Government is facilitating the speedy completion of the commodities exchange to stabilise commodity prices and create alternative exchanges to accommodate small and medium enterprises, Hannah Tetteh, Minister for Trade and Industry, has stated.
“Next year, the commodities exchange for the country will be in operation to create huge opportunities for the agricultural sector,” she hinted at a forum in Accra.
Securities and Exchange Commission (SEC), the lead promoter of the commodities exchange and warehouse receipts system in the country, is mandated to develop the need¬ed regulatory framework to facilitate establishment of the exchange once gov¬ernment accepts the recommendations.
SEC is evaluating the submitted applications received from experts for the drafting of the needed framework, which will be the blueprint document for the operations of the exchange, a senior official at SEC disclosed to B&FT in a recent interview.
The legal and regulatory framework, which will regulate the modalities in which commodities exchanges may be established, organided and operated, is to ensure that all those in the supply and value chain in agriculture sector benefit from their involvement.
The exchange when fully operational could raise the hopes of millions of farmers, especially large-scale farmers and make their lives more meaningful. It provides for market transparency, efficient price discovery and standardisation, and the attendant improvement in quality standards thereby assists farmers to gain easy access to ready markets - both local and international.
The exchange’s establishment will help to deal with challenges facing the supply of agricultural produce, which in turn will deal with food inflation. It will as well provide a potent tool for a farmer to manage price fluctuations, stabilise his/her income and gain access to relatively cheaper credit.
Ghana has suffered three failed attempts towards the establishment of a commodities exchange, due to the unavailability of a regulatory framework.
A commodities market or exchange is a platform where various commodities and derivatives are traded.
Most commodities exchange trade in agricultural products and other raw materials like wheat, barley, sugar, maize, cocoa, coffee, cotton, milk products, oil and the metals.
“There is no doubt that a commodity exchange for futures trading is necessary for the efficient functioning of an economy,” a commodity price expert has opined.
In West Africa, and across sub-Saharan Africa, it is rightly envisaged that properly functioning exchanges that play a big role in poverty alleviation initiatives would increase the incomes of agricultural producers.
Ghana will be the fifth country in Africa, after South Africa, Nigeria, Kenya and Ethiopia, to operate a commodities exchange that aims to embark on an aggressive over¬haul of its agricultural sector.
This will promote the use of derivatives like forwards, futures and options in Ghana as the door is opened to foreigners to participate in speculating on agricultural products or metals traded on the exchange.
Dr. Boeh-Ocansey, Director-General, Private Enterprise Foundation, has also endorsed the idea. He said: “Since Ghana’s economy is basically agricultur¬al, it would make a lot of sense to see to the establishment of an effective commodity exchange that would not only eliminate the regular post-harvest losses through the buy¬ing of produce for storage, but also put money in the pockets of farmers in the short¬-term to facilitate their downstream opera¬tions.”
Thursday, November 25, 2010
US$22 million Manet Twin Towers inaugurated
Manet Group has officially inaugurated its US$22 million Twin-Towers at the Accra Airport City to boost the country’s commercial building industry.
The two blocks have office space each reaching eight floors skyward and consequently transforms the outlook of the real-estate sector in the country, offers businesses an ultra-modern, secure, accessible and convenient location, with affordable parking space for up to 230 cars.
The Manet twin-towers were completed in September 2010 and are just a tip of the iceberg, Dr. Theresa Oppong-Beeko, Chief Executive Officer, Manet Group disclosed after the ceremony.
Manet Group comprises Manet Housing, a real-estate development firm, Manet Paradise, a three-star hotel resort, Manet Construction, a civil engineering company and Manet Towers.
Mr. Martin Beeko, Director of MANET, a real-estate development company, said the company had over the past 16 years built more than 1,200 residential units for the upper-end of the housing market, making the group the second-largest real-estate developer in the country.
Alban Bagbin, Minister of Water Resources, Works and Housing, said rapid population growth and increasing urbanisation has made shelter one of the most critical problems - necessitating government to review the National Housing policy to focus more on the housing needs of low-income people.
He said the current data indicate that the country's housing deficit stands at more than a million housing units.
“Out of the four million housing units in the country, less than one-half were classified as houses; as much as 58 percent of the houses were of poor quality and made of mud, laterite brick, wattle and daub, and earth. More than 74,000 kiosks and containers were also being used as homes.
“Only 17 percent of Ghanaian households sleep in four- or more roomed facilities.
“As a country now enjoying middle-income status, our built environment and our cityscapes - from residential to commercial and leisure - leaves much to be desired,” he said.
Mr. Bagbin urged stakeholders in the real-estate sector to partner with government to ensure that the country’s housing situation is improved.
Dr. Mensah Otabil, General Overseer of the International Central Gospel Church, said the inauguration of the Twin-Towers project is a testimony to years of dedication and faithfulness of Manet’s contribution to development of the country.
The two blocks have office space each reaching eight floors skyward and consequently transforms the outlook of the real-estate sector in the country, offers businesses an ultra-modern, secure, accessible and convenient location, with affordable parking space for up to 230 cars.
The Manet twin-towers were completed in September 2010 and are just a tip of the iceberg, Dr. Theresa Oppong-Beeko, Chief Executive Officer, Manet Group disclosed after the ceremony.
Manet Group comprises Manet Housing, a real-estate development firm, Manet Paradise, a three-star hotel resort, Manet Construction, a civil engineering company and Manet Towers.
Mr. Martin Beeko, Director of MANET, a real-estate development company, said the company had over the past 16 years built more than 1,200 residential units for the upper-end of the housing market, making the group the second-largest real-estate developer in the country.
Alban Bagbin, Minister of Water Resources, Works and Housing, said rapid population growth and increasing urbanisation has made shelter one of the most critical problems - necessitating government to review the National Housing policy to focus more on the housing needs of low-income people.
He said the current data indicate that the country's housing deficit stands at more than a million housing units.
“Out of the four million housing units in the country, less than one-half were classified as houses; as much as 58 percent of the houses were of poor quality and made of mud, laterite brick, wattle and daub, and earth. More than 74,000 kiosks and containers were also being used as homes.
“Only 17 percent of Ghanaian households sleep in four- or more roomed facilities.
“As a country now enjoying middle-income status, our built environment and our cityscapes - from residential to commercial and leisure - leaves much to be desired,” he said.
Mr. Bagbin urged stakeholders in the real-estate sector to partner with government to ensure that the country’s housing situation is improved.
Dr. Mensah Otabil, General Overseer of the International Central Gospel Church, said the inauguration of the Twin-Towers project is a testimony to years of dedication and faithfulness of Manet’s contribution to development of the country.
New technology to the rescue of firms
A new technology which innovatively combines the pluses of both email and fax and offers a quick, easy and cost-effective transfer service has been out-doored in the county.
The technology - Fax2Email is also an answer to the nightmares of organisations that receive large amounts of documentations by fax on regular basis.
Fax2Email is an African electronic faxing solution designed for global use. Now you can receive faxes in your email inbox where faxes can be sent and received electronically as would documents that have been sent using email.
The product is a cutting edge technology that ensures cost cutting, smooth and instant recipient and dispatch of document in real time, Mr. Charles Asante, Group Managing Director, Charlitex Investment Limited, the lead promoters of the technology explained at the official outdooring of the service in Accra.
“This technology will help improve access to communication tools in the country at large. It would also translate to the country’s standing in technological advancement on the continent and the world at large.
“The country will be seen to be proactively ensuring efficient and secure communication, improving its standing as an investment destination,” Mr. Asante cited.
“The fax to email is an innovative way of using the Internet connectivity to send and receive fax messages in one’s email without using the usual fax machine.
“By lowering the hardware requirements to communicating, the setup costs for communications are also lowered. This will improve access to those in the lower income categories, thus bridging the digital divide as more can now receive more information on their inboxes.
“A user now has the ability to seamlessly communicate with both email and fax clients simultaneously, and through the desktop email platform using normal Internet email, attached files are delivered to traditional fax machines and vice versa.”
All you need is Internet connectivity. You don’t need a fax machine at a stationary point to receive it.
Businesses operators can now receive faxes for free in their inboxes, ensuring that all communication formats come to one central point.
The faxes will only be received by the intended recipient, ensuring better security and improved confidentiality of faxes.
Stephen Amoanor Kwao, Minister of State at the Office of the President, pledged government commitment to improve the country’s Information and Communication Technology (ICT) sector, emphasising that the technology is fast-growing in the continent.
“Government’s support such investment which would create jobs and grow the economy,” Mr. Kwao stressed.
The technology - Fax2Email is also an answer to the nightmares of organisations that receive large amounts of documentations by fax on regular basis.
Fax2Email is an African electronic faxing solution designed for global use. Now you can receive faxes in your email inbox where faxes can be sent and received electronically as would documents that have been sent using email.
The product is a cutting edge technology that ensures cost cutting, smooth and instant recipient and dispatch of document in real time, Mr. Charles Asante, Group Managing Director, Charlitex Investment Limited, the lead promoters of the technology explained at the official outdooring of the service in Accra.
“This technology will help improve access to communication tools in the country at large. It would also translate to the country’s standing in technological advancement on the continent and the world at large.
“The country will be seen to be proactively ensuring efficient and secure communication, improving its standing as an investment destination,” Mr. Asante cited.
“The fax to email is an innovative way of using the Internet connectivity to send and receive fax messages in one’s email without using the usual fax machine.
“By lowering the hardware requirements to communicating, the setup costs for communications are also lowered. This will improve access to those in the lower income categories, thus bridging the digital divide as more can now receive more information on their inboxes.
“A user now has the ability to seamlessly communicate with both email and fax clients simultaneously, and through the desktop email platform using normal Internet email, attached files are delivered to traditional fax machines and vice versa.”
All you need is Internet connectivity. You don’t need a fax machine at a stationary point to receive it.
