Business24 Newspaper - 18th Sept 2020

THEBUSINESS24ONLINE.COM

NO. B24 / 102

NEWS FOR BUSINESS LEADERS

FRIDAY SEPTEMBER 18, 2020

GDP contraction: 'reforms saved economy from sinking deeper'

Oil recovery would depend on reduction of virus risk, trade tensions—Moody's

By Benson AFFUL affulbenson@gmail.com

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lobal demand for transportation fuel will remain below trailing five-year average levels beyond 2021, barring a speedier resolution to both the COVID-19 pandemic and trade tensions among the largest oil consuming nations, international rating agency Moody's has said.

“Mitigating these risks effectively would accelerate the oil market's recovery,” it added.

Cont’d on page 3

The contraction in the GDP growth largely spared the agriculture sector highlighting its importance in the economy

GPHA takes action to expedite clearance of dangerous cargo

By Patrick PAINTSIL (p_paintsil@hotmail.com)

By Nii Annerquaye Abbey (abbeykwei@gmail.com)

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hana's economy would have sunk deeper into recession but for the financial sector reforms implemented by the central bank as well as the fiscal stimulus package announced by government, Courage Martey, an economist with the Databank Group, has said.

showed that the country's economy contracted by 3.4 percent year-on-year in the second quarter, said the various reforms strengthened the economy to withstand the shock presented by the pandemic.

The financial services sector, according to the statistical service, grew at 3.9 percent in the second quarter of this year, among a number of sectors that escaped the contraction caused by the coronavirus.

Mr. Martey, commenting on the Ghana Statistical Service's (GSS) latest data that

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sing the recent Beirut port disaster as a wake-up call, the Ghana Ports and Harbours Authorit y (GPHA) is currently engaging the ministries of Transport and Interior and the Environmental Protection Agency (EPA) to expedite approvals for the clearance of dangerous cargo at the country's ports.

Cont’d on page 2

Develop security models to deal with sophisticated fraud – Abiola advises Banks

Economy, good governance to decide 2020 polls—iPoll Survey

Story on page 5

Story on page 7

Cont’d on page 3 ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

USD$1 =GHC 5.6995*

*POLICY RATE

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

11.4 % OF GDP

PROJECTED GDP GROWTH RATE AVERAGE PETROL & DIESEL PRICE:

0.9% GHc 5.13*

INTERNATIONAL MARKET BRENT CRUDE $/BARREL NATURAL GAS $/MILLION BTUS GOLD $/TROY OUNCE CORN $/BUSHEL COCOA $/METRIC TON

40.68 2.37 1,944.60 329.50 2,693

COFFEE $/POUND:

$123.55

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

17.07

Copyright @ 2020 Business24 Limited.

All Rights Reserved.

Tel: +233 030 296 5297 editor@thebsuiness24online.net

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NEWS/EDITORIAL

FRIDAY SEPTEMBER 18, 2020

EDITORIAL

Population issues matter 1

Wash your hands 2

Cover your cough 3

Wear a mask Brought to you by

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he National Population Council s work matters in the country's national development agenda and is time they are adequately resourced to carry out its activities and programmes.

issues.

Their work allows couples to plan their families and chart their futures. They help people avoid HIV infection and access life-saving HIV services as well as empower girls to protect With a core responsibility of themselves and have a say in m e s s a g i n g , a d v o c a c y , their own lives. consistency and targeting if they Despite its crucial role, the are adequately resourced, their council is severely underi m p a c t o n t h e n a t i o n a l resourced. For instance, it development agenda is expected requested GH₵7m last year but to be great. received under Gh₵1m

In the area of family planning for instance, the council s work encompasses education on contraceptives that give women, men, couples, and adolescents the ability to avoid unintended pregnancy and choose whether and or when to have a child.

It is also linked to human rights, gender equality, and empowerment , impac t on maternal, newborn, child, and adolescent health.

Accelerating progress in these areas is critical for sustainable Their crucial role cannot be It is time government overemphasized given that it prioritise the work of the d e v e l o p m e n t g o a l s conducts research to address Population Council to reap the achievement. critical health and development long-term benefits.

GDP contraction: 'reforms saved economy from sinking deeper' CONTINUED FROM COVER

“Ghana had just emerged from fi s c a l a n d fi n a n c i a l s e c to r re f o r m s , w i t h t h e g row t h m o m e n t u m a l re a dy s t ro n g around its potential levels.

C o n s e q u e n t l y, w h i l e t h e contraction was expected, the fiscal and financial sector reforms had already strenghtened Ghana's capacity to withstand shocks,” Mr. Martey told the Business24 in an interview.

“Also, the swift decision by the Bank of Ghana to provide strong liquidity support to the financial system to mitigate a total collapse in private sector demand may have played a part. And since private sector demand would take time to recover, the government's fiscal stimulus, as the bigger spender in the economy, was crucial to provide a backstop for aggregate demand.”

Despite the overall contraction in GDP growth, Mr. Martey explained that government's decision to ease restrictions earlier, compared to most African countries, may have prevented further damage.

considering that the economy showed signs of a rebound in the latter part of the second quarter.

“If we consider the GSS data that proved that the economy had started showing signs of restarting from late Q2-2020, then “This enabled a quicker restart there's a reason to be hopeful for of the economy and partly the 2H-2020. explains Ghana's relatively For growth to fall short of the modest contraction, compared to 0.9 percent projection for endits peers. This also set up the 2020, we would have to grow by economy to avoid a recession less than 1 percent on average in when the third quarter numbers the second half of 2020. are published, because we expect “But I feel strongly that we a marginally positive growth rate have the potential to recover for the third quarter of 2020,” he growth to 1 percent or more. added.

Public expenditure in the lead up Mr. Martey said government's to the December 2020 elections projection of achieving 0.9 should also provide another percent GDP growth in 2020 extraordinary lift to aggregate appears more feasible now demand.”

