Monday, June 27, 2011

Potency of Ghana’s mining and national development

As the nation marks 54 years of attaining independence, the fundamental question still remains: has the mining industry proven to be an effective vehicle for poverty alleviation and sustainable national development? Ekow Essabra-Mensah, our Chief Correspondent, probes.

Although there is agreement on the mineral potential of the country, there is much disagreement about the importance of the contribution of mining to the country’s national economic development.

The debate is even more intense with respect to the contribution of mining activities to poverty reduction efforts, particularly in local communities where mining activities are carried on.

Ironically incidence of poverty is quite high in mining areas apart from the fact that social infrastructure is very poor.

The issue has always been made that over-bloated tax concessions and incentives to investors in the mining sector leave little in the way of retained earnings for visible national development efforts.

Mining companies and their umbrella body, the Ghana Chamber of Mines are trying hard to convince Ghanaians that the companies are contributing significantly to the development of local communities within their operational areas. Various mining companies are carrying out community development projects in mining communities that are delivering measurable results.

However, there is increasing evidence to suggest the contrary. Positive economic impacts of mining activities on communities affected by mining activities are not particularly visible.

The Mining Code is silent on measures that might be required to effectively deliver benefits to local communities directly impacted by mining, to protect the physical environment and, particularly, the rights of vulnerable segments of the population.

There is global consensus that mining and the waste generated from active and inactive mining sites from ore benefication, and their impacts on human health and the environment, are a serious and continuing problem facing government agencies, industry and the general public globally

Recent studies have shown that poverty is pervasive and endemic in mining communities. The main argument is that mining companies are annexing vast lands in their operational areas and depriving communities of their chief source of livelihood.

Rampant dislocations of communities for mining activities have tended to foster poverty among these displaced communities. This arises from poor compensation packages for affected communities. Communities rarely benefit from tax revenue accruing from mining operations in their area.

The Wassa West District of the Western Region of Ghana has the highest concentration of mining and exploration companies in a single location on the African continent hosting eight of the 16 mines currently in operation in the country.

Although poverty is higher at the national level than in the Western Region using all the different measures of poverty, taking into consideration that the majority of the gold exported from this country is produced in the Wassa West District, one would have expected that the poverty levels and income distribution would be lower compared with other districts in the region.

Unfortunately that is not the case. Poverty level in the Wassa West District using any of the poverty measures is higher than that of the Western Region but lower than the national poverty level.

To ensure that mining is carried out in a manner that will cause little or no damage to the environment, government has over the years enacted laws and regulations to ensure that mining is carried out with due regard for safety and environment.

These laws, regulations and guidelines that enjoin mining companies take preventive measures against environmental degradation and pay compensation for lands, farms and properties affected by mining activities.

These laws include the Minerals and Mining Act, 2006 (Act 703), Environmental Protection Agency Act,1994 (Act 490) among others .

If these laws, regulations and guidelines are enforced, the adverse environmental impacts of mining can be prevented or minimized to permissible levels.

Mining, environmental degradation and social problems
The main negative socio-environmental impacts of mining in the country are vegetation destruction and land degradation, air pollution, ground vibration and noise, water pollution and social problems.

The rapid growth of the country’s mining has encouraged the migration of people seeking jobs to the mining areas, creating slums with concomitant health hazards, crime and promiscuity.

“One thing that is worrisome is child labour, by my conservative estimation, more than 2000 children of school-going age are engaged in small-scale mining,” Professor Daniel Mireku-Gyimah, Vice Chancellor, University of Mines and Technology, Tarkwa observed.

Certainly, forest destruction and land degradation constitute a grate financial loss to the indigenes whose livelihood depends on farming. Air and water pollution causes diseases, the curing of which requires extra money.

Over population in mining areas with its attendant crime and promiscuity bring about social problems, the solution of which calls for extra national budget.

It is clear then that unless special attention is paid to environmental problems associated with mining, the cost of solving the problems will far out weight the benefits of mining.

This has constrained employment opportunities in the sector. Indeed the controversy surrounding the appropriateness of government taxation of private business in general is an age-old one which has been aptly captured by a recent World Bank sponsored study on mineral royalties in the mining industry globally:

In matters of mining taxation, governments rarely believe that companies pay too much tax; companies rarely believe that they pay too little tax; and citizens rarely believe that they actually see tangible benefits from the taxes that are paid.

This presupposes that government revenue generation is constrained by the range of capital allowances, list of mining-related equipment and items exempted from customs and import duties, the nonpayment of capital gain taxes, dividend withholding taxes, corporate income taxes, the huge offshore sales revenue retentions and the payment of royalty at the lowest allowable rate.

This results in a less visible contribution of the sector to national economic development. Similarly, the constrained employment capacity of modern mining methods, the increased expatriate staff quotas in the mines and the negative environmental and social impacts of mining activities on local communities have contributed to dwarf the contribution of the sector to national development and poverty alleviation.

One school of thought strongly contends that the industry is contributing substantially to national development and poverty reduction in the country. Mining companies, governmental agencies promoting mining, mining sector consultants, some academics, some government officials and traditional rulers share this opinion.

They argue that the country’s mining sector has been a star performer and plays a cardinal role in the national economy, particularly as a result of policy reforms in the sector since 1986.

They have often pointed to increased foreign direct investment (FDI) flows to the sector, rising annual mineral output and value of mineral exports, increased exploration activities and the threefold increase in the number of operating mines, as compelling evidence to support the sector’s contribution to the national economy.

Statistical summaries on the industry provided by the Minerals Commission give credence to this position. The country now boasts 16 operating mines, six projects at mine development stage and over 150 local and foreign companies with exploration licences, mainly in the domain of gold.

Total mine output for all major minerals mined increased severalfold. Annual gold production increased from 282,299 ounces in 1984 to 2,143,000 ounces in 2005, manganese from 267,996 tons to 1,719,589 tons, bauxite from 44,169 tons to 606,700 tons and diamond from 341,978 carats to 1,065,923 carats, during the same period.

Total annual mineral exports rose from US$115.3 million in 1984 to US$995.2 million in 2005. The sector now accounts for more than 30 per cent of gross foreign exchange earnings.

Gold is the most important subsector, accounting for over 90 per cent of the total value of mineral exports, and recording as much as 95 per cent in 1994 and 1995, largely due to increased gold prices.

Mineral royalties increased from GH¢1.9 million in 1990 to approximately GH¢90 million in 2009.

Data from the Minerals Commission indicate that FDI in the mining sector increased from US$6 million in 1983 to US$427 million in 2007.

The sector had attracted nearly US$6 billion worth of FDI at the close of 2005, accounting for nearly 60 per cent of FDI flows to the national economy during the period.

The mining industry in 2009 also paid an amount of GH¢125 million as corporate tax while GH¢1.7 billion was collected by the Internal Revenue Service (IRS) from the sector.

Mineral revenue for the first quarter of 2010 stood at US$809.89 million - up from US$640.15 million for the same period in 2009.

Socio-economic benefits of mining

The mining industry in Ghana provides employment and social benefits, generates foreign exchange and internal revenue and produces raw materials for local industries.

The industry may be categoried into two, large –scale mining and small-scale mining, depending on the size and mode of operation. So far, the large-scale mining companies have concentrated on mining gold, diamond, bauxite and manganese.

It is estimated that the large scale mining companies have 27,000 direct employees made up of professionals like engineers, scientist, accountants and administrators, artisans like carpenters, electricians, plumbers, machine operators and drivers, and some unskilled labour. The mining industry directly employs about 527,000 people.

The birth of the new mining law

In 2001, the country was obliged to put in place a process to review its code with financial and technical assistance from the World Bank. This time consultants for the review had as their minimum acceptable prototype the codes of Tanzania, Mali, a host of other perceived investor-friendly codes across the globe, and of course, the survey recommendations of Naito and Remy (2000).

The Minerals Commission, said the proposed revised law would reflect new thinking and developments in the global mining industry, and consolidate legislation on both global-scale mining and small-scale gold mining.

According to the World Bank Supervision Mission report: the objective of the review project is to develop an internationally competitive framework that will ensure a strong legal base and a stable and equitable tax regime with fair and clear environmental rules for the continuous development of Ghanaian mining in the next decade.

Minerals Commission has again announced its readiness to complete the new mining policy to guide government in its management of the mining and minerals sector by 2012.

The policy document, soon to be presented to Cabinet for adoption, is currently at its draft stage and when fully operational will define the usage of the country’s mineral resources for national development. The policy was initiated in 1999 and went through various stakeholder consultations and independent review in 2001, now reaching its current final draft stage.

Mr. Benjamin Aryee, Chief Executive Officer of the Mineral Commission - lead promoters of the policy - disclosed to B&FT that it is expected to provide a framework of principles and policies which will ensure that the country’s mineral endowment is managed on a sustainable economically, socially and environmentally accepted standards.

The policy seeks to provide a standard framework for implementation of the various mineral laws in the country.

Outlining the core objectives of the policy at a stakeholder workshop in Accra, he explained that the policy intends to diversify the country’s export base and thereby increase foreign exchange earnings.

It will as well optimise tax revenue generation to support development, generate skilled employment and develop local capacity for the mineral industry, and create demand for local goods and services.

Mr. Aryee said: “In order to achieve these objectives, government recognises that there is a need to establish a clear, comprehensive and forward-looking national policy that will govern regulation and development of the mining sector.

“Government also recognises that the national mining policy must provide for the establishment of an enabling environment for investors, which is based upon modern regulatory arrangements and sufficient attractive terms.

“Whilst seeking to encourage investment, there is also a need to ensure that mineral operations are conducted responsibly. Government considers that neglect of the environment and harm to local communities as a result of mining operations is not acceptable.