Businesses operators can now receive faxes for free in their inboxes, ensuring that all communication formats come to one central point.
The faxes will only be received by the intended recipient, ensuring better security and improved confidentiality of faxes.
Stephen Amoanor Kwao, Minister of State at the Office of the President, pledged government commitment to improve the country’s Information and Communication Technology (ICT) sector, emphasising that the technology is fast-growing in the continent.
“Government’s support such investment which would create jobs and grow the economy,” Mr. Kwao stressed.
Friday, November 19, 2010
Ghana’s oil palm blueprint
A new plan is being unveiled in Ghana to raise the nation's competitiveness in oil palm production, unrivalled in the sub-region, as authorities’ quick-start a multi-million oil palm development plan.
Dubbed the oil palm Master Plan, it is expected to boost the nation’s competitiveness in the global commodities market and also enable it to meet the local demand estimated at 295,000 metric tonnes for its manufacturing industry and for local consumption.
Last year oil palm processing groups projected a production output of 260,000 metric tonnes of palm oil which indicates a deficit of 35,000 metric tonnes leaving government with no option but to spend US$100 million annually on the importation of oil palm to compensate for the deficit.
The Master Plan will focus on access to financing, certification, land-use policy, technology transfer, and infrastructure development from the farm to the port, as well as pricing mechanism and marketing.
The policy document will seek to outline set of projects and programmes to be executed within the next 15 years and will become the blue print for the sector’s growth. This is aimed at maximising development outcomes for the communities while supporting smaller businesses, as well as alleviating poverty.
Joseph Baidoo-Williams, Head of Tree Crops Development Unit, Ministry of Food and Agriculture (MOFA) in an interview with BT opines that the development of the plan would make it very easy to attract donor support to enhance palm oil production.
Government has up-to-date spent 2.4 million euros on the oil palm project and is expected to release an additional one million euros on its production by close of 2010.
The country has enjoyed some support from the International Finance Corporation which to date has invested close to US$132 million in palm oil projects in West Africa, Asia, Central America and the Ukraine.
Baidoo-Williams said government has identified the palm oil sector as holding tremendous potential to create jobs and reduce poverty and as such would give the necessary support to enable it to contribute to the development of the economy.
Recent trends in world price suggest that crude palm oil when properly nurtured could easily become a major foreign exchange earner for the country.
The overarching goal for the policy framework is to achieve and sustain macroeconomic stability while placing the economy on a path of higher growth, in order to attain middle-income status by 2020 while also achieving the Millennium Development Goals (MDGs).
It is also aimed at reducing poverty through a pro-poor, export-led growth strategy based on modernizing agriculture and linking it to industry in an emerging oil and gas economy, he said.
Trade analysts say the strategy is timely as Ghana is expected to export 36,000 metric tonnes of palm oil to China next year, following the conclusion of a US$21.6 million deal between Chyuan Chya Ghana Limited and China-Africa Economic Trade Limited.
The oil palm to be exported by Chyuan Chya will mainly be purchased from small and medium-scale smallholder producers across the country
Approximately, 305,700 hectares of oil palm plantation is being cultivated nationwide and an additional 20,000 hectares of oil palm farm is needed to meet the local demand.
Current forecast suggests the ECOWAS sub regional market is being faced with an unmet demand of up to one million metric tonnes.
Malaysia, the country, which took the oil palm seeds away from Nigeria several years ago, is planning to flood the market from its silos in Ghana.
Malaysia, the world’s second largest producer of palm oil, had concluded plans to build silos on Tema Beach, in Ghana.The move by the Malaysians’ to set up a base in Ghana was to further improve its export to the Nigerian market with barrels of palm oil, the shortage of which has hit the country.
Malaysia remains the world’s second-largest exporter of palm oil after Indonesia. The two countries account for 85 percent of global production of palm oil
Baidoo-Williams disclosed that government is supporting the cultivation of 3,000 hectares of small holder farms in the Twifo Hemang Lower Denkyira and the Upper Denkyira and that 1,000 farmers have been supported in these two districts to cultivate 2,300 hectares of farm.
He explained that Twifo Oil Palm Plantation has been contracted by Agriculture ministry as as the technical operators. The company is also expected to purchase the fruits and provide extension services to the farmers.
“Government provides financial support in the form of loans to farmers for maintenance, fertilizers and planting materials. The loans to farmers are channeled through National Investment Bank of which the repayment starts after five years,” Mr. Baidoo-Williams said.
Land area cultivated by the four is barely 30 percent of the national endowment. The rest is either lying fallow or cultivated on subsistence basis by individual smallholder farmers. Oil palm is a crop that provides multiple outputs and it is the only plant whose fruit produces two types of oil- palm oil and palm kennel oil.
Oil is an input in industrial production of non-dairy creams, ice-cream powder, salad dressing, fat spread and chocolate.
The rising trend in international demand has been precipitated by increasing demand for palm oil for bio-fuel purposes.
Crude Petroleum Price determinants continue to push upwards pressure on the price, and demand for Crude Palm Oil (CPO) is steadily rising in India, China, Europe and the America for bio-fuel. In view of this development, investors have been diverting their investment portfolios into CPO.
Ghana’s major producers, Benso Oil Palm Plantation (BOPP) and Twifo Oil Palm Plantation (TOPP), Ghana Oil Palm Development and Norpalm, a Norwegian firm turn out around 80,000 tonnes per annum as against 90,000 tonnes demanded by Unilever alone.
Credit:BT Magazine
Dubbed the oil palm Master Plan, it is expected to boost the nation’s competitiveness in the global commodities market and also enable it to meet the local demand estimated at 295,000 metric tonnes for its manufacturing industry and for local consumption.
Last year oil palm processing groups projected a production output of 260,000 metric tonnes of palm oil which indicates a deficit of 35,000 metric tonnes leaving government with no option but to spend US$100 million annually on the importation of oil palm to compensate for the deficit.
The Master Plan will focus on access to financing, certification, land-use policy, technology transfer, and infrastructure development from the farm to the port, as well as pricing mechanism and marketing.
The policy document will seek to outline set of projects and programmes to be executed within the next 15 years and will become the blue print for the sector’s growth. This is aimed at maximising development outcomes for the communities while supporting smaller businesses, as well as alleviating poverty.
Joseph Baidoo-Williams, Head of Tree Crops Development Unit, Ministry of Food and Agriculture (MOFA) in an interview with BT opines that the development of the plan would make it very easy to attract donor support to enhance palm oil production.
Government has up-to-date spent 2.4 million euros on the oil palm project and is expected to release an additional one million euros on its production by close of 2010.
The country has enjoyed some support from the International Finance Corporation which to date has invested close to US$132 million in palm oil projects in West Africa, Asia, Central America and the Ukraine.
Baidoo-Williams said government has identified the palm oil sector as holding tremendous potential to create jobs and reduce poverty and as such would give the necessary support to enable it to contribute to the development of the economy.
Recent trends in world price suggest that crude palm oil when properly nurtured could easily become a major foreign exchange earner for the country.
The overarching goal for the policy framework is to achieve and sustain macroeconomic stability while placing the economy on a path of higher growth, in order to attain middle-income status by 2020 while also achieving the Millennium Development Goals (MDGs).
It is also aimed at reducing poverty through a pro-poor, export-led growth strategy based on modernizing agriculture and linking it to industry in an emerging oil and gas economy, he said.
Trade analysts say the strategy is timely as Ghana is expected to export 36,000 metric tonnes of palm oil to China next year, following the conclusion of a US$21.6 million deal between Chyuan Chya Ghana Limited and China-Africa Economic Trade Limited.
The oil palm to be exported by Chyuan Chya will mainly be purchased from small and medium-scale smallholder producers across the country
Approximately, 305,700 hectares of oil palm plantation is being cultivated nationwide and an additional 20,000 hectares of oil palm farm is needed to meet the local demand.
Current forecast suggests the ECOWAS sub regional market is being faced with an unmet demand of up to one million metric tonnes.
Malaysia, the country, which took the oil palm seeds away from Nigeria several years ago, is planning to flood the market from its silos in Ghana.
Malaysia, the world’s second largest producer of palm oil, had concluded plans to build silos on Tema Beach, in Ghana.The move by the Malaysians’ to set up a base in Ghana was to further improve its export to the Nigerian market with barrels of palm oil, the shortage of which has hit the country.
Malaysia remains the world’s second-largest exporter of palm oil after Indonesia. The two countries account for 85 percent of global production of palm oil
Baidoo-Williams disclosed that government is supporting the cultivation of 3,000 hectares of small holder farms in the Twifo Hemang Lower Denkyira and the Upper Denkyira and that 1,000 farmers have been supported in these two districts to cultivate 2,300 hectares of farm.
He explained that Twifo Oil Palm Plantation has been contracted by Agriculture ministry as as the technical operators. The company is also expected to purchase the fruits and provide extension services to the farmers.
“Government provides financial support in the form of loans to farmers for maintenance, fertilizers and planting materials. The loans to farmers are channeled through National Investment Bank of which the repayment starts after five years,” Mr. Baidoo-Williams said.
Land area cultivated by the four is barely 30 percent of the national endowment. The rest is either lying fallow or cultivated on subsistence basis by individual smallholder farmers. Oil palm is a crop that provides multiple outputs and it is the only plant whose fruit produces two types of oil- palm oil and palm kennel oil.
Oil is an input in industrial production of non-dairy creams, ice-cream powder, salad dressing, fat spread and chocolate.
The rising trend in international demand has been precipitated by increasing demand for palm oil for bio-fuel purposes.
Crude Petroleum Price determinants continue to push upwards pressure on the price, and demand for Crude Palm Oil (CPO) is steadily rising in India, China, Europe and the America for bio-fuel. In view of this development, investors have been diverting their investment portfolios into CPO.