Other factors The biggest slump in the second quarter GDP data occurred in the hospitality subsector, which fell by more than 79 percent year-on-year. This was followed by the trade, repair of vehicles, and household goods sub-sector, which saw a 20.2 percent contraction.

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News

FRIDAY SEPTEMBER 18, 2020

Oil recovery would depend on reduction of virus risk, trade tensions—Moody's CONTINUED FROM COVER

By Benson AFFUL

It said the pandemic will have a lasting impact on how people travel, work and spend money, adding that even with effective policy responses from governments around the world and major vaccine and therapeutic breakthroughs, a signific ant por tion of the population may remain fearful for a while and not go back to running their lives as they did before.

Moody's said it is still unclear

how long it could take to fully eradicate the coronavirus.

“Meanwhile, lower demand would also necessitate continued producer discipline to support prices. Any major escalation in trade wars between major economic powers, particularly the US, China and the EU, will also di scourage spending, investments and industrial activity, thereby limiting oil demand and prices,” it argued.

Oil prices have stabilised around US$40/barrel (bbl) since

July 2020, after averaging US$30/bbl during the second quarter of 2020.

Moody's base case oil price assumption is an average of US$40/bbl in 2021 for West Texas Intermediate (WTI), the North American benchmark crude, rising towards a US$45-65/bbl medium-term price band after that.

Benchmark Brent crude prices are expected to have a US$5 average premium over WTI prices through 2021.

M&A to gain steam The situation, according to Moody's, will spark mergers and acquisitions (M&A) through 2021, with stronger companies leading the charge.

However, it said companies will look for compelling strategic rationales before engaging in major M&A deals, instead prioritising debt reduction, d iv i d e n d i n c re a s e s , sh a re repurchases or growth spending that they had paused in early 2020.

GPHA takes action to expedite clearance of dangerous cargo CONTINUED FROM COVER

By Patrick PAINTSIL

A shipper importing any dangerous or hazardous chemical currently requires a number of permits to get the goods discharged at the port but will need a special permit solely issued by the Interior Minister to move it out of the port to the final destination.

What this means is that as long as the minister remains unavailable to sign and grant that permit, the dangerous goods will still be stuck at the port, posing serious threat to ac tivities within the por t community.

“We want to look at this situation to see how we can get these institutions closer and to review their processes. The port authority and other stakeholders have tried several times to see if we can vary the process but it has been on deaf ears and no one is paying heed to us,” Mr. Garvin Amarvie, GPHA's Corporate Monitoring Manager, said.

But whilst the discussion goes on, he has proposed the need for c l e a rly d e fi n e d ro l e s a n d

GPHA's Corporate Monitoring Manager Garvin Amarvie is advocating improved handling of hazardous cargo at the country's ports

responsibilities for the tracking, handling and carting of dangerous goods that are shipped through the ports.

“There is the need for close monitoring and random inspection of parties working with dangerous goods and other combustible materials within our port area, whilst enforcing institutional disaster and emergency drills,” he said at a CILT Ghana Tema Section Webinar on the theme “Lessons from Beirut: Reviewing

preparedness of Ghana's ports.”

According to him, the authority, working industry actors, has drafted a working document for the treatment of dangerous and hazardous cargo within the port enclave but adds that those regulations and guidelines are currently undergoing a review.

“The port has set up a committee to study and audit activities in relation to dangerous goods, review the handling procedure as well as advise on

the re-zoning of discharging and storage areas for such cargo. By next week, that reviewed document will be out for broader stakeholder consultations,” he noted.

On 4 August 2020, a large amount of ammonium nitrate stored at the port of the city of Beirut, the capital of Lebanon, exploded, causing at least 200 deaths, US$10–15 billion in property damage, and leaving an estimated 300,000 people homeless.

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FRIDAY SEPTEMBER 18, 2020

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News

FRIDAY SEPTEMBER 18, 2020

Tullow Ghana supports 2,170 BECE candidates for 2020 exam preparation

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il giant, Tullow Ghana Limited (TGL), has supported 2,170 final year Ju n i o r H i g h S c h o o l ( J H S) students in the Western Region to prepare for the on-going 2020 BECE final examinations.

As part of the Company's Educate to Innovate with Science, Technology, Engineering and Mathematics (STEM) Project, TGL partnered with Youth Bridge Foundation (YBF) to provide sustained extra tuition for students in 21 schools.

Utilizing various platforms including mobile STEM Clinics, revision sessions with WAEC examiners and the first ever Tullow STEM radio programmes, s t u d e n t s f ro m 2 1 P ro j e c t beneficiary schools of Tullow's Educate to Innovate with STEM project received extra tuition and participated in practical experiments in Mathematics, Science and English.

The Educate to Innovate with STEM Project is one of TGL's STEM

initiatives aimed at promoting and supporting STEM education at the pre-tertiary level. The Project is implemented by YBF, with support from Ghana Education Service, in seven coastal districts (Sekondi-Takoradi Metropolitan Assembly, Effia-Kwesimintsim Municipal Assembly, Shama, Jomoro, Ellembelle, Ahanta West Districts and Nzema East Municipal Assembly) of the Western Region.

In the last three years, the Project has supported approximately 10,000 students at JHS and Senior High School levels in the 21 Project beneficiary schools with after school tuition lessons in STEM, p ra c t i c a l s c i e n c e l e s s o n s , industrial site visits and mentorship support.

Cynthia Lumor, Corporate Affairs Director, Tullow Ghana commented: “Tullow Ghana is committed to promoting STEM education and building the capacity of our youth in STEM.

We are proud of the support we provide in STEM development and excited to have also found innovative solutions such as Tullow's STEM radio school to prepare students during the C OV I D re s t r i c t i o n p e r i o d .

