Business24 Newspaper 22nd March, 2021

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MONDAY MARCH 22, 2021

BUSINESS24.COM.GH

NO. B24 / 174 | NEWS FOR BUSINESS LEADERS

MPC likely to hold rate, economists project

MONDAY MARCH 22, 2021

Ghanaians urged to segregate waste, support sanitation levy

By Eugene Davis ugendavis@gmail.com

M

anagers of liquid waste in Accra have appealed to the public not to contaminate their liquid waste with solid ones since waste managers incur huge costs to carry out waste segregation.

Cont’d on page 3

GSE to attract more investors on capital gains boost

By Joshua Worlasi Amlanu macjosh1922@gmail.com Dr. Ernest Addison, Governor and Chairman of the Bank of Ghana’s MPC

By Joshua Worlasi Amlanu macjosh1922@gmail.com

S

ome are the Committee of Ghana

economists projecting that Monetary Policy (MPC) of the Bank will maintain the

policy rate at 14.5 percent when it announces its decision today given the upside risk to inflation as well as government’s fiscal policy.

Inflation increased from 9.9 percent in January to 10.3 percent in February, driven

ECONOMIC INDICATORS EXCHANGE RATE (INT. RATE)

Business24 Limited.

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Tel: +233 030 296 5297 Editor@thebusiness24online.net

POLICY RATE

14.5% 14.77%

OVERALL FISCAL DEFICIT

11.4% OF GDP

AVERAGE PETROL & DIESEL PRICE:

4.2% GHC 5.13

G

hana’s equities market is set to gain a major positive momentum from government’s policy to permanently exempt taxes on capital gains on listed securities.

Cont’d on page 2 INTERNATIONAL MARKET

US$1 = GHC 5.7606

GHANA REFERENCE RATE PROJECTED GDP GROWTH RATE

by non-food prices, which recorded an inflation rate of 8.8 percent from 7.7 percent in the previous month.

Professor Peter Quartey, Director of the Institute of

BRENT CRUDE $/BARREL NATURAL GAS $/MILLION BTUS GOLD $/TROY OUNCE

Follow us online: $57.79 $2.6801,922.57 $1,836.62

CORN $/BUSHEL

$543.75

COCOA $/METRIC TON

$123.55

COFFEE $/POUND:

Cont’d on page 3

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Editorial / News

MONDAY MARCH 22, 2021

Editorial

Deploy innovation to widen tax net T here is no denying that the coronavirus pandemic has rendered the country needing more revenues to bridge its yawning fiscal deficit.

And as is the usual approach almost every time the country is cash-strapped the attention has to be put on the low-hanging fruits, the formal sector.

Meanwhile, the informal sector provides a means of livelihood for the vast majority of Ghanaians. The Ghana Statistical Service (GSS) pegs that figure to about 80 percent of the active workforce.

While the sector is very crucial to providing jobs that support the economy, over the years their tax contribution has been abysmally low.

Many regimes have not made the adequate effort to rope in this all too important sector into the formal economy and get them to pay what is due to the state.

Very often the refrain has been about how difficult and costly it is for tax administrators to go after these businesses especially due to the lack of a proper addressing system among others.

Thanks to technology some of these inhibiting factors are becoming obsolete by the day.

Nevertheless, the innovativeness of the tax collectors must be on full display if they are to make anything out of the abundance of technology.

In addition to mobile

money which has been a real gamechanger, this government very much touts its digital addressing system which at the very least should contribute to providing geolocations to some of these hard-to-reach businesses.

For more than a decade that mobile money has been in existence, it has been an instant success. It is disappointing that the country’s tax policies have not been tweaked to take advantage of mobile money and allow people to file their returns with that technology.

While this paper believes that widening the tax net is a very difficult thing to do, it is worth noting that the country needs to, at least, start from somewhere.

MPC likely to hold rate, economists project Continued from cover

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Statistical, Social and Economic Research (ISSER) at the University of Ghana, said in an interview that an increase in the policy rate would lead to an increase in interest rates, which is not in line with government’s fiscal policy.

“So, a reduction or maintaining the policy rate is the way to go. For now, I think they may maintain it,” he said.

Other economists said the downside risks to inflation are not low enough to trigger a cut in the policy rate, but neither are the upside risks high enough to warrant a hike in the policy rate.

They said the factors requiring the MPC to maintain the policy rate include the elevated headline and core inflation rates of above 10 percent, the mounting upside risks to global oil prices, and the potential upside push from the new taxes announced in the 2021 budget.

The taxes include a new 5 percent levy on bank profits, a 1 percent increase in the VAT flat rate, and a 1 percent increase in

the National Health Insurance Levy.

Courage Kingsley Martey, senior market analyst with Databank Research, said holding the policy rate unchanged at 14.5

percent will allow the MPC to monitor how the new taxes are reflected in aggregate price levels in the coming months before deciding the next move.

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Ghanaians urged to segregate waste, support sanitation levy Continued from cover Eric Simon Amofa-Sarkodie, the head of processing and engineering services at Sewerage Systems Ghana Limited, the operator of Mudor faecal treatment plant and Lavender Hill landfill site, made the call when members of the Parliamentary Press Corps toured some waste management facilities owned by the Jospong Group of Companies.

The Lavender Hill facility generates by-products such as biogas and solid products used for producing organic manure and charcoal, while the water is treated for reuse or flushed into the Korle Lagoon.

The press corps also visited Zoompak, a medical waste treatment facility at TeshieNungua which is a partnership between Zoomlion and a Turkish waste company.

The Chief Executive Officer of Zoompak, Durmus Findkci, said the facility is one of its kind in Africa and called on the government to give it maximum support.

