Business24 Newspaper 7th April, 2021

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WESNESDAY APRIL 7, 2021

BUSINESS24.COM.GH

NO. B24 / 179 | NEWS FOR BUSINESS LEADERS

WEDNESDAY APRIL 7, 2021

Ghana’s external debt gets more commercial and expensive

Dr. Ernest Addison, Governor, Bank of Ghana (BoG)

Eurobond proceeds to boost cedi stability

By Joshua Worlasi Amlanu macjosh1922@gmail.com

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arket analysts are predicting that proceeds from the 2021 Eurobond issuance will boost the stability of the cedi by helping the Bank of Ghana build up its foreign exchange reserves.

Cont’d on page 3

Ken Ofori-Atta, Finance Minister

By Nii Annerquaye Abbey abbeykwei@gmail.com

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he commercial component of Ghana’s total external debt has exceeded 50 percent— which is more than double the share

two decades ago when the country was classified as a Highly Indebted Poor Country (HIPC).

According to the Finance Ministry’s 2020 Public Debt Statistical Bulletin, 51.1 percent of the country’s GH¢141.8bn

Maintain the right mind frame irrespective of your surroundings

See page 13

external debt stock is owed to commercial lenders, with the regular issuance of Eurobonds largely driving this development.

Cont’d on page 2

RMB assists Ghana to issue US$3bn+ multi-tranche Eurobond In Africa’s largest Eurobond issuance since the onset of the Covid-19 pandemic, Rand Merchant Bank (RMB), the corporate and investment banking arm of FirstRand Bank Limited, acted as Joint Lead Cont’d on page 3 Follow us online: facebook.com/business24gh twitter.com/business24gh linkedin.com/pg/business24gh instagram.com/business24gh

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Editorial / News

WESNESDAY APRIL 7, 2021

Editorial

Let’s get serious on marine resources T he Ministry of Fisheries and Aquaculture Development is coordinating an inter-agency investigation into the reported incidents of dead fishes of various species washed ashore beaches in Accra and Axim over the Easter weekend.

The Fisheries Commission, Food and Drugs Authority, the Environmental Protection Agency, the Ghana Maritime Authority, the Ghana Navy, the Marine Police have been tasked to determine the causes of the incidents and possible preventive measures for the future.

Despite this being a good move, it is the usual reactive approach to tackling serious issues as a nation.

Admittedly, the issue of dead marine species being washed ashore is not a new thing but the scale of the recent incidents demands a more proactive approach if we could secure our marine resources and the livelihoods of coastal dwellers who depend on that Over the last few decades, excessive human activities such as the spreading of harmful substances such as oil, plastic, industrial and agricultural waste and chemical particles into the sea have greatly affected marine life.

It is time for Ghana, as a coastal state, to ensure the safety and sustainability of its marine resources and much of that step will come from the findings of this inter-agency investigation.

The ocean provides the home to a wide variety of marine animals and plants, it is the responsibility of every citizen to play his or her part in making these oceans clean so that marine species can thrive for a longer period.

We are counting on the team to come up with workable recommendations and enforceable sanctions to industry players whose inactions continue to put the lives of marine species in danger.

While we are it to unravel this mystery, the security agencies must fish out the unscrupulous persons that harvested these unwholesome fishes and are selling them to unsuspecting members of the public.

Ghana’s external debt gets more commercial and expensive Continued from cover

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Between 2017 and 2020, the stock of outstanding Eurobonds increased by more than GH¢42bn, from GH¢16.3bn to GH¢58.6bn.

The country raised US$2bn in 2018, US$3bn in 2019 and US$3bn in 2020 through Eurobonds. Just last week, another US$3bn worth of Eurobonds were sold by the government on the international capital market.

The rise in the commercial component of Ghana’s external debt translates into a more expensive debt servicing cost, as commercial loans cost more than the concessional credit that is usually obtained from multilateral institutions like the World Bank, International Monetary Fund and African Development Bank.

Due to Ghana’s middle-income status, the country has seen reduced access to concessional loans, which has fuelled the rapid increase in commercial borrowing.

Rising external commercial borrowing has meanwhile contributed to making interest payments the biggest expenditure item on government’s books for

2021.

According to the 2021 budget statement presented to lawmakers last month, government will spend GH¢35.9bn as interest payments, whereas workers’ compensation is expected to amount to GH¢30.3bn.

Compensation paid to workers has historically been government’s biggest expenditure item, but rising public debt since the late 2000s has rapidly pushed up interest spending, which has now eclipsed the compensation bill.

In the 2021 budget, government

sought parliamentary approval to spend GH¢110bn on its programmes and initiatives, with 31 percent of the amount dedicated to debt servicing.