“The intention is therefore that the country secures the full economic and social benefits that mining development promises, in an environmentally and socially responsible manner,” Mr. Aryee stated.

Untapped mineral potential

Ghana is endowed with significant mineral wealth. Gold, manganese, diamond, bauxite, limestone, silica salt and salt are being exploited in commercial quantities, with gold representing by far the most important mineral mined. In addition to these, considerable resources of iron and various other industrial minerals exist.

Gold is the predominant mineral that has been produced in the country since 15th century, which explains why the country was originally called the Gold Coast.

Industry chieftains, in calculating its forecasts have taken account of the vast untapped potential of the extractive sector, and expect the value of the mining industry to increase from US$0.64billion in 2009 to US$1.68billion in 2014.

It is already Africa’s second largest producer and exporter of gold, and is among the global top-five in manganese-ore production.

Moreover, with gold being the country’s principal mining asset and prices remaining strong, forecasts for the mining sector are more positive than those of some of its African neighbours.

Ghana containing the second largest area of gold deposits in the African region after South Africa is also counted among the top five nations across the globe for its manganese ore production and is home to some of the biggest names from the global extractive industry: Gold Fields, Newmont Ghana and AngloGold Ashanti, Golden Star Resources among others.

In 2008, overall revenue from the Ghanaian mining sector reached US$2.3billion, an increase of 28 percent year-on- year according to figures released by the Ghana Chamber of Mines in June 2009.

Gold revenues stood at US$2.2billion, with output of 2.6million oz, up four percent year-on-year, selling at an average realised price of US$852 per oz. Manganese revenue was up by a stellar 69 percent, to US$62.34millon, while bauxite revenue was essentially flat, at US$19.81million.

The Chamber of Mines anticipates a mixed year for Ghana’s mining industry, expecting gold to perform well, while bauxite and manganese exports could fall as a result of a decline in demand.

Going Forward

The mining sector should be viewed as an economic “bonus” with which to accelerate structural change rather than as the backbone of the country’s economy.

The long-term outlook for the country’s mining sector is bright, but requires the acceleration of both political, economic and industry reforms to ensure that the mining communities and the indigenes derive the full benefit from the earnings generated by the mining and the extractive sector.

In assessing the implications of the proposed new mining law, no one can question the positive strides relating to increased productivity in the sector.

However, an evaluation of the contribution of the sector to employment creation, to government revenues, net foreign exchange retained in the national economy, and the social and environmental impacts of the upsurge in mining activities, paint a quite different picture.

In spite of concern raised about governance of the mining sector in favour of the poor, and in spite of the adoption of the potentials of the proposed new mining law, the country is still very far from obtaining optimal benefits from its mining sector.

Legalisation of small-scale mining was and remains a laudable policy objective. Yet merely legalising the activity without adequately capturing its fast-evolving and complex social dynamics may prevent the attainment of other social objectives, such as enhancing the potential of the small scale mining sector to contribute to better livelihoods and poverty alleviation.

In conclusion, the country has mineral deposits that can be mined profitably. If the correct methods are used to mine the deposit, employ the best mining practices to prevent or minimize associated environmental damage, and manage corporate social responsibility to improve the socio economic life of the mine local community, then the country can enjoy the economic benefits of mining peacefully.

Now, since the cost of environmental protection and management of corporate social responsibility can be very high, the country must estimate these cost properly as part of any mine feasibility assessment.

If the assessment depicts that the mine is economically viable, then we can mine the deposit; if the assessment shows that the mine is not profitable, then there is no need to mine the deposit.

In this way, the economic controversy posed by the potency of mining and the national development as well as the cost of socio-environmental damage can be resolved and the question of whether after 54 years of nationhood, has the mining industry proved to be an effective vehicle for poverty alleviation and sustainable national development can be answered.

GNCCI congratulates former president Kufuor & Lula da Silva

The Ghana National Chamber of Commerce & Industry (GNCCI) has congratulated Former President John Agyekum Kufuor and his counterpart Brazilian Former President Luiz Inacio Lula da Silva for jointly receiving the 2011 World Food Prize.

In a recent development, former President Kufuor and Lula da Silva jointly inaugurated the Ghana-Brazil Chamber of Commerce and Industry an affiliate of GNCCI in Accra.

Speaking at the ceremony, President Kufuor said that Ghana and Brazil would build solid diplomatic and economic relations for the benefit of the two countries.

“The vision and programmes of Brazilian government aimed at unleashing wealth, reducing poverty and encouraging joint ventures falls in line with Ghana’s development policy frame-work.”

PMMC considers stock listing

Precious Mineral Marketing Company (PMMC) is considering a listing on the Ghana Stock Exchange (GSE) to shore-up its capital and meet the company’s financing needs in the future.

Mr. Henry Ford Kamel, Deputy Minister of Lands and Natural Resources, disclosed this at the 5th Annual General Meeting (AGM) of the company in Accra last week.

He however declined to give any timetable, saying it is a plan that is being discussed by the Ministry.
If the listing occurs, PMMC will be following in the steps of other state-owned enterprises like GOIL which have gone public to raise capital for expansion.

The Deputy Minister praised the company’s success over the years, and his ministry has approved delivery of a bullion-van for the company to enhance its transactions.

Mr. Kwabena Kyere, Board Chairman of the company, said last year was full of challenges for the industry.

He said market liberalisation coupled with internal and external factors as well as competition characterised the operations for gold, diamonds and jewellery.

He said, nonetheless, the company surmounted the challenges by the adoption of new management strategies.

These strategies reflected in the pricing policies, reliability in payments, value-addition, customer service, flexibility, high quality and ethical standards for the jewellery products which are tailor-made to suit the clientele, resulting in positive customer-response to all the marketing initiatives.

“The diversified efforts initiated during the year under review enabled us to respond to these challenges and enabled us to end the year successfully, thereby increasing our income and profits,” he stated.

The company achieved a profit before tax (PBT) of GH¢895,760, representing an increase of 19.71% over the previous year’s result of GH¢748,229.

Turnover increased to GH¢149.4 million, over and above year 2009’s amount of GHC 112.2 million, an increase of 33.20% due to the huge turnover achieved from the gold exports.

Its purchases and exports of gold represented about 12% of national gold output and surpassed the output of all operating mines, with the exception of Goldfields, Tarkwa, Newmont and Ahafo.

Exports of gold, diamonds and jewellery sales generated foreign exchange of US$207million, all of which was repatriated into the country through the banking system.

In order to maintain its position and support growth of the the economy, the company will commission a diamond-polishing plant and start polishing rough diamonds mined locally.

It will develop other local stones for ornament-making by intensifying research, the Board Chairman said.

The company will ensure the implementation of a variety of training programmes to sharpen the skills, knowledge and technical competence of staff to provide for proper succession in the company, and to meet the future human resource needs, he added.

Meanwhile, the company paid out GH¢350,000 as dividend to the government.
This represents an increase of 40% over the previous year’s dividend of GH¢250,000.

Stanbic, Gold Fields sign US$60m loan deal

Stanbic Bank Ghana has closed a US$60million loan deal with Gold Fields Ghana Limited for fleet replacement at the Tarkwa and Abosso mines of the mining company.

The loan facility, which has a lifespan of 3 years, is the single largest transaction closed locally by a mining company in the last couple of years.

Stanbic’s Corporate and Investment banking unit partnered its parent company, Standard Bank, to structure the deal for the mining firm.

Head of Investment Banking at Stanbic Bank, Sam Botwe, said the deal with Gold Fields Ghana is yet another manifestation of the Standard Bank Group’s unique project-financing capabilities.

“This landmark deal underscores the structuring and execution capacity of Stanbic Bank and Standard Bank as a whole. Our vast network in Africa and across the globe enables us to leverage skills and synergies across borders to provide solutions, and connect our clients to resources to move their business forward,” he said.

“The activities of the extractive companies in the country, including Gold Fields Ghana, have put the country on the international commodities market, bolstering the nation’s emerging market growth focus and status,” said Stanbic’s Managing Director Mr. Alhassan Andani.

“There remains enormous potential to develop further and sustain this growth path, and that is where we come in as a financial institution. Stanbic Bank is committed to supporting those crucial sectors of the economy by partnering the right actors to make things happen.”

For his part, Mr. Peter Turner, Executive Vice President of Gold Fields West African Operations, emphasised the importance of the deal to the mining firm’s operations.

“With this facility in place, Gold Fields operations in West Africa have fully matured and will no longer depend solely on shareholder loans for its working capital and future investments.

“Since 2010, the Abosso mine has been working towards “owner” mining. We are confident that the facility will help the Abosso mines realise this objective; we are excited about this partnership,” he said.

Huawei refurbishes UCC ICT lab

Huawei Technologies Ghana Limited has refurbished University of Cape Coast (UCC) Information and Communications Technology (ICT) laboratory.

The company as well presented laptops and desk top computers, which forms part of its project of building a training laboratory centers for some selected universities in the country to promote academic research.

Minister of Communications, Haruna Iddrisu speaking at the ceremony to officially commission the laboratory at Cape-Coast, appealed to the company to consider increasing the number of computers at the laboratory to promote ICT among students.

The Vice Chancellor of UCC, Professor Naana Jane Opoku Agyemang, indicated that the laboratory would assist in improving the knowledge of students in ICT.

Deputy Managing Director of Huawei Technologies, Ms. Diana Ayem, said: “Our universities are the ultimate training centres, hence providing these computer training laboratories will help train and equip our students who are being trained for the future leader.

“Huawei’s vision is to enrich people's life through communication. By leveraging our experience and expertise in telecom sector, we help bridge the digital divide and give people the opportunity to join the information age, regardless of their geographic origin.”