Through the Safe School Model structure being run under Educate to Innovate with STEM, we have been able to adequately prepare final year JHS students

for their BECE examinations and we wish them every success as they start their examinations on the 14th September.”

In furtherance of its commitment to Shared Prosperity in Ghana, Tullow Ghana supports STEM development with initiatives from kindergarten to tertiary education.

Develop security models to deal with sophisticated fraud – Abiola advises Banks

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he Regional CEO of UBA West Africa, Mrs. Abiola Bawuah, has charged banks and financial institutions to develop security models that can overpower the sophistication with which fraud is perpetuated.

She noted the novel Coronavirus pandemic has led us to be more dependent on technology which present a challenge to securing them in order to protect our systems from these fraudsters.

“These fraudsters become sophisticated by the day, and it behoves on us, to also be a step ahead of them. For all the many years that I have known Chiedu, I know he's got the right expertise to write a book that can provide solutions for Fraud.

Mrs. Bawuah was speaking at a ceremony where two books that speak to fraud and building SMEs were launch in Accra.

The Author who is the Country Chief Inspector of the

United Bank for Africa, Chiedu Okonta also called on businesses and financial institutions to institute robust security systems and surveillance in order to be fraud protected. This he noted has become necessary, due to the increasing cases of fraud recorded in the financial sector.

A 2014 PWC report showed the typical business loses 5% of

annual revenues due to fraud and when this is applied to global GDP, the result is an estimated US$3.7 trillion in annual fraud losses.

This report also indicated, only 14% of businesses are able to fully recover from unauthorized transactions and other fraudulent activities.

The rising costs of fraud as a

percentage of revenues present a cause for concern to the global economy.

As part of efforts to nib this canker in the bud, the financial sector has been presented with two books on the subject matter.

The books “Stamp out Fraud in your stem and Keys to Sustainable SMEs” are thought provoking on combating fraud and assisting with SME development.

Chiedu Okonta underscored the need for business, both large and small to be vigilant and responsive to the growing demands of the business environment, “I have written these books after many years of careful practice and surveillance.

I am optimistic that it will be a reliable guide for SMEs who want to grow, and also support large businesses to be able to withstand fraud,” he said.

The books are currently available in all leading bookshops.

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FRIDAY SEPTEMBER 18, 2020

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News

FRIDAY SEPTEMBER 18, 2020

World Bank sets ambitious targets for green and resilient economic growth in Africa

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h e Wo r l d B a n k h a s released the Next Generation Africa Climate Business Plan (NG-ACBP), which sets out a blueprint to help SubSaharan African economies achieve low carbon and climateresilient outcomes.

The Plan calls for countries to seize the opportunity to scale-up climate resilience to grow their economies and reduce poverty, redouble efforts to increase energy access across the region, and take advantage of sustainable and innovative approaches to leapfrog into greener development pathways.

Without rapid deployment of inclusive, climate-informed development, 43 million additional people could be pushed below the poverty line by 2030 in Sub-Saharan Africa.

As the largest financier of climate action in Africa, the World Bank will use this new Climate Plan to build on a strong track record under the original plan in which the Bank supported 346 projects with more than US$33 billion in World Bank financing over the past six years.

“The climate challenge cuts across every priority – poverty re d u c t i o n , a g r i c u l t u re , j o b creation, women's empowerment, fragility, and more,” Ousmane D i a g a n a , Wo r l d B a n k Vi c e President for West and Central Africa said.

“Countries therefore have to tackle it in multiple ways, including by helping cities develop in clean ways, making climate smart agriculture practices the norm, improving clean, green, and affordable energy, and putting people and communities at the forefront in order to improve lives and protect the future,” he added.

Over the next six years (2021–26), the World Bank will focus on five key areas in Africa— food security, clean energy, green and resilient cities, environmental stability, and climate shocks— that emphasize the interrelatedness of climate risks and opportunities. The Plan sets ambitious goals that push the boundaries of sustainable development in

Africa, including training 10 million farmers on climate-smart agricultural approaches, expanding integrated landscape management over 60 million hec t ares in 20 countries, increasing renewable energy generation capacity from 28GW to 38GW to increase access to clean electricity, and outfitting at least 3O cities with low carbon and compact urban planning approaches.

The World Bank recommends that Sub-Saharan African countries enact policy reforms that recognise the realities of climate change, in order to strengthen recovery and promote long-term growth. This includes addressing the sizable infrastructure gap in a green and resilient manner, using less carbon-intensive materials and technologies while creating more competitive job opportunities.

“Africa's main challenge is to adapt to climate change by investing in more resilient agriculture and food systems, building infrastructure that resists extreme weather events, protecting its coastal cities, and enhancing disaster preparedness systems. At the same time, green technologies provide an opportunity for growth and job creation. This is especially true in the energy sector where renewables have become a source of clean and inexpensive energy, bringing the goal of universal access to electricity within reach,” said Hafez Ghanem, World Bank Vice President for East and Southern Africa.

The development of the Plan was led by Kanta Kumari Rigaud, Lead Environment Specialist Rigaud, who underscored that ramping up climate action on both the resilience and clean energy fronts is critical to address climate change and poverty in Sub-Saharan Africa, as the window of opportunity to counter the climate crisis is rapidly narrowing.

This Plan will be rolled out amid the COVID-19 pandemic, recognizing that climate action and green recovery will be key priorities as countries work to build back better from one of the biggest setbacks in the region's development in the last 25 years.

Economy, good governance to decide 2020 polls—iPoll Survey

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he performance of the Ghanaian economy, jobs c re a t i o n a n d vo t e r s ' perception about which of the two main leading political parties offers good governance will decide the 2020 polls, the latest iPoll survey has revealed.

Education and corruption, which were key issues in the previous general election, were ranked low by respondents as key issues that can influence their decision in the up-coming elections.