Since 2013, the country has turned to Eurobonds to finance the fiscal deficit as well as refinance more expensive domestic debts.

Government has set its sights on bringing down the fiscal deficit from 11.7 percent to 9.5 percent of GDP in 2021 in a bid to achieve a fiscal consolidation and help contain the rate of debt accumulation.

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Eurobond proceeds to boost cedi stability Continued from cover The reserves stood at US$8.72bn in February, providing cover for 4.2 months of imports of goods and services, compared with the end-December 2020 position of US$8.62bn, equivalent to 4.1 months of import cover.

Government sold US$3.025bn worth of Eurobonds to international investors on March 29 in four different tranches—a four-year zero-coupon bond and 7-, 12-, and 20-year bonds.

“The proceeds from the Eurobond offer, expected to be settled on April 7, will strengthen the gross forex reserves position and support the BoG’s intervention measures,” said Courage Kingsley Martey, Senior Analyst with Databank Research, in an interview with Business24 on the impact of the issuance.

“The Ghana cedi should find support from the Eurobond proceeds and the domestic liability management exercise.

The cedi has enjoyed another impressive start to the year, following the relatively stable outturn in 2020. We view the Bank of Ghana’s commitment to maintain forex reserves above 4 months of imports and deploy same through its strategic FX forward auctions as a crucial anchor for the cedi,” he added.

The cedi appreciated by 0.5 percent against the US dollar in the first quarter of 2021, making it one of the most stable currencies in Africa during the period.

Although a potential outflow of foreign portfolio investment in local bonds remains a risk to cedi stability, Mr. Martey said the Finance Ministry could target a buyback of potential sell orders as

part of its liability management.

“This strategy will minimise the portfolio-induced depreciation risk, sustain the cedi stability and anchor low interest rate expectations on the domestic market.”

A forex broker with GT Bank, Jeffrey Papa-Kwesi Tawiah, also said in an interview that the proceeds of the Eurobond will have an immediate impact on the

stability of the cedi, but added that the effect will fade over time as usually happens.

“We don’t expect the cedi appreciation to stay for long,” he predicted.

In the first three months of 2021, the BoG committed a total of US$283.75m to the forex market through its forward auctions, which has positively impacted the stability of the cedi.

RMB assists Ghana to issue US$3bn+ multi-tranche Eurobond Continued from cover Manager and Joint Bookrunner ( JLM), alongside other transaction parties, in Ghana’s four-tranche Eurobond.

RMB also acted as Dealer Manager on Ghana’s Tender Offer on its 2023 maturity. Eurobonds.

RMB is proud to have assisted Ghana to issue a new money Zero Coupon Senior Unsecured Eurobond, the first of its kind by an Emerging Market (EM) sovereign.

Ken Ofori-Atta, Minister for Finance, who was sworn in on 30 March, 2021, has in the past made a case for the creation of an “inclusive global forum to rebuild the international financial and economic architecture and a new ability to respond equitably and rapidly to such a catastrophe.”

The effective execution of the zero-coupon Eurobond tranche is another step towards achieving this vision and helps to create additional fiscal space to assist Ghana Build Back Better post the Covid-19 impact on the economy.

RMB is pleased to have been able to assist the Government to achieve its goal on this transaction. The issuance further demonstrates the RMB Debt Capital Markets Team’s expertise, innovation and ability to execute amidst a volatile market backdrop.

Dominic Adu

This issuance enables the Ministry of Finance to raise funds to refinance more expensive shorter-dated debt with affordable term debt. This transaction was preceded by a 3-day virtual deal roadshow, where Ghana presented its impressive credit story to global fixed income investor base, whilst emphasising the government’s focus on fiscal consolidation, completion and continuity as the economy recovers from the impact of the pandemic.

Commenting on the

transaction, James Formby, Global RMB CEO, says: “Ghana has always been a trailblazer as an issuer in the capital markets and was the first sub-Saharan African Sovereign to issue a 40year Eurobond. RMB is delighted to have been appointed by Ghana to jointly lead the execution of this Eurobond, especially the novel Zero Coupon tranche. The appointment of RMB as Joint Lead Manager and the successful outcome of the transaction can be attributed to RMB’s commitment to Ghana through

our on the ground presence, and the continuous investments we have made in our global credit distribution platforms.”

“Our agility in turning around the transaction within a short period enabled Ghana to navigate the choppy waters in the markets and achieve the government’s objectives in terms of their debt management strategy. The services of RMB’s leading Debt Capital Markets Team, based in London, a key financial hub, and remains available to African issuers to help them direct capital into the continent for investment, growth and development.” adds Dominic Adu, CEO of First National Bank Ghana.