Ms. Ayem added: “Huawei is highly committed to contributing to the sustainable development of the social, economic, health and safety of our environment as well as education.

“Our new venture to build a training lab for some universities has started. University of Cape Coast is the first recipient of this promise. Work has partially started in all the other remaining universities, namely, Kwame Nkrumah University of Science and Technology, University of Development Studies and University of Ghana.

“Our company is technology based and we believe in aiding the people in our society to be well trained and equipped to meet these technological advancements. Our universities are the ultimate training centers, hence citing these computer training labs in the universities will help train and equip the our students who are being trained to be future leaders of our nation. “

Huawei is a leading telecom solutions provider with our products and solutions being deployed in over 100 countries and have served 45 of the world's top 50 telecom operators.

Ghana likely to meet MDG poverty target

The high growth rate in agricultural production in the country has caused a radical decline in poverty and hunger, from 52 percent during the early 1990’s to about 20 percent in 2011.

This makes Ghana, one of the few African countries likely to meet, ahead of schedule, the Millennium Development Goal One (MDG 1) target of reducing poverty and hunger by half, by 2015.

Dr. Tia Alfred Sugri, Deputy Minister of Food and Agriculture (MOFA) in-charge of Livestock, made the observation at the launch of a report on Ghana’s Agricultural Growth in Accra on Thursday.

He commended farmers for being the backbone of the nation’s economy, which has resulted in the lowest food price inflation in 16 years and helped to bring inflation down to around nine percent in 2010.

The report was conducted by the Overseas Development Institute (ODI), a UK-based research think-tank.

Dr. Sugri noted that prior to 1985 overall economic growth in the country was subject to large fluctuations, which were driven by wide annual variations in agricultural growth.

“The consequence was a steady decline in per capita income and a steady increase in the percentage of the population under the poverty line,” he said.

Dr. Sugri said in 2010 agricultural growth alone was 5.8 percent while that of the overall Gross Domestic Product (GDP) was 7.7 percent.

“Indeed, according to the Economist Magazine, Ghana is projected to become the second-fastest growing economy in 2011 with a growth rate of 14 percent, second only to Qatar with a 20 percent growth rate.”

He cited the inability to significantly increase agricultural productivity through commercialisation to meet local and export demands as one of the major challenges facing agriculture in the country.

Dr. Sugri intimated that only 7.7 million hectares (57 percent) out of a total of 13.6 million hectares of agricultural land is currently under cultivation in the country.

He said government is putting in place the needed measures to employ scientifically-based approaches to food production and post-harvest food handling, and increase domestic and foreign direct investment in agriculture.

“Government is also working to produce high volumes of staple and high value non-traditional crops to supply domestic, inter-regional and global markets,” he added.

Dr. Henri Leturgue, Research Officer of ODI, noted that Ghana’s agricultural sector had experienced steady growth due to a stable economy, market liberalisation and improved infrastructure.

He said the economic growth of the country had also stimulated production of vegetables for the domestic market, especially tomato production.

Ghana imports 31,000 tonnes of “toxics”

Official data released by the Ghana Shippers Authority say the country imported 31,400 metric tonnes of used electrical appliances last year, representing 74.6 percent increase compared to the 2009 figure of 17,987 metric tonnes.

The port of Tema handled 72 percent of the total importation, which amounted to 23,623 metric tonnes, while the port of Takoradi handled the remaining 7,768 metric tonnes, representing 28 percent.

According to the data, 17,765 metric tonnes came from the United Kingdom last year, higher than the 2009 figure of 10,659 metric tonnes.

Imports from the North Continent, including Germany, Holland and Denmark, increased from 2,812 metric tonnes in 2009 to 4,830 metric tonnes, while imports from Mediterranean Europe jumped from 2,564 metric tonnes in 2009 to 3,954 metric tonnes during the period.

The data also show that the North America range recorded 1,220 metric tonnes, higher than the previous figure of 949 metric tonnes. The Far East, Africa and others recorded 2,810, 297 and 524 metric tonnes respectively, higher than the previous figures of 786, 98 and 119 metric tonnes.

The second-hand electrical import business is a highly booming sector in the country - both formal and informal. The sector enjoys high patronage from all levels of the societal spectrum in Ghana due to the inability of many Ghanaians to afford brand-new products.

Importers of second-hand goods have repair and refurbishment capacities to handle damaged or outdated equipment. Some importers use their refurbishment capacities also for promotions.

Importers sell electrical appliances and accessories in shops or on the street directly to the general public. It is estimated that there are currently more than 300 importers and distributors of electrical and electronic equipment in the country.

Ghana has an unregulated and unrestricted import regime for second-hand electrical and electronic equipment. In the case of the importation and sale of used air-conditioners, refrigerators, refrigerator-freezers and freezers, there are specific prohibitions in Legislative Instrument (LI) 1932 (2008), but there is lack of enforcement.

Though the Energy Commission this month reiterated a ban on importation of second-hand refrigerators to take effect in December 2012, environmental analysts believe it will take a political effort to enforce the ban since it is not the first time.

But the Executive Secretary of the Energy Commission, Dr. Alfred Ofosu-Ahenkora, says the ban is in compliance with an international directive. He added: “Ghana is signatory to the Montreal protocol which sanctioned the ban.

“The whole world has banned the use of chlorofluorocarbons as a refrigerant. It took effect from January 1 this year and countries that do not comply could be fined by the international community,” he said.

Dr. Ahenkora explained that the second-hand refrigerators imported into the country have an energy component which is not conducive to the tropics.

“Users of such refrigerators pay three times more in electricity consumption than others in other countries who use the newly-efficient refrigerant.”

The Energy Commission, after the ban in 2012, will gradually begin to phase out the use of second-hand refrigerators in the country.

The move is in fulfilment of the Energy Commission’s regulations and will be jointly enforced by other stakeholders including the Ministries of Environment and Science, Trade and Industry and the Environmental Protection Agency.

Meanwhile, a recent report by the London-based Environmental Investigation Agency said British companies are illegally dumping thousands of tonnes of harmful electronic waste such as old computers in West Africa, instead of recycling them.

Taking advantage of a lack of oversight of recycling procedures, a number of waste- management companies are taking unwanted televisions, phones and computers and selling them on to West Africa as goods, especially to Ghana and Nigeria.

“Consignments of such equipment arriving in West African ports are mostly e-waste, with about 75 percent of the electronic units arriving found to be broken," the report said.

“Importers seem willing to bring in containers mostly filled with e-waste because demand for electronics is so high that buyers are prepared to purchase untested items,” it said, adding that half-a-million computers were landing in Nigeria every month.

The Agency said its report is the product of an 18-month undercover investigation of “recycling companies and waste brokers,” focusing mostly on Britain’s southeast.

“The waste is then often dumped in African rubbish tips, then smashed, burned or stripped down by hand by scavengers, many of them young children, to remove sellable parts like copper wires.”

It contains many toxic chemicals, the report said, including “dangerous metals ... flame retardants ... mercury ... (and) large amounts of lead,” so it is likely to be harmful to people living nearby or children who scavenge through dumps.

“The potential health consequences for those involved in this kind of work are dire -- reproductive and developmental problems; damaged immune, nervous and blood systems; kidney damage and impaired brain development in children.”

source B&FT

Friday, June 24, 2011

Ghana's Veep assures Estate developers

The Vice President, John Mahama has assured that all challenges facing real estate developers are receiving the highest attention and have been addressed holistically in the National Housing Policy.

“The Policy has an overall goal of providing adequate, safe decent and affordable housing that is accessible and sustainable with infrastructural facilities, using private sector as the driving force, with government as the facilitator or partner,” Mr. Mahama said.

The Vice President made this known in a speech read on his behalf, at the occasion to officially launch the Regimanuel Gray Limited’s 20th Anniversary Celebration and the outdooring of its 17,000 flagship housing project at the Katamanso in the Tema Districts.

The country’s built industry operators have raised concerns such as access to land, free from all encumbrances, provision of physical infrastructure, access to construction finance and affordable mortgages, requisite support from the statutory planning and enforcement authorities and over reliance on imported building materials.

The country’s housing deficit, according to statistics is currently hitting the one million mark, whereas the annual housing requirement is about 140,000 units, supply figures are about 45,000 units.

The demand for housing which has superseded supply for more than four decades has put a strain on the existing housing stock and infrastructure causing deterioration in housing structures and unsanitary conditions in squatter and slum areas of the urban centres.

The Vice President added that the sector Ministry is working with the Ghana Housing Finance Association to get a Condominium Property Bill passed.

“The Act when in place will provide for the division of buildings into units and common property and provide for individual ownership of those units by issuance of certificates of titles in relation to the units.

“It will also provide for ownership of common property by proprietors of units as tenants in common and for the use and management of the units and common property and for other connected matters.”

He reiterated: “Government abolishing of the general five year tax exemption for real estate developers and that only those companies who partner with government to provide affordable housing will now benefit.”

Mr. Emmanuel Botchwey, Executive Chairman, Regimanuel Gray Limited said: “As is obvious from the range of houses types at our various estates, we strive to cater for the widest range of income groups contrary to the erroneous impression that the company is only interested in the affluent. A large percentage of our customers are public servants who have acquired their houses through mortgage financing.”

He revealed that its latest development is expected to add 500 housing units to the country’s housing stock with an additional 17,000 housing units made up of single family and multifamily houses to be constructed.

“Over the years we have developed an integrated approach to diversify our business and in pursuance of this, we have set up industries which are related to our mainline business of estate development.

The leverage this gives us enables us to control the quality of the materials that are used on our projects and their pricing and this ultimately enhances the value chain.”