Ghana’s major producers, Benso Oil Palm Plantation (BOPP) and Twifo Oil Palm Plantation (TOPP), Ghana Oil Palm Development and Norpalm, a Norwegian firm turn out around 80,000 tonnes per annum as against 90,000 tonnes demanded by Unilever alone.
Credit:BT Magazine
Wednesday, November 17, 2010
MASLOC automation expected in 2011
The Microfinance and Small Loans Centre (MASLOC) is to be fully automated by the first quarter of 2011 to enhance disbursement and loans recovery, Mrs. Bertha Ansah-Djan, Chief Executive Officer of MASLOC, has disclosed.
“The Centre had installed new software and trained credit officers to inject professionalism into the centre’s operations.”
The Centre is expected to disburse over GH¢23million for micro-credit on-lending, GHC¢11,500,000 for small loans, GH¢1,000,000 for on-lending to other micro- financial institutions in 2011, and has so far disbursed GH¢3,000,000 to groups and individuals.
Mrs. Ansah-Djan at a media interaction in Accra said: “The new management adopted a multi-faceted loan recovery and prudent approach to salvage the old loans which have yielded 99.5 percent success against the 6.63 percent recovered in the previous administration. Management is committed towards the sustenance of the recovery efforts.
“MASLOC will increase its disbursements to cover all regions and districts throughout the country and continue with the decentralisation of its lending operations,” emphasising that it will continue to encourage groups to form credit unions and inculcate in them a saving culture.
Mrs. Ansah-Djan disclosed that management will roll-out a new scheme to partner a company that is ready to fund the cost of farm inputs, agro-processing machineries and sewing machines for hire purchase by qualified beneficiaries.
“As a result of the new management’s efforts, the threat of MASLOC becoming bankrupt is now a thing of the past; thanks to the commitment of the government,” she remarked.
MASLOC was created under the Office of the President with the objective of supporting government’s programme of sustainable reduction in poverty as indicated under the Growth and Poverty Reduction Strategy, by providing micro-credit and small loans to the productive poor of the population.
MASLOC's facilities are principally targeted at the marginalised productive poor, who fall mostly within the micro-, small- and medium-enterprises sector, which comprises women, the physically challenged and the youth.
As at 2008, approximately 279,000 micro-entrepreneurs had benefitted from the micro-finance scheme.
MASLOC was introduced in 2004 in collaboration with the World Bank, with nine new regional offices launched in September 2006, with seed-money of US$50million towards the establishment of a Micro Credit Fund to provide capital for the country’s micro-finance initiatives.
Under the Scheme, individuals, groups and businesses are eligible to apply for loans between GH¢100,000 and GH¢250,000. Groups need to have a minimum of five and maximum of 25 members to access up to GH¢250,000. Each member of the group could access GH¢10,000, refundable within one year with 10 percent interest.
Other categories which could access loans from GH¢20,000 up to GH¢250,000 attract the going Bank of Ghana prime interest rate.
“The Centre had installed new software and trained credit officers to inject professionalism into the centre’s operations.”
The Centre is expected to disburse over GH¢23million for micro-credit on-lending, GHC¢11,500,000 for small loans, GH¢1,000,000 for on-lending to other micro- financial institutions in 2011, and has so far disbursed GH¢3,000,000 to groups and individuals.
Mrs. Ansah-Djan at a media interaction in Accra said: “The new management adopted a multi-faceted loan recovery and prudent approach to salvage the old loans which have yielded 99.5 percent success against the 6.63 percent recovered in the previous administration. Management is committed towards the sustenance of the recovery efforts.
“MASLOC will increase its disbursements to cover all regions and districts throughout the country and continue with the decentralisation of its lending operations,” emphasising that it will continue to encourage groups to form credit unions and inculcate in them a saving culture.
Mrs. Ansah-Djan disclosed that management will roll-out a new scheme to partner a company that is ready to fund the cost of farm inputs, agro-processing machineries and sewing machines for hire purchase by qualified beneficiaries.
“As a result of the new management’s efforts, the threat of MASLOC becoming bankrupt is now a thing of the past; thanks to the commitment of the government,” she remarked.
MASLOC was created under the Office of the President with the objective of supporting government’s programme of sustainable reduction in poverty as indicated under the Growth and Poverty Reduction Strategy, by providing micro-credit and small loans to the productive poor of the population.
MASLOC's facilities are principally targeted at the marginalised productive poor, who fall mostly within the micro-, small- and medium-enterprises sector, which comprises women, the physically challenged and the youth.
As at 2008, approximately 279,000 micro-entrepreneurs had benefitted from the micro-finance scheme.
MASLOC was introduced in 2004 in collaboration with the World Bank, with nine new regional offices launched in September 2006, with seed-money of US$50million towards the establishment of a Micro Credit Fund to provide capital for the country’s micro-finance initiatives.
Under the Scheme, individuals, groups and businesses are eligible to apply for loans between GH¢100,000 and GH¢250,000. Groups need to have a minimum of five and maximum of 25 members to access up to GH¢250,000. Each member of the group could access GH¢10,000, refundable within one year with 10 percent interest.
Other categories which could access loans from GH¢20,000 up to GH¢250,000 attract the going Bank of Ghana prime interest rate.
Monday, November 15, 2010
Newmont refutes allegations on safety standards
Newmont Ghana Gold Limited says it is committed to operating safely and responsibly in its operations and projects in the country.
“We are committed to the continuous improvement of our health, well-being and safety procedures and standards. Newmont’s first priority remains the safety of our neighbors, employees and contractors.”
Adiki Ofeibea Ayitevie, Regional Manager Communications Newmont Ghana, explained in an interview with B&FT in Accra said: “The health and safety of our employees and our neighbors is of utmost importance and is taken very seriously as part of our business, and we continuously seek to improve our safety practices and methods.
“We regret and are deeply concerned with any fatality or injury that occurs from activities of Newmont employees and our contractors, whether inside the boundaries of our mine areas or outside the operations on public roads or in communities.”
She made this known when reacting to various allegations made by civil society organisations and some community members concerning its environmental health and safety measures in its Ahafo mine project located in the Brong Ahafo Region.
Ayitevie explained that Newmont recognised from the earliest days of the Ahafo project feasibility study that road traffic safety and related accidents in Ghana were amongst the highest in any country where Newmont had previously worked.
“As a result of the initial project risk assessments and the health impact assessment, the company has continuously strived to put measures in place to address road safety risks. These measures include extensive, regular and frequent training for all employees and contractors in addition to numerous efforts with external stakeholders and local communities to increase awareness and improve safety in and around the mine-site area.
“The facilities at Ahafo which contain “dams” or engineered embankments have been designed and constructed to international standards. Similarly, all embankments which are larger than 15 metres in elevation were reviewed by independent engineers during both the design and construction phase. Embankments are also independently audited annually to ensure facilities are operating as designed. To date, no design or operational issues have been identified by any of the independent reviews or audits.”
She mentioned that the Ahafo operation has not had a mine work-related fatality associated with its mine operations since production began in 2006.
However, in a recent report released by the Wassa Association of Communities Affected by Mining (WACAM), a civil society group challenged Newmont Ghana’s safety and health record claiming that 15 fatalities have occurred in the Ahafo mine during its operations in the past five years.
“There have been instances where community people got drowned and died in dams constructed by Newmont Ahafo mine on rivers for its operations, whilst many community people have died or suffered permanent injuries to their bodies when they were knocked down by vehicles belonging to Newmont Ahafo mine or ancillary companies of Newmont.”
Mr. Daniel Owusu-Koranteng, Executive Director of WACAM said: “We call on government to institute investigations into the social, economic, safety, cultural problems associated with the Newmont Ahafo mine for its operations.
“We further call on government to investigate these deaths and ensure that appropriate compensations are paid to the victims and their families.”
The report also makes reference to the standards utilised in the construction of “dams” or facilities at the Ahafo mine.
Newmont Ghana operates for Newmont Mining Corporation, one of the largest gold companies in the world.
It operates the Ahafo Mine in the Brong-Ahafo Region and also has a development project, the Akyem Project in the Birim North District of the Eastern Region, which has an equity reserve of 7.7 million ounces of gold with US$1 billion investment and about 15 years mine life.
The company employs approximately 5,400 employees and contractors, with the majority working at its Ahafo Mine.
.
“We are committed to the continuous improvement of our health, well-being and safety procedures and standards. Newmont’s first priority remains the safety of our neighbors, employees and contractors.”
Adiki Ofeibea Ayitevie, Regional Manager Communications Newmont Ghana, explained in an interview with B&FT in Accra said: “The health and safety of our employees and our neighbors is of utmost importance and is taken very seriously as part of our business, and we continuously seek to improve our safety practices and methods.
“We regret and are deeply concerned with any fatality or injury that occurs from activities of Newmont employees and our contractors, whether inside the boundaries of our mine areas or outside the operations on public roads or in communities.”
She made this known when reacting to various allegations made by civil society organisations and some community members concerning its environmental health and safety measures in its Ahafo mine project located in the Brong Ahafo Region.
Ayitevie explained that Newmont recognised from the earliest days of the Ahafo project feasibility study that road traffic safety and related accidents in Ghana were amongst the highest in any country where Newmont had previously worked.
“As a result of the initial project risk assessments and the health impact assessment, the company has continuously strived to put measures in place to address road safety risks. These measures include extensive, regular and frequent training for all employees and contractors in addition to numerous efforts with external stakeholders and local communities to increase awareness and improve safety in and around the mine-site area.
“The facilities at Ahafo which contain “dams” or engineered embankments have been designed and constructed to international standards. Similarly, all embankments which are larger than 15 metres in elevation were reviewed by independent engineers during both the design and construction phase. Embankments are also independently audited annually to ensure facilities are operating as designed. To date, no design or operational issues have been identified by any of the independent reviews or audits.”