Sharing their views on the deal, Eyitayo Netufo, Head of International Debt Capital Markets and Harris Hadjitheoris, Head of Bond Syndicate at RMB, say: “It was a pleasure working with the market astute Government of Ghana deal team as they expertly executed on the advice of the bookrunners on the transaction which enabled a very successful deal despite the volatile market backdrop.”

RMB and First National Bank, members of the FirstRand Group family, remain committed to Ghana and are proud to have been able to assist the Ministry of Finance with this transaction.

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News

WESNESDAY APRIL 7, 2021

Sickle Cell Foundation of Ghana receives support from SOS student

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student of SOS-Herman Gmeiner International College, Ms. Chloe Elinam Mawuenyega has donated a sum of GH¢12,000 to support the Sickle Cell Foundation of Ghana.

The fifteen-year-old, through a car wash fundraising activity raised the said amount and presented a cheque to the Foundation in Accra last month.

The activity forms part of the requirements for all Year-5 students to explore an area of personal interest with outcomes.

Speaking at a short presentation ceremony in Accra, Ms. Mawuenyega explained that, “it has always been in my interest to support persons living with Sickle Cell Disease (SCD) in their treatment, and so when the opportunity came, I decided to raise some funds for the Foundation to support such people. I am glad my school gave me this opportunity”.

She expressed appreciation to her family and friends who supported her to raise the money.

“A big thank you to Silver Star

Auto Limited for also contributing to this activity”, she added.

The Business Manager at the Foundation, Mrs. Gifty Jecty, who received the donation thanked Miss Mawuenyega and her school for the gesture.

Mrs. Jecty used the opportunity to appeal to philanthropists and organisations in the country to support the activities of the Foundation to give hope to persons living with SCD. “Especially with the expansion of Newborn-Screening for Sickle

Cell Disease. Newborn Screening ensures diagnosed babies receive appropriate healthcare which includes twice daily penicillin, comprehensive care and parental counselling and education.

Newborn Screening for Sickle Cell Disease saves lives,” she added.

The Principal of SOS-Hermann Gmeiner International College, Mrs. Eliz Dadson, explained the school’s initiative. “The School’s philosophy embraces internationalism in its widest sense, a commitment to uplift

Africa and active service to the community.

Its educational mission is holistic in nature, aiming to develop all students into confident adults capable of facing the challenges of a fast– changing world, by inculcating in them critical and analytical abilities which will equip them to become compassionate thinkers who are aware of their common humanity, with a belief and pride in themselves as Africans”.

The Foundation is a nongovernmental organisation with the mission to support the development of resources and services to improve the health and quality of life of people with SCD and related conditions.

The organisation serves as an agency of the Ministry of Health (MOH), and as Program Managers of the National Newborn Screening Programme for SCD. In addition, the Foundation, together with the Ministry of Health and the Ghana Health Service is a member of the Ghana-Novartis Public-Private Partnership in SCD.

Deeper cooperation needed to end COVID-19 economic scarring

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he economic recovery from the COVID-19 pandemic has begun in some parts of the world but many vulnerable nations remain in recession with rising infection rates and affordable vaccines in short supply.

A statement issued in Accra

by Marilou Uy, Director, G-24 Secretariat, said the crisis had strained the health systems and severely hit the economies of developing countries.

It said fast access to affordable vaccines would be crucial for recovery in developing countries.

The statement said access now was heavily constrained by existing supply, which had mostly been purchased by advanced economies.

It said millions of people had fallen into extreme poverty and food insecurity had risen starkly, especially in the poorest countries and those living in fragile and conflict-affected situations.

“COVID-19s destruction is global and will only be overcome with a strong global response that ensures fair distribution of vaccines and sustained support to vulnerable developing countries, Mr Abdolnasser Hemmati,

Governor of the Central Bank of Iran and Chair of the Group of Twenty-Four (G-24) nations, said in the statement.

Mr Hemmati said the G-24 believed all must recognise the common humanity and work together to defeat the pandemic.

The G-24 members commended swift international economic and health support for the crisis so far, but noted intensified action was needed to end the pandemic and prevent long-term economic damage in vulnerable nations.

It said that COVID severely disrupted economic activity in many developing nations and intensified their fiscal and debt problems.

“Recovery to pre-pandemic levels could be protracted where countries lack the revenues or borrowing capacity needed to stimulate their economies,” the statement said.

International assistance for developing countries has fallen short of their estimated $2.5 trillion in additional financing needs.