Health was surprisingly the l e a s t m e n t i o n e d f a c t o r, considering that we are in the midst of a global pandemic that has killed nearly three hundred Ghanaians and caused the government to promise new hospitals across the country.

These sentiments were very strong amongst both public and private sector employees, and students surveyed.

For this poll, 892 people from across the country participated and formed a fairly representative picture of the national view. The

poll took place between August 228, 2020.

On the performance of the current government, majority of respondents to the poll felt that government had been unable to fulfil its promises made during the 2016 elections that brought it into office.

This view was more strongly felt among respondents with graduate and post-graduate education.

Similarly, respondents felt that the general state of affairs and their own personal circumstances had not improved since this government took over in 2017.

However, students were an exception who held the view that their personal circumstances had improved over the period.

On the parliamentary elections, majority of respondents said they make the choices in the parliamentary elections based on local issues.

This, we believe could see more split votes, known in local parlance as “skirt and blouse”.

The enthusiasm for the

electoral process, based on the survey, remains remarkably high. From our respondents, a marginally higher percentage of people are sure of voting this year than did in the last elections in 2016. This eagerness was strong amongst graduate and postgraduate respondents.

“For those who are not yet committed, a greater percentage say they would be moved to do so if government initiated some new policies. This suggests that the apathy is coming from supporters of the government who are still waiting to be convinced and might sit out the election if they are not,” Dr. Ko b b y M e n s a h , P r i n c i p a l Consultant at iPoll noted.

The iPoll mobile and web application is available to download on Android and iOS. It can also be accessed via web.

Once a user registered, we take some basic biodata that enables us to establish a profile of the user. These include age, gender, education, profession and area of residence. This enables us to target and form a representative

sample size when we conduct our polls.

“For this poll, we collected the views of 892 respondents who completed the questionnaire.

Respondents came from across the entire country and formed a fairly representative picture of the national view. The poll was available to take between 2nd to 28th August when it was closed. iPoll's reach is limited to voters with access to the internet and the ability to use it. The survey results should thus be taken with this fact in mind.

“However, we believe that the breadth of opinions in this demographic are significant because their experiences reflect the national experience and also because of their tendency to play the role of opinion former as they are regarded as more informed,” Dr. Mensah added.

Respondents to the poll were mostly young, educated and mostly male and employed. An over whelming major it y of respondents were from the Greater Accra Region.

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Travel & Tourism

FRIDAY SEPTEMBER 18, 2020

Will Kotoka Int. Airport make the top 100 list as airports reopen?

By Philip Gebu

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he reopening of Kotoka International Airport is less than a month since the President Nana Akufo-Addo's announcement on Sunday, August 30. Those arriving in Ghana are required to produce a negative COVID-19 test result acquired no more than 72 hours prior to scheduled arrival.

Arriving travellers have had to undergo a mandatory COVID-19 test, which involves a fee paid by the passenger. So far, its good news for airlines who have been struggling due to the impact of C OV I D -1 9 o n t h e tou r i s m industry. I was at the airport over the week-end to see off a friend. His impression of the process is that its somehow cumbersome. As uncomfortable as people may be with the procedures introduced, we must always remember that these measures have become the new normal as we have come to get used to in recent times.

As these protocols are

enforced at K.I.A travellers must understand that its globally implemented in all airports.

Skytrax, an international airport industry rating body placed Rome's Fiumicino Airport as the first airport in the world to earn "the COVID-19 5-Star Airport Rating". Skytrax is best known for its annual rankings of the world's best airports. According to the publication from Skytrax, the organization based its rating on "a combination of procedural efficiency checks, visual observation analysis and ATP sampling tests." Fiumicino Airport (FCO), also known as Leonardo Da Vinci International Airport, is the busiest airport in Italy. On September 1 this year, the airport opened a 7,000square-foot Covid testing center, which is co-managed with the Italian Red Cross. But it's not only organized, rapid testing that Skytrax noted in its review of FCO. The airport scored points for having easy-to-read signage in multiple languages, strict enforcement of mask wearing,

visibly present cleaning staff and efficiency thanks to the consolidation of all incoming and outgoing flights to a single terminal for easier tracking. In addition to FCO's five-star ranking, three other airports have been awarded three stars for their Covid response -Málaga-Costa del Sol Airport (AGP) in Spain, Nice Côte d'Azur Airport (NCE) in France and London's Heathrow (LHR).

According to the Skytrax rating system, five stars indicates "very high standards of airport cleanliness and maintenance procedures," while four stars is "good" and three "average." Two stars, the lowest possible rating, means that the airport's antiCovid protocols "need work."

Accessibility plays a critical role in attracting tourists to a destination. It is therefore imperative, ensuring our number one international airport continues to improve will be in line with propelling the over all tourism agenda of

making Ghana the preferred destinations in West Africa.

Skytrax also rated the best 100 airports in the world and only four airports in Africa - 3 are in South Africa - made the list. Any researcher will wonder why.

Could it be that the high levels of investments in our tourism industry and for that matter airports are still lacking behind?

What ever the reason may be, it is important to note that if Ghana will eventually be that preferred tourism destination on the continent , continuous improvement at our airports must be the priority.

Below is the list of the top 10 best airports; 1. Singapore Changi Singapore Changi Airport has been named as the ‘Worlds Best Airport for the eighth consecutive year by customers at the 2020 World Airport Awards.

CONTINUED ON PAGE 11

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Travel & Tourism

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CONTINUED FROM PAGE 9 Changi Airport also won the award for the 'Worlds Best Airport Leisure Amenities.

S i n g a p o re C h a n g i A i r p o r t connects customers to over 200 destinations worldwide, with 5000 arrivals and departures a week by 80 international airlines. Changi Airport was voted the Best Airport in Asia, World's Best Airport Leisure Amenities, and Best Airport: 6070 million passengers in 2020.