He also appealed to the government to institute control

measures on medical waste management because of its sensitivity, as improper collection and disposal of such waste can spark a major health disaster in the country.

“Zoompak is equipped to get rid of medical waste under hygienic conditions. The Ministry of Health must control all the processes of the sector and also support the investors in terms of funding, as the cost of operating the facility is currently borne by the investors,” he stated.

At the Integrated Recycling and Compost Plant (IRECOP), General Manager of the facility, Betty

Brown Nyadu, stated that over 60 percent of waste segregated at the 400-tonne facility is organic in nature.

The waste segregated at the facility is recycled for conversion into by-products such as organic fertilizer and plastic pellets.

Simon Agianab, the dean of the Parliamentary Press Corps, appealed to Ghanaians to embrace the 10-pesewa sanitation levy on petroleum products since it will help solve the sanitation challenges confronting the country.

He urged citizens not to regard the sanitation levy as a nuisance

levy but one that has the potential to change the face of sanitation in the country if embraced by all.

The levy, he noted, will provide a dedicated and reliable funding source to address sanitation issues in the country.

The tour formed part of a learning process to expose the press corps to the challenges of waste management in the country.

Government in the 2021 budget statement proposed the imposition of a 10-pesewa Sanitation and Pollution Levy (SPL) on fuel prices. This has generated lots of criticism from the public, with some describing the levy as a nuisance tax.

Sector players such as ESPA, SSGL and CONIWAS, however, welcomed the tax as a life saver for the sanitation sector.

According to the sanitation service providers, the levy could provide a dedicated fund for waste management which is currently non-existent. They argued that a dedicated fund for the sector means service providers would be paid on time and fully to enable them maintain their services.

GSE to attract more investors on capital gains boost Continued from cover The current capital gains tax exemption for listed securities will expire at the end of 2021. The exemption was first introduced in 1990 at the start of operation of the Ghana Stock Exchange (GSE).

It was renewed at various times until 2015, when it was abolished, and then reintroduced in 2016.

The exemption, critical to attracting investment flows, has helped make the market competitive, especially in the African region, with capital gains tax exemptions in place in many markets including Nigeria.

Announcing the decision to make the exemption permanent in his 2021 budget speech on March 12, the interim Finance

Minister, Osei Kyei-MensahBonsu, said government is continuously making efforts to develop and deepen Ghana’s capital market.

“The reinstatement of tax exemptions on capital gains on listed companies has encouraged investors, particularly local and retail ones, to actively participate in the market. In view of this positive development, government has decided to make this tax-exempt initiative permanent.”

The Technical Consultant of the GSE, David Tetteh, said in an interview with Business24 that the policy gives the GSE a long-term competitive advantage over its peers, especially from a foreign portfolio manager point of view.

Courage Kingsley Martey, a senior research analyst with Databank Research, also said in an interview that the policy should increase the upside potential of the general market in the short to medium term,

subject to general economic conditions.

However, he said the policy is only one of the many factors required to improve the global competitiveness of the market.

At the moment, market liquidity is not high enough to attract significant volumes of funds, and there is the need for more companies from the various sectors of the economy to list on the market, he explained.

“As things stand, market capitalisation may be as high as over GH¢57bn, but only a few stocks can really be counted as liquidity stocks, in terms of how frequently they trade,” he said.

As the stock market expands to cover all the sectors of the economy, it would truly serve as a leading indicator of economic activity and be used as a proper gauge of activity or expectations across the various sectors of the economy, as seen in other advanced or emerging markets, he added.

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News

MONDAY MARCH 22, 2021

Experts urge gov’t to develop tax policies to target informal sector

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n economist at the Economics Department of the University of Ghana, Prof. Eric Osei-Assibey has bemoaned the government’s inability to formulate policies that will shore up tax revenue from the informal sector.

Prof. Osei-Assibey speaking at the Pwc post-budget forum said it is disappointing that while the informal sector is acclaimed as the largest contributor to the country’s GDP, its tax contribution is nothing to write home about.

“I was expecting government would come up with perhaps more straightforward or targeted tax policies towards the informal sector particularly the issue about widening tax net rope in informal players. …with the advent of technology and mobile money platforms currently being deployed, I think it provides enormous opportunities for government to really target that sector as much

Prof. Eric Osei-Assibey

as possible for them to contribute to the tax net we are looking at,” he said.

According to the budget statement, the government is targeting raising more than GH¢70bn in revenues with direct taxes expected to amount to GH¢29.93 billion to be generated

in 2021, representing a growth of approximately 27% over the 2020 provisional performance.

Speaking at the forum, Abeku Gyan-Quansah, a Tax Partner at Pwc said the informal sector’s tax contribution is woefully inadequate. He explained that the sector’s contribution is nearly

1/15th of what is paid by the formal sector via direct taxes.

While the government has set its sights on increasing the taxto-GDP ratio to about 20 percent in the short-term, Mr. GyanQuansah argued that specific policies must be outlined to cater to the informal sector.

StanChart and Ghana sign 55-million Euro agreement said: “We are extremely proud The Bank has operated in for road infrastructure to reinforce our position as a Ghana for 125 years and will

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tandard Chartered and the Ghana’s Ministry of Finance have signed a 55-million Euro agreement for a road infrastructure supported by an Export Credit Agency (ECA).

Working closely with Exportkreditnämnden1(EKN, the Swedish ECA) and Swedish Export Credit Corporation (SEK), Standard Chartered’s project financing will fund the asphalt overlay of 100km of feeder roads in Tamale, Walewale, Nalerigu, Gambaga, Damongo, and Yendi all in the Northern Region of Ghana.

A statement said the financing transaction provided a significant contribution to the Ghanaian Government’s commitment for major investments in road transportation infrastructure, and alignment with the United Nations’ Sustainable Development Goal 93 (SDG) concerning industry, innovation and infrastructure.