He indicated that presently the company has 403 employees on its payroll for its Ghanaian operations and another 100 from the other subsidiaries. There are 143 accredited subcontractors who in their turn employ at least ten artisans each.

“The impact that our activities over the past 20 years have had on the economic lives and housing needs of thousands of families both locally and internationally gives us more gratification. This is our noble service to humanity and country.” Mr. Botchwey said.

Regimanuel Gray Limited was established in 1991 and has become the premier real estate developer in the West Africa Sub Region. Headquartered in Accra, the Regimanuel Gray Group of Companies’ core business is the planning and development of the residential communities.

In addition to real estate development, the Group excels in general construction, civil construction, road construction, building materials manufacturing and management services.

Regimanuel Gray is an international company with Ghanaian, American and international equity partners. Through its subsidiaries, the company is currently active in Liberia and Sierra Leone real estate markets.

The Group has over 500 professionals dedicated to providing the highest caliber of service to clients, providing over 2,500 homes to satisfied customers within many master planned communities and home to 17,500 people.

The company offers a mix of affordable and executive properties to cater for a wide range of prospective homeowners. While historically providing single family dwellings, the company is embarking on the development of multifamily apartment projects to suite the evolving urban markets.

Ghana's producer inflation drops, but still high

Annual producer inflation dropped marginally to 23.80 per cent in May from 24.29 percent in the previous month, the Ghana Statistical Service (GSS) said.

On a month-on-month basis, producer prices rose 0.74 per cent during the month of May, after increasing by 0.63 percent in April.

Despite the drop in annual producer inflation, the rate remains high and suggests industry costs are pacing quite rapidly on a year-on-year basis, with implications for the price-competitiveness of the sector’s output.

On specific industry basis, mining and quarrying inflation declined to 32.6 per cent, down from 37.07 per cent in April. Manufacturing, which contributes more than two-thirds to total industry, saw its inflation rise to 12.42 per cent from 12.22 per cent in April.

Dr. Grace Bediako, Government Statistician, at a media conference in Accra, said the highest year-on-year price change of 71.84 per cent was recorded in the utilities sector, and this has remained unchanged since June 2010.

She indicated that seven out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the manufacturing sector average of 12.42 percent. Manufacturing of papers and paper products recorded the highest inflation rate of 36.41 percent, while manufacture of fabricated metals recorded a negative change rate.

Between October 2009 and December 2009, producer inflation in the manufacture of petroleum products recorded a sharp increase.

Inflation in this industry stabilised for the first two months of 2010, but dropped between March and June 2010.The rate declined in November 2010 after increasing slightly in October 2010.

In January 2011, inflation in the petroleum industry jumped, but since February 2011 the rate has remained stable, recording 26.64 last month.

During the 12-month period from May 2010 to May 2011, producer inflation recorded its highest rate in April this year. Within this period, the rate went up slightly between May and June 2010.

Thereafter, the rate went quite stable until November 2010. From December 2010 to April this year, the rate has been rising steadily, making the May figure the rate’s first dip in a five-month period.

Last month, the Association of Ghana Industries (AGI) said its members continued to face high input costs, taxes and interest rates, ranking them as the top-three challenges to their businesses.

Manufacturers also cited high utility rates as a factor restricting the growth of their enterprises.

But if the initial dip in producer inflation triggers a reverse-trend in the coming months, industry may breathe a respite and ultimately pass on the savings to consumers.

Economy expands by 23%

The country’s economy grew by an annual 23 percent in the first quarter of this year compared to the same period a year ago, latest real Gross Domestic Product (GDP) estimates show.

The increase was due largely to exports of oil and significant improvements in cocoa, mining and quarrying.

The government forecasts oil revenues of US$400 million this year after commercial oil production began last December. This, it expects, will help boost economic growth to around 13 percent this year, from 7.7 percent in 2010.

Oil output is nearing a peak of 120,000 barrels a day, with millions already exported to refineries in Europe.

Addressing a news conference in Accra, Government Statistician, Dr. Grace Bediako, said the quarter-on-quarter estimate of real GDP declined by 5.1 percent in first quarter 2011 - due mainly to seasonal agricultural trends.

She said agriculture shrank by 35.7 percent in the first quarter from the fourth quarter of last year due to seasonal patterns.

“Primarily because of the negative growth in agriculture, we have an overall negative GDP growth in the first quarter [compared to three months before],” she said.

She explained that on quarter-on-quarter basis, industry recorded the highest growth of 21.4 percent among the major sectors.

Within the sector, mining and quarrying rebounded from the previous quarter’s decline with the introduction of crude oil, increasing the subsector’s output by 136.1 percent, while construction output rose by 21.3 percent and electricity by 3.2 percent.

Output of manufacturing and water declined by 7.0 and 1.2 percent respectively, offsetting further increases in the industrial sector’s growth.

Output in the service industries rose by 5.3 percent, mainly due to significant growth in the several subsectors, namely transport and storage, which increased by 11.5 percent; hotels and restaurants, by 17.4 percent; business services, by 19.7 percent; and personal service activities, by 14.2 percent.

Data on the external sector also reveal improving indicators, according to the Bank of Ghana. Total merchandise exports grew 62 percent year-on-year in the first quarter, recording US$3 billion and outpacing growth in imports by some 30 percentage points.

Oil exports were valued at US$484.2 million, while cocoa beans and products earned US$859.4 million, a 26 percent increase year-on-year. Gold receipts came in at US$1.2 billion.

Import expenditure was US$3.3 billion and the trade deficit narrowed to US$284.6 million in the period.

The Government Statistician said judging by historical trends, growth will likely be stronger in the third and final quarters of the year.

Last year, real GDP growth was 7.7%, a strong rebound from 4% growth in 2009. The services sector was the main driver, growing by 9.8%.

Gold Fields approve US$667m acquisition

Gold Fields says it has approved the US$667million acquisition of IAMGOLD Corporation's 18.9 percent stake in the Tarkwa and Damang gold mines.

The transaction, when fully completed by the end of this week, will increase its interest in each of the Tarkwa and Damang gold mines from 71.1 percent to 90 percent, with the remaining 10 percent interest being held by the Government of Ghana.

The decision to buy-out its minority partners in its mines is part of Gold Fields’ strategy to own its operations 100 percent. The acquisition will add 181,000 ounces to the company's annual production -- at current cash cost of US$540 per ounce and notional cash expenditure of about US$940 per ounce.

Senior official of Gold Fields Ghana explained that the purchase will also add a further 2.14 million reserve ounces at a cost of about US$300 per ounce.

“Gold Fields has a target of achieving five million ounces per annum, either in production or in development, by the end of 2015.

“The first phase of the Greater Damang, with 29,000-metre drilling programme continued, with completion expected during the second quarter 2011.

“The drilling covers the entire strike length of this geological complex, to assess the cutback potential of the Huni, Damang and Juno deposits. A model update is expected to be completed in September 2011, incorporating the new drilling assays and geological understanding.”

Gold Fields is one of the world’s largest un-hedged producers of gold -- with attributable annualised production of 3.6 million ounces from eight operating mines in Australia, Ghana, Peru and South Africa.

Gold Fields also has an extensive and diverse global growth pipeline with four major projects in resource development and feasibility, with construction decisions expected in the next 18 to 24 months.

Gold Fields has total attributable gold equivalent Mineral Reserves of 76.7 million ounces and Mineral Resources of 225.4 million ounces.

In addition to its resource development projects, the Greenfields exploration portfolio also consists of three advanced drilling projects, seven initial drilling projects and nine target definition projects in Peru, Chile, Mali, Ghana, Canada, Finland, Kyrgyzstan, Australia and the Philippines. Mine exploration continued at St Ives, Agnew, Damang and commenced at Cerro Corona during the quarter.

Gold Fields is listed on the JSE Limited, the New York Stock Exchange, NASDAQ Dubai Limited, Euronext in Brussels and the Swiss Exchange.

Gold Fields approve US$667m acquisition

Gold Fields says it has approved the US$667million acquisition of IAMGOLD Corporation's 18.9 percent stake in the Tarkwa and Damang gold mines.

The transaction, when fully completed by the end of this week, will increase its interest in each of the Tarkwa and Damang gold mines from 71.1 percent to 90 percent, with the remaining 10 percent interest being held by the Government of Ghana.

The decision to buy-out its minority partners in its mines is part of Gold Fields’ strategy to own its operations 100 percent. The acquisition will add 181,000 ounces to the company's annual production -- at current cash cost of US$540 per ounce and notional cash expenditure of about US$940 per ounce.

Senior official of Gold Fields Ghana explained that the purchase will also add a further 2.14 million reserve ounces at a cost of about US$300 per ounce.

“Gold Fields has a target of achieving five million ounces per annum, either in production or in development, by the end of 2015.

“The first phase of the Greater Damang, with 29,000-metre drilling programme continued, with completion expected during the second quarter 2011.

“The drilling covers the entire strike length of this geological complex, to assess the cutback potential of the Huni, Damang and Juno deposits. A model update is expected to be completed in September 2011, incorporating the new drilling assays and geological understanding.”

Gold Fields is one of the world’s largest un-hedged producers of gold -- with attributable annualised production of 3.6 million ounces from eight operating mines in Australia, Ghana, Peru and South Africa.

Gold Fields also has an extensive and diverse global growth pipeline with four major projects in resource development and feasibility, with construction decisions expected in the next 18 to 24 months.

Gold Fields has total attributable gold equivalent Mineral Reserves of 76.7 million ounces and Mineral Resources of 225.4 million ounces.

In addition to its resource development projects, the Greenfields exploration portfolio also consists of three advanced drilling projects, seven initial drilling projects and nine target definition projects in Peru, Chile, Mali, Ghana, Canada, Finland, Kyrgyzstan, Australia and the Philippines. Mine exploration continued at St Ives, Agnew, Damang and commenced at Cerro Corona during the quarter.