She mentioned that the Ahafo operation has not had a mine work-related fatality associated with its mine operations since production began in 2006.
However, in a recent report released by the Wassa Association of Communities Affected by Mining (WACAM), a civil society group challenged Newmont Ghana’s safety and health record claiming that 15 fatalities have occurred in the Ahafo mine during its operations in the past five years.
“There have been instances where community people got drowned and died in dams constructed by Newmont Ahafo mine on rivers for its operations, whilst many community people have died or suffered permanent injuries to their bodies when they were knocked down by vehicles belonging to Newmont Ahafo mine or ancillary companies of Newmont.”
Mr. Daniel Owusu-Koranteng, Executive Director of WACAM said: “We call on government to institute investigations into the social, economic, safety, cultural problems associated with the Newmont Ahafo mine for its operations.
“We further call on government to investigate these deaths and ensure that appropriate compensations are paid to the victims and their families.”
The report also makes reference to the standards utilised in the construction of “dams” or facilities at the Ahafo mine.
Newmont Ghana operates for Newmont Mining Corporation, one of the largest gold companies in the world.
It operates the Ahafo Mine in the Brong-Ahafo Region and also has a development project, the Akyem Project in the Birim North District of the Eastern Region, which has an equity reserve of 7.7 million ounces of gold with US$1 billion investment and about 15 years mine life.
The company employs approximately 5,400 employees and contractors, with the majority working at its Ahafo Mine.
.
October inflation rate flat at 9.38 %
The Headline inflation rate was flat at 9.38 percent for October 2010, halting the 15th consecutive monthly fall since June 2009, when the rate stood at 20.74 per cent, data released by the Ghana Statistical Service has shown.
October’s rate which stood at 9.38 percent is the same as that of the previous month-September, meaning that the general price level in the country increased by 9.38 percent in October 2010 relative to October 2009.
Magnus Ebo Duncan, Head of Economics and Statistics at the Ghana Statistical Service at a media briefing in Accra explained that although there was a change, it was too small to make any impact in the calculation of the rate.
He explained that current downward pressures on the Consumer Price Index (CPI) were driven generally by both the food and non-food sectors.
The non-food component, which constitutes 55.09 percent exerted much more inflationary pressure with items such as alcoholic beverages, tobacco and narcotic recording (19.39 %), hotels and restaurants (15.70%), housing, water, electricity, gas and other utilities (15.71 %) and Clothing and footwear (14.95%) being the main drivers of the current inflationary. Prices of products in the Communications sub-group remain constant recording zero inflation rate.
The non-food inflation rate has been declining, though still in double digit; falling from 18.79 percent in January 2010 to 11.89 percent in July 2010 before increasing to 12.25 percent in August 2010.
On the other hand, the food and non-alcoholic beverages group, which constitute 44.91 percent of the CPI, had bread and cereals (-3.38%) vegetables including potatoes (3.78 %), and food products (5.46 %) recording inflation rates lower than the group’s average.
The group has been recording single digit inflation rate since January 2010, falling from 9.08 percent to 4.69% in May 2010, before rising to 6.13 % in June 2010.
Meanwhile, the Centre for Policy Analysis insists that the downward trend is likely to cease and inflation rate will start rising.
Analysts have contended that continuous drop reflects the effects of government’s relatively tight fiscal and monetary policies in its fiscal economic management and the stability of the cedi against major trading currencies in the past quarter.
The outlook, as assessed by the Bank of Ghana (BoG), points to lowering inflationary risks, an indication that the real value of money will continue to rise, implying commercial banks should become more willing to reduce lending rates to improve private business growth.
AVOIDING THE BOOM-BUST
Razia Khan of Standard Chartered Bank noted that while early revenues from oil production, due to reach 125,000 barrels a day next year, would be modest, at least Ghanaians could expect to benefit from continued price stability.
"A commitment to a sound macroeconomic backdrop that lessens the likelihood of boom-bust cycles is the best that the authorities can deliver for now," she noted.
Yet some analysts still see scope for a further rate cut. Kobla Nyaletey of Barclays Ghana, saw inflation falling further to close the year at around 8.5-9 percent.
"We see inflation falling in November and December to ... strengthen the case for a further rate cut at the December Monetary Policy Committee sitting," he said.
The figures come a week after Ghana unveiled a long-awaited statistical re-basing of its economy that added over 60 percent to its national output figure by better reflecting recent growth areas such as mobile telephony and banking.
Although purely a statistical readjustment, the re-basing prodded Ghana's annual per capita income above the $1,000 threshold, allowing it to join the World Bank ranking of middle-income countries including Thailand and Ivory Coast.
The International Monetary Fund last month downgraded its expectations of Ghana's oil earnings in 2011 to the equivalent of three percentage points of gross domestic product from an earlier estimate of five percentage points of GDP.
The revenue boost will barely cover the cost of implementing a new pay structure for the country's public sector workers which the IMF calculated would cost the country the equivalent of a minimum 2.5 percent points of GDP.
(With additional files from Reuters)
October’s rate which stood at 9.38 percent is the same as that of the previous month-September, meaning that the general price level in the country increased by 9.38 percent in October 2010 relative to October 2009.
Magnus Ebo Duncan, Head of Economics and Statistics at the Ghana Statistical Service at a media briefing in Accra explained that although there was a change, it was too small to make any impact in the calculation of the rate.
He explained that current downward pressures on the Consumer Price Index (CPI) were driven generally by both the food and non-food sectors.
The non-food component, which constitutes 55.09 percent exerted much more inflationary pressure with items such as alcoholic beverages, tobacco and narcotic recording (19.39 %), hotels and restaurants (15.70%), housing, water, electricity, gas and other utilities (15.71 %) and Clothing and footwear (14.95%) being the main drivers of the current inflationary. Prices of products in the Communications sub-group remain constant recording zero inflation rate.
The non-food inflation rate has been declining, though still in double digit; falling from 18.79 percent in January 2010 to 11.89 percent in July 2010 before increasing to 12.25 percent in August 2010.
On the other hand, the food and non-alcoholic beverages group, which constitute 44.91 percent of the CPI, had bread and cereals (-3.38%) vegetables including potatoes (3.78 %), and food products (5.46 %) recording inflation rates lower than the group’s average.
The group has been recording single digit inflation rate since January 2010, falling from 9.08 percent to 4.69% in May 2010, before rising to 6.13 % in June 2010.
Meanwhile, the Centre for Policy Analysis insists that the downward trend is likely to cease and inflation rate will start rising.
Analysts have contended that continuous drop reflects the effects of government’s relatively tight fiscal and monetary policies in its fiscal economic management and the stability of the cedi against major trading currencies in the past quarter.
The outlook, as assessed by the Bank of Ghana (BoG), points to lowering inflationary risks, an indication that the real value of money will continue to rise, implying commercial banks should become more willing to reduce lending rates to improve private business growth.
AVOIDING THE BOOM-BUST
Razia Khan of Standard Chartered Bank noted that while early revenues from oil production, due to reach 125,000 barrels a day next year, would be modest, at least Ghanaians could expect to benefit from continued price stability.
"A commitment to a sound macroeconomic backdrop that lessens the likelihood of boom-bust cycles is the best that the authorities can deliver for now," she noted.
Yet some analysts still see scope for a further rate cut. Kobla Nyaletey of Barclays Ghana, saw inflation falling further to close the year at around 8.5-9 percent.
"We see inflation falling in November and December to ... strengthen the case for a further rate cut at the December Monetary Policy Committee sitting," he said.
The figures come a week after Ghana unveiled a long-awaited statistical re-basing of its economy that added over 60 percent to its national output figure by better reflecting recent growth areas such as mobile telephony and banking.
Although purely a statistical readjustment, the re-basing prodded Ghana's annual per capita income above the $1,000 threshold, allowing it to join the World Bank ranking of middle-income countries including Thailand and Ivory Coast.
The International Monetary Fund last month downgraded its expectations of Ghana's oil earnings in 2011 to the equivalent of three percentage points of gross domestic product from an earlier estimate of five percentage points of GDP.
The revenue boost will barely cover the cost of implementing a new pay structure for the country's public sector workers which the IMF calculated would cost the country the equivalent of a minimum 2.5 percent points of GDP.
(With additional files from Reuters)
Monday, November 8, 2010
Ghana's economy now bigger,....……worth US$31bn
Ghana has joined the world ranking of middle-income bracket countries, a rebased index of the economy has revealed.
By raising the annual per capita income above the US$1,000 mark, Ghana leaves the Bretton Woods low–income bracket of countries to join the affluent league of countries like Cote’d’Ivoire. This also means that Ghana no longer qualifies for concessionary loans.
According to the index, whose base year is now 2006 instead of 1993, Ghana’s economy will grow by 6.6 percent this year. Government Statistician Dr. Grace Bediako told journalists in Accra on Friday that there has been a significant change in the size of the economy due to the rebasing of the national accounts to capture the realities of the current period.
With 2006 as the new base year, the rebased economy has grown by 60 percent, while the provisional estimate puts per capita Gross Domestic Product (GDP) at US$1,318.36, against the existing estimate of US$753.
The new series places Ghana as the third-largest in ranking of GDP per person in the sub-region – after Cape Verde and Nigeria – and the 21st in Africa.
The services sector has overtaken agriculture - the one-time leader - and now accounts for 51 percent of the economy, while agriculture now accounts for 30.2 percent and the industrial sector, 18.6 percent.
The services sector in 2009 accounted for 49.5% of GDP, with agriculture registering 31.7% while the industrial sector attained 18.6 percent during the period.
The figures released disclose that the provisional GDP estimate for 2010 is valued at GH¢44,798.7million, an increase over the estimated figure of GH¢37,231million for 2009. This translates into a 2010 GDP estimate of about US$31billion.
Rebasing of national accounts series means replacing the old base year used for compiling the constant price estimates to a new and more recent base year.
