaucratic institution controlled by politicians. 


What safeguards has the NBSSI put in place to ensure that  the funds disbursed are used for the approved purpose?


Other questions that require immediate clarity are:

1. What exactly is the qualifying criteria the NBSSI will outline for funds eligibility; in addition to the  basic guidelines outlined by the Ministry of Finance?


2. What precisely can these funds be used for?: for example, are these eligible:

- workers salaries and statutory expenses

-  interest repayments on loans to banks

- rent payments

- utility payments

- other working capital needs


Financial institutions should be the channel for disbursing the GHS600m earmarked for the SMEs under CAP, or it could become a political slush fund otherwise.


Clear risk sharing allocation protocols must be agreed between Government and Financial institutions.


Additionally, stakeholder engagement e.g. trade associations, Association of small scale induatries (ASSI) etc is necessary to help determine the needs of SMEs amid the COVID-19 pandemic.


We should all remember this is NOT free money and approval criteria needs to be obvious and transparent.



Alex Mould



Tem-Kotokolis donates GHC10K to COVID-19 Trust Fund

Dr Inusah Abdul-Nasiru leads Tem-Kotokolis to donate ₵10k into ...


 A delegation from the Tem-Kotokoli Development Association has presented a cheque of GHS10,000.00 as their contribution into the COVID-19 National Trust Fund.


The delegation led by a Senior Lecturer at the Department of Psychology of the University of Ghana Legon, Dr. Inusah Abdul-Nasiru made the donation at the Jubilee House on Thursday, May 14, 2020.


Making the donation on behalf of Wuro Dauda Chedere Brenai II, Overlord of Tem-Kotokoli of Ghana, and on behalf of all Tem-Kotokolis of Ghana, Dr. Abdul-Nasiru who is also the Chairman of the Tem-Kotokoli Development Association thanked the President, Nana Addo Dankwah Akufo-Addo for effectively handling the fight against the pandemic.


He also encouraged all Ghanaians to observe the preventive protocols, minimize anxiety and avoid stigmatization as we all make efforts to stop the spread of the deadly virus.


The delegation included other Tem-Kotokoli chiefs and opinion leaders such as Wuro Adamu Salifu (Wuro Bemo Esso), Adenta Municipal Zongo Chief, Wuro Zakaria Chaa-Agodomu who is the Jaayoo Kotokoli Chief, Nana Alia Isso-Nyena (Tchaa Atakora I).


Others were Wuro Mudasiru Alhassan, Batoolim na bonyoo wey, the Ogbodjo Tem-Kotokoli Chief and Al-haaj Mochktar Zamba-Zamba, the Vice-Chair of the Association who doubles as President of AKTEG.


The COVID-19 National Trust Fund has in a short while received many donations and contributions from businesses and individuals to complement the efforts of government in the fight against the disease.


Over GHs44 million has so far been donated to the National COVID-19 Trust Fund to support the fight against the novel coronavirus, chairperson for the Fund, Sophia Akuffo has disclosed.


“We have received an amount of GHS44,900,000. The board of trustees will ensure the judicious and transparent application of all money and other resources received for their intended purposes. We deeply recognise and appreciate the individuals, corporate bodies and groups who have enthusiastically donated cash and in-kind as well as donors who have made direct transfers into Ghana Commercial Bank and Consolidated Bank accounts”, she said.




Tuesday, 12 May 2020

Muslims call on Justice Tanko to retract 'disappointing comment' on Islamic inheritance and hijab

Muslims Angry Over Justice Tanko Amadu's Comment On Wearing Of ...
Justice Amadu Tanko, a Supreme Court nominee

Muslims in the country have called on Justice Amadu Tanko, a Supreme Court nominee who was vetted by the Appointment Committee of Parliament on Monday, May 11, 2020, to retract 'disappointing comment' on Islamic inheritance and hijab.

MUYAD Social Services in a press release issued today and signed by the Executive Director, Adnan Adams Mohammed joined the majority of Muslims who have since yesterday during the vetting of the Supreme Court nominee registered their dismay and disappointment at how he answered a question posed to him on Islamic inheritance and hijab. 

Below is the full press statement: 






Unreservedly, MUYAD Social Services (MSS) has joined the majority of Muslims in Ghana to register their dismay and disappointment at some comments made by senior brother (Justice) Amadu Tanko, a Supreme Court Judge nominee who was vetted by the Appointment Committee of Parliament on Monday, May 11, 2020.