The road infrastructure project will help considerably the Government’s efforts to boost the socio-economic development of the country’s urban and rural communities by providing easier access to healthcare, education,

employment and other social services.

Tamale’s road network project is being developed by a Swedish EPC (engineering, procurement and construction) contractor, QG Konstruktion AB (QGMI, SCB client),and will help improve regional networks in the Northern Region and consequently increase the flow of business, agricultural trade and market access.

Desislava Radeva, Director, Structured Export Finance, Standard Chartered Bank,

Mansa Nettey

reliable bank of choice to Ministry of Finance of the Republic of Ghana and to enhance our collaboration with EKN and SEK by closing this landmark infrastructure financing during such challenging times.”

Mansa Nettey, Chief Executive, Standard Chartered Bank Ghana Plc said: “This transaction stays true to Standard Chartered’s brand promise, Here for good, and underscores our proficiency and capacity to provide solutions that contribute to Ghana’s socioeconomic development.

continue to be a conduit for long term project and infrastructure financing that help Ghana achieve its Sustainable Development Goals.”

Maria Mattsson, senior underwriter at EKN, said: “EKN’s mission is to enable financing of the purchase of Swedish high-quality equipment. It is particularly rewarding that EKN has participated in this important project. ”Marcio Jordao, Structured and Export Finance Director at QGMI, said: “Our participation once again reaffirms QGMI’s commitment with Ghana. This project, developed with the important support of Standard Chartered Bank, EKN and SEK, will promote the growth of the region economy and a better quality of life for the local population.”

This transaction marks another significant ECA-supported term facility arranged by Standard Chartered Bank and signed with MoF Ghana during 2020.It follows the Bank’s EUR 78 million UKEF-supported financing for the construction of a new regional hospital in Koforidua, Ghana.

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Companies

MONDAY MARCH 22, 2021

Eni, Vitol and GNPC donate equipment to Korle-Bu to support fight against COVID-19

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ni Ghana, on behalf of the Offshore Cape Three Points (OCTP) Joint Venture, delivered medical equipment to the Korle Bu Teaching Hospital to enhance its capacity to provide support to Ghanaians in the fight against Covid-19.

It is aimed at providing immediate relief and lasting support to Ghana’s health care delivery system. The equipment includes a 30-bed capacity medical tent, 4 prefabricated washrooms/bathrooms for patients housed in the tent, 20 vital signs monitors and 2 portable ultrasound machines with cardiac probe.

This donation is part of an overall initiative of about $900,000 by Eni Ghana and its partners in the OCTP project – Vitol and GNPC, and is designed to strengthen Ghana’s health care system to be able to respond to the health needs of the people in an efficient and effective manner.

Similarly, last year Eni Ghana

and its partners, Vitol and GNPC, donated to the Ghana Health Service, St Martins De Porres Hospital in Eikwe and the Ellembelle District Health

Directorate, medical equipment and personal protective equipment to help in the management of COVID-19 in the country.

Eni Ghana’s Managing Director, Giuseppe Valenti, commented, “Eni prioritises the health of its workers and the citizens of the host countries in which it operates by investing for the continuous improvement of their healthcare systems”.

Eni is a global integrated energy company operating in over 60 countries. It has been present in Ghana since 2009 with its upstream activity, and currently accounts a gross production of about 70,000 barrels of oil equivalent per day.

The gas produced from OCTP’s Sankofa field ensures reliable, stable and sustainable fuel for Ghana’s power plants, with a positive impact for the country: it develops local production, enhances access to energy, crates skills, jobs, revenues and royalties, while reducing reliance on imported fuel which weighs negatively on the balance of payments.

Reiss & Co. appoints Jeffrey Sowa as new Managing Director

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eiss & Co (Ghana) Ltd announces the appointment of Mr. Jeffrey Sowa as its new Managing Director effective March 21, 2021.

The appointment is in line with Reiss & Co. Ghana’s strategy to strengthen its local operations and management in Ghana.

“We are delighted with the choice of Mr. Jeffrey Sowa as the Managing Director of Reiss & Co. We believe this move will reinforce our operations, strengthen our position in the market and leverage new opportunities for growth.

With Jeff ’s experience, we are confident that he will provide the leadership needed to steer our business at such a critical moment,” a statement from the board said.

Mr. Sowa is taking over from Peter van der Wurff, who successfully ran the company for more than three decades.

In his new capacity, Mr. Sowa will lean on years of experience in marketing and business development across various sectors - with stints at Databank, Swivel Marketing, Barclays/Absa Bank, EIB Network and Bayport Savings and Loans - to guide the affairs of Reiss & Co’s agriculture, veterinary, information technology, mechanical and

Jeffrey Sowa

industrial safety supplies divisions.

“I am honoured to be selected to lead this iconic company at this time. With a 69-year-old brand in Ghana and technology at the centre of what we do on a dayto-day basis, my core task will be to reinforce our operations, strengthen our position in the market and leverage new opportunities for growth. With a board as capable as the one we currently have, I am confident of success,” Mr. Sowa said.

Profile of Mr. Jeffery Sowa Gifted with a creative mind and an insatiable thirst for success, Jeffrey Sowa is the “go to” person to get things done, and for his

marketing insights. For more than 16 years, he has pioneered “firstof-it-kind” industry changing initiatives that propelled revenue growth, business exposure and market expansion for brands such as Barclays/Absa Bank, EIB Network and Bayport Savings and Loans.

A proud Odade3 and a graduate of University of Ghana, where he read Bachelor of Arts (Hons) Psychology, before finding his passion in marketing.

In 2005, he proceeded to have his master’s degree in Business Management at Kingston University, London-UK. Jeffrey has an appetite for learning as he also holds a PRINCE 2 certificate

from Sterling Group Ghana.