The new measure reflects growth in areas such as banking and telecommunications, which were fully captured in the rate.
Policy think-tank Centre for Policy Analysis (CEPA), however, contends that the rebasing of the national accounts, which makes Ghana a middle-income country immediately, could have some negative effects on the economy - citing the introduction of new taxes, while existing taxes are more likely to be increased.
The country’s economy had been growing consistently upward over the last decade until 2009 when it slumped to 4.1 percent. From a growth rate of 3.7 percent in 2000, it shot up to 4.2 percent and 4.5 percent in 2000 and 2001, before hitting 4.5 and 5.2 percent in 2002 and 2003 respectively. It hit a record high of 7.3 percent in 2008.
South Africa, which attained middle-income status in 2007, is ranked the biggest economy in Africa with a size of US$467.6billion, followed by Egypt with USS$431.9billion.
Nigeria and Algeria, two oil-producing countries, and Morocco follow suit with economic sizes of US$294.8 billion, US$268.9 billion and US$127 billion respectively.
Sudan, Angola, Libya, Tunisia and Kenya are ranked 6th, 7th, 8th, 9th and 10th respectively with respective economic sizes of US$107.8billion, US$80.95billion, US$78.79 billion, US$77.16billion and US$57.65billion.
By raising the annual per capita income above the US$1,000 mark, Ghana leaves the Bretton Woods low–income bracket of countries to join the affluent league of countries like Cote’d’Ivoire. This also means that Ghana no longer qualifies for concessionary loans.
According to the index, whose base year is now 2006 instead of 1993, Ghana’s economy will grow by 6.6 percent this year. Government Statistician Dr. Grace Bediako told journalists in Accra on Friday that there has been a significant change in the size of the economy due to the rebasing of the national accounts to capture the realities of the current period.
With 2006 as the new base year, the rebased economy has grown by 60 percent, while the provisional estimate puts per capita Gross Domestic Product (GDP) at US$1,318.36, against the existing estimate of US$753.
The new series places Ghana as the third-largest in ranking of GDP per person in the sub-region – after Cape Verde and Nigeria – and the 21st in Africa.
The services sector has overtaken agriculture - the one-time leader - and now accounts for 51 percent of the economy, while agriculture now accounts for 30.2 percent and the industrial sector, 18.6 percent.
The services sector in 2009 accounted for 49.5% of GDP, with agriculture registering 31.7% while the industrial sector attained 18.6 percent during the period.
The figures released disclose that the provisional GDP estimate for 2010 is valued at GH¢44,798.7million, an increase over the estimated figure of GH¢37,231million for 2009. This translates into a 2010 GDP estimate of about US$31billion.
Rebasing of national accounts series means replacing the old base year used for compiling the constant price estimates to a new and more recent base year.
The new measure reflects growth in areas such as banking and telecommunications, which were fully captured in the rate.
Policy think-tank Centre for Policy Analysis (CEPA), however, contends that the rebasing of the national accounts, which makes Ghana a middle-income country immediately, could have some negative effects on the economy - citing the introduction of new taxes, while existing taxes are more likely to be increased.
The country’s economy had been growing consistently upward over the last decade until 2009 when it slumped to 4.1 percent. From a growth rate of 3.7 percent in 2000, it shot up to 4.2 percent and 4.5 percent in 2000 and 2001, before hitting 4.5 and 5.2 percent in 2002 and 2003 respectively. It hit a record high of 7.3 percent in 2008.
South Africa, which attained middle-income status in 2007, is ranked the biggest economy in Africa with a size of US$467.6billion, followed by Egypt with USS$431.9billion.
Nigeria and Algeria, two oil-producing countries, and Morocco follow suit with economic sizes of US$294.8 billion, US$268.9 billion and US$127 billion respectively.
Sudan, Angola, Libya, Tunisia and Kenya are ranked 6th, 7th, 8th, 9th and 10th respectively with respective economic sizes of US$107.8billion, US$80.95billion, US$78.79 billion, US$77.16billion and US$57.65billion.
Ghana's Business reforms hailed
Ghana is the global top reformer in improving access to credit and still, overall, the easiest place to do business in West Africa, the International Finance Corporation, an arm of the World Bank’s 2011Doing Business Report, has revealed.
In the sub-region, Ghana remains overall the easiest place to do business and ranks top in two other indicators - Registering Property and Paying Taxes - the report said.
The report also indicates that Ghana has implemented reforms in Getting Credit, one of the nine indicators of the report and has maintained its overall ranking as the easiest place to do business in West Africa.
It said the establishment of the centralised Collateral Registry and improved credit information and legal rights, through granting an operating licence to a private credit bureau, positioned the country from 77 to 67 - moving up 10 places among countries where doing business is favourable.
Interest rates in Ghana remain high and there are other areas such as infrastructure and the provision of reliable and affordable energy which, while not measured by the Doing Business report, have a direct impact on the overall investment climate and thus the ability of Ghana to develop a true competitive edge in the region and globally.
Banks have long cited a legacy of bad loans as reason for maintaining basic lending rates at anything up to 29 percent - more than double the current 13.5 percent central bank prime rate - despite repeated calls from authorities to ease credit.
The high lending rates have been cited as a drag on the economy, which is due to grow around 6.6 percent this year,
The establishment of the registry is expected to bring down lending rates since the risk factor that is always the concern for the lenders has been automatically addressed
The 2011 Doing Business report, titled ‘Making a Difference for Entrepreneurs’ and eighth in the series of annual reports, ranked 183 economies around the world which have improved the environment for private businesses to thrive and also benchmarked the regulations that enhance business activity and those that constrain it. The data are current as of June 2010.
Launching the report in Accra, acting Country Manager, IFC, Brigid Amoako said:”I am pleased that Ghana implemented reforms in Getting Credit, one of the nine indicators of the report and has maintained its overall ranking as the easiest place to do business in West Africa.
“This year Doing Business 2011 introduces a new indicator - getting electricity. This and the employing workers indicators are not included in the ranking on the on the overall ease of doing business ranking. This report also features cumulative five-year trends of the focus and pace of legal and regulatory reform in the economies surveyed.
“IFC working with SECO has provided advisory support in improving Secured Transactions in Ghana. However, there are clearly opportunities - especially in deepening the products and scope of the financial markets - to ensure that the legal and regulatory framework established by the Borrowers and Lenders Act; the credit reference bureau and the Collateral Registry actually translates into affordable long-term credit for firms, especially the large SME market.”
The rankings also revealed that Ghana made some strong showing in protecting investors ranking 44th out of 183 countries. The rankings also showed that Ghana has shown continued improvement over the past five years in improving the environment for doing business.
Sierra Leone was named as the easiest place to Start a Business and provides the best Protection for Investors; Burkina Faso provides simplified regulations for getting a Construction Permit; Cape Verde tops in Trading Across Borders and Enforcing Contracts; while neighboring Cote d’ Ivoire makes it easiest in legally Closing a Business.
Ghana, which is due to join the ranks of the world's oil producers later this year, was among the world's top-ten fastest-improving business venues, according to the report.
Overall, it ranked fourth in Africa in improving the general business environment after Mauritius, Rwanda and Tunisia.
Since 2005, about 85% of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Among the 30 most-improved economies during those five years, a third are in sub-Saharan Africa - Burkina Faso, Ghana, Madagascar, Mali, Mauritius, Mozambique, Nigeria, Rwanda, Senegal and Sierra Leone.
Governor of the Bank of Ghana, Kwesi Amissah-Arthur who was overwhelmed with the performance, welcomed the country’s new position as a top business reformer in the sub-region, adding that the improvement in business reforms is aimed at growing the country’s business sector.
“It is great news and a positive achievement as far as private business is concern. We are confident it will benefit the stakeholders in both the private and the public sectors to grow the Ghanaian economy,” Amissah-Arthur remarked.
In the sub-region, Ghana remains overall the easiest place to do business and ranks top in two other indicators - Registering Property and Paying Taxes - the report said.
The report also indicates that Ghana has implemented reforms in Getting Credit, one of the nine indicators of the report and has maintained its overall ranking as the easiest place to do business in West Africa.
It said the establishment of the centralised Collateral Registry and improved credit information and legal rights, through granting an operating licence to a private credit bureau, positioned the country from 77 to 67 - moving up 10 places among countries where doing business is favourable.
Interest rates in Ghana remain high and there are other areas such as infrastructure and the provision of reliable and affordable energy which, while not measured by the Doing Business report, have a direct impact on the overall investment climate and thus the ability of Ghana to develop a true competitive edge in the region and globally.
Banks have long cited a legacy of bad loans as reason for maintaining basic lending rates at anything up to 29 percent - more than double the current 13.5 percent central bank prime rate - despite repeated calls from authorities to ease credit.
The high lending rates have been cited as a drag on the economy, which is due to grow around 6.6 percent this year,
The establishment of the registry is expected to bring down lending rates since the risk factor that is always the concern for the lenders has been automatically addressed
The 2011 Doing Business report, titled ‘Making a Difference for Entrepreneurs’ and eighth in the series of annual reports, ranked 183 economies around the world which have improved the environment for private businesses to thrive and also benchmarked the regulations that enhance business activity and those that constrain it. The data are current as of June 2010.
Launching the report in Accra, acting Country Manager, IFC, Brigid Amoako said:”I am pleased that Ghana implemented reforms in Getting Credit, one of the nine indicators of the report and has maintained its overall ranking as the easiest place to do business in West Africa.
“This year Doing Business 2011 introduces a new indicator - getting electricity. This and the employing workers indicators are not included in the ranking on the on the overall ease of doing business ranking. This report also features cumulative five-year trends of the focus and pace of legal and regulatory reform in the economies surveyed.