Upon the announcement by the President of Ghana, Nana Akuffo Addo’s the name of Justice Tanko as a Supreme Court judge nominee, many Muslims took to the street to jubilate and thanked the president for elevating the first Muslim to serve as Supreme Court Justice (Judge).


The announcement was very crucial and much needed at a time there were many public civic actions, outcry and displeasure by the Muslim communities on how the female Muslims were being discriminated, humiliated and their dignity and religious identity was taken from them by force (oppression) by some elements of the society who do not see the sense or need to respect the Supreme Law of the land, thus, the 1992 Constitution of Ghana; Article 21(1)(c), which allows every citizen to observe and manifest their religion in the country.


It was at a time Muslims were contemplating seeking justice through the legal jurisdiction on the matter which has caused several mishaps in the country like the sudden death of our promising brother Abdul Gafar who died at school (Adisadel College) for being pursued to attend compulsory church and poses a high threat to national security.


If the Supreme Law of the land is vividly clear on the religious rights of the citizens, CAN A REGULATION NEGATE SUCH CONSTITUTIONAL RIGHT?


Unfortunately, our learned lawyer chose to please his personal sentiment and interest and betrayed the Constitution he is trained to safeguard and protect. Not, only betraying the Constitution of Ghana, also, he betrayed his religion and Creator.

Justice Tanko in one of his answer to a question on Islamic inheritance arrogantly challenged the proof and words of ALLAH (his Creator) and said, Allah, discriminated in His commandment for the distribution of inheritance in Islam according to the verses in the Quran. Again, on a question posed to him on the ‘hot and sensational HIJAB DISCRIMINATION’ issue, he answered that, enforcing the provision of the Constitution of Ghana and all other International Conventions on the fundamental human right is a matter of ‘choice’. This kind or type of ‘choice’ he referred to is what we do not yet understand and even the members of the Appointment Committee were not happy with his answers.   


A very serious blasphemous and disappointing attitude which NO RELIGIOUS DENOMINATION WILL TAKE LIGHTLY.


We wish to ask Justice Tanko as he ascends to take his seat as Supreme Court Judge: “Will it also be a matter of ‘choice’ for any plaintiff and defendant standing before the law court to refuse to ‘swear an oath by the Quran, Bible, Cross, or any of the religious identity and Power or take a solemn oath’?”


Can he call for the total ban of all forms of religious expression, including prayer (worship) and prescribed religious dressing (as an identity and obligation) in all institutions in Ghana, especially in the basic and second cycle institutions as we are all witnesses to ‘compulsory churches services’?


MUYAD Social Services demand answers from our senior brother as well as we will wish he immediately come public to retract his comments and apologize to the Muslim community.


The rest is left between him and his Creator (ALLAH).


We remind our cherished brother that; Every soul will taste death and we shall be called to reckon with all what we said did or looked unconcern when injustice was melted to other creatures. In our graves, no excuse will be accepted by the Allah. 


Thank you


Adnan Adams Mohammed

Executive Director

MUYAD Social Services

+233244653664 / +233267874318



Monday, 11 May 2020

COVID-19 shines light on e-commerce– WTO Report

WTO - Report sheds light on impact of digital technologies on ... 



The World Trade Organisation (WTO) in recent report noted that e-commerce is flourishing in the wake of the COVID-19 and the accompanying measures to forestall its spread which include lockdowns.


The report noted that one of the most significant segments of online purchasing by value, tourism and travel has plummeted as a result of the COVID-19 pandemic for obvious reasons.


In March, for example, 30 per cent of US consumers reported delaying vacations and 25 per cent delaying flights.


In this environment, e-commerce by tourism-related purchasing platforms has likewise fallen. For example,the holiday accommodation rental platform AirBNB has experienced a dramatic reduction in customer traffic.


However, spurred by social distancing and stay-at-home requirements, e-commerce in services that can be delivered electronically has flourished, with demand rising sharply. While it may be a short-term phenomenon that might not last beyond the current crisis, as with online shopping, longer-term shifts in customer habits could potentially make businesses and consumers more accustomed to consuming online services in both work and personal settings.


One example is media services. Facebook reports that its online messaging, voice and video call services are up by more than 50 per cent, with Italy showing a 70 per cent surge overall, and a 1,000 per cent increase in group calls. Spain’s Telefonica has seen an increase in IP (i.e. internet protocol) and mobile data traffic of 40 per cent and 50 per cent, respectively. Thailand reported an 828 per cent rise in data traffic from Zoom Video Communications and a 215 per cent spike on Skype video conferencing.


