Friday, April 27, 2012

Producer inflation surges to 16.3%

Mining and quarrying prices continue to drive year-on-year producer inflation, causing it rise to 16.3% in March from 16.1% in February, latest official figures have shown. “Based on the revised figures for February 2012, the year-on-year producer inflation rate for March 2012 was 0.2 percentage points higher than that of February 2012. “The mining and quarrying sub-sector recorded the highest year-on-year producer inflation rate of 31.5%, followed by manufacturing with 15.6% and utilities registering the lowest rate of 9.5%,” said acting Government Statistician, Dr. Philomena Nyarko, at a media briefing in Accra. Dr. Nyarko explained that the producer inflation rate in the mining and quarrying sub-sector dropped by 7.8 percentage points to 31.5 % relative to the rate recorded in February 2012 (39.3%), mainly on account of a decrease in gold prices on the world market. The rate for manufacturing in March 2012 was slightly higher than that for February 2012 by 1.4 percentage points. Dr. Nyarko said the slight increase in the manufacturing sector could be attributed to the depreciation of the cedi to the dollar, which increased the cost of imported inputs in the production process. The rate for utilities was virtually unchanged from the previous month. During the 12-month period between March 2011 and March 2012, the producer inflation rate decreased gradually between April 2011 and June 2011. Subsequently, the rate increased consistently till it peaked in September 2011 (19.6%) and then declined marginally in October (16.4%). From the beginning of 2012, the producer inflation rate has increased steadily over the three month-period to record a rate of 16.3% in March. Manufacturing sector During the month of March 2012, six out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the sector average of 15.6%. Manufacture of machinery and equipment recorded the highest information rate of 38.1%, while tanning and dressing of leather, manufacture of luggage, handbags, saddles, harness and footwear recorded the lowest rate of -1.4%. Petroleum Price Index In the last two years, producer inflation in the petroleum industry subgroup recorded three major significant changes -- in April 2010, June 2010, and January 2011. Prices in the petroleum industry increased in January 2011, resulting in a sharp rise in inflation for this subgroup to 23.4 %. It then remained stable until December 2011. In March 2012, this group had a slight increase of 0.3 percentage points over February 2012 (19.7 %) to record a producer inflation rate of 20%.

Time to tell Africa’s story better -- investors

Africa has great prospect to attract equity investors to promote development and economic growth, discussants at the 9th African Venture Capital Association (AVCA) conference have observed. Discussants made up of commercial equity investors from across Africa said: “It is time for Africa to tell her own story better, to enable investors make informed decisions about the continent. “Africa has not performed badly and is now in its prime time, but most often risk perceptions are overpriced.” Speaking at the annual Africa Venture Capital Association conference which ended yesterday, under the theme ‘Africa, The Rising Giant’, Mr. Seth Terkper, a Deputy Minister for Finance and Economic Planning said: “Africa is regarded as an important investment destination and the next frontier in emerging terms. He added: “Africa is also benefitting from sluggish economic performance in the advanced west while investors from an emerging East take a second look at the continent.” Mr. Terkper observed that the continent is attracting more permanent sources of investment funds to lubricate the wheels of commerce better -- through stock exchange and private equity initiatives, and through new and existing commercial and investment banking. “As Africa begins a journey to catch up with the emerging world, it must be aware of these opportunities as well as several pitfalls -- in order not to be complacent in a fiercely competitive world,” he said, and called on investors to see and categorise the 50-plus African countries on a league or rating table to differentiate the good and stable performers from the bad ones beyond notions and re-colonisation of the continent.” He advised that Africa must learn from the global crisis that has brought many advanced countries on their knees, and that countries such as Ghana cannot sacrifice their macroeconomic successes on the altar of poor monetary and fiscal policies. The conference ended yesterday and was aimed at providing opportunity for key players in the private equity investment industry to converge and discuss important topical issues. It was both insightful and thought-provoking, with exciting roundtable discussions leading the debate on Africa Rising in a World of Crisis. It also covered diverse topics such as: Getting Africa ready for primetime; perspectives on investing in Africa; a current overview of private equity in Africa; fundamentals of private equity in Africa, and regional perspectives on private equity across the continent. Mr. Daniel Duku, Chief Executive Officer of Venture Capital Trust Fund, (VCTF) co-host of the conference, explained that the Fund was established by government as a means of providing alternative financing for Small Medium Enterprises (SMEs) which led to a VCTF ACT in 2004. It has since partnered five indigenous funds which have invested in more than 46 SMEs in all sectors of the economy, and had increased the total pool of funds available for SMEs by up to three times its initial endowment to US$62 million. The VCTF is expected to outdoor its new strategies aimed at providing appropriate vehicles for both local and international investors to participate in Ghana’s booming economy through private equity fund investing. Mr. Duku said: “It is a fact that existing private equity investment has proved challenging across Africa, although several efforts have been made in the past through innovative deal structuring. “To address this challenge, VCTF in collaboration with the Ghana Stock Exchange is supporting the establishment of an alternative market for SMEs, which will serve as an effective and more efficient means of existence for private equity funds. “For new investors to the continent, they are optimistic that they will be seeking to explore the great continent in the next few months and that existing investors can attest to the development of the African continent. The image of a rising Africa would be incomplete without mentioning Ghana, a country among its fastest-growing economies.” Ms Michelle Kathryn Essome, Chief Executive Officer of Africa Venture Capital Association, explained that the prime target of the conference was to showcase opportunities in Africa through in-depth discussion and analysis examining risks -- macroeconomic, currency, political and rule of law-- which needed to be address and mitigated to create an enabling environment for private equity and venture capital in Africa, with the goal of attracting a broader range of investors from around the world. AVCA is an industry association supporting African private equity and venture capital investors through conferences, training, research, and information dissemination. It represents African private equity and venture capital firms, institutional investors, foundations, international development institutions, and global professional service firms.