During his tenure with EIB Network, he made a significant contribution which saw the organization make exponential growth and became a recognizable market leader.

The business was awarded Top Quality Emerging Brand Award (August 2015) and Best Emerging Brand Award in November 2014, CIMG Award for Best Digital Brand 2015-2016.

In his spare time Jeffrey enjoys spending time with his friends and family and being active outdoors. A few of his favorite activities are swimming and supporting his favourite football team Manchester United.

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Feature

MONDAY MARCH 22, 2021

Referral ideas for small businesses

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here is no better time to start thinking about how you can acquire more customers for your business.

For small businesses that don’t have a large amount of cash flow, it is far better to stick to the tried-and-tested methods of getting customers, and referral marketing is as reliable as it gets.

What is a Referral Program?

A referral program is a word-of-mouth marketing that encourages customers to promote on behalf of your business. Rather than writing reviews online, or submitting customer feedback surveys, referral programs let customers share their brand experience with partners, colleagues, and friends.

The purpose of a referral program is to attract new customer to try your product or service. By asking existing customers to think about people who would benefit from your product or service, they’ll refer leads that are a good fit for your brand.

Whilst big companies can have a big success with their referral programs, replicating their exact same strategy and referral message might not work for your business. For your particular product offering, you will need to find a way to make your referral program resonate with your retained customers you already have, and reach your revenue goals.

Having a plan in place will reveal two things: It shows that you are confident in your product or service to identify that a referral program is a positive investment.

You realize that despite you having an excellent product or service some potential customers still need some persuasion to give yours a try.

Thankfully, there are many different ways to offer a referral program. Some of these include offering discounts, product giveaways, exclusive deals, gift cards, or even cash.

If you are not sure what could work for your small business

here are some ideas to create your referral program: - Set your goals - Research how referrals are coming to your business - Determine what is a ‘good fit’ for your business - List all possible customer referral sources - Identify all channels to host your referral program - Make a plan on how you are going to reach out to people - Identify your referral incentives - Work out what resources will alert your customers - Set up tracking to log the progress of your plan - Don’t forget to say thank you - Remember to follow up on your referrals quickly

Authored by: BforB Ghana | Networking Clubs

Business for Breakfast (BforB) is internationally recognised for creating successful networking meetings, events and training for referral marketing. Our global offices are in Australia, Germany, Czech Republic, Spain, Slovakia, Ghana and headquartered in UK. We create an environment where you can build quality relationships within your group, backed up by an ongoing member support programme. BforB is committed to helping small to medium scale businesses expand.

In our professional network, members meet regularly in business networks to develop relationships, support each other and to share and record referral business.

We are here to help you get new business from quality business introductions and referrals made through our meetings.

Kindly join our next meeting using this link: https://rb.gy/qrf4pl Contact us: 059 4 016 432 | info@bforbgh.com | Facebook & LinkedIn: @bforbghana | www. bforb.co.uk

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Feature

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Shell and Eni acquitted in a corruption case in Nigeria

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orruption in Africa burns hotter than the sun, drying up the resources within the continent. Nigeria, a West African nation, blessed with oil and other natural resources, but a few of her citizens live in hardcore poverty.

Corruption in the oil and gas sector in Nigeria finally finds itself in the courts in Italy.

On Wednesday, 17th March, 2021, a court in Italy acquitted Eni and Shell of $1.1 billion corruption charges related to an oil exploration deal in Nigeria. This according to industry historians is the biggest scandal ever to hit the industry.

In 2011, ENI and Shell purchased an offshore oilfield estimated to hold 9 billion barrels of crude.

A deal prosecutors alleged the companies paid bribes to secure the field. An alleged amount of $1.3billion (€1.09 billion) for a license on Oil Prospecting License (OPL) 245 to buy the oil field that was once owned Malabu Oil and Gas , a company owned by Dan Etete, the then Nigerian Oil Minister.

Out of this amount, $1.1 billion was used to line the pockets of middlemen and some influential politicians, including Etete. The owner himself.

Why pay twice, when you can pay once?

According to credible sources, the money was paid into a Nigerian Government bank account in London (UK), which was to be disbursed as bribes.

Key witnesses to the case failed to back their allegations when they were called to testify.

The case landed in court after three anti-corruption NGOs brought a complaint before prosecutors in Milan.

The group uncovered documents that informed to the Italian prosecutor’s decision to take up

the case.

At the court in Milan, Italy, the Judges cleared Eni, Shell and 13 defendants, including Eni’s CEO Claudio Descalzi and his predecessor Paolo Scaroni, a spokesperson for Eni said.

Prosecutors called for the managers to be jailed and the companies to be fined, as well as confiscating $1.1 billion from the defendants. Nevertheless, Judge Marco Tremolada in reading out the sentence in Milan acquitted the defendants, as there was no case to answer.

This ruling comes three (3) years after the trial kicked off and after 74 hearings. In 2018, two middlemen were found guilty of corruption in a separate trial.

What does this mean to the Nigerian Government, will the authorities appeal?

According to a Nigerian Government spokesperson, “The Federal Republic of Nigeria is disappointed in today’s ruling in Milan, but thanks the Italian prosecuting authorities for their tireless efforts,” He also stated, Nigeria “will continue to hold those responsible for the OPL 245 fraud accountable.”

The verdict is a setback for Global Witness, the nongovernmental that seeks to expose corruption and humanrights abuses around the world “This ruling is obviously very disappointing,” Barnaby Pace, a campaigner for Global Witness who followed the trial closely, said,. “We urge the Milan prosecutor to consider all options to appeal.”