Both companies and governments are moving to address capacity constraints and facilitate consumer access. Some publishers have, for example, made COVID-19-related content freely available online. In addition, social distancing measures have dramatically boosted the demand for audiovisual content; and, as consumers cannot attend cultural events physically, content is being brought online. For example, a number of opera and concert houses have chosen to offer free online streaming of their repertoire.


The considerable increase in demand for these digital services, as illustrated above, has led to an equivalent increase in data volumes which, in some cases, has strained the telecommunications infrastructure. In order to ensure continuity of service, Netflix and YouTube have reduced video quality to alleviate network congestion. In India, this move by Netflix has reduced its network traffic by 25 per cent.


In the financial sector, some mobile phone companies have moved independently to reduce their fees on mobile payments, and these moves have been complemented by governments in an effect to discourage the use of cash.


Many central banks have lifted some of the restrictions and requirements applied to e-payment systems, particularly in Africa, where mobile payments are common. Ghana, for example, agreed to alter policies for mobile money transactions for a period of three months; smaller withdrawals will not carry a charge, and transaction limits and balance levels have been increased. Rwanda has removed fees on all mobile money transactions, with increased daily and monthly limits depending on the type of user.


Following discussions with Uganda’s central bank, mobile providers of payment services announced temporary measures that included removing fees for lower-value transactions, and certain providers will make mobile wallet-to-bank transactions cost-free. Kenya introduced similar temporary measures, such as increasing daily transaction limits and suspending fees for transferring funds between mobile services and banks. Egypt has raised contactless payment limits and reduced costs of mobile cash transfers.


Once the crisis necessitated the closure of businesses and schools, demand for online collaboration tools and learning platforms grew dramatically. Platforms such as Amazon have chipped in, offering the public sector free access to its remote education, remote working and research tools, and Cisco has made its Webex video conferencing tool free of charge.15 Looking forward, the current crisis is likely to have a significant and lasting impact on the demand for e-working facilities and online education traded across borders.


Trading activity surges while stock market declines

 Coronavirus: Trading activity surges while stock market declines -


Adnan Adams Mohammed


The Ghana Stock Exchange benchmark index closed 60.18 points (-2.81%) lower after seven financial with oil marketing and telecom counters shed off their prices, closing at 2,083.72 with a -7.68% year-to-date return.


Also, the market capitalization declined by 1.12% to settle at GH¢55.02 billion amidst COVID-19 negative impact on global economy.


Financial stocks led the loser’s chart as five of its counters, GCB (-0.22%), EGL (-2.37%), CAL (-2.50%), SOGEGH (-7.14%) and RBGH (-12.28%) dragged the GSE Financial Index down by 20.82 points (-1.09%) to close at 1,883.37 with -6.75% year-to-date return. GOIL (-2.44%) and MTNGH (-5.88%) summed up the losers’ chart.


“We expect trading activity to pick up as investors take advantage of bargain stocks”, SAS Research optimistic.


Meanwhile, the SAS Manufacturing Index stayed at level of 3,192.63 with a -8.30% year-to-date return as at last week, Wednesday.


Trading activity surged as 14,307,206 shares valued at GH¢9,180,920 changed hands from 13,253 shares valued at GH¢35,386 at the previous session. MTN Ghana dominated trades by volume and value, accounting for 99.47% of the total volume traded and 99.21% of the total value traded.


GCB has given notice that its Annual General Meeting (AGM) scheduled for 29th May 2020 has been put on hold.


The Bank's decision to put the AGM on hold is a way of responding to the risk associated with the Covid-19 pandemic and the current state in the country.


Also, UNIL has announced that its Annual General Meeting scheduled for Thursday, May 14, 2020, has been put on hold until further notice.


Their decision is in compliance with the Directive on public gatherings issued by the President of the Republic of Ghana and the Ghana Stock Exchange as a result of the COVID-19 pandemic on the 15th and 16th of March 2020 respectively.


Collapsed MFIs and S&L depositors claim reach GH¢5.06bn after vetting–Gov’t

Microfinance companies take on receiver over latest directive to ...

Adnan Adams Mohammed


The legitimate claims made to depositors of Savings & Loans and Micro Credit institutions whose funds were locked up due to the financial sector clean-up is at GH¢5.06 billion, according to a government official.


Out of this, GH¢2.11 billion in cash has so far been paid to depositors with about GH¢2.95 billion in zero-rated coupon bonds known as debt instruments have been issued.