The G-24 Nations, therefore, called for increased concessional financing and ensuring sustained positive net transfers from the

World Bank and other Multilateral Development Banks (MDBs).

They said it was to avoid prolonged damage to development prospects of vulnerable developing countries.

It also called on international financial institutions, especially

the IMF and World Bank, in coordination with the international community to ensure the availability, to the fullest extent possible, of the necessary liquidity and fiscal support for all developing countries.

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Feature

WESNESDAY APRIL 7, 2021

Surviving in a male-dominated industry: MX Construction CEO tells her story

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ike it or not, certain industries are still largely male-dominated. In such a set-up, it is important for a woman to hold her own and succeed on her own terms. It certainly will require extra work, smartness and tactfulness for a driven woman to conquer a maledominated industry.

Several people have argued for female entrepreneurs in male – dominated sectors to have a mentor who has already seen the ups and downs of the industry which will bode well for these entrepreneurs who are just starting out. Agreeably, a mentor plays a huge role in introducing the challenges to be faced and will help to connect with the right people that belong to his or her network.

Marsixer Olichey is the Chief Executive Officer (CEO) of MX Construction, producers of a range of world class concrete products including concrete building blocks of all sizes, design decorative ventilation blocks, concrete kerbs, pavement blocks and others. She believes having a mentor could be very for female entrepreneurs in male dominated sectors like herself.

Popularly referred to as Nana Ama by her pears, the young female entrepreneur describes herself as a self-motivated person, goal getter, non-conformist, persistent and someone with the desire to acquire knowledge at all times. Until she achieves it or makes it happen, there is no stopping for her.

Nana Ama had a humble beginning growing up with her family in Sunyani in the Bono Region. She is a certified nurse and has a degree in public Administration from the Ghana Institute of Management and Public Administration (GIMPA).

Nana is currently pursuing a Master’s degree in International Relations also at GIMPA. The young entrepreneur revealed that one of the things she values is family. “For me, family is not just very important but everything. My dad has always been my inspiration and the kind of training I got in my formative years has shaped me into becoming who I am today so I don’t joke with my family”, she added.

On how she started her entrepreneurial journey, she said “to be very honest, I learnt it from my dad, who has been

into the poultry business and education; he owns and runs a school. From my early years, I learnt to start saving from an early age and by the time I got to nursing school, I had saved up a lot. I got support from my dad to start my very first business, which was transportation. I bought some cars to be used for work and pay businesses and by the time I completed I had four cars working for me. On the side, I was selling ladies bags and other ladies products”.

Nana Ama believes in making sacrifices for long term benefits as she recounted her first degree days. “I remember when I started my degree program at GIMPA, I had no personal car but I had eight cars for my transportation business. I believe in making sacrifices to achieve the ultimate so I wasn’t pushed to convert into of the cars for my personal use”, she revealed.

Interestingly, Nana Ama decided to move into a more male dominated business, construction and started by setting up a block factory. And for the motivation for that move, she said “I always wanted to

stand out and didn’t want to do the ordinary things women are mostly known for. After traveling to Turkey and Dubai to buy ladies bags and other items, the business didn’t go well as planned. I never gave up, rather, I did some research and discovered that the real estate business has been one of the fastest growing sectors in Ghana. Then I decide to go for the most used product in building houses, offices, and more”.

About the challenges she faces, she said “when I started, I didn’t have a truck to transport the blocks so it created some delays sometimes and the truck drivers will disappoint you making you look unprofessional sometimes.

This created a lot of pressure sometimes so I made it a point to work towards acquiring one and with perseverance we managed to get one in a few months”.

She added that, as a female you need to develop a thick skin and know how to handle your clients and know where to respectfully draw the line when it comes to the male clients. “As a woman, I get a lot of favors from people who get fascinated to see a young lady doing this type of business and

genuinely want to assist. Some will go out of their way just to help you and others will also like to take advantage of you and that gets very worrisome sometimes.

The fact is when you grow with certain principles and you stick to them, you can still grow your business and make a decent margin and not necessarily falling for such antics from men”.

Apart from her quest to succeed, the ability to put smiles on the faces of several people by employing them to be able to put food on the table for themselves and their families is one thing that keeps Nana Ama going every day and striving to grow the business.

She also mentioned some principles which have helped her to survive in the business.

In the next five years, she hopes to commence her real estate business. “Through research, I have come to know that we have a housing deficit in Ghana and there is a need to solve this.

There is an opportunity to build beautiful, quality and affordable houses for sale or rent and that is a business challenge I will take up”, she concluded.