An associate fellow at the Chatham House Africa programme, Matthew Page said, “This is a huge blow for natural resource governance and transparency in Nigeria,” he

further stated, “This judgment will continue to sting.”

A sting that has gone deep into the heart of the campaign to ensure fairness in the oil and gas industry in Nigeria.

However, on the side of ENI and Shell, both companies have denied the charges and have welcomed the ruling.

According to the manager’s, lawyer Paola Severino, the verdict “finally restores Claudio Descalzi’s professional reputation and Eni’s standing as a large company”.

Italian prosecutors had sought an eight-year jail term for Eni Chief Executive Officer Claudio Descalzi, who was among those found not guilty on Wednesday.

A few other top executives were all cleared including Malcolm Brinded who was in charge of Shell’s Exploration and Production division.

At a parliamentary hearing last year, Descalzi said Eni has not suffered reputational damage from the case or any setbacks to its operational plans. He was reappointed to his position by the Italian government in April, his third mandate, which runs to mid-2023. The Treasury and Italy’s state-back lender are Eni’s biggest shareholders.

The ruling is a blow for Nigeria’s government, which joined the case as a civil party in 2018 and was seeking compensation.

Chief executive of Royal Dutch Shell, Ben van Beurden, also welcomed the ruling, saying: “We have always maintained that the 2011 settlement was legal, designed to resolve a decadelong legal dispute and unlock development of the OPL 245 block.

“At the same time, this has been a difficult learning experience for us.

“Shell is a company that operates with integrity and we work hard every day to ensure

our actions not only follow the letter and spirit of the law, but also live up to society’s wider expectations of us.”

According to Eni, the Nigerian government never gave them production rights to start extracting oil and this will lead to Eni and Shell ending up as losers from the OPL 245 deal.

“The benefits never materialized, Eni and Shell invested $2.5 billion and their license will expire in May. So the truth is that the two companies are the damaged parties in this affair,” an Eni spokesperson said.

The ruling means the Muhammadu Bihari led Government has failed to secure a $1.1 Billion in courtordered compensation from Eni and Shell. The oil resources remained undeveloped and Eni in September, initiated an international arbitration proceedings against Nigeria, alleging the government has breached its obligations by refusing to let the firm develop the license, which will expire in May. As we sit here and observe, the question remains.

Will individuals with responsibility of serving its people, put their personal gains second to the interest of the people, they serve?

Will the resources of Africa, bow to the monies offered to the resource gatekeepers?

How do we move from relearning the past, to re-thinking about the future?

A bribe is like a bride…a few will understand many will not.

Writer: Donald Marshall Company: Mframadan Energy Management & Research Institute (M.E.M.R.I).

Contact: 00233-24-4550854 Email: donaldamus@yahoo.com

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Feature

MONDAY MARCH 22, 2021

Zeepay – changing the remittance narrative via fintech disruption

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Andrew Takyi-Appiah, CEO of Zeepay Ghana

t is a paradox that a continent that is often described as having very little to offer, can produce such consistent and persistent giants that take on the world every day. The narrative of Zeepay is simple and yet powerful: it is an African fintech start up that is changing lives and making a positive impact on the continent on a daily basis.

As a continent, Africa’s billion consumers have emerged in several markets, making it the most exciting beginning in the new 100 years we just entered.

As I roam through Africa, I have come across a striking narrative that stays outside the experience of the average urban home.

It is a simple truth, that 80 percent of the population live in rural communities and have to travel long distances for access to financial services. What caught my eye while traveling to these rural areas, is that many people walk for over 20 kilometers to get to the nearest bank or financial services point to pick up remittances of amounts as low as US$100 from their friends and family abroad.

It poses a huge challenge and

yet we are in a new millennium where problems like these shouldn’t exist. Given these pressing socio-economic issues, I was excited when I came across the Zeepay narrative which had established a real solution.

Zeepay is a start-up that has come into the ecosystem to disrupt the archaic process of walking long distances to withdraw money. Many people in the rural areas also have to deal with encountering poor customer service at some point in their withdrawal process, a problem they would never encounter with Zeepay.

Zeepay changed the narrative by making it possible for remittance receivers to now receive their remittances from money transfer companies such MoneyGram, Taptap, Small World, Ria, Transfast, among many others. People are able to receive their funds directly onto their Zeepay mobile money wallets instantly and also have the option of withdrawing from a local agent nearby.

What I found most interesting is that the start-up developed an engineering system that makes

it possible for the receiver to not only receive in their Zeepay mobile wallet but also be able to withdraw from all mobile money merchants regardless of which network they are using whether it is MTN, AirtelTigo or Vodafone Cash. This powerful narrative is what makes Zeepay a consumer choice brand.

After five days of travel across Ghana, Ivory Coast and Guinea, I now find that the narrative of Zeepay is not only centralized in and confined to Ghana but can also be identified in many other African countries as far as Mozambique. In all of these corners of Africa, Zeepay’s partners aim to be the solution to the problem of financial inclusion.

Zeepay is providing this service to millions of Africans through a simple, disruptive force lead by a group of young disruptive men and women. A surprising statistic that I have come across in my research into the challenger fintech is that the mean average age of a ‘zeepayian’ is only 28 but what I found to be most incredible is that while the company has only 23 full time

staff but currently serving over 2.4 million Africans across the continent.

On the other hand, banks have been offering remittances for over 30 years and have not seen or been able to provide this level of support or convenience to consumers.

The million-dollar question then is, what comes next for Africa and how will young Africans help improve the narrative of mother Africa? I believe Zeepay is a hot number to follow and a true beacon of hope in the digital age.

I believe 2021 will see a lot more excitement from Zeepay as its takes on more and opens up the economy with new and exciting products such as Beneficiary Micro Insurance. This new product is centered around the remittance receiver and gives senders the opportunity to purchase life insurance for as low as 2.50 pesewas that provides receivers with a cover of up to GH¢5000 monthly.