The Information Minister, Kojo Oppong Nkrumah, speaking at the meet-the-press series in Accra, last week, disclosed that, depositors are expected to receive payments after validation of claims by the end of May, 2020.


“They want to conclude the final second level validation of GH¢340 million and make payment accordingly. They expect that by the end of May they should be done with that one,” he indicated.


“There are some organizations whose books and records still have challenges and they are processing those for some investigations. And finally, they will issue a report to the Bank of Ghana on the depositor payment”, Oppong Nkrumah added.


Earlier, the Receiver for the collapsed Savings & Loans and Micro Credit institutions, Eric Nana Nipah said about 290,000 customers, representing 98 percent of individual depositors will be paid fully in cash, whilst the remaining 2 percent will receive their payments in cash and bonds.


Report on Ghana’s first ‘Oil Blocks Bid and licensing Round’ launched with 5points recommendations

 Correction To Press Release: Opening Of Prequalification ...



Adnan Adams Mohammed


The Natural Resource Governance Institute (NRGI) and the Ghana Oil and Gas for Inclusive Growth (GOGIG), in collaboration with the Civil Society & media Bid and Licensing Round Monitoring Group (“the CSO Working Group”), have virtually launched the CSO Working Group Report on Ghana’s first oil bid and licensing round.


The report titled “Ghana's First Oil Licensing Round Monitoring Report” launched last week, recommended five (5) areas of focus for government beyond the application of the law in subsequent bidding rounds to ensure greater success.


It recommended that: Government must start issuing reconnaissance licenses to gather quality data to aid future bidding rounds.


“The cost for such an activity will be recovered from data fees during competitive tendering”, the report expatiated, adding that, Liberia used this approach to acquire data which enabled them to carry out competitive tendering.


It added that: government must publish disaggregated information on bidders and their respective blocks they are prequalified for; Disclosures on beneficial ownership must be made publicly available during the prequalification stage. This allows for citizens to monitor the bidding process and to identify politically exposed persons in the contract process.


The other recommendations included: Government must ensure that direct negotiations are done only where peculiarities that point to a specific company to optimise the resources are established; and the government must make deliberate efforts to engage the public beyond the requirement of the law. It is recommended that such engagements must have feedback systems to encourage citizens to share information that might be relevant for the licensing round and by extension, the national interest.                                                                                                                                    


Ghana’s first licensing round was officially launched in October 2018 to give effect to the open contracting provisions of Act 919. Prior to the enactment of Act 919, Ghana largely relied on direct negotiations for the award of petroleum licenses, which often crowds out experienced companies while encouraging politically induced awards. The plan was to award a total of six blocks: three via an open and competitive bidding process in line with section 10(3) of Act 919; two via direct negotiations in line with section 10(9) of same Law; and one reserved for the Ghana National Petroleum Corporation (GNPC) to partner with strategic investors in line with sections 7(9) and 11(5) of Act 919.


To ensure openness and competitiveness of the bid process, and efficient implementation of the regulatory policy, NRGI and GOGIG convened and established a CSO monitoring group (made up of civil society and the media) to serve as a strong external oversight and social accountability body throughout the process.


The CSO monitoring groups were tasked to ensure an objective assessment of the country’s adherence to the legal regime, best practice standards and ensure Ghanaians are well informed about the process for accountability. Working with three consultants, the Monitoring Group has produced a comprehensive report on the three stages of the bid process; a useful learning tool to inform future bid rounds in Ghana and beyond.


GEXIM targets bond market as it expands investment support to local businesses

1D1F: GHc362m disbursed – EXIM bank CEO reveals | Starr Fm
Chief Executive Officer of GEXIM, Lawrence Agyinsam



Adnan Adnan Mohammed


The Ghana EXIM Bank has hinted it is considering going on the bond market for sustainable long-dated financial instruments to meet demands for financing support from local export-focused businesses.



Being the financial backbone to champion Ghana's industrialisation agenda through supporting manufacturing industries, agribusinesses and exported production companies, the Bank's current source of funding is from an import levy which is not a sustainable way of meeting its core mandate.



As GEXIM is looking beyond its current source of funding to other sustainable and cheaper sources, then the bond market is surely a sustainable source of funding for a policy and developmental driven financial institution such as GEXIM Bank. It can also access longer maturity facilities mostly directed towards long-term development projects.