Gold Fields is listed on the JSE Limited, the New York Stock Exchange, NASDAQ Dubai Limited, Euronext in Brussels and the Swiss Exchange.

Enter into active partnership-Ghana's Trade Minister

Local businesses need to enter into partnerships with their foreign counterparts to improve international trade, the Trade Minister has said.

Government has been pursuing the agenda of export-led growth strategy.

“Our commitment to encourage the export sector, improve the competitiveness of our local industries and products as well as the competitiveness of the country as a business destination, is very much complemented by encouraging Ghanaian private sector business people to enter into active and focused engagement with foreign investor counterparts,” Hannah Tetteh, Minister of Trade and Industry, told a Moroccan investment delegation in Accra.

The investment team was on a trade road-show to four African countries seeking partnerships in the areas of agri-business, information and communication technology, among others.

The delegation also met their Ghanaian counterparts to explore ways to deepen bilateral trade ties for the mutual benefit of both countries.

Ms. Tetteh revealed that trade between the two countries is skewed in favour of Morocco and that Ghana requires more efforts to bridge the widening trade deficit.
Ghana’s imports from Morocco on average accounted for goods amounting to US$60million annually, while its exports to the North African country averaged US$3million.

“The two countries need to enhance the level of trade and to identify the best ways through which to link up the business communities, facilitate efforts to develop and grow existing businesses and capacities as well as improve on the livelihoods of their peoples.

“Morocco has remained an important partner of Ghana in both political and trade relations since independence. History shows that our mutual interest and benefit in trade, tradable goods and cultural exchanges have been enduring for centuries,” Ms. Tetteh remarked.

Abdelatif Mazzouz, Morocco’s Minister of Foreign Trade, appealed for the establishment of a convention for the Avoidance of Double Taxation between the two countries, and the activation of the Agreement of the Promotion and the Reciprocal Protection of Investments the two countries signed in 2005.

He said the promotion of a bilateral economic partnership between the two countries requires the involvement of Moroccan and Ghanaian private sector players, and stressed the need for establishment of a legal framework in the fields of air and maritime transport.

“The Kingdom of Morocco gives great importance to the reforms conducted by Ghana, and that the country is a beacon of stability in the region. Its process of democratisation of public life is a model on the African continent.

“Morocco is the second investor on the African continent, with a budget of US$582million in 2010, indicating nearly 91 percent of Moroccan direct investment abroad.

“Almost 56 percent of this investment was carried out within the ECOWAS States, whilst the aggregate Moroccan investments made in the last five years amounted to US$1.7billion,” he remarked.

Friday, June 17, 2011

VODAFONE African Business Leaders Forum launched

One of Africa’s most sought-after business conferences, the newly-christened Vodafone African Business Leaders Forum (ABLF), has been launched in Accra.

Started some eight years ago, the ABLF aims at addressing leadership issues in Africa through creating a conference platform for proactive and practical responses to current challenges.

The 2011 conference, which is in its 7th edition, is under the theme Enhancing Africa’s Business Opportunities through Effective Public-Private Partnerships, and will be held from November 10 to 12, 2011, in the Ghanaian capital, Accra

This year’s forum is being convened to create a platform for African business leaders within and outside the continent to brainstorm on the creation of opportunities out of the misfortunes that have been experienced by the continent over the past several years.

It will seek to advance the need for the pursuit of development and economic transformation for the continent.

ABLF 2011 will engender strategic collaborations between African business leaders on the continent and their compatriots in the Diaspora to revolutionise Africa’s developmental agenda for a massive socio-economic turnaround.

Over the past two or more decades, the continent has shown more dedication to changing its fortunes through improved leadership and sustainable developmental efforts.

The level of progress achieved so far is however a pointer to the fact that a lot more needs to be done.

In its World Economic Outlook Update, the IMF said most countries in sub-Saharan Africa have recovered quickly from the global financial crisis, with the region projected to grow 5½ percent in 2011.

Low income countries, which escaped the worst impacts of the global crisis, are expected to match pre-crisis growth rates of about 6½ percent in 2011. But the recovery in South Africa has been more subdued, restricting projected growth to about 3½ percent in 2011.

Domestic demand in most countries is being supported by automatic stabilisers, expansion in public investment and social support programs, and continued monetary accommodation. Growing trade ties with Asia are also playing a role in the region’s recovery, primarily through commodity markets.

One major concern raised in the report is that rising global fuel and food prices may have a significant impact on Africa in 2011.

While the effects of recent increases in world food prices have so far been small in Africa, because of good local harvests, the urban poor remain very vulnerable to rising food prices because of the high share of food in their consumption baskets.

This may increase pressure for additional support from government budgets.

Mr. Kyle Whitehill, Chief Executive Officer of Vodafone Ghana, said the company is proud to be associated with the forum - as the title sponsor - not because of the commercial opportunity that it provides, but to give back to society as part of demonstrating corporate social responsibility.

“As a corporate citizen in Ghana, we feel the responsibility to facilitate the meeting of some of the greatest minds across the African continent and their compatriots in the Diaspora to collectively discuss and debate a journey of new opportunities and success in the sphere of economic and social development for Africa,” he said.

Mr. Whitehill said strong vision and leadership were necessary to help countries grow and achieve the goals of economic transformation.

Mrs. Edith Dankwa, Executive Director, Business and Financial Times, said: “Over the years, the ABLF has assembled some of Africa’s most remarkable minds to discuss, debate and gain insights needed to achieve excellence in both private and public-sector organisations on the continent.

“ABLF boasts a line-up of notable leadership experts including captains of industry, presidents, professors, researchers and international experts who have made useful and thought-provoking presentations that continue to redefine leadership in Africa.”

She added: “The 2011 forum will seek to advance the need for the pursuit of development and economic transformation for the continent.

The forum is spearheaded by BIA Conferences, a leading pan-African conference-organiser, in partnership with Business and Financial Times, the Ministry of Trade and Industry, the Ghana Investment Promotion Centre and the Business Times Magazine.

The 2011 event will include 20 sessions on leadership learning, one-on-one meetings with African business leaders in Europe, African Women in Leadership workshop, among others.

Thursday, June 16, 2011

AngloGold Ashanti bridges the gap

It’s exactly seven years when the biggest corporate merger between former Ashanti Goldfields of Ghana and the ex- AngloGold of South Africa took place simultaneously in Accra and Johannesburg, Ekow Essabra-Mensah, our Chief Correspondent looks at the economic impact of the merger in the country’s development so far.

AngloGold Ashanti’s (AGA) production performance for the past six years may not be one of the best since the historic merger between the former Ashanti Goldfields and the former AngloGold of South Africa.

Production has been below at 400,000 ounces at Obuasi and costs relatively high compared with its peers, but it s current managers say the problems undermining the old mine is been fixed. It has lost its prestigious position as both costs and production leader, and it is no longer the big elephant the locals called the company in the past.

However, the role of the company in the local and national economy is still respected. The NGOs have been accusing the company of environmental neglect and alleged human right abuses; but for the people in the Obuasi municipality and the surrounding communities, it is business as usual. “We need AGA and the company also needs us, so we have to work together”, Daniel Adisah, a spare parts supplies to the Obuasi mine said.

The banks - Standard Chartered Bank, Agriculture Development Bank, Ghana Commercial Bank, Barclays – are first to acknowledge that they are making brisk business, taking larger volumes of deposits and savings whiles the market women, shopkeepers are also profitably busy with their merchandise, thanks to the mining company.

Created as a result of the combination of assets of the former Ashanti Goldfields of Ghana and the ex- AngloGold of South Africa in April 2004, AGA was seven years old last May, and questions been asked by keen watchers of the mining sector is what significant impact has the merger made on the fortunes of the communities and the people of Ghana.

For freshers who have not been following the mining industry with keen industry, the merger was the biggest corporate event to take place in Ghana in 2004 and it took place simultaneously in Accra and Johannesburg in April/May 2004. In terms of the scheme of arrangement, which consummated the merger, the Ghana Government received 29 AngloGold Ashanti shares for every 100 Ashanti shares, and at the share price of $33, the value of the government stake was valued at $210 million.

In addition, AngloGold Ashanti paid about $98 million to the Government, in respect of the Stability Agreement as follows: 2.6 million AGA shares, valued then at $88 million; $5million Cash and $5 million as advisory fee on behalf of the Government and “given the hosts of risks associated with mining, these payments were genuinely made to secure the comfort and stability of the Company’s current and future investments”’, a mining researcher in Accra explained.

If the Ghana Stock Exchange credits itself as one of the biggest stock markets in Africa, whatever angle one looks at it, AGA certainly takes part of the credit as the exchange is growing at its back. It is one of the renowned multinational companies to be listed on the exchange with an average weight of 65% of the entire market capitalisation of the exchange. It has been on the exchange since 1994.

Its presence on the exchange also has given Ghanaians the opportunity to buy into the company to share in its success and challenges. The government is the seventh biggest shareholder of the company, with 11.2 million of the Company’s total ordinary shares of 362 million, representing approximately 3 % stake.

In addition to the Government, there are 117 Ghanaian ordinary shareholders and about 25, 000 Ghana Depository holders. The government made $221 million from the company when it sold part of its interest in AGA last February to support national development.

The company, for the past years, has repatriated substantial part of its earnings back to the country and has even injected more than US $800 million to support capital and stay - in - business in the two operations in the country.

Admittedly, with unemployment higher in the country, when it comes to provision of jobs, AGA is a leader of job creation as it employs more than 63,000 people worldwide, of which 9000 of them are Ghanaians. This includes its employees at Iduapriem, Obuasi, Accra Corporate Offices and Tema/Takoradi. This makes it the biggest employer in the mining industry, before and post merger.