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Energy

WESNESDAY APRIL 7, 2021

Tullow Oil completes sale of assets in Equatorial Guinea

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few weeks ago, reports and agreements were made concerning the sale of some interesting assets in Equatorial Guinea.

On February 9, 2021, Tullow announced its sale and purchase agreements with Panoro for the Equatorial Guinea and Gabon assets. The deals called for up to $105 million for the Equatorial Guinea transaction and up to $70 million for the Gabon transaction, and another $5 million after both transactions close.

This deal was keenly followed by Mframadan Energy Management & Research Institute (MEMRI) and after careful analysis of information available, were very confident of a successful transaction based on a few business decisions made by Tullow and other key players.

On Wednesday 31st March 2021, Tullow Oil plc reported that it has completed the sale of its assets in Equatorial Guinea to Panoro Energy ASA, having received an $88.8 million payment from the buyer.

“Although Tullow will continue to have a financial link to the assets in Ceiba and Okume fields, the

closing of this transaction marks Tullow’s exit from its licenses in Equatorial Guinea after 18 years,” As previously disclosed, this transaction also includes contingent cash payments of up to $16 million which are linked to asset performance and oil price.

The closing of this transaction follows the satisfaction of all completion conditions, including the approval from the Government of Equatorial Guinea and Tullow and Panoro shareholders and other customary third-party approvals.

Tullow also noted that it expects to complete the sale of another asset to Panoro its 10% interest in the Dussafu Marin Permit Exploration and Production Sharing contract in Gabon - in the second quarter of 2021.

After the completion of both Panoro transactions, Tullow anticipates another $5 million from the buyer.

Will these series of payments made be enough to shoot Tullow’s operations in Ghana?

Although Tullow will continue to have a financial link to the assets in Ceiba and Okume fields,

the closing of this transaction marks Tullow’s exit from its licenses in Equatorial Guinea after 18 years. On receipt of funds, Tullow has net debt of c. $2.3 billion and liquidity headroom of c. $1 billion.

As resilient as businesses have been in these times, many will sell off to take off.

An interesting statement made to keep an eye on a few other transactions, going forward.

“Our Equatorial Guinea assets have formed an important and stable part of our non-operated West Africa producing portfolio

since 2004,” Tullow CEO Rahul Dhir, commented on February 9. “We will be exiting Equatorial Guinea after many years of successful investment and cooperation and we thank the Government of Equatorial Guinea for their continued support.

A deal sealed, as Tullow Oil walks out with a smile.

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

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

Academic City, Worcester Polytechnic to offer accelerated Master’s degrees Systems Dynamics, System Prof. Fred McBagonluri, President and exchange opportunities

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cademic City University College and Worcester Polytechnic Institute, USA (WPI), a renowned research university have signed a Memorandum of Understanding (MoU) for academic collaboration to implement an accelerated master’s degree and exchange programmes. This is tailored towards enhancing the academic, professional and cultural needs

of students.

The two agreements being signed will provide the opportunity for Academic City students to earn an accelerated Master’s degree from WPI and the ability to enroll in undergraduate courses at WPI through an exchange program, for a period of up to one year. The areas of study for the master’s programme will include Business Administration,

Prof. Fred McBagonluri, President of Academic City and Prof. Winston Oluwole Soboyejo, Provost and Senior Vice President of WPI

Engineering, Data Science, Robotics Engineering, Mechanical Engineering, Science and Technology for Innovation, Computer Science and Electrical and Computer Engineering.

With the agreement, students of Academic City after the successful completion of their three years of undergraduate studies, have an opportunity to enroll in WPI’s online graduate courses to satisfy the terms of their fourth year of undergraduate studies.

After receiving their undergraduate degree from Academic City, interested students will be admitted to the WPI master’s programme in their area of study and complete one year of graduate studies in residence at WPI. Also under this agreement, continuing students of the two institutions will have a platform to experience high-quality higher education and hybrid learning opportunity, besides a rich crosscultural exposure in the comfort of their home countries.

Speaking on the partnership,

of Academic City remarked “We at Academic City are excited to work together with WPI on this innovative programme for our students”.

“We are optimistic that this initiative will be fruitful and both institutions will benefit from the collaborative work in addressing important academic and professional needs of students.

This MoU is very critical in terms of the exposure to global benchmark and best practices in academia”, he noted.

“It is becoming increasingly evident that as the global economy continues to expand cross-cultural partnerships are essential,” said Winston Oluwole Soboyejo, WPI Provost and Senior Vice President.

“Together we can empower students to collaboratively solve problems and develop their critical thinking, giving them an effective capability to use STEM to innovate in their own lives as well as for their communities, their region, and the world at large.”