“IFC working with SECO has provided advisory support in improving Secured Transactions in Ghana. However, there are clearly opportunities - especially in deepening the products and scope of the financial markets - to ensure that the legal and regulatory framework established by the Borrowers and Lenders Act; the credit reference bureau and the Collateral Registry actually translates into affordable long-term credit for firms, especially the large SME market.”
The rankings also revealed that Ghana made some strong showing in protecting investors ranking 44th out of 183 countries. The rankings also showed that Ghana has shown continued improvement over the past five years in improving the environment for doing business.
Sierra Leone was named as the easiest place to Start a Business and provides the best Protection for Investors; Burkina Faso provides simplified regulations for getting a Construction Permit; Cape Verde tops in Trading Across Borders and Enforcing Contracts; while neighboring Cote d’ Ivoire makes it easiest in legally Closing a Business.
Ghana, which is due to join the ranks of the world's oil producers later this year, was among the world's top-ten fastest-improving business venues, according to the report.
Overall, it ranked fourth in Africa in improving the general business environment after Mauritius, Rwanda and Tunisia.
Since 2005, about 85% of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Among the 30 most-improved economies during those five years, a third are in sub-Saharan Africa - Burkina Faso, Ghana, Madagascar, Mali, Mauritius, Mozambique, Nigeria, Rwanda, Senegal and Sierra Leone.
Governor of the Bank of Ghana, Kwesi Amissah-Arthur who was overwhelmed with the performance, welcomed the country’s new position as a top business reformer in the sub-region, adding that the improvement in business reforms is aimed at growing the country’s business sector.
“It is great news and a positive achievement as far as private business is concern. We are confident it will benefit the stakeholders in both the private and the public sectors to grow the Ghanaian economy,” Amissah-Arthur remarked.
Friday, November 5, 2010
IRS to achieve GH¢2.23b target
The Internal Revenue Service (IRS) says it will achieve its target of GH¢ 2.235 billion by close of 2010, B&FT has learnt.
The Service’s half year collection stood at GH¢1,074.70 million against the target of GH¢1,055.89. This represents marginal increase of 1.8 percent.
In 2009, the Service exceeded its targeted revenue collection of GH¢1,554,542,500, representing an increase of 14.4 per cent.
Major (rtd) Daniel Sowah Ablorh-Quarcoo, Commissioner of IRS explained to B&FT in Accra that the completion of the automation exercise expected to be completed within the next 18 months will enhance tax administration, and improve compliance.
“With the completion of the automation system, it will help IRS expand the tax net to reach more people and will also improve efficiency in tax administration and enhance transparency,” he said.
The automation forms part of the e-government project is aimed at extending the national backbone infrastructure to all districts in the country, and provide a national data centre and a secondary data centre facility for disaster recovery capability.
It is also to connect all public institutions and Ministries, Departments and Agencies (MDAs) and Municipal, Metropolitan and District and Assemblies (MMDAs) to a single shared communications and computing infrastructure to facilitate the effective delivery of government services to citizens and businesses amongst others.
The e-government project will computerise the major business processes of registration, assessment, collection and accounts and will also network the Greater Accra on Wide Area Network.
The automated regime will improve access to information, release staff from desk-work to increase field audit capacity, increase in-house communication, and tax client, eliminate duplication and offer transparency.
It will as well improve data availability for efficient revenue forecast, impose standards across the service, intensify and make taxpayer education easy and accessible.
Tax experts have opined that the national revenue agency has failed to achieve success in its revenue mobilisation efforts due to its manual system of operation.
Official figures show that as at 2009, there were 226,760 self –employed registered in the informal sector, but only 53,352 were registered with the IRS and are being assessed to tax.
The Service’s half year collection stood at GH¢1,074.70 million against the target of GH¢1,055.89. This represents marginal increase of 1.8 percent.
In 2009, the Service exceeded its targeted revenue collection of GH¢1,554,542,500, representing an increase of 14.4 per cent.
Major (rtd) Daniel Sowah Ablorh-Quarcoo, Commissioner of IRS explained to B&FT in Accra that the completion of the automation exercise expected to be completed within the next 18 months will enhance tax administration, and improve compliance.
“With the completion of the automation system, it will help IRS expand the tax net to reach more people and will also improve efficiency in tax administration and enhance transparency,” he said.
The automation forms part of the e-government project is aimed at extending the national backbone infrastructure to all districts in the country, and provide a national data centre and a secondary data centre facility for disaster recovery capability.
It is also to connect all public institutions and Ministries, Departments and Agencies (MDAs) and Municipal, Metropolitan and District and Assemblies (MMDAs) to a single shared communications and computing infrastructure to facilitate the effective delivery of government services to citizens and businesses amongst others.
The e-government project will computerise the major business processes of registration, assessment, collection and accounts and will also network the Greater Accra on Wide Area Network.
The automated regime will improve access to information, release staff from desk-work to increase field audit capacity, increase in-house communication, and tax client, eliminate duplication and offer transparency.
It will as well improve data availability for efficient revenue forecast, impose standards across the service, intensify and make taxpayer education easy and accessible.
Tax experts have opined that the national revenue agency has failed to achieve success in its revenue mobilisation efforts due to its manual system of operation.
Official figures show that as at 2009, there were 226,760 self –employed registered in the informal sector, but only 53,352 were registered with the IRS and are being assessed to tax.
Wednesday, November 3, 2010
Oil poses challenge to banking sector - Prof. Badu
The commencement of oil and gas poses a great challenge to the country’s banking sector, Professor Ellis Badu, Member, Board of Directors uniBank Ghana Limited, has said.
Consequently, he has asked banks to position themselves to enable them to participate in the emerging sector.
“Competition in the banking sector is high and requirements by the Bank of Ghana for commercial banks to recapitalise to be able to take on greater risks also stares the sector in the face, while the imminent commencement of oil and gas production also poses a lot more challenge to the banking sector,” he said.
Prof. Badu, who made this known at a dinner in Accra to climax the Bank’s customer appreciation week, said: “uniBank has appropriately geared itself up for any future challenges. We have shown remarkable strength in the face of competition, and we also take pride in the growth of the bank over the years.
“Domestic interest rates continue to fall, but we promise to be competitive so as to retain customer support and grow businesses and to contribute to the development of the entire nation.
“UniBank Ghana Limited, with loyal support, is making giant strides in the banking industry. Our primary focus has been the provision of a comprehensive range of financial services and products to individual customers as well as small and Medium Enterprises (SMEs).”
He revealed that the bank has enhanced its information technology offerings with a biometric ATM aimed at serving the customers better. It also intends to open branches in Tamale, Tarkwa and Madina in its desire to bring banking closer to the doorsteps of the general public.
“Our core values of flexibility, caring, vibrancy and teamwork serve as an anchor point in all. Our vision becomes the leading and preferred Bank, offering comprehensive financial solutions to our chosen customers - SMEs and Personal Banking markets are on course.
“uniBank improved its position from 37 to 32 in the Ghana Club 100 listing for 2009. We have resolved to improve upon our service delivery in order to win more awards and also maintain our position as the best bank in customer care in the industry,” he said.
The Bank’s Managing Director, Mr. Ammishaddai Owusu-Amoah, said: “the customer appreciation week was a medium for engaging with customers on an emotional level to help motivate staff towards achieving and maintaining customer service excellence - which is a key success factor for the bank.
“We are committed to delivering excellent services. We are committed in building the relationship.
“The celebration is an opportunity for the bank to show appreciation to customers and prospective clients for dedicated business all year round, as well as showing gratitude and recognising staff who serve and support customers with the highest degree of care and professionalism.”
The week-long customer appreciation programme was held to deepen relationship with customers and to enable senior management staff to serve as tellers and Customer Service Officers in the banking halls.
It is also a reaffirmation of the Bank’s commitment to ensure customer satisfaction at all times - while boosting the morale, motivation and teamwork of staff to be exemplary customer service ambassadors.
Consequently, he has asked banks to position themselves to enable them to participate in the emerging sector.
“Competition in the banking sector is high and requirements by the Bank of Ghana for commercial banks to recapitalise to be able to take on greater risks also stares the sector in the face, while the imminent commencement of oil and gas production also poses a lot more challenge to the banking sector,” he said.
Prof. Badu, who made this known at a dinner in Accra to climax the Bank’s customer appreciation week, said: “uniBank has appropriately geared itself up for any future challenges. We have shown remarkable strength in the face of competition, and we also take pride in the growth of the bank over the years.
“Domestic interest rates continue to fall, but we promise to be competitive so as to retain customer support and grow businesses and to contribute to the development of the entire nation.
“UniBank Ghana Limited, with loyal support, is making giant strides in the banking industry. Our primary focus has been the provision of a comprehensive range of financial services and products to individual customers as well as small and Medium Enterprises (SMEs).”
He revealed that the bank has enhanced its information technology offerings with a biometric ATM aimed at serving the customers better. It also intends to open branches in Tamale, Tarkwa and Madina in its desire to bring banking closer to the doorsteps of the general public.
“Our core values of flexibility, caring, vibrancy and teamwork serve as an anchor point in all. Our vision becomes the leading and preferred Bank, offering comprehensive financial solutions to our chosen customers - SMEs and Personal Banking markets are on course.
“uniBank improved its position from 37 to 32 in the Ghana Club 100 listing for 2009. We have resolved to improve upon our service delivery in order to win more awards and also maintain our position as the best bank in customer care in the industry,” he said.
The Bank’s Managing Director, Mr. Ammishaddai Owusu-Amoah, said: “the customer appreciation week was a medium for engaging with customers on an emotional level to help motivate staff towards achieving and maintaining customer service excellence - which is a key success factor for the bank.
“We are committed to delivering excellent services. We are committed in building the relationship.
“The celebration is an opportunity for the bank to show appreciation to customers and prospective clients for dedicated business all year round, as well as showing gratitude and recognising staff who serve and support customers with the highest degree of care and professionalism.”