“We had labour losses in the form of retrenchments and attrition, but we are currently employing directly about 9000 Ghanaians, including contractors working directly for the company. Comparatively, this is more than half of the industry’s direct employees. Indirectly we employ more than 54,000 people,” Mr. John Owusu, General Manager Public Affairs, AGA, told B&FT in an interview in Accra.

Production is certainly low and costs are on the high side, compared with the Goldfields and the Newmonts, AGA continues to pay more dividends and other form of legal exertions since 2004. Mr. Owusu noted that in terms of payments to the government as a regulator and shareholder of the company, since 2004, it has paid over $290 million in direct and indirect taxes as at December 2010. This is made up of royalties, customs duties, dividends, payroll and property taxes.

Social Investments

On the company’s social investments, Mr. Owusu said: “Our job at Obuasi and Iduapriem, like other AGA operations elsewhere, is to explore and mine gold for export. We are also working hand in hand with our business and social partners to move the entire communities around our operations forward in the spirit of our values. We uphold and promote fundamental human rights. We will contribute to building productive, respectful and mutually beneficial partnerships in the communities. We aim to leave the host communities with a sustainable future.”

According to the Public Affairs Manager, to sharpen the skills and experiences of its employees, AGA has carefully selected local and international institutions of higher learning for training and development of its employees and as at the end of 2010, some $9 million had been spent on Ghanaians alones. The employees who have benefitted so far were sent to GIMPA and University of Cape Town Business School.

There are also scores of university and polytechnic graduates, who are undergoing free training in engineering, metallurgy, finance and management, under the Company’s apprenticeship scheme at Iduapriem and Obuasi mines, most of whom were selected from the host communities.”

AGA has built and donated more than 14 schools in the Iduapriem and Obuasi communities, and we were the first to build a hostel for the Komfo Anokye Medical School in Kumasi, which have benefitted hundreds of students, most of whom are medical officers and specialists.

Remote communities, such as Wangarakrom, Adieyie and Abunponiso in the Tarkwa Nsuem area have for the first time schools with teachers partly paid by the mine. The fact is that some of the products of these schools are graduates working as miners, teachers, nurses, civil servants and business people.

At the University of Ghana, AGA has sponsored the Kwame Nkrumah Chair with $400,000 to promote the study and research of contribution of Africa to world civilisation. As part of the chair, the Institute of Africa Studies organises Business lectures on Africa with the company annually.

Possible the company biggest achievement in the health sector is the malaria control programme, which h as ben acclaimed locally and international as a “successful project”. The $3million malaria control programme, dubbed “Obuasi Malaria Control Programme” in 2006 was inaugurated by the former President of Ghana. The objective at that time was to reduce the incidence of malaria by 50% in two years.

Working in partnership with the government, Obuasi municipal assembly and other institutions malaria cases in the Obuasi municipality has reduced by 75%, according to Steve Knowles, Director of the AngloGold Ashanti Malaria Company. Similar malaria project was carried out at Iduapriem communities last year and the results were outstanding.

This has spared thousands of women and children, who would have become victims of the deadly infection. Absenteeism among employees, traders and schoolchildren have significantly reduced impacting positively on the hospital beds in the municipality, Knowles observed.

AngloGold Ashanti has so far solely funded the project with $8.4 million, and in recognition of this success, the the Swiss - based Global Fund has agreed to fund with $133million in 5years, the upscale of the Obuasi project in 40 districts in the country, most of which are located in the three northern regions. Besides the thousands of new jobs, which will be open in these districts, literally thousands of lives will be saved from malaria infection.

AGA health stride does not end with malaria control. In the same vein, working in partnership with the Ministry of Health, AGA has put up the Obuasi Arthur Cade Hospital, which is one of the biggest medical facilities in Adansi districts, as part of the Government’s National Insurance Scheme. Besides the numerous referral cases sent from the mostly ill-equipped private hospitals, operating in the districts, this has created a rare access to thousands of people in the communities, who otherwise lack access to modern medical care.

The Quarterly medical outreach programme launched by the Iduapriem mine in Tarkwa Nsuem Municipal Assembly for the people in its communities, has also saved hundreds of active lives. The outreach drive, besides free medical screening, some token of drugs are given to the people.

At the national level, AngloGold Ashanti was the first to contribute a seed funding of $100,000 for the construction of a neuroscience clinic at Korle-Bu Hospital in Accra, which will be the biggest of its kind in West Africa, after construction.The government hospitals in Obuasi, Bibiani and Tarkwa have all benefitted from substantial donations from the company, which in all way sustained access to modern medical services to the people.

AngloGold Ashanti, as part of its social development has committed itself to sponsor the construction of 20 multi-purpose sports facilities in all the ten regions of the country.

Working in conjunction with the Ministry of Sports and the National Sports Council, the Company is providing $2 million funding.The expectation is that the projects will go a long way, when completed, to uplift sports development in the less - endowed districts in the country. The company owns the Len Clay Sports Stadium and continues to sponsor the Obuasi - based Ashanti Gold Football Club at a fortune.

Ghana Ports trade boom

Ghana, in the first quarter of this year, recorded a total of 4.1 million metric tonnes of maritime trade.

The Ghana Shippers Authority says this was made up of about 3.1 million metric tonnes of imports and 1.0 million tonnes of exports.

A comparison of the 2011 performance to that of 2010 showed an increase of about 21 percent in the total trade as depicted in figure 1.

The port of Tema handled more than 72 percent of the total trade which amounted to about 2.96 million metric tonnes, while the port of Takoradi handled the remaining 1.14 million metric tonnes representing 28 percent of total trade for the period.

Total imports for the review period was 26 percent more than what was obtained in 2010 for the same period. Total exports also increased, by about 9 percent over the 2010 tonnage.

According to the Authority, total transit trade for the review period amounted to 168,978 metric tonnes. This was about 58 percent more than recorded for the same period in 2010. The tonnage for the review period was made up of 160,802 metric tonnes of imports and 8,176 metric tonnes of exports, representing a 16 percent decline.

Total Import for the review period was about 3.1 million metric tonnes. This comprised of 1.4 million metric tonnes of liner items representing 46.84 percent, while 887,109 metric tonnes of dry bulk items represented 28.99 percent and 739,428 metric tonnes of liquid bulk items represented 24.17 percent respectively.

Maritime imports for the review period increased by more than 26 percent from what was obtained in the 2010 period; the same applied to the various types of import trade, with dry bulk import increasing by 17 percent and liquid bulk by 31 percent.

The Authority disclosed that more of the maritime imports for the first quarter came from the Far East and the Northern Europe ranges, each of which recorded 768,515 metric tonnes or 25 percent of total import and 658,882 metric tonnes or 22 percent of total import respectively for the review period.

Imports from the other ranges recorded more than 501,800 metric tonnes or about 16 percent of the total import trade for the review period, followed by the Mediterranean Europe range with 456,891 million metric tonnes representing about 15 percent.

The Africa range recorded more than 419,100 metric tonnes or about 14 percent, with the North American and the UK ranges recording about 7 percent and 2 percent respectively.

The statistics indicated that the total export trade for the review period amounted to about 1.0 million metric tonnes.

This was made up of about 481,043 metric tonnes or 45 percent of liner items, 538,380 metric tonnes (about 51%) of dry bulk items, and 29,014 metric tonnes or about 3 percent of liquid bulk items.

Compared to the same period in 2010, the review period recorded an over-9 percent increase in the total export trade.

The liner trade and the dry bulk trade recorded 4.8 percent and 9.3 percent increases over the 2010 tonnages respectively, while the liquid bulk trade recorded an increase of over 300 percent.

The 1.0 million metric tonnes of maritime exports recorded for the period was shipped to various destinations in the world. The majority of items exported went to the Northern Europe and the Far East ranges.

The Northern Europe range received a total of 397,721 metric tonnes representing 38 percent of total exports, while the Far East range had a tonnage of 389,884 metric tonnes or 37 percent of total export.

The Authority explained that a total of 117,913 metric tonnes, which amounted to 11 percent, was shipped to the Mediterranean Europe range followed by the other ranges which had 42,749 metric tonnes representing 4 percent.

The United Kingdom range recorded 39,635 metric tonnes or 4 percent of the total maritime exports and the North America range received 3 percent (28,735 metric tonnes), while the Africa range received a total of 31,800 metric tonnes or over 3 percent of total maritime export.

The Authority stated that the total transit trade for the period was 168,978 metric tonnes comprising 160,802 metric tonnes of import items representing about 95 percent and 8,176 metric tonnes of export items.

The total transit tonnage was about 59 percent more than last year’s figure. Most of the transit countries recorded increases in their performance, with the neighbouring landlocked countries of Burkina Faso and Niger showing increases of 53 percent and 345 percent in their transit trade while Mali recorded an increase in tonnage (18,438m/t) of 4 percent compared to 2010.

Orthopedic Training Centre is 50

The Orthopedic Training Centre (OTC)-Nsawam, in the Akwapim South District of the Eastern Region, has celebrated its 50th anniversary with a call on government, donor agencies and stakeholders to improve and motivate the lives of the physically challenged to attain their full potential and contribute to the economy.

The OTC was founded in 1961 by Brother Tarcisius de Ruyter, an orthopedic shoemaker, with the main objective of offering rehabilitation to these who unfortunately fall victim to circumstances ranging from road traffic accidents, post-polio infection, occupational and sometimes domestic accidents.

More than 3,000 patients are treated on an annual basis. Last year 290 children were admitted to the centre, with 1,030 polio patients. The Centre also recorded 231 new amputees who were treated, and the causes of their amputation were buruli ulcer, diabetes, osteomyelitis, fractures, snakebites, industrial accidents, home accidents and road traffic accidents, whilst 957 amputees came for review and repair of their artificial limbs.