In this period of COVID-19 the introduction of this service is timely and exciting and comes as a relief to the continent and to the people who need it most.

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Surviving covid-19 as a young entrepreneur A conversation with Ghanaian entrepreneur, Abubakar Nii Commey Boye

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he year 2020 came with its fair share of surprises.

Not only was the world at a standstill because of the devastative effect of coronavirus on countries and communities, but the ripple effect of shutting down all activities all over the world is now being felt as many economies slip into recession and many more barely hold on.

One thing that has managed to surprise everyone is the fact that despite the hardship and economic downslide, some young entrepreneurs seem to have it all under control and are running thriving businesses.

Falling demand, reduced spending on nonessential things and stay-athome curfews mandating that certain businesses remain closed have certainly taken their toll on many companies.

Abubakar Nii Commey Boye is a young Ghanaian entrepreneur who manages Lyon Properties Limited, a property management and sale company which also consults on investments into properties. He is also the pillar behind Boniak Ventures, importers of furniture, building materials and cars.

The young entrepreneur grew up in Alajo, Accra with my parents till the death of his father in 2000 at the age of 13. He lived with his mother who took care of him and his two siblings, making sure they had the best of education.

He attended Achimota Primary School and proceeded to Accra Academy Secondary School.

He graduated with a degree in Marketing from the Wisconsin International University College After secondary school, Abubakar decided to take over his father’s real estate business without knowing much about the business. He learnt the rudiments of the trade and introduced the retail arm to sell building materials. For this purpose, he travelled to China to establish contact with suppliers and that was the beginning of his entrepreneurial journey.

I recently had a conversation with Abubakar on how young entrepreneurs can survive this current trying times and scale to the next level in their businesses.

Passionate about the subject, he highlighted the important of young entrepreneurs to come up with businesses that are vital in helping many countries make the shift from old norms toward fully digitalized services.

“It is important to remain dynamic, unique and innovative especially in these difficult times when the entire world if facing the harsh impact of the coronavirus. To be able to sustain your business in this critical time, you cannot operate ordinarily, but rather, find alternative ways of doing things that will provide the required results”, he stated.

Looking beyond the present circumstance, Abubakar indicated how young entrepreneurs must ensure the survival of their companies in the years to come and surpassing

the proverbial five-year mark in their businesses.

“Relevance is one of the most important factors to consider in business. If your business is no longer relevant to the consumer, then it is time to change it up.

While the manufacturers of toilet paper may have witnessed an unbelievable surge in sales during the “toilet paper paranoia” early this year, everything has started to go back to normal as people realize that toilet paper isn’t such a big deal. Manufacturers of toilet paper, therefore, should not expect the same surge in sales as they did a couple of months ago.

It may be time to restrategize and ensure that they stay relevant after Covid-19”, he added.

According to Abubakar, having a fresh approach is a very important step entrepreneurs cannot ignore another. “Business is very tricky and there is no exact formula to guarantee a startup. A young entrepreneur who started thriving during the pandemic may have put in place strategies to have a presence amid all the confusion. However, moving forward, these startups need a fresh approach to accommodate their companies not just for the rest of the pandemic, but also after the dust has settled.

The design, culture and ways of business have to adapt if it is to survive the five-year mark”, he emphasized.

Currently, most consumers of products and services are stuck at home because of the pandemic

and entrepreneurs are to find a way to reach out and make sure their products and services are being used even if they cannot physically see the customers.

Abubakar further stated that “we have to meet the needs of our customers and actively involve them in decision-making about the company. Going forward, businesses must take care of customers’ current needs and be ready to change up when those needs change as well. It’s important to be flexible and understand the market trends and attend to the particular needs as and when”.

Abubakar believes it is the perfect time for young entrepreneurs to take a step back and take a long, hard look at their business. Are there any services that need to be added or removed? Are there outdated approaches that will not work after Covid-19? Are there systems currently in place that may need to change during the coming years? All these questions should be asked and answered to help their business grow.

In conclusion, he said: “customers must be actively involved in all change processes.

Information on new products and services or the cancellation of old ones must be disseminated to customers promptly. Newly added products and services must also be announced to customers, or they may get discouraged about the change and move on to other prospects”

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2021 Budget and Economic Policy Statement - Our Thoughts

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n 2020 Government was very bullish about growth prospects. The comprehensive set of fiscal and monetary policies implemented since 2017 had yielded some positive results.

As it approached the final leg of its four-year term Government believed that a strong foundation for accelerated growth had been laid. Interest rates were trending downwards, the Cedi had survived some pressure in critical moments, and the financial sector clean-up had restored some confidence in the financial sector.

Extensive interventions in the agricultural sector – particularly the Planting for Food and Jobs and other related initiatives had provided a major boost to the real sector. Government therefore started 2020 believing that its “Consolidating the Gains for Growth, Jobs & Prosperity for all” drive was going to place Ghana on a growth trajectory without the usual fiscal slippage characteristic of election years.

Barely three months into 2020, Ghana like all other countries around the world experienced the worst human disaster only second to the 1930 Flu pandemic.

The effects of COVID-19 were very devastating – lives were lost, people lost their jobs and some businesses closed shop.

Government’s response was swift and decisive. Economic policies and programmes were adjusted through significant increases in government expenditure to develop health infrastructure

and provide the requisite logistics to contain the pandemic.

Sweeping social interventions, including free electricity and water supply were introduced to reduce the social burden of this pandemic.

Expenditure ballooned in response to the aforementioned interventions.

Massive job losses decline in tourism and international travel, and disruptions in global supply chains resulted in a significant drop in demand. Tightness in consumer and business spending meant a significant drop in tax revenues which could not cater for the expanded expenditure.