"Just last week, we had a board meeting and we looked at other cheaper and sustainable source of funding. And the bond market was one focused area we will soon go", the Chief Executive Officer of GEXIM, Lawrence Agyinsam said during a briefing session with executives and editors of the Private Newspaper Publishers Association of Ghana, (PRINPAG) in Accra.



With its current debt recovery rate above 60%, it is a good outlook to take advantage of the domestic and international bond market. This means more local export trade and businesses will get backing and support to do to help leap-jump Ghana's Non-Traditional Exports (NTEs) earning in near future.



The CEO in his presentation listed with photographical evidences of over 80 factories and farms (existing and new) the Bank has supported for the past three (3) years in the areas of pharmaceutical manufacturing, agrochemicals manufacturing, poultry, fruit juices processing, other agribusinesses, garments and apparels factories, youth support in greenhouse technology, Shea butter processing among others.



GEXIM established in 2016, by an act of parliament, ACT 991, aim to become a strong financial institution that will be a key engine in the development of Ghana's export trade, facilitate cross border trade and make Ghana a pillar in regional and continental trade.



Fortnight ago, the Bank pledged to give additional support to local pharmaceutical manufacturing companies to help them meet the World Health Organization (WHO) Good Manufacturing Practice (GMP) compliance so they could export drugs to the West African sub-region.



The bank has initially supported these local pharmaceutical manufacturing companies with a US$10 million facility each to about nine (9) companies some years back. 


Entrance Pharmaceuticals (the largest pharmaceutical manufacturing company in West Africa currently) is set to start production of (Hydroxyl Chloroquine) which is confirmed and being used in many countries as one of the cure for COVID-19 and already producing other essential drugs.



“We are ready to give further support to these pharmaceutical companies as we are impressed with how they utilized the initial support”, the Board Chair for Ghana EXIM Bank, KwadwoBoatengGenfi has said during a tour of some local industries that had received funding support from the Bank.


Ghana is ready to be self-sufficient in pharmaceutical products very soon and export the excesses to help the country earn more foreign income to help strengthen the local currency (Cedi), the Chief Executive Officer of EXIM Bank, Lawrence Agyinsam added in a short address during the tour.


Some of the companies visited were; Entrance Pharmaceuticals (subsidiary of Tobinco Group of Companies), Ernest Chemist, Atlantic Life Scientists (subsidiary of Pharmanova Industries), and Kinapharma Industries.


The Pharmaceutical Manufacturers Association of Ghana (PMAG) has targeted to produce 70 percent of the country’s essential pharmaceutical products within the next three years.


The move is meant to reduce the importation of pharmaceutical products into the country and create more job opportunities in line with the Ghana Beyond Aid agenda.


Currently, the 15 local pharmaceutical companies in the country account for 30 per cent of the country’s essential drug requirement, with the remaining 70 per cent imported.


However, Ernest BediakoSampong, Chief Executive Officer (CEO) of Ernest Chemists Limited (a local manufacturer of pharmaceutical products), during the tour to its new manufacturing plant under construction noted that, the pharmaceutical companies had begun rolling out initiatives to expand their existing infrastructure and to introduce modern technologies into their operations to improve production.


“What is required to realise the targeted output is adequate funding support from the government”, MrSampong posited. 


He added that, GEXIM Bank’s investment into the pharmaceutical industry had helped many of the companies to undertake innovative projects and to acquire appropriate technologies to boost their production.


“We are calling however for funding support to be made sustainable in order to allow us to complete some of our ongoing projects since a lot of pharmaceutical products are going to be manufactured locally.


“We also intend to export and it means that we will earn foreign exchange, employ more people and train them to acquire skills needed to improve the system,” he said.


Additionally, the Managing Director of Tobinco Group, MrKwadwoAsareTwerefour, said investing in key infrastructure projects was crucial to achieving self-sufficiency in the pharmaceutical industry.


He said Tobinco Pharmaceuticals was setting up a sterile plant to enable it to go into producing sterile pharmaceutical products and avoid dependence on imported products.


“All of us are trying to increase our capacity, improve on technology and expand our production lines so that we can produce most of the essential drugs that this country needs; but we need more funds to do this,” he said.


The GEXIM Bank team was satisfied that the bank’s investment in the pharmaceutical industry was yielding good results and gave an assurance that more funds would be pumped into the industry.


Mr. Agyinsam, in-wrapping up the tour said, investment in local pharmaceutical companies to produce essential medicines locally was a giant step towards self-sufficiency.


He urged local pharmaceutical companies to get themselves ready to take advantage of opportunities that the African Continental Free Trade Area (AfCFTA) would present to them.