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Feature

WESNESDAY APRIL 7, 2021

Doing business with family and friends

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usiness ideas pop-up in various ways under very interesting circumstances.

Speak to any business owner or entrepreneur and you will be surprised how they came up with their business idea. Some of these ideas pop up whilst spending time with friends and family, having a bath or even whilst driving and observing nature.

Most of these business ideas involve funding, which the entrepreneur most at times lacks.

They go ahead to sell the idea to friends and family members who show interest and then invest resources into the idea to start businesses.

This nature of transactions abounds, but these businesses later fail because a “friends and family” relationship does not build successful business, strong legal pillars do.

Now the first point of call for the entrepreneur is always to register a business, because of course this is the only way to put life into the bright business idea. The decisions that go into the business registration is always the undoing of most businesses especially in Ghana. Most entrepreneurs do not take the time to analyze the legal implications of mindlessly filling the company registration forms. They name their best friends and family members as directors and shareholders without looking into the future to assess if these individuals are the right fit for their businesses.

Should I make my brother a shareholder? Or maybe I can appoint my best friend as a director. I get along very well with my cousin, should I consider making her a manager in my company once it takes off? These are questions I regularly get from young entrepreneurs.

These questions are very legitimate because it is with good spirit that any entrepreneur will want to work with his family and friends with the intentions of enjoying a great working environment and building stronger family ties. After all any young entrepreneur who reads wide knows that companies like

Walmart and Ford motors are all family businesses that have transcended generations.

What they do not know however and what almost all Ghanaian businesses fail at is putting in structures from the birth of the company that will ensure the business outlives you for generations.

It is therefore important to ponder on these things before making decisions about who you approach to invest in your company (shareholder) and appoint as a director to manage your company.

Shareholders 1. In making a family member, friend or any person a shareholder, you need to assess if the person does not exercise control over you. This is important because as a business owner your business looks to you to guide and grow it. You are there to invest the funds of shareholders and not take management instructions from shareholders.

Shareholders have certain rights but you should be sure to know the direction you want to lead your company in. So before you make your father your largest shareholder think about it critically. Can I, and am I ready to go against him in the event he starts giving directions I am sure will not inure to the benefit of my company? If an incorporated company is said to have a life of its own, then can anyone own it?

It can be said that the shareholders are the owners of the company. The shares held by the shareholders are their assets which they can bequeath or sell.

They can be said to be the ones that give the company life. They are the ones that will salvage the company when debt arises, though to a limited extent; to the extent of their exposure by way of shares.

The shareholders give more life or blood to the company when it is broke or want to expand its business. It does this by recapitalization; they pump more money into the

company. Shareholders are also the ultimate beneficiaries of any profit that the company will make after it pays off all its debts.

Thus, shareholders take the hit in bad times and also take the honey in good times. Any major decision affecting the company is also taken by the shareholders; but not the day to day running decisions of the company because that is the responsibility and use of directors.

Another important thing to note also is that since the shares held by shareholders are their assets and can be sold to anyone or bequeathed to anyone they wish, it is in your interest to have a Share Holder Agreement (SHA) where you make provisions as to how the shareholders manage their shares.

Directors 2. Secondly, Directors are said to be the brain, eyes and ears of a company.

Before appointing a director you need to as a matter of importance to assess the competencies of the person. In making your best friend or cousin a director, you should ask yourself whether or not you have sold your vision to their understanding and if they have the competencies to manage your business better than you ever can manage it. If your answer to this is in the negative then you know not to appoint them as a director.

A director must owe allegiance to the company and must not do anything to hurt or that is not in the interest of the company. A director is to steer and guide the affairs of the company towards its set goals and objects.

life of its own. The only difference is that the company cannot think for itself.

So that, any act done by or in the name of the company is said to have been done with the company being responsible for its consequences. So for instance, if a loan is taken in the name of a company, it is the company that owes and not the persons behind the company that owe. If any money is paid to the company or if the business the company is engaged in realizes any profit, it is the company that owns or has the money or profit and not the persons that run it.

If the company is unable to pay its loan, it is the assets of the company, i.e. assets registered in the name of the company that will be attached and sold not the assets of the persons that run the company. It also then means that those who run the affairs of the company should not and legally cannot deal with the assets of the company as theirs, especially going on to sell or expose them to certain risks without due authorization by the decisionmaking bodies of the company (the board or shareholders).

It is always important to have a clear understanding of these cardinal concepts when it comes to starting and incorporating a business. The importance of these hardly come up in the initial stages of the life of the business, but rather when the business has grown and is much more valuable.