Growth forecasts were thrown off target. The industrial sector shrank by 3.1 percent as a result of poor performances in the mining and quarrying and manufacturing sub-sectors which contracted by 7 percent and 1.8 percent respectively. The tourism and hospitality sub-sectors took a major hit, and growth in the services sector slowed down with a growth rate of 1.9 percent by Q3 2020, after a rapid growth of 6.5 percent during the same period in 2019. Economic growth fell significantly short of the target GDP growth of 6.8 percent. The outturn of 0.9 percent however exceeded the global 3.5 percent GDP contraction predicted by the IMF, a sign of some level of economic resilience. Year-end inflation was 10.4 percent, above the single digit target of 8 percent.

Other key macroeconomic indicators remained largely stable

with inflation staying close to the single digit target. Interest rates dropped, while the Cedi stayed relatively stronger with foreign exchange reserves remaining unchanged at 4 months of import cover. The Agricultural sector remained quite resilient with a growth rate of 4.5 percent in response to growth in the crops, fishing, and livestock subsectors under the Government’s “Planting for Food and Jobs (PFJ)” and “Rearing for Food and Jobs (RFJ)” initiatives.

With little or no real alternatives available to finance the budget deficit, Government had to increase borrowing from both domestic and external sources than planned. This has significantly increased the public debt stock to 76 percent of GDP at end of 2020. The fiscal deficit/ GDP ratio target of 5 percent remained elusive, ending the year at 11.7 percent.

Ghana goes into 2021 confronted with a fragile economy with alarming debt levels. The country is still grappling with COVID-19. The fiscal gap created by the unplanned expansion in expenditure in 2020 must be corrected. The signal from the 2021 Budget and Policy Statement dubbed the “Won Ya Wo Hi33” budget is that Government will tackle these issues head on.

The medium-term objective of recovery and consolidation will remain a core policy thrust.

Simultaneously, Government intends to push an aggressive

growth agenda by developing both social and physical infrastructure to spur further growth. Recovery, consolidation, and aggressive growth with constraints in revenue generation and a lid on borrowing presents Government with a rather tall order and limited options. Government aims to spend GHS113.8 billion to achieve these three targets in 2021. The indication from the 2021 Budget is that additional borrowing would not be favoured as an option to raise the requisite funding to support this vision. Government intends to look within to raise funding to push this agenda.

The 2021 Budget proposes the following additional taxes to raise revenue of GHS72.5 billion through an aggressive tax reform programme: 1. A one percent increase in NHIL and VAT flat rate; 2. A five percent Financial sector clean-up levy on banks’ pre-tax profits; 3. A one percent COVID-19 Health levy; and 4. 10 pesewa Sanitation and Pollution levy and 20 pesewa Energy sector recovery levy.

The forecast fiscal deficit for the year is GHS41.3 billion (9.5 percent of GDP). The effects of COVID-19 are still present, and we believe that these revenue generation measures will be counterproductive.

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19 CONTINUED FROM PAGE 18 The passthrough effect of these taxes could generate inflationary pressures and push the end-year single digit inflation target off course. Demand still remains depressed, and businesses are still struggling to recover.

This year, GDP growth is expected to return towards the 2020 forecast. The five percent projected growth rate will mirror the medium-term target, as external and domestic demand gain traction after an extended period of slowdown last year. We are of the opinion that this projected growth target will be partly flattered by a favourable base effect. Headline inflation is expected to drop to the target inflation rate of 8 percent. Improved agricultural productivity would determine whether the single-digit inflation target would be achieved. It would also be interesting to see the net effect of the new tax measures and improved food production on inflation at the end of 2021.

Interest rates are forecasted to remain relatively stable in line with the monetary policy rate while the Cedi grows relatively stronger with rise in consumer demand. Government aims at maintaining the import cover at 4 months.

Growth rate in the agricultural sector for 2021 is projected at 4 percent. The formation of the Tree Crops Development Authority to coordinate the activities of stakeholders of some cash crops other than cocoa is a laudable initiative which could give this growth target a major boost. We believe that the establishment of

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the Authority allows Government to focus on a critical piece of the agriculture value chain to achieve specific targets. It is estimated that cocoa alone provides the country US$2.5 billion in export earnings.

The Authority would be expected to give tree crop productivity a major boost, with the potential export earnings from selected tree crops (especially shea and rubber), increasing exponentially.

This presents Ghana with a unique opportunity to add value to primary products. There is no reason for Ghana to earn less than 2 percent of the global cocoa final consumer market of US$87 billion when the country is responsible for more than 20 percent of global cocoa production. Similar opportunities exist in the shea butter and other cash crop subsectors.

The industrial sector is projected to grow at 4.8 percent. The power sector is currently reporting excess generation capacity which costs Ghana GHS2.5 billion a year. As government tries to renegotiate the Power Purchase Agreements with some of the generation companies to manage this exposure, a more efficient approach would be to deploy the latent excess power through an aggressive industrialization drive and consider driving the West African Power Pool Project agenda to feed this sub-regional grid. We consider government’s operational 76 1D1F factories, expansion of existing ports, the development of our iron, steel, and aluminium industries, among others as crucial to the achievement of the aforementioned, and projected growth target for the sector.

Additionally, the implementation of the “cashflow waterfall” of harnessing all revenues generated by the electricity company and distributing same across the players within the sector based on their contribution will ease the perennial debt accumulation within the sector and provide some transparency of prudent cashflow management within the energy sector.

The services sector is projected to be the fastest growing in 2021 with a growth rate of 5.6 percent.