New regime for allocating mineral rights

A new plan to govern the allocation of mining rights will come into effect by close of this year to ensure transparency and maximum revenue for the nation from the industry. ‘Tendering of mining rights’, the new initiative, when fully operational will replace the current practice whereby interested investors apply for mining licences and are allocated concessions to commence exploration. This blueprint legislation is aimed at developing regulations that will govern access by the private sector to mineral rights for blocks found to be geologically promising. Tendering of mining rights is a global acceptable best practice in the mining industry wherein mining concessions are advertised and selected, and available blocks are allocated to the bidders. The Minerals Commission, the lead promoter of the initiative, is excited about its implementation which will benefit the country by ensuring maximum benefits from the sector and promoting transparency. Mr. Jerry Ahadjie, Principal Sectoral Policy & Planning Officer at the Minerals Commission, disclosed to the Business and Financial Times in Accra that there has been enormous investment targetted at enhancing geological, geographical and geochemical information within the dedicated concessions. “A lot of investment has gone into this project just to weed out speculative investors.” The prime objective, he explained, is to speedily attract reliable investors with financial and technical capabilities to help develop the various mining blocks. “We want to attract serious investors who are technically and financially capable of exploring and exploiting the deposits to our benefit,” he said. “It is also to attract investors with technical and financial capabilities to help generate enough revenue for the state.” Mr. Ahadjie disclosed that various minerals, including the base-metals, have been discovered in large deposits in areas such as the Volta, Western and the Ashanti Regions. “Tendering of mining rights, which is currently awaiting parliamentary approval, will form part of the new mining law. Presently, a special committee has been set up to fine-tune the guidelines which will be adopted as a blueprint guiding the sale and allocation of mining rights in the country. “It is part of the government and European Union-funded project completed in 2010 and tasked to zone viable mining areas for possible exploration to attract investors,” he revealed. Government is embarking on a mining industry review to reflect changes that fairly meet the needs of the industry, tighten exemptions, and ensure fairness across industries while safeguarding revenues. The review will mandate companies to pay mining royalties monthly instead of quarterly. It will also push for an increase in royalties paid by mining companies. In March 2010, government announced an increase in the country's mineral royalty tax from three percent to five percent. Government is also implementing its new increased corporate tax rate for miners from 25% to 35%, while a windfall profit tax of 10% has been imposed. Ghana is ranked the seventh-biggest gold-producing country based on 2011 output. According to the London-based metals-consulting company, CRU, the country is producing more than Canada (8th), Indonesia (9th) and Mexico (10th), but came below South Africa, which was fourth on the log. China came first followed by Australia, US, South Africa, Russia and Peru in that order. The country produced 102 metric tonnes of gold in 2011 as against 92 metric tonnes in 2010, with the world’s production for the year under review recording 2,789 metric tonnes as compared to 2,638 in the previous year.