Separate legal entity 3. It is largely known that an incorporated company limited by shares or by guarantee is said to be a separate legal entity from its owners. But what does this actually mean? It only means that the company lives a separate life, from that of the owners. It means the company is a person on its own. It means the company has a

PROFILE Cephas Tettey Omenyo is a Commercial and Corporate lawyer who specializes in transactions and civil litigation.

E-mail: ctomenyo@gmail.com LinkedIn: Cephas Tettey Omenyo Instagram: c.t_omenyo Telephone: 020 823 1346

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Opinion

WESNESDAY APRIL 7, 2021

Maintain the right mind frame irrespective of your surroundings

By Louisa Afriyie Boateng

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here is a reason the most powerful organ in the human body is the brain.

It controls all other parts of the body through brain functions. It is where the mind works through thoughts, ideas and feelings.

Having the right mind frame can boost your confidence, improve your general mood and help you reduce stress-related illnesses.

In the words of Chanakya, an Indian teacher, “it is the mind of man alone that is the cause of his bondage or freedom.” This quote expresses succinctly the power our minds wield. No matter where or how you live, we are supposedly prisoners of our own minds. That is why it is absolutely vital to protect the sanity of our minds and be wilfully positive.

Life, as we know, is full of challenges and obstacles.

However, we are affected by our reactions to what life serves us.

To stay sane, safe and have the right frame of mind regardless of your circumstances, you need to do these five practical things: • Manage your stress levels Our lives have changed in the past two decades. The desire to be successful and live comfortably have contributed immensely to

people’s stress levels (sleepless nights trying to solve socioeconomic issues).

Managing stress does not take one form. You can read books, listen to music, exercise, or just have a drink and relax (take a break) because stress can break you down.

• Transform your let-downs into lessons Almost inevitably, you are going to face difficult situations – there is no such thing as a perfect life.

It may sound cliché but expect the unexpected. Take lessons from every experience whether good or bad. Do not focus on why things did not work out. Rather, think about how you are going to be better next time with the lessons learnt. In doing so, you improve your decision-making and critical thinking capabilities.

• Be motivated by other people’s stories Hearing inspirational stories being shared by many different people and how they overcame their struggles will fuel your mind. Aristotle once said, “The energy of the mind is the essence of life.” As your mind energizes, you get motivated and you begin to visualize the great things you can achieve. In that moment,

you should write them down or use that to design your vision board. You can alternatively read books from successful people, life coaches or motivational speakers.

• Be your mind’s gatekeeper Just as security guards a building or establishment, always strive to guard your mind from negative thoughts. You have the ability to control what you think and allow certain thoughts to linger on your mind. Make sure they are not the negative ones. Replace them with positive thoughts or happy moments in your life and let the good memories remain on your mind.

• Surround yourself with positive people When you are in the company of positive people, you always hear positive words and engage in positive talks. After a while, their continuous positivity will consume you, your words and thoughts. Their energy will teach you to have a positive outlook on things. Finding such people is difficult and requires critical observation of what people say and how they speak. That will lead you to the right people you need to be around.

The way you treat your mind,

determines how you behave.

Habits start from the mind.

That is why psychologists focus on identifying the reasoning (mindset) behind their clients’ actions. Arnold Schwarzenegger, an American actor, puts it brilliantly, “Where the mind goes, the body will follow.”

About the author Louisa Afriyie Boateng is a forward-thinking individual with sound experience in the real estate industry, primarily within Accra’s choicest neighbourhoods.

She has 12 years of operational experience, with a vast majority of it being within real estate sourcing, property consulting, interior styling, project management and client relations Her role as Business Operations Manager at Earlbeam Realty gives her the opportunity to implement her skills on a daily basis to lead a team to provide clients with high level expertise and service

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Global Financing to End the Pandemic

By Jeffrey D. Sachs

A

new allocation of up to $650 billion worth of the IMF’s reserve asset, special drawing rights, would ensure that governments have the means to combat the coronavirus pandemic and start on the path of investment-led recovery. We must seize this critical opportunity to cooperate effectively for the sake of humanity.

This week’s spring meetings of the International Monetary Fund and the World Bank offer a historic chance for financial cooperation.

The major economies, including the United States, the European Union, China, and other G20 countries, have already signaled their support for a new allocation of $650 billion worth of the IMF’s reserve asset, special drawing rights (SDRs), to ensure that governments in low-income and middle-income countries have the means to combat the COVID-19 pandemic and start on the path of investment-led recovery.

With leadership, boldness, and creativity, this global financial cooperation can help to end the pandemic.