The week-long customer appreciation programme was held to deepen relationship with customers and to enable senior management staff to serve as tellers and Customer Service Officers in the banking halls.
It is also a reaffirmation of the Bank’s commitment to ensure customer satisfaction at all times - while boosting the morale, motivation and teamwork of staff to be exemplary customer service ambassadors.
Career Destinations Summit 2010
Speakers at this year’s ‘Career Destinations Summit 2010’ have called on the country’s tertiary graduates and the youth to equip themselves with relevant career planning skills to enhance their success in the job market.
Participants were also urged to include in their future planning a decision on a career path that would meet the expectations of income, progression and fulfillment.
“The job place today is looking for prospective employees who have technical competence, critical thinking skills, and are team-players with innovations, as well as employees with multi-task management capacity and are computer literate.”
The ‘Career Destinations Summit, organized by CiTi F.M, seeks to provide an informative platform for career advises for tertiary graduates, equip participants with relevant career planning skills for success in the job market and also provide a platform for participant engagement with prospective employers.
Minister of Food and Agriculture, Kwasi Ahwoi making a presentation at the opening of the programme in Accra said: “Government remains committed to creating jobs for the youth as a way of developing a rich resource pool and harnessing much needed human capital to support a rapid socio-economic development.”
He revealed that the public sector employment in the country is dwindling and government refocuses and downsizes its operations and manpower levels.
Mr. Ahwoi indicated that the demand for food security and eradication of poverty has turned the agricultural and agro processing sectors into potential massive job creators as private sector responds positively to government’s interventions.
In 2009, the Youth -In-Agriculture Programme (YIAP) created 47,000 jobs. For 2010 it is creating jobs for 197,000.The YIAP is a programme designed to encourage the youth to take agriculture as a business.
“The prudent macroeconomic policies, structural reforms, and constructive government interventions in various sectors of the economy have led economic stabilization, growth, and a vibrant private sector.
“The country now looks set to enjoy even stronger growth rate when oil production comes on stream in the last quarter of 2010,” Mr. Ahwoi remarked.
Albert Ocran, CEO of Combert Impressions said: “there is the need for a new orientation for graduates and the youth to really learn what is happening in the corporate world in order to be relevant,” emphasizing that job hunting has become an exercise in futility for many”
He advised participants to position themselves as a unique brand in the competitive market place, since the current globalization, information explosion and technology has brought huge competition in the job market.
The recent Ghana Living Standard Survey Five Report revealed that the private sector employs 66.7 percent of employed adults in the country, while the public sector accounts for 28.5 percent.
Within the private sector, formal sector account for 18.9 percent, while 47.8 percent are employed in the informal sector.
The bulk of the country’s employed persons, 81.9 percent work mainly in the three main industry groups namely: agriculture (55.8 percent), trade (15.2 percent), and manufacturing (10.9 percent). The other industry groups account for about 18 percent of the employed population.
Among other speakers at the programme included Robert Ahomka Lindsay, former investment promoter, Ghana Investment Promotion Council, Patrick Awuah, founder, Asheshi University, Martyn Mensah, CEO Kasapreko Limited.
Participants were also urged to include in their future planning a decision on a career path that would meet the expectations of income, progression and fulfillment.
“The job place today is looking for prospective employees who have technical competence, critical thinking skills, and are team-players with innovations, as well as employees with multi-task management capacity and are computer literate.”
The ‘Career Destinations Summit, organized by CiTi F.M, seeks to provide an informative platform for career advises for tertiary graduates, equip participants with relevant career planning skills for success in the job market and also provide a platform for participant engagement with prospective employers.
Minister of Food and Agriculture, Kwasi Ahwoi making a presentation at the opening of the programme in Accra said: “Government remains committed to creating jobs for the youth as a way of developing a rich resource pool and harnessing much needed human capital to support a rapid socio-economic development.”
He revealed that the public sector employment in the country is dwindling and government refocuses and downsizes its operations and manpower levels.
Mr. Ahwoi indicated that the demand for food security and eradication of poverty has turned the agricultural and agro processing sectors into potential massive job creators as private sector responds positively to government’s interventions.
In 2009, the Youth -In-Agriculture Programme (YIAP) created 47,000 jobs. For 2010 it is creating jobs for 197,000.The YIAP is a programme designed to encourage the youth to take agriculture as a business.
“The prudent macroeconomic policies, structural reforms, and constructive government interventions in various sectors of the economy have led economic stabilization, growth, and a vibrant private sector.
“The country now looks set to enjoy even stronger growth rate when oil production comes on stream in the last quarter of 2010,” Mr. Ahwoi remarked.
Albert Ocran, CEO of Combert Impressions said: “there is the need for a new orientation for graduates and the youth to really learn what is happening in the corporate world in order to be relevant,” emphasizing that job hunting has become an exercise in futility for many”
He advised participants to position themselves as a unique brand in the competitive market place, since the current globalization, information explosion and technology has brought huge competition in the job market.
The recent Ghana Living Standard Survey Five Report revealed that the private sector employs 66.7 percent of employed adults in the country, while the public sector accounts for 28.5 percent.
Within the private sector, formal sector account for 18.9 percent, while 47.8 percent are employed in the informal sector.
The bulk of the country’s employed persons, 81.9 percent work mainly in the three main industry groups namely: agriculture (55.8 percent), trade (15.2 percent), and manufacturing (10.9 percent). The other industry groups account for about 18 percent of the employed population.
Among other speakers at the programme included Robert Ahomka Lindsay, former investment promoter, Ghana Investment Promotion Council, Patrick Awuah, founder, Asheshi University, Martyn Mensah, CEO Kasapreko Limited.
Tuesday, November 2, 2010
PwC wants Ghana's 2011 budget to focus on tax uniformity
PricewaterhouseCoopers (PwC)Ghana wants government’s 2011 budget statement to focus on prompt issuance of refunds of taxes paid in excess by companies to state revenue collection agencies, and practical guidance regarding application of provisions in various petroleum agreements to ensure uniformity in the country’s tax system.
Cases of tax refunds occur when companies pay their taxes before production based on projection of profits after production, which sometimes do not materialize.
Other proposals include computerization of tax credit certificate issuance process, consultation prior to passing new tax legislations, consolidation of tax laws into one Revenue Act and streamlining of Value Added Tax (VAT) on imported services, among others.
This is contained in a proposal for consideration by government in formulating the 2011 budget to ensure a transformed approach by state institutions in dealing with concerns of the private sector.
At the 2011 Pre-Budget Forum themed: ‘Dawn of a New Ghana: Creating a Strong Economic Base for Sustainable Growth: The Case for Assuring Stronger Accountability’, Mr. George Kwatia, Partner at PwC, told business executives, private sector operators, policy makers and government officials that the proposals were the expectations and views submitted to the PwC by business entities.
The forum, which was also attended by business analysts and other stakeholders, is an annual event organized by the PwC, which is part of efforts to seek views of interest groups and the private sector when formulating the budget.
“It is the hope of businesses that government strikes out unnecessary elements in the tax structure to avoid instances of refunds which take a long time to be paid,” he said.
Mr. Kwatia argued for the standardization of practices across various offices, issuance and application of practice notes and guidance to allow the same basis of understanding, interpretation and practice of tax laws
This, he said, would address instances where a different state agency gives a different interpretation and meaning to a similar piece of legislation that separate agencies administered in the course of their operations.
Mr. Kwatia revealed that businesses also proposed that upon request or application, the Ghana Revenue Authority (GRA) should, in good time, state its position on contentious matters regarding tax administration.
Mr. Seth Terkpe, Deputy Minister of Finance and Economic Planning, said: “government’s objective is to improve the business environment through adoption of appropriate strategies and implementation of policies that would enhance the growth and development of the country’s economy.”
He indicated that the most sophisticated tax payers do not practice voluntary tax compliance and that the essence of compliance is a fair tax policy for all.
“With the establishment of the GRA, and the automation of the tax agencies, concerns bordering on tax administration would greatly be improved,” he expressed.
Ghana, which joins the ranks of oil producers after it starts pumping oil from the Jubilee Field at the end of the year, is expected to present the 2011 budget to the 230-member legislature next month.
The budget is expected to reflect the revenue management from oil production and show how the government intends to keep tabs on growing spending.
Also, the economy is expecting to achieve tremendous growth next year, since the 2011budget is focused on consolidating and building on the gains of economic stabilization that have been made in the past two years.
The 2009 and 2010 budgets were used to stabilize the economy, which government said was in fast decline.
Cases of tax refunds occur when companies pay their taxes before production based on projection of profits after production, which sometimes do not materialize.
Other proposals include computerization of tax credit certificate issuance process, consultation prior to passing new tax legislations, consolidation of tax laws into one Revenue Act and streamlining of Value Added Tax (VAT) on imported services, among others.
This is contained in a proposal for consideration by government in formulating the 2011 budget to ensure a transformed approach by state institutions in dealing with concerns of the private sector.
At the 2011 Pre-Budget Forum themed: ‘Dawn of a New Ghana: Creating a Strong Economic Base for Sustainable Growth: The Case for Assuring Stronger Accountability’, Mr. George Kwatia, Partner at PwC, told business executives, private sector operators, policy makers and government officials that the proposals were the expectations and views submitted to the PwC by business entities.
The forum, which was also attended by business analysts and other stakeholders, is an annual event organized by the PwC, which is part of efforts to seek views of interest groups and the private sector when formulating the budget.
“It is the hope of businesses that government strikes out unnecessary elements in the tax structure to avoid instances of refunds which take a long time to be paid,” he said.
Mr. Kwatia argued for the standardization of practices across various offices, issuance and application of practice notes and guidance to allow the same basis of understanding, interpretation and practice of tax laws
This, he said, would address instances where a different state agency gives a different interpretation and meaning to a similar piece of legislation that separate agencies administered in the course of their operations.