The Centre as part of its strategy to expand its services to other regions established Mobile Unit in 1965, providing patients an opportunity to see consultants and technicians without travelling too far from their homes. It currently has 39 stations nationwide, registering 3,113 patients and travelling 20,908 kilometers last year.

Co-Director, Elizabeth Newman, speaking at the jubilee celebration, noted that the main objective of the home is to help the children reach their highest potential.

“Even though rehabilitation is the main goal, while they are admitted we offer them opportunities to attend classes and participate in many events and outings.

“A holistic rehabilitation programme that not only teaches the children how to walk, but also offers opportunities to help them develop in the aspects of their lives.

Some of these programmes include education from Kindergarten to Junior High School, skills training for patients, hairdressing, handicrafts, introduction to computer training, as well as assisting some of the patients to establish income-generating ventures.”

She urged government to help in the area of high utility bills, and expansion of its physiotherapy room.

Mr. Herman Wittebrood, Manager, Special Projects, Air Cargo Netherlands, said the 50th Anniversary of OTC is the result of the determination, involvement and unbending belief of the founder - Father Tarcisius.

This has resulted not only in the Centre as it stands, but has also provided the motivation and confidence for others to follow his direction.

He said the importance of the ability to motivate others is so often under estimated, adding that it is only through motivating others that continuation of the OTC activities can be warranted.

Dr. Sophia Winful, Municipal Director of Health Service-Akwpim South District, speaking under the theme “Fifty Years of Assisting the Physically Challenged to Reach Their Potential” said: “The contributions of the OTC are very important, as much as any other healthcare institution in the Municipality and the Country. Vital, in the sense that this institution contributes to the rehabilitation of those who unfortunately fall victim to circumstances.

“It not only re-designs their potential to continue contributing to the economy, it also pre-empts the possibilities of removing the multiplicity of liabilities - ranging from their inability to cater for their families and themselves, to contributing to the country in sustaining and maintaining its Middle Income level status.”

Dr. Winful added: “The collaboration between OTC and the Ghana Health Service is essential and strategic in providing for the poor, underprivileged and the marginalised.

“Government and stakeholders therefore need to increase support to improve and motivate physically challenged people to attain their full potential and contribute to the economy,” she remarked.

Computer Warehouse Group eyes GSE

Computer Warehouse Group (CWG) Ghana is to be listed on the Ghana Stock Exchange (GSE) in the next three to five years as part of its broad strategy to serve the African continent.

“We are really planning to be listed on the GSE in the next three to five years as part of our broad strategy to serve the African continent and to position us of becoming the number one information technology utility company in Africa by 2015.

“This would enable CWG to serve countries in sub-Saharan Africa with results that would transform lives. The company’s listing would as well provide Ghanaian investors the opportunity to share in CWG’s vision and drive, Mr. Austin Okere, Founder and Group Chief Executive Officer, CWG made this disclosure in Accra at a media conference.

He said: “CWG has invested tremendously in technology in the Africa market. As a result, through its highly professional team and cutting-edge technology, CWG has enhanced businesses across the West African region, enabling them to increase their productivity and business output.”

“CWG’s customers can be assured of more improved solutions that will enhance efficiencies in their businesses.

“The company with presence in three African countries- Ghana, Nigeria and Uganda- and provides services indirectly in 17 other countries, last year made a turnover of US$120 million employing approximately 550 persons. ”

Mr. Okere was confident that the pan-African drive of the company would be attained despite the stiff competition and challenges, adding “we have the template that will help us role out faster in the other countries on the continent.”

He urged government s on the continent to provide a structured support to the local industry by encouraging them to focus in areas where they could become major world players.

“Government’s excessive reliance on foreign companies for the provision of some services which local companies could best deliver did not augur well for the growth of entrepreneurship.

“What the Africa continent need is the creation of an enabling environment and a level playing field for entrepreneurs to transform their dreams to build big companies,” Mr Okere said.

Mr. Tony Dadzie, Country Manager, CWG Ghana, said the company had acquired the rights of major players, including Dell and Oracle to offer solutions to clients.

He explained that CWG has grown from being a computer hardware sales company to today becoming one of the leading Systems Integration companies, providing hardware and infrastructure solutions (CWL Systems), to communications and networking solutions (DCC Networks) and software applications and deployment (ExpertEdge Software) across West Africa. As the needs of its growing customers grew across the West Africa region, it was imperative that CWG establish its presence in other West Africa countries.

“Though, a landmark achievement for CWG, the company is committed to furthering its strength across other cities in Africa providing enterprise solutions and enabling more businesses through technology, Mr. Dadzie remarked.

KIA opens new boarding gates

Mrs. Doreen Owusu – Fianko, Managing Director of the Ghana Airports Company Ltd (GACL), has officially opened two new boarding gates at the Kotoka International Airport (KIA) to enhance and upgrade facilities for travellers.

The 3rd and 4th boarding gates, constructed in partnership with Delta Air Lines and Air France KLM, form part of GACL’s effort to make KIA a preferred destination within the sub-region, and also to deepen its business relations with stakeholders.

KLM and Delta Air Lines, as a result of this partnership, will have primary use of these departure gates which have capacity for 170 travellers.

“The pre-financing of 3rd and 4th boarding gates by Delta and KLM is an indication of GACL’s willingness to partner stakeholders to help achieve our vision of making KIA the hub and gateway of the West African sub-region,” said Mrs. Owusu – Fianko at the official opening in Accra.

She commended the two organisations for their strategic partnership in ensuring the speedy completion of the two gates.

“The new departure gates at Kotoka Airport highlight Delta’s ongoing commitment to Ghana with improved airport facilities for our customers,” Bobby Bryan, Delta’s Sales Manager for West and East Africa, stated.

“As the leading carrier to the U.S. from Ghana, we offer our passengers non-stop services to the United States, boosting travel and tourism between our two nations and increasing travel choice for Ghanaians with flights to the two U.S. gateways.”

Delta operates a four-time weekly service from Accra to New York, which became an overnight service from 1st June, using a 216-seat Boeing 767-300ER aircraft. In addition, Delta also offers three times weekly service between Accra and Atlanta.

Air France - KLM’s Regional Manager for Ghana, Liberia & Sierra Leone, Jack Urlus, said “KLM is proud to have partnered with GACL and Delta Air Lines to offer improved service for our passengers. With the daily KLM Boeing 777-200 operation, accommodating 35 world business class and 283 tourist passengers from Accra to Amsterdam, this dedicated gate will aid in the smooth processing of its passengers and reduce the boarding waiting time.”

There will be a dedicated area for KLM's Economy Comfort passengers at the gate, whilst Business Elite, World Business Class passengers and Flying Blue Elite members can still use the facilities of the Akwaaba lounge.

Delta recently announced the introduction of a premium economy product, “Economy Comfort”, in summer 2011, as well as the roll-out of full flat-bed seats on the international wide-body fleet over the coming months. This forms part of a $2 billion investment to enhance airport facilities and global products and services, including new international terminals at New York-JFK and Atlanta airports.

Delta Air Lines serves more than 160 million customers each year. With an industry-leading global network, Delta and the Delta Connection carriers offer services to 356 destinations in 65 countries on six continents. Headquartered in Atlanta, Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft.

GACL was incorporated in the year 2006 and commenced operations in January 2007 and has been entrusted with the responsibility for developing, managing and maintaining all airports in Ghana including the three domestic airports, namely Kumasi, Tamale, Sunyani as well as various airstrips in Ghana.

The aviation industry in Ghana has experienced steady, if not phenomenal, growth in recent years. The number of scheduled airlines operating to and from Ghana has increased from 13 in the 1990’s to 30 in 2010. Passenger traffic has also seen a significant increase since the beginning of the decade. The airport serviced 1,430,431 passengers in 2010 to about 26 destinations (point to point).

Air France and KLM Royal Dutch Airlines merged in May 2004, becoming AIR France-KLM, the largest airline group in Europe and one of the largest in the world, carrying more than 71 million passengers per year. Air France and KLM operate independently from their respective hubs in Paris and Amsterdam, but are working closely to coordinate their operations, both as sister companies and as members of the SkyTeam alliance.

Vodafone educates media on number portability

Vodafone Ghana has organised a Mobile Number Portability (MNP) seminar for journalists as part of its education programme on MNP, and to demonstrate support for its launch in July.

Vodafone Ghana is working closely with the National Communications Authority (NCA) and other Ghanaian operators to progress the successful launch of MNP in the Ghanaian market.

It is also actively collaborating with these partners to develop and agree on an aligned communication and education framework that will ensure that the MNP process is publicly communicated in a comprehensible and consistent manner.

Mr. James Wild, MNP Programme Manager for Vodafone Ghana, speaking at the seminar, said: “Vodafone has made significant progress in its preparations for the implementation of MNP, having finalised its business and operational processes.

Vodafone Ghana is progressing well with its inter-operator testing, and the company’s routing platform and porting system have both been installed and are currently undergoing final testing.”

Mr. Wild indicated that the company has invested in staff training to equip them with the requisite skills in readiness for the launch of MNP.

He further disclosed that Vodafone is taking progressive measures to ensure that the porting experience for its customers is positive, simple, consistent and robust.

This objective has been demonstrated in Vodafone’s proactive decision to not charge customers for porting into the Vodafone network, by bearing the cost of porting and paying all porting charges for customers, he said.

Vodafone has further reinforced its commitment and support for MNP through its significant investment in automated porting systems which will ensure a consistent, quick and positive porting experience for all customers, whether they are porting into or out of Vodafone.