2. Tokyo Haneda Boasting both domestic and international terminals, Tokyo International Airport Haneda plays a very important role in furthering Japan's development as a tourism-oriented nation.

Haneda was named the Best Airport: 70+ million passengers, 'Worlds Cleanest Airport, 'Worlds Best Domestic Airport, and 'Worlds Best PRM/Accessible Facilities in 2020.

3. Doha Hamad Hamad International Airport is the international airport for Doha, capital city of Qatar. The airport has been described as the most architecturally significant terminal complex in the world, as well as being the most luxurious. Hamad was voted the Best Airport in the Middle East, Best Airport: 30-40 million passengers, and Best Airport Staff in the Middle East in 2020.

4. Seoul Incheon Incheon International Airport is the largest airport in South Korea and one of the busiest airports in the world. It is a former winner of the Airport of the Year title at the World A i r p o r t Aw a r d s . I n c h e o n International Airport was named the winner of 'Worlds Best T r a n s i t A i r p o r t i n 2 02 0.

Te r m i n a l 2 a t I n c h e o n International Airport was named 'Worlds Best Airport Terminal in 2020.

5. Munich Munich Airport is the second busiest airport in Germany and the secondary hub for Lufthansa German Airlines. With over 150 retail stores and some 50 places where you can eat and drink, it's like a city centre, offering travelers and visitors plenty to see and do. Munich was voted the Best Airport in Europe, Best Airport in Central Europe, and Best Airport: 40-50 million

passengers in 2020.

6. Hong Kong Hong Kong International Airport serves over 100 airlines operating flights to about 180 locations worldwide, including 44 destinations on the Chinese Mainland. It is a former, multiple winner of the Airport of the Year title at the World Airport Awards.

Hong Kong was named the 'Worlds Best Airport Immigration Service in 2020.

7. Tokyo Narita Tokyo Narita Airport is an international airport serving the Greater Tokyo Area of Japan.

Narita serves as the international hub for Japan Airlines and All Nippon Airways. As of 2016, Narita was the second-busiest passenger airport in Japan.

Narita Airport was named 'Worlds Best Airport Dining in 2020.

8. Centrair Nagoya In 2014, 9.8 million passengers travelled through Central Japan International Airport in Nagoya, better known as Centrair. The airport has a large domestic traffic percent age, with a number of regional routes operated to Asian cities. Longer haul routes include Helsinki, Frankfurt, Honolulu and Detroit.

Centrair was named the 'Worlds Best Regional Airport, and Best Airport: 10-20 million passengers in 2020.

9. Amsterdam Schiphol Amsterdam Airport Schiphol is the main international airport of the Netherlands. Schiphol Airport is the third-busiest airport in Europe in terms of passenger volume and the

busiest in Europe in terms of aircraft movement. Schiphol Airport was voted the Best Airport in Western Europe in 2020.

10. Kansai Kansai International Airport (KIX) opened in 1994, and has since become an important international hub for Japan, providing one of the largest networks for both domestic and international routes with 24hour operations. Kansai was named Best Airport Staff in Asia, 'Worlds Best Airport Staff and 'Worlds Best Airport for Baggage Delivery in 2020.

Mr Lee Seow Hiang, Chief Executive Officer of Changi Airport Group said, “Changi Airport is humbled to receive t h i s a ffi r m at i o n f ro m ou r travellers, made possible by the strong support from our airport partners. This has been a challenging year for all us. Like everyone else, here at Changi, we continue to do our best to safeguard and protect the health of our travellers, our visitors and our airport workers. We wish everyone in the international aviation community well. Let's look forward to better times and soon.” Mr Edward Plaisted, CEO of Skytrax said, “For Singapore Changi Airport to be voted the World's Best Airport title for eight consecutive years is a truly remarkable achievement and demonstrates a simply fantastic level of consistency. Singapore Changi Airport remains a very popular choice with customers and delights at nearly all points in the airport journey, and it is this attention to detail that proves so popular. This year also marks the first time that customers have been able to recognise Jewel Changi Airport,

a multi-dimensional destination filled with inspiring attractions, u n i q u e re t a i l a n d d i n i n g concepts. The annual survey and awards finalisation was all completed this year in March, but due to Covid-19 the awards event scheduled for 1st April Paris was cancelled. Having deferred the award announcements for nearly six weeks, we felt it was now right to try and bring some cheer into the airport industry in these difficult times.”

For Singapore airport to continually make it to the top for this past eight years means we in Ghana can also get there.

Already, KIA has been adjudged the best airport in West Africa.

As our tourism begins the recovery process this month when world tourism day is celebrated, we must be inspired that tourism will bounce back to where it has been.

Philip Gebu is a Tourism Lecturer. He is the C.E.O of FoReal Destinations Ltd, a Tourism Destinations Management and Marketing Company based in Ghana and with partners in many other countries. Please contact Philip with your comments and suggestions. Write to forealdestinations@gmail.com / info@forealdestinations.com. Visit our website at or call or WhatsApp +233(0)244295901/0264295901. Visit our social media sites Facebook, Twitter and Instagram: FoReal Destinations.

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Feature

FRIDAY SEPTEMBER 18, 2020

The mortgage industry landscape in Ghana: trends and implications Dr. Frank Gyamfi-Yeboah Senior Lecturer, Department of Land Economy, KNUST Email: fgyamfi-yeboah.cabe@knust.edu.gh; redfgyx@gmail.com

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he mortgage market is one of the central pillars of the financial system of many countries. Besides its role in helping to deepen capital markets and providing a strong credit channel for monetary policy, the mortgage market has welfare implic ations as it impacts on households' ability to meet one of the basic necessities of life, shelter. The history of Ghana's mortgage market dates back to 1956 when the First Ghana Building Society (FGBS) was established to assist in mobilizing savings and to extend credit to households for home purchases. Over the past six decades, several efforts have been made by succeeding governments to develop this important segment of the financial sector albeit with very limited evidence of success. The purpose of this article is to highlight recent developments in the mortgage industry and the implications.