This will be fuelled largely by the recovery of economic activities and increasing output in both the agricultural and industrial sectors. A major lesson COVID-19 has taught us is the need to take domestic tourism seriously. This would require direct Government interventionist policies to spur private sector interest and investment in the sector.

Direct Government spending on infrastructure development would also give a major push to this industry.

Government wishes to cement its economic recovery efforts by continuing the GhanaCare “Obaatanpa” initiative, a GHS100 billion programme to be implemented in three and half years to mitigate the impact of the pandemic, return the country to a sustained path of robust growth and to create a stronger, more resilient and transformed economy. After a successful execution of phase one in 2020, the Obaatanpa programme seeks to begin the final phase this year, which includes policies like fast-tracking digitisation and developing Ghana’s housing and construction industries, among

others.

Overall, we commend Government for presenting a budget that seeks to give hope to the ordinary Ghanaian, businesses, and foreign investors as we anticipate a sharp economic recovery in 2021 after an extended period of slowdown in 2020. The pursuit of recovery, consolidation, and accelerated growth, in our opinion is a bit aggressive for Government to achieve within one fiscal year when the threat posed by COVID-19 persists.

Perhaps, a phased approach and a more medium-term execution of these laudable policies would be more successful without imposing additional tax burdens on consumers and businesses.

Government must also explore the widening of the tax bracket within the framework of our digitization agenda to remove excessive human intervention in tax collection. The much-flogged rationalization of property taxes to re-align them with realistic property values across the country needs to be revisited and championed as a major source of government revenue. Finally, bold steps must be taken to shut down SOEs that have major financial leakages on the government purse, while those with prospects and foreign exchange earning capacity should be restructured taking advantage of the new insolvency and restructuring laws and be re-capitalized to take their pride of place in national development.

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Reimagining diplomacy in the post-covid world: An Indian perspective

By Dr. S. Jaishankar

W

e enter 2021, hoping to put the COVID-19 pandemic behind us.

While each society has dealt with it uniquely, global diplomacy will nevertheless focus on common concerns and shared lessons.

Much of that revolves around the nature of globalization.

Our generation has been conditioned to think of that largely in economic terms. The general sense is one of trade, finance, services, communication, technology and mobility. This expresses the interdependence and interpenetration of our era.

What COVID, however, brought out was the deeper indivisibility of our existence. Real globalization is more about pandemics, climate change and terrorism. They must constitute the core of diplomatic deliberations. As we saw in 2020, overlooking such challenges comes at a huge cost.

Despite its many benefits, the world has also seen strong reactions to globalization. Much of that arises from unequal benefits, between and within societies.

Regimes and dispensations that are oblivious to such happenings are therefore being challenged.

We must ensure that this is not about winners and losers, but about nurturing sustainable communities everywhere.

COVID-19 has also redefined our understanding of security.

Until now, nations thought largely in military, intelligence,

economic, and perhaps, cultural terms. Today, they will not only assign greater weight to health security but increasingly worry about trusted and resilient supply chains. The stresses of the COVID-19 era brought out the fragility of our current situation. Additional engines of growth are needed to de-risk the global economy, as indeed is more transparency and marketviability.

Multilateral institutions have not come out well from this experience. Quite apart from controversies surrounding them, there was not even a pretense of a collective response to the most serious global crisis since 1945. This is cause for serious introspection.

Reforming multilateralism is essential to creating effective solutions.

Fashioning a robust response to the COVID-19 challenge is set to dominate global diplomacy in 2021. In its own way, India has set an example. That it has done by defying prophets of doom and creating the health wherewithal to minimize its fatality rate and maximize its recovery rate. An international comparison of these numbers tells its own story.

Not just that, India also stepped forward as the pharmacy of the world, supplying medicines to more than 150 countries, many as grants.

As our nation embarks on a mass vaccination effort, Prime Minister Narendra Modi’s assurance that it would help

make vaccines accessible and affordable to the world is already being implemented. The first consignments of Made in India vaccines have reached not only our neighbors like Bhutan, Maldives, Bangladesh, Nepal, Mauritius, Seychelles and Sri Lanka but partners far beyond like Brazil and Morocco.

Other key global challenges today deserve similar attention.

As a central participant in reaching the Paris agreement, India has stood firm with regard to combating climate change.

Its renewable energy targets have multiplied, its forest cover has grown, its bio-diversity has expanded and its focus on water utilization has increased.

Practices honed at home are now applied to its development partnerships in Africa and elsewhere. By example and energy, Indian diplomacy is leading the way, including through the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure initiatives.

The challenge of countering terrorism and radicalization is also a formidable one. As a society, long subjected to crossborder terrorist attacks, India has been active in enhancing global awareness and encouraging coordinated action. It will be a major focus in India’s diplomacy as a non-permanent member of the Security Council and in forums like FATF and G20.

Among the takeaways from the

COVID-19 experience has been the power of the digital domain.

Whether it was contact tracing or the provision of financial and food support, India’s digital focus after 2014 has yielded impressive results. The “work from anywhere” practice was as strongly enhanced by COVID-19 as the “study from home” one. All these will help expand the toolkit of India’s development programs abroad and assist the recovery of many partners.

2020 also saw the largest repatriation exercise in history– the return home of more than 4 million Indians. This alone brings out the importance of mobility in contemporary times.

As smart manufacturing and the knowledge economy take deeper root, the need for trusted talent will surely grow. Facilitating its movement through diplomacy is in the global interest.

A return to normalcy in 2021 will mean safer travel, better health, economic revival and digitally driven services. They will be expressed in new conversations and fresh understandings. The world after COVID-19 will be more multi-polar, pluralistic and rebalanced. And India, with its experiences, will help make a difference.

About the author Dr. S. Jaishankar is the minister of external affairs of India and author of “The India Way: Strategies for an Uncertain World.”

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