Mr. Bob Palitz, a consultant to the National Communications Authority (NCA), said: “It is very important to set consumer-friendly rules from the beginning. Although the technology involved and the implementation are complex, most country’s implementing MNP use similar technologies, but it is the MNP business rules and processes that are developed by the stakeholders that will make the difference between success and failure.”

Carmen Bruce Annan, Head of Corporate Communications, Vodafone Ghana, revealed that Vodafone is in full support of the launch of MNP and understands the positive impact the initiative will have on the Ghanaian mobile market.

“We recognise the importance of MNP in increasing competition amongst telecom operators in the country, which ultimately gives consumers the freedom to move to the service provider of their choice. At Vodafone, we believe that this will provide consumers with the opportunity to join and experience the Vodafone network and its amazing offers. There is no better time to join the Vodafone family,” Annan remarked.

The General Secretary of the Ghana Journalists Association, Mr. Bright Blewu, commended Vodafone on its initiative in demonstrating the company’s support for the launch of MNP.

Mr. Saqib Nazir, CEO of Porting Access Ghana, asserted that his company is strategically positioned and committed to making the porting experience of Ghanaians fast and reliable.

“We are working hand in hand with Vodafone, telecommunications operators in general, and the NCA to ensure that the process is a smooth and seamless one,” he said.

Ghana gov’t hedges oil output at US$107/barrel

Minister of Finance, Dr. Kwabena Duffuor says the country is hedging 100 percent of the state share of the country's oil production at US$107 per barrel from May to December, 2011.

It was also hedging about 50 percent of its purchases of crude oil, much of it used to produce fuel at the state-run Tema Oil Refinery, but did not say at what price
The hedge protects the country from declines on the world market price, but also prevents it from benefiting from a sustained increase.

“The hedging position are not designed to make speculative profits, rather to ensure that the country’s economy attain stability.

“I want to emphasize that our risk management programme is primarily an insurance programme, we would buy protection to ensure that over a reasonable period of time, we have a predictable maximum price for our consumption and a predictable minimum price for our export.” Dr. Duffour made this known at the inauguration of the National Risk Management Committee established by the President, John Evans Atta Mills to develop overall risk management policies for government.

.Ghana began commercial oil production in December 2010 with the start up of the offshore Jubilee field, which is running at around 70,000 bpd and could reach a target 120,000 bpd by July.

The GNPC has a 13.75 percent revenue share entitlement in the field, operated by U.K. energy firm Tullow, along with government royalty rights.

The country has so far sold two cargoes of about 1 million barrels of oil each, representing its accumulated share of Jubilee's production since start-up.

The most recent cargo, which settled June 1, was expected to bring in $108 million in revenue to the state, GNPC said in a press release . The cargo was bound for a Total refinery in France and was priced as a differential to London's Brent crude.
Risk Management Committee
The committee would also be tasked to approve and implement monitoring systems, that would ensure that adequate controls are in place whilst it also report regularly to Cabinet on ongoing risk management activities.

The committee would as well ensure that the public is adequately informed about the risk management policies and activities of government.

Dr. Duffour revealed that the Committee would be supported by a technical team that has already been established at the Ministry of Finance and Economic Planning to handle day-to-day operations of the committee.

He added that the country’s economy has been heavily dependent on commodities both as a producer and consumer.

“The unpredictability of commodity prices has historically been a major source of instability in our economy and that the major risk associated with an economy that is heavily dependent on commodities is price risk.

“The hedging protects the exporter from declines on the world market price, but also prevents it from benefiting from a sustained increase.”

Chairman of the Committee, Sam Appah, thanked government for the establishment of the Committee and pledged to work toward the development of the country.
Members of the committee include, Alex Mould head of National Petroleum Authority, Kwaku Awotwe, head of Volta River Authority, Nana Oduro Owusu also head of Cocoa Marketing Company.

Others are Nana Asafu Adjaye, head of Ghana National Petroleum Corporation, Steve Opata, representative from Bank of Ghana, Thomas Akabzaa, Chief Director-Ministry o Energy, Dorothy Afriyie-Ansah, representative from Attorney General’s Department and Ms. Yvonne Quansah, Ministry of Finance and Economic Planning.

300,000 jobs expected from ICT Park

Minister of Communication, Haruna Iddrisu, says the US$10billion ICT Park when fully operational is expected to provide between 100,000 and 300,000 jobs.

The objective of the ICT Park is therefore to stimulate ICT start-ups and promote the growth of technology-intensive, knowledge-based businesses in the country.

The benefits of the Park include technology development and diffusion, stimulating the formation of new technology-based firms and the growth of existing technology-based firms, as well as facilitating the growth of SMEs. It will also spin off firms started by academics, thereby helping to commercialise academic researches.

The Park is to be located in the Tema Freezone enclave and will be developed in phases using the Public-Private Partnership model in collaboration between Micro, Small and Medium Enterprises (MSME) and the Ministries of Trade and Industry and Communication.

It seeks to stimulate the private sector to invest in the provision of technology parks and other ICT infrastructure that provide the fuel for building wealth and job opportunities.

At a stakeholders’ workshop aimed at reviewing the draft drawings and designs of the ICT Park’s master-plan in Accra, Mr. Iddrisu said: “The ICT Parks worldwide played a critical role as intermediaries which supported knowledge-based economies and that they will become legacies for the country.”

He explained that the country has the potential to emerge as a major ICT-hub in the sub-region, adding that “we need more matured technology industries to thrive.
“One of the best ways to achieve this is to grow and enhance technology skills and knowledge in the country.”

Mr. Iddrisu indicated that the ICT industry has been identified as one of the sectors that can enhance economic growth by creating opportunities of employment to absorb the abundant talent pool and at the same time generate new and thriving partnership in the country.

He added that the IT-Enabled Services Secretariat under the e-Ghana Project has been specifically tasked to create a vibrant private sector/entrepreneurs and also attract and retain ITES/BPO foreign direct investment in the country.

“It is also expected that this will further increase employment in the ICT/Information Technology-Enabled Services/Business Process Outsourcing by attracting firms in the ICT Park.

“Besides the development of the ICT Park in Tema, government is also seeking funding for a proposed ICT Park in Cape Coast in the Central Region, which will be replicated in future in other regions to enhance the growth of the ICT industry.”

Mr. Iddrisu commended the support of the World Bank to the ICT project and also the members of Garland Ormond International of Ireland for their commitment to development of the first ICT technology park in the country, the benchmark of which is up to global standard.

Tullow likely to double revenue

Jubilee Oil partner Tullow Oil plc says it is likely to double its revenue this year from last year’s US$1.1billion, as first production from Jubilee Field feeds through into results.

“I can’t put an absolute figure on it, but because of oil prices being at level they are, and increase of production from Jubilee Field, it will have significant impact on our revenue this year,” Chris Perry, Head of Investor Relations, told Business and Financial Times.

Tullow expects capital expenditure for 2011 to be in the region of US$1.5billion (€1billion) as it ramps up production at the Jubilee Field.

In April this year, Tullow increased its reserves-based lending facility by US$500million to US$3.0billion and said it now has total debt facilities of US$3.65billion.

Last month it announced a conditional agreement to pay US$305m in cash and shares to acquire Ghana’s EO Group.

The deal increases Tullow’s shareholding in Jubilee, which is expected to reach “plateau production” of 120,000 barrels per day in July, by rising 1.75 percent to 36.5 percent.
In fulfilling an earlier promise to offer locals the opportunity to invest in exploration of the country’s oil finds, Tullow has opened its offer for 4,000,000 shares to be listed on the Ghana Stock Exchange (GSE) at an offer price of 31 Ghana cedis per share.

The offer price represents a 2.57 percent discount to the closing price of the UK shares on the last trading day prior to the announcement of the flotation price.
It is expected that admission of the offer to the GSE will take place on July 27, 2011. The offered shares represent approximately 0.45 percent of Tullow's existing issued ordinary share capital.

“This listing and share-offer further demonstrates Tullow’s long-term commitment to Ghana,” said Paul McDade, Tullow’s Chief Operating Officer.

“We have strong indications that there's high investor interest. We are hoping it’ll go well and be oversubscribed.”

Stock analysts also expect the offer to be oversubscribed - not mainly due to heavy demand for the shares of the oil exploratory firm, but largely on the back of the relatively low number of shares available on offer.

But Derrick Mensah - Analyst, Corporate Finance & Research, SIC Financial Services Limited - believes local institutional investors such as Social Security and National Insurance Trust (SSNIT) could easily mop-up the entire offer.

“International investors with the financial muscle are likely to be on hand to push demand up considerably, since they can easily buy the shares relatively cheaper on the Ghanaian market and sell at a higher price on either the London Stock Exchange or Irish Stock Exchange,” Derrick said.

In Africa, Tullow has production in Ghana, Gabon, Côte d'Ivoire, Mauritania, Congo (Brazzaville) and Equatorial Guinea with two large appraisal and development programmes in Ghana and Uganda. Tullow also has exploration interests in Gabon, Côte d'Ivoire, Liberia, Sierra Leone, Mauritania, Senegal, Tanzania, Madagascar, Namibia, Kenya and Ethiopia.

Timetable for share offer
Date Time in Ghana
Commencement of Offer Period 13 June 2011 9am
End of Offer Period 04 July 2011 5pm
Application Forms review for allotment commences 05 July 2011 9am
End of allotment and submission of results to the SEC 18 July 2011 5pm
Crediting of Tullow Shares to successful applicants 22 July 2011 5pm
Commence dispatching letters to successful applicants 25 July 2011 9am
Secondary Listing of all Tullow Shares. First day of trading on GSE. 27 July 2011 10am
Source: Tullow Oil plc