Mr. Kwatia revealed that businesses also proposed that upon request or application, the Ghana Revenue Authority (GRA) should, in good time, state its position on contentious matters regarding tax administration.
Mr. Seth Terkpe, Deputy Minister of Finance and Economic Planning, said: “government’s objective is to improve the business environment through adoption of appropriate strategies and implementation of policies that would enhance the growth and development of the country’s economy.”
He indicated that the most sophisticated tax payers do not practice voluntary tax compliance and that the essence of compliance is a fair tax policy for all.
“With the establishment of the GRA, and the automation of the tax agencies, concerns bordering on tax administration would greatly be improved,” he expressed.
Ghana, which joins the ranks of oil producers after it starts pumping oil from the Jubilee Field at the end of the year, is expected to present the 2011 budget to the 230-member legislature next month.
The budget is expected to reflect the revenue management from oil production and show how the government intends to keep tabs on growing spending.
Also, the economy is expecting to achieve tremendous growth next year, since the 2011budget is focused on consolidating and building on the gains of economic stabilization that have been made in the past two years.
The 2009 and 2010 budgets were used to stabilize the economy, which government said was in fast decline.
MillwardBrown research inaugurated in Ghana
Mr. Charles Foster, Managing Director, MillwardBrown, Africa says Ghana has enormous pool of marketing research talent which can best serve the needs of the West African market.
He stated that the country’s stable business atmosphere coupled with the prevailing business philosophy has attracted multinational firms.
Ghana has therefore become the 78th host of the company and the 51st country in the world and that Accra will serve as the West African hub office of the research agency which expertise in advertising, marketing communications, media and brand equity research,” Mr. Foster told B&FT after the official inauguration of the company in Accra.
Millward Brown is a leading global research agency specialized in advertising, marketing communications, media and brand equity research. It has been in the business of brands for more than 35 years. The company started in the UK in 1974, it located to South Africa in 1984 and Kenya in 2008.
Mr. Niger Hollis, Chief Global Analyst of Millward making a presentation on the theme: “Winning on West Africa's Brand Battlefields” urged marketers to apply more local understanding, thought and action as cultural diversity increases.
“Companies that have moved too far in the direction of global brand consistency may be ill-equipped to do this.”
“They may have little alternative but to hold their ground as best, they can by leveraging their advantages of scale. But those advantages will need to be significant if they are to stave off competition in developing economies.”
Mr. Hollis indicated that quality and price will not offer an advantage, only effective innovation and marketing combined with local knowledge and insight will make an impact in current competitive market.
He urged marketers to pay much attention to innovation which will allow promising brand to stay ahead of their competition.
“Innovation must be targeted at supporting the brand’s point of differentiation, strong availability and effective communication.
“Promotion of a value brand eventually pays off, rather than the mere reduction of the cost of services by rival brands, which affects quality,” Hollis remarked.
He stated that the country’s stable business atmosphere coupled with the prevailing business philosophy has attracted multinational firms.
Ghana has therefore become the 78th host of the company and the 51st country in the world and that Accra will serve as the West African hub office of the research agency which expertise in advertising, marketing communications, media and brand equity research,” Mr. Foster told B&FT after the official inauguration of the company in Accra.
Millward Brown is a leading global research agency specialized in advertising, marketing communications, media and brand equity research. It has been in the business of brands for more than 35 years. The company started in the UK in 1974, it located to South Africa in 1984 and Kenya in 2008.
Mr. Niger Hollis, Chief Global Analyst of Millward making a presentation on the theme: “Winning on West Africa's Brand Battlefields” urged marketers to apply more local understanding, thought and action as cultural diversity increases.
“Companies that have moved too far in the direction of global brand consistency may be ill-equipped to do this.”
“They may have little alternative but to hold their ground as best, they can by leveraging their advantages of scale. But those advantages will need to be significant if they are to stave off competition in developing economies.”
Mr. Hollis indicated that quality and price will not offer an advantage, only effective innovation and marketing combined with local knowledge and insight will make an impact in current competitive market.
He urged marketers to pay much attention to innovation which will allow promising brand to stay ahead of their competition.
“Innovation must be targeted at supporting the brand’s point of differentiation, strong availability and effective communication.
“Promotion of a value brand eventually pays off, rather than the mere reduction of the cost of services by rival brands, which affects quality,” Hollis remarked.
GCB predicts bouyant outlook
Ghana Commercial Bank (GCB) Limited is confident of a strong overall performance of its outlook which is in line with the general commitment made to grow the bank in the ensuing years.
Simon Dornoo, Managing Director of GCB said: “Our expectation of an improved overall performance for 2010 is unchanged. We expect the interest rate easing cycle to continue, albeit at a slower pace, as efforts are made to stimulate the economy. Business volume growth is expected to be strongest as in the last quarter.”
“We indicated that one of the key focus areas for the Bank is to improve the risk profile of the Bank in order to reduce earnings volatility and achieve sustained bottom-line growth over the long term. Our key metrics on liquidity, assets and capital continue to move in the right direction towards achieving this objective.
“We do not expect further increase in impairment losses for the rest of the year as we work with the government to settle the debt owed to GCB by state-owned Tema Oil Refinery. GCB’s total debt owed by TOR stands at GH¢620, million and out of that over GH¢4,045 million has been paid.”
Mr. Dornoo presenting the bank’s third quarter financial result at a media briefing in Accra explained that the overall performance was an improvement on the previous quarters with a sustained revenue momentum producing improved profitability.
The Bank’s total assets increased by four percent to GH¢1.99 billion, as against the 2009 figure of GH¢ 1.92billion. This was driven by a 12 percent growth in customer deposits to GH¢1.41 billion against the 2009 figure of GH¢1.26 billion.
The growth in deposits came from current and savings accounts products which increased by 13 percent over the period.
Loans to customers decreased by 18 percent to GH¢1.0 billion in line with the bank’s strategy to re-balance the loan portfolio over the medium term.
“We therefore anticipate a further reduction in the size of loan portfolio in the short term as we expect significant loan repayments from the public sector,” he said.
The bank maintained its loan to deposit ratio at 71 percent during the period which reflected in the improved liquidity profile of the Bank.
For nine months period ending September 2010, the Bank recorded a profit before tax of GH¢ 53 million representing an increase of six percent from the 2009 figure of GH¢50 million.
Income for the period to September 2010 was GH¢251.4 million against GH¢ 169.9 million for same period last year representing a growth of 48 percent. This was as a result of improved balance sheet management and further progress made in optimizing risk return trade-offs.
Operating cost of GH¢ 126.5 million for the nine months were 20 percent higher than the GH¢105.6 million recorded for the same period a year ago.
Despite this increase in costs, the Bank recorded an improvement in its operating efficiency with a cost income ratio of 50 percent compared to 62 percent for same period last year.
Impairment were in line with expectations, held relatively flat during the quarter under review.
This resulted in an annualized impairment charge of nine percent against 14 percent at June 2010.
It reflects the increased focus on improving the quality of the loan book. Total impairment charge for the nine months was GH¢71.9 million against 9.9 million in 2009.
“A combination of strong revenue growth and relatively slower cost and impairment growth resulted in an overall improvement in operating profitability,” Dornoo remarked.
Simon Dornoo, Managing Director of GCB said: “Our expectation of an improved overall performance for 2010 is unchanged. We expect the interest rate easing cycle to continue, albeit at a slower pace, as efforts are made to stimulate the economy. Business volume growth is expected to be strongest as in the last quarter.”
“We indicated that one of the key focus areas for the Bank is to improve the risk profile of the Bank in order to reduce earnings volatility and achieve sustained bottom-line growth over the long term. Our key metrics on liquidity, assets and capital continue to move in the right direction towards achieving this objective.
“We do not expect further increase in impairment losses for the rest of the year as we work with the government to settle the debt owed to GCB by state-owned Tema Oil Refinery. GCB’s total debt owed by TOR stands at GH¢620, million and out of that over GH¢4,045 million has been paid.”
Mr. Dornoo presenting the bank’s third quarter financial result at a media briefing in Accra explained that the overall performance was an improvement on the previous quarters with a sustained revenue momentum producing improved profitability.
The Bank’s total assets increased by four percent to GH¢1.99 billion, as against the 2009 figure of GH¢ 1.92billion. This was driven by a 12 percent growth in customer deposits to GH¢1.41 billion against the 2009 figure of GH¢1.26 billion.
The growth in deposits came from current and savings accounts products which increased by 13 percent over the period.
Loans to customers decreased by 18 percent to GH¢1.0 billion in line with the bank’s strategy to re-balance the loan portfolio over the medium term.
“We therefore anticipate a further reduction in the size of loan portfolio in the short term as we expect significant loan repayments from the public sector,” he said.
The bank maintained its loan to deposit ratio at 71 percent during the period which reflected in the improved liquidity profile of the Bank.
For nine months period ending September 2010, the Bank recorded a profit before tax of GH¢ 53 million representing an increase of six percent from the 2009 figure of GH¢50 million.
Income for the period to September 2010 was GH¢251.4 million against GH¢ 169.9 million for same period last year representing a growth of 48 percent. This was as a result of improved balance sheet management and further progress made in optimizing risk return trade-offs.
Operating cost of GH¢ 126.5 million for the nine months were 20 percent higher than the GH¢105.6 million recorded for the same period a year ago.
Despite this increase in costs, the Bank recorded an improvement in its operating efficiency with a cost income ratio of 50 percent compared to 62 percent for same period last year.
Impairment were in line with expectations, held relatively flat during the quarter under review.
This resulted in an annualized impairment charge of nine percent against 14 percent at June 2010.
It reflects the increased focus on improving the quality of the loan book. Total impairment charge for the nine months was GH¢71.9 million against 9.9 million in 2009.
“A combination of strong revenue growth and relatively slower cost and impairment growth resulted in an overall improvement in operating profitability,” Dornoo remarked.
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