Ghana's mortgage market remains relatively underdeveloped when compared to the other segments of the financial sector. As a result, only a very small p e rc e n t a ge o f h ou s e h o l d s finance house acquisitions with a mortgage. Data from the 2010 population and housing census shows that only 0.8% of households financed the acquisition of their houses with a mortgage. In fact, the mortgage to GDP ratio, which is used to measure the depth of mortgage markets, has remained consistently low at less than 0.5%. In the past, the mortgage industry was dominated by statesponsored institutions such as FGBS, Bank for Housing and Construction (BHC) and Home Finance Company (HFC). The impact of the defunct FGBS and BHC over their period of existence has generally been regarded as very insignificant.

HFC (now Republic Bank) was, however, able to survive the

economic and political cycles even though its leadership role in the mortgage market was eclipsed by Ghana Home Loans (Now First National Bank Ghana).

Over the past decade and a half, the mortgage industry has experienced a remarkable structural transformation. In particular, the establishment of Ghana Home Loans in 2006 ushered in a new era where the private sector began to play a leading role in extending credit to households for home purchases. For the first time in Ghana's history, a local private company was able to create a mechanism that enabled it to mobilize long-term funding primarily from Development Finance Institutions (DFIs) for mortgage lending in spite of the volatile economic environment characterized by high inflation and currency depreciation. In recent years, an increasing number of banks appear to be engaging in mortgage lending. A review of the annual reports of the twenty-three (23) universal banks reveals that eight (8) representing about 35% engage in mortgage lending. While the extent of engagement differs

among the various institutions, the trend is unmistakable. As at the end of 2019, the total mortgage debt outstanding amounted to about GHS 1.72 billion rising from GHS 854 million in 2015 indicating an annual rise of about 19% over the past five (5) years. Figure 1 displays the total amount of mortgage debt outstanding over the period 2015 - 2019. In terms of market share (by value), First National Bank Ghana (Formerly GHL Bank) is the market leader with about 34% share as at the end of 2019 followed by Stanbic Bank (21%), Republic Bank (17%) and Ecobank Ghana (12%).

T o g e t h e r, t h e t o p f o u r institutions controlled about 84% of the market. The remaining four institutions, Standard Chartered Bank (6%), Absa (6%), Prudential (2%) and CalBank (2%) accounted for the remaining 16%. It is important to point out the possibility that the various institutions may not classify loans in the same way, which would make it inappropriate to make direct comparisons. Also, an alternative measure of market share such as volume of loans may reveal different rankings.

It must be encouraging to observe a rise in the amount of mortgage credit and the number of participating institutions even though the market still faces several challenges including an unfavorable macroeconomic environment, lack of access to long-term funds, high cost of funds and weak regulatory regime among others. Inasmuch as government has a critical role to play in the development of a vibrant mortgage market, it is important that this is limited to the creation of an enabling environment. Interventions such as the public sector mortgage scheme by the National Housing and Mortgage Fund (NHMF), which is aimed at reducing the cost of local currency mortgage, must be sustained in the shortterm and expanded to include workers in the private sector as well to improve affordability and further deepen the market.

H o w e v e r, s t a b i l i z i n g t h e economy and reducing the rate on the benchmark Treasury bill rate, in particular, will be the most significant boost government can give to the growth of the market.

The banking sector reform and recapitalization of banks have resulted in a safer and more robust financial sector that appear poised to play its intermediation role in mobilizing savings and extending credit to households for housing investments. Moreover, the implementation of the three-tier pension regime has resulted in increased mobilization of longterm funds over the past decade.

There is an obvious opportunity to channel a substantial portion of the more than GHS 13 billion in private pensions to the housing sector. It is hoped that government will, in addition to intensifying efforts to improve the economic and regulatory environments, assist in creating the necessary mechanisms that would allow banks to have access to long-term funds for mortgage lending on a sustained basis. This will not only help to solve the severe housing crisis the country faces but will also be a catalyst for economic growth and job creation.

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Feature

FRIDAY SEPTEMBER 18, 2020

Making the WTO Work for Africa

By Hippolyte Fofack and Pat Utomi

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AGOS – The contest to succeed Roberto Azevêdo as director-general of the World Trade Organization has entered a crucial new phase, with the first round of voting by WTO members set to end on September 16. Three of the eight contenders are African: Ngozi Okonjo-Iweala, a fo r m e r N i ge r i a n fi n a n c e minister; Amina Mohamed, a Kenyan former chair of the WTO General Council; and AbdelHamid Mamdouh, a former Egyptian trade negotiator and WTO official.

Africans are hoping that one of these three highly competent candidates will emerge victorious when the winner is announced in November. But regardless of who eventually prevails – three of the eight candidates will be eliminated after the first round – Africa must demand a level playing field from the WTO. Trade is vital for Africa's development and to generate enough good jobs to absorb the 17 million young people who enter the labor market every year. But, for too long, global trade regulations have left the continent holding the short end of the stick.

In the 25 years since the WTO succeeded the General Agreement o n Ta r i ff s a n d Trad e , t h e organization has mostly failed to work in the interest of development. Instead, the WTO has largely benefited its chief architects, namely, countries that had already industrialized or were otherwise in positions of strength.

The resulting global trade rules did not take the developing world's circumstances into account.

Despite the huge trade volumes – and profits – generated by globalization, Africa's share of global trade since 1970 has fallen from 4.4% to 2.7%. This is partly because binding supply-side constraints have limited Africa's exp o r t s l a r ge ly to n at u ra l resources and primary commodities. But unfair trade rules also have undermined Africa's foreign-trade growth in sectors where the region could benefit from comparative advantage.