Mining firms ready for local procurement

The Ghana Mining Buyers and Sellers Forum has ended with a call on miners to implement local content procurement strategy so as to increase employment and wealth-creation by local companies, and help grow the economy. “The multiplier effect of this growth on the country’s economy will be many times this incremental increase in direct expenditure,” speakers said. Available data gathered by Supply Managers from some of the mining firms indicate that the sector possibly increase spending on the local manufactured products in the long-term by 66%; from around US$120million per annum to US$200million. This does not include any contribution from new mines or planned expansions to existing mines, or export opportunities within the sub-region. “By working closely in partnership with mining companies as an industry, we will help to shape the government agenda for implementing local procurement frameworks that will achieve broader development objectives; be economically sustainable; and mitigate concerns relating to product quality and continuity of supply,” said Mr. George Brakoh, Regional Manager Local Contractor and Supplier Development at Newmont Ghana. He said: “Now the hard work begins! We will need to work together with our partners to develop a capacity building and import substitution programme that will allow us to meet our objectives.” The Buyers and Sellers Forum was aimed at creating a common platform to encourage mining operators to appreciate the local content procurement policy, help grow the local firms and create employment. It was also to educate the local firms on positioning themselves to take advantage of opportunities in the mining industry. An estimated 34 percent of annual mineral exports currently enjoyed by foreign firms and expatriates providing mining services in the country could pass to locals if they take steps to make themselves capable of providing these services. Estimates according to the Minerals Commission show that these services procured by the mining firms in 2008 alone came to US$680million, and they continue to go to foreigners because the locals have not positioned themselves to take advantage of these opportunities in the mining sector. The World Bank, the Ghana Chamber of Mines and some Civil Society Organisations (CSOs) have said that when mining companies buy more local goods and services than they are presently doing, the country will gain manifold the revenue it is now garnering in royalties from multinational miners. The World Bank revealed that raising the share of local procurement by mining companies will spread the benefits of mining more evenly across a country’s economy, creating jobs and stimulating the sustainable development of local enterprises. “Increasing local procurement by the Mining Industry in West Africa would spread the benefits of mining more evenly across a country’s economy, creating jobs and stimulating the sustainable development of local enterprises,” a new World Bank report has revealed. The WB said local procurement by mining companies could bring significant benefits to a wide range of stakeholders in resource-rich countries, due to the large scale of current and potential mining activity in West African countries. Mr. Daniel Owiredu, President of the Ghana Chamber of Mines, explained that stimulation of economic activity in local areas; attraction of additional investment in local economies; and knowledge and technology transfer are among some of the benefits expected to be derived from implementation of the local content strategy. He indicated that implementation of the local content procurement policy would strengthen trust with local communities by demonstrating a positive impact in local economy, contributing to resource assurance and minimising community dependency post-closure; and a leave lasting heritage independent of the company by building capacity within other sectors and diversifying the customer-base of localised suppliers. “Local content procurement policy will also position the local community to increase confidence in job-stability, leading to investment in the aspirations of employees, their families and their communities -- as well as improvements in local infrastructure, education and health through increasing local tax revenues.”

Market must decide airfares

Government has been told to allow market forces to determine airfares rather than attempt to pressure airline operators into reducing them. “We feel that the market is the best regulator of airfares. Market forces should be allowed to determine airfares,” Mr. Robert Bryan, Commercial Director (Africa Occidentale and Oriental) for Delta Airlines, said about a directive from the Ghana Civil Aviation Authority (GCAA) and lawmakers to airlines to reduce airfares. Mr. Bryan was speaking to B&FT on the sidelines of a tour organised by Delta Airlines for selected journalists to experience the facilities onboard its Boeing 767-400ER aircraft. Lawmakers have in recent times called for a reduction in airfares by international airline operators in the country. Failure to reduce airfares, they said, will attract sanctions. The Ghana Civil Aviation Authority (GCAA), the industry’s regulator, has also directed international airlines to take measures to reduce airfares and provide world-class quality services to passengers who fly in and out of the country. It warned of “drastic measures” if companies fail to comply. Airlines have retorted that high taxes and fees, which sometimes account for more than half of airfares, inflate ticket prices. “Authorities should review the level of taxes being charged. The level of taxes does not encourage people to travel. In any case, is it being re-invested to improve airport infrastructure?” said James Wooldridge, British Airways’ Country Commercial Manager, in a recent chat with B&FT. “For a ticket that costs US$350, passengers pay about US$500 in taxes, bringing the total price to US$850. If the taxes are reviewed, it will bring down the cost of airfares considerably,” he said. The Managing Director, Delta GSA, Ghana and Liberia, Mr. Pakwo Shum, said the tour of Delta’s facilities was to reveal investments the airline has made in recent times, to upgrade its facilities and afford its passengers the best of air travel experience. Mr. Shum said the airline’s fares are very competitive, and it regularly undertakes promotional activities and offers discounts to different segments of the market. Delta Airlines in 2010 earmarked an investment of US$1billion in technology, products, services and airport facilities. Customers can now check in for flights, print boarding-passes, check bags and review flight status online. Delta has upgraded the seats and in-flight entertainment on its Boeing 767-400 ER aircraft. All seats are now equipped with the latest in-flight entertainment technology and passengers in BusinessElite enjoy flat-bed seats. All the seats in BusinessElite are also fitted with massagers. It also has upgraded pillow, blanket, duvet cover, amenity kit, personal reading lights, and power source for charging personal electronics. Economy Comfort passengers now enjoy 50 percent more recline in their seat and four inches additional legroom on Delta’s Boeing 767-400ER. Economy passengers also enjoy all-leather seats with 81-84cm pitch and complimentary meal service. Delta Air Lines serves more than 160 million customers each year. The airline was named by Fortune magazine as the most admired airline worldwide in its 2011 World's Most Admired Companies airline industry list, and was named the “Top Tech-Friendly U.S. Airline” by PCWorld magazine for its innovation in technology. It offers services to 341 destinations in 61 countries on six continents. Source: B&FT