Mass immunization is key. Less than a year after SARS-CoV-2, the virus that causes COVID-19, was first identified and sequenced, financial backing by governments – including the US, United Kingdom, Germany, Russia, China, and India – enabled several companies to roll out safe and effective vaccines. Rich countries that quickly negotiated favorable deals with vaccine makers have received most of the doses so far. But ending the pandemic requires that all countries achieve comprehensive vaccine coverage as soon as possible. In practical terms, the target should be no later than the end of 2022.

Such an unprecedented global undertaking requires strong cooperation, including financial support.

Yet the urgency should be clear to all. As long as

COVID-19 persists at high rates of transmission anywhere in the world, the pandemic will continue to disrupt global production, trade, and travel, and will also give rise to viral mutations that threaten to undermine previously acquired immunity from past infections and vaccinations.

Still worse, on the current trajectory, COVID-19 could well become endemic in many regions of the world, imposing high health and economic costs for years to come. As US Treasury Secretary Janet Yellen emphasized this week, all countries, therefore, share a strong interest in ending the pandemic everywhere.

The world’s governments established the Access to COVID-19 Tools Accelerator (ACT-A), which includes the COVID-19 Vaccine Global Access (COVAX) facility, the vaccine pillar of ACT-A, to ensure universal control of SARS-CoV-2. But while ACT-A and COVAX have established global plans for vaccines, tests, and treatments, the plans need urgently to be strengthened for two closely related reasons.

First, the operational target currently used by COVAX – a minimum of 27% of all eligible countries’ population immunized by the end of this year – must be raised to vaccination of all adults by the end of 2022. This is necessary to end the pandemic and to reduce the chances of new mutations.

Second, planning until the end of 2022 is urgently needed, given the lead times for scaling up the production and supply chains of vaccines and other crucial commodities. Yet ACT-A and COVAX remain underfunded even for 2021: the $11 billion governments have allocated to date leaves a financing gap of $22 billion for this year – a shortfall that has so far delayed necessary planning through the end of 2022.

In the meantime, the current vaccine shortfall is leading countries to scramble to jump

the queue, including by paying premium prices. This underscores the urgent need to ensure that all countries, including the poorest, can achieve comprehensive vaccine coverage in a fair and timely manner.

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The additional sums needed to ensure universal vaccine coverage by the end of 2022, and other COVID-19 supplies, are modest – perhaps $50 billion for ACT-A. That is a negligible amount relative to the enormous global benefits of ending the pandemic and the massive pandemic-related spending by governments of high-income countries around the world. The US government alone has spent roughly $5 trillion in emergency outlays between March 2020 and March 2021.

To do its job, ACT-A (including COVAX) needs front-loaded funding to cover vaccine needs through 2022. Given that scaling up the production of vaccines (and some other commodities) requires a lead time of 6-12 months, the $50 billion should be guaranteed within the coming weeks, so that ACT-A and COVAX can work with manufacturers to ensure the necessary supplies.

The IMF’s allocation of new SDRs offers a unique – and perhaps the only – opportunity to get this funding in hand.

When the new SDRs are issued, around $20 billion of new reserves will go directly to the poorest countries. In addition, around $100 billion or more that is allocated to rich countries will be recycled to the IMF to be used for long-term, low-interest loans. IMF Managing Director Kristalina Georgieva has been

working closely and creatively with G20 governments to design this novel, promising approach.

One excellent idea is to use the SDRs to bolster the IMF’s Poverty Reduction and Growth Trust (PRGT), the Fund’s financing window for poor countries.

There is an important precedent here. In 2015, the IMF created a Catastrophe and Containment Relief Fund to help provide emergency Ebola-control financing to Guinea, Liberia, and Sierra Leone. This time, the PRGT financing could be made conditional on its use for ACT-A and COVAX-related procurements and for other COVID-19 control measures that the borrowing government documents to the IMF (such as reimbursements for COVID-19 vaccines that have been contracted by the member state outside COVAX).

ACT-A is now preparing estimates of the financing that the world’s 92 low- and middleincome countries eligible for COVAX support will need for vaccines, testing, therapeutics, and other supplies until the end of 2022. Based on the estimated financing needs, an ACT-A financial plan can be established for each country, to be supported by the SDRs and the expanded PRGT funds.

In the next few weeks, a rational plan to finance all countries’ COVID-19 balance-ofpayments needs until the end of 2022 should emerge. The IMF was created to handle such a balanceof-payments emergency.

Access to IMF financing will protect the well-being and macroeconomic stability of individual countries and the world as a whole. We must seize this critical opportunity for the United Nations, the IMF, and key governments – including the US, China, Russia, the EU, Japan, the UK, and others – to cooperate effectively for the sake of humanity.

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