For starters, persistent import barriers in developed economies – including tariff escalations and stringent standards for final goods – have limited Africa's ability to move up value chains.

Shifting rules are another obstacle to Africa's effective integration into the global economy. In particular, advanced economies do not allow developing countries to adopt the industrial policies that they themselves used to transform their production structures and diversify their exports. The Universit y of Cambridge economist Ha-Joon Chang described this phenomenon as rich countries “kicking away the ladder” with which they had climbed to the top.

But perhaps the most serious indictment against the WTO system is the agricultural subsidies developed-country governments provide, at the expense of millions of Africa's poorest farmers. These subsidies not only depress world food prices, making it difficult for African producers to compete, but also lead to excess production being dumped in African markets, which wipes out local industries and thus threatens food security.

The current global trade regime is the cause of African countries' structural balance-of-payments deficits and increasing external debt, as well as the main cause of inter-generational poverty and migration pressures. Encouraged by their thriving private sector, today's Africans are asking for fair trade, not aid.

A growing number of African entrepreneurs and industrialists are leading the continent's economic transformation, supported by regional financial institutions such as the African Export-Import Bank (Afreximbank). For example, Aliko Dangote, one of Africa's most successful industrialists and an Afreximbank Trade Champion, is

now making his biggest bet yet by building a $15 billion petrochemical complex near Lagos, Nigeria that will contain one of the world's largest oil refineries.

Moreover, African markets will be big enough to support largescale industrialization once the African Continental Free Trade Area – the world's largest trading bloc in terms of the number of participating countries – starts operating on January 1, 2021. With its relatively cheap labor, Africa could become an investment mecca and, in time, a net exporter of industrial and manufactured goods as well as commodities.

The private sector is well aware of these opportunities. But a recent survey commissioned by the Pan-African Private Sector Trade and Investment Committee of over 200 African CEOs – including leaders of multibilliondollar firms, start-ups, and other fast-growing businesses – revealed a clear consensus on the need to reform the WTO. And a majority of those who report that trade is an important growth driver for their business also stress that unfair trade practices severely constrain their companies' expansion.

Notwithstanding these problems, development-finance institutions are helping to power A f r i c a ' s e c o n o m i c transformation. For example, Ghana and Côte d'Ivoire produce more than half of the world's cocoa, but until recently accounted for less than 10% of the global processed cocoa market.

The Afreximbank Africa Cocoa Initiative enabled both countries to capture a larger share of the value chain. Today, Côte d'Ivoire, t h e wo rl d ' s l e a d i n g c o c o a

producer, is effectively competing with the Netherlands to be the world's top processor.

Africa is now a mature global player, with a private sector ready to drive development and take its rightful place alongside firms in more advanced economies. All we ask is that the WTO remove the artificial barriers and prejudicial hindrances that prevent Africans from unleashing their creative and productive energies.

A fairer, more equal, and more accessible global trade system must be at the top of the next director-general's reform agenda.

A WTO that is fit for purpose will also allow governments of smaller developing countries to act on behalf of their private sectors without fear or favor. Africa will support Azevêdo's successor, provided that the WTO serves Africa in the same way it serves the rest of the world.

Hippolyte Fofack is Chief Economist of the African Export-Import Bank (Afreximbank). Pat Utomi, Chair of the African Union's Pan-African Private Sector Trade and Investment Committee (PAFTRAC), heads the Centre for Values in Leadership at the Lagos Business School.

Copyright: Project Syndicate, 2020. www.project-syndicate.org

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News

FRIDAY SEPTEMBER 18, 2020

Pandemic threatens human capital gains of the past decade– World Bank Report

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he COVID-19 pandemic threatens hard-won gains in health and education over the past decade, especially in the poorest countries, a new World Bank Group analysis finds.

Investments in human capital—the knowledge, skills, and health that people accumulate over their lives—are key to unlocking a child's potential and to improving economic growth in every country.

The World Bank Group's 2020 Human Capital Index includes health and education data for 174 countries – covering 98 percent of the world's population – up to March 2020, providing a prepandemic baseline on the health and education of children. The analysis shows that prepandemic, most countries had made steady progress in building human capital of children, with the biggest strides made in lowincome countries. Despite this progress, and even before the effects of the pandemic, a child born in a typical country could expect to achieve just 56 percent of their potential human capital, relative to a benchmark of complete education and full health.

"The pandemic puts at risk the decade's progress in building human capital, including the improvements in health, survival rates, school enrollment, and reduced stunting. The economic impact of the pandemic has been particularly deep for women and for the most disadvantaged families, leaving many vulnerable to food insecurity and poverty," said World Bank Group President David Malpass.

“Protecting and investing in

people is vital as countries work to lay the foundation for sustainable, inclusive recoveries and future growth."

Due to the pandemic's impact, most children – more than 1 billion – have been out of school and could lose out, on average, half a year of schooling, adjusted for learning, translating into considerable monetary losses.

Data also shows significant disruptions to essential health services for women and children, with many children missing out on crucial vaccinations.

The 2020 Human Capital Index also presents a decade-long view of the evolution of human capital outcomes from 2010 through 2020, finding improvements across all regions, where data are available, and across all income levels. These were largely due to improvements in health, reflected in better child and adult survival rates and reduced stunting, as well as an increase in school enrollment. This progress is now at risk due to the global pandemic.

The analysis finds that human capital outcomes for girls are on average higher than for boys.

However, this has not translated into comparable opportunities to use human capital in the labor market: on average, employment rates are 20 percentage points lower for women than for men, with a wider gap in many countries and regions. Moreover, the pandemic is exacerbating risks of gender-based violence, child marriage and adolescent pregnancy, all of which further reduce opportunities for learning and empowerment for women and girls.