Adamus targets 250,000 ounces of gold

Adamus Resources Limited, a subsidiary of Endeavour Mining Corporation, has said it is on course to achieve its targetted production of 250,000 ounces of gold by the end of 2013. The company hopes to hit the mark from its two operating mines -- Nzema in Ghana and Youga in Burkina Faso – and has an extensive 2012 exploration programme estimated at US$30million. Its current annual production is 180,000 ounces. Mr. Mark Addo, Vice President for Sustainability, made this known at a press briefing in Accra. He indicated that as part of the company’s plan to resettle communities within its concession area, it acquired a 250-acre site at Salman and constructed 706 residential buildings, 29 public structures -- including schools and a health centre -- and 17 boreholes. The company resettled a total of 2,200 people. Mr. Addo said as part of the company’s corporate social responsibility programme, it has established the Nzema Gold Scholarship Programme to support brilliant students pursuing secondary, tertiary or vocational education within its operational area. “The company is now in a strong financial position as a result of additional capital injection following the merger with Endeavour Mining Corporation,” he said. Adamus Resources Limited last year announced the merger of the two entities, expected to position the combined entity as one of the leading West African gold production, development and exploration companies. Endeavour is expected to invest about US$160million to improve the finances of Adamus’ Nzema gold project, including the repayment of a US$60million loan and US$100million toward the reduction of hedged gold volumes. Endeavour and Adamus shareholders own approximately 47.2% and 52.8% respectively of the issued common shares of the merged entity.

Monday, April 23, 2012

2ND UT Bank - Ghana Entrepreneur Awards held

The Second Edition of the UT Bank - Ghana Entrepreneur Awards, an initiative to honour and recognise outstanding achievements of Ghanaian and Foreign resident entrepreneurs in Small, Medium and Large Scale Enterprises (SMLEs) has been held in Accra. Organized by the Entrepreneurs Foundation of Ghana the awards seeks to honour entrepreneurs who have excelled at developing successful businesses, employment generation and contributing to the growth of the country’s economy. Other collaborators are Ministry of Local Government and Rural Development, Ghana Chamber of Commerce and Industry, the Entrepreneur Magazine and Deloitte and Touche and was under the theme: “Unleashing Entrepreneurial Capabilities to Meet the Global Challenges of the 21st Century.” Dr Joseph Siaw Agyepong, Chief Executive Officer (CEO) of ZoomLion Ghana, and J.A. Plant Pool was adjudged the Overall Best Entrepreneur for 2012. Over 30 entrepreneurs including Mrs Edith Dankwa, the Executive Director of the Business and Financial Times, Africa’s leading provider of business information as the best entrepreneur in the print media industry category were honoured. The Vice President, Mr. John Dramani Mahama in a speech read on his behalf said: “Ghana has a promising future because some of its entrepreneurs are rising up to the occasion, and making phenomenal impacts in their various fields. “We are blessed in Ghana that, today many resilient people are rising to take advantage of the numerous opportunities in our business environment to make life better for other people and themselves.” Mr. Mahama observed that there are risk in running business in the country, as in other countries, though, but there are also great rewards. “The challenges are becoming more surmountable than some decades ago.” He challenged the country’s corporate leaders and entrepreneurs to identify high impact budding entrepreneurs to mentor and assist. “The mentoring will make their start-up journeys less lonely, and failure-proof. We will then be leading a movement to catalyse long-term economic growth of the country.” He assured that government will provide support to promote the spirit of entrepreneurship, especially among the youth, who complete school. Mr. Mahama called for collaboration between the universities and the polytechnics to provide entrepreneurship clinics that will whip their interest in self-employment, and new ventures creation. “I believe a few of you can team up to set up venture capital funds and angel investment funds that can give these young businesses the needed start-up capital to launch properly, in addition to the benefit of your experiences, which is priceless.” He therefore encouraged the multinational companies and established organizations to support young businesses with a percentage of contracts to provide the needed financial push, experience and exposure. He revealed that government is working with small business holders trained and set-up by the local enterprises and skilled development programme to give them contracts for the free school uniforms. Mr. Sam Ato Gaisie, President/ Founder of the Entrepreneurs Foundation of Ghana explained that the award is a platform to enhance growth in entrepreneurship, innovation to grow Ghanaian businesses.

Free seedlings for 16,000 cocoa farmers

Ghana Cocoa Board (COCOBOD) says it is ready to