Today, hard-won human

capital gains in many countries are at risk. But countries can do more than just work to recover the lost progress. To protect and extend earlier human capital gains, countries need to expand health service coverage and quality among marginalized communities, boost learning outcomes together with school e n ro l l m e n t s , a n d su pp o r t vulnerable families with social protection measures adapted to the scale of the COVID-19 crisis.

The World Bank Group is working closely with governments to develop longterm solutions to protect and invest in people during and after the pandemic: In Ethiopia, Haiti and Mongolia, the Bank has been supporting the acquisition of vital medical equipment. In Bangladesh, Burkina Faso, and Nepal, the Bank is supporting the development of school safety and hygiene protocols while working with Water Supply, Sanitation, and Hygiene teams to provide basic sanitization and hygiene supplies. · I n Jo rd a n a n d T u rke y, through recently approved new operations, the Bank is supporting the development of TV and digital content for blended teaching and learning for the new academic year, as well as psycho-social counseling and remedial courses. ·In the Sahel region, the Bank is backing the Sahel Women's Economic Empowerment and the Demographic Dividend (SWEDD) project aimed at creating a favorable environment for women and girls' empowerment through programs to keep girls in school,

a n d t o exp a n d e c o n o m i c opportunities and access to quality reproductive health services. . ·The Bank is also helping India immediately scale-up cash transfers and food benefits, using a set of pre-existing national platforms and programs, to provide social protection for essential workers involved in COVID-19 relief efforts; and benefit vulnerable groups, particularly migrants and informal workers, who face high risks of exclusion.

Ambitious, evidence-driven policy measures in health, education, and social protection can recover lost ground and pave the way for today's children to surpass the human capital achievements and quality of life of the generations that preceded them. Fully realizing the creative promise embodied in each child has never been more important.

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery.

This includes $50 billion of new IDA resources through grants and highly concessional loans.

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China dominates the lithium-ion battery supply chain C hina dominates BloombergNEF's (BNEF) lithium-ion battery supply chain ranking in 2020, having quickly surpassed Japan and Korea that were leaders for the majority of the previous decade.

China's success results from its large domestic battery demand, 72GWh, and control of 80% of the world's raw material refining, 77% of the world's cell capacity and 60% of the world's component manufac turing, according to data from BNEF. In 2020, Japan and Korea rank number two and three r e s p e c t i v e l y. W h i l e b o t h countries are leaders in battery and components manufacturing, they do not have the same influence in raw materials refining and mining as China.

What they lack in the control of the raw materials supply chain, they make-up for in higher environmental and RII (regulations, innovation & infrastructure) scores compared to China.

James Frith, BNEF's head of energy storage, said: “China's dominance of the industry is to be expected given its huge investments and the policies the country has implemented over the past dec ade. Chine se manufacturers, like CATL, have come from nothing to being world-leading in less than 10 years.

weigh tin gs in t h e overal l ranking.

As EV demand grows there is an increasing need for cell manufacturing facilities close to automotive production. This has led to a boom in European cell plants, and the rest of the supply chain is also slowly making its way to Europe. The growing industry within the region and Europe's strong environmental credentials helped five European countries place in the top ten ranking for 2020.

BNEF's 2025 rankings are based on a country's current trajectory, but if a country enacts targeted policy and regulations there is ample time to improve t h e i r p o s i t i o n . T h e U. S . languishes in sixth place in 2020 but the upcoming presidential election could change things.

If the U.S. were to increase its investment in raw materials and promote EV adoption, it could overtake Japan and China to be number one in 2025. In contrast, the U.K. could see its position in the rankings fall in 2025 if it becomes unable to access the

large demand in continental Europe, which, at 152GWh, will be around five times the size of its domestic market.

Sophie Lu, head of metals and mining at BloombergNEF, added: “A key concern of many raw materials producing countries is how to leverage resource wealth into more value-add, and attract further downstream i nv e s t m e n t s , l i ke b a t t e r y manufacturing.

Key distinguishing factors are the environmental footprint of industry, the availability of cheap but clean electricity, a technically skilled labor force, and incentives driving battery demand. These factors may be more important than a monopoly on one specific critical metal.”

Sustainability and carbon emissions associated with the supply chain are of growing importance. Making sure that the electricity used in material processing and cell manufacturing is low-carbon is vital. France performed best in the environmental category,

helped by its electricity grids low carbon emissions factor, at 28gCO2/kWh in 2019. The introduction of carbon border taxes as proposed by the European Commission and Joe Biden, the U.S. Democratic presidential candidate, could give re gions or countries leverage to secure localized supply chains.

Kwasi Ampofo, BNEF's lead analyst covering battery raw materials, said: “Access to raw materials, talent and infrastructure are vital in attracting investment into the value chain. In addition to making significant investments into mining of critical minerals all around the world, China is also the dominant player in materials refining.

This has given it the advantage over Japan and Korea. Other countries seeking to be dominant players in the overall value chain may need to support upstream metals mining and refining development, while also formulating policies that will safeguard the environment.”

The next decade will be par ticularly interesting as Europe and the U.S. try to create their own battery champions to challenge Asian incumbents who are already building capacity in both places. While Europe is launching initiatives to capture more of the raw material value chain, the U.S. is slower to react on this.”

BNEF's lithium-ion battery supply chain ranking provides a snapshot of a country's position in 2020 and where it will place in 2025, based on its current development trajectory. The work ranks countries across five key themes related to the supply chain: raw materials, cell & component manufac turing, environment, RII and end demand (across electric vehicles and stationary storage). The five key themes were given equal

Source: BloombergNEF. Note: “Environ.” is environmental. “RII” is regulations, infrastructure and innovation.

Red represents countries in the Asia-Pacific region, teal countries in Europe and Africa, and blue countries in the Americas. The symbol represents if country has moved up or down the rankings in comparison to its 2020 score, green represents up and red represents down. The number shows the number of places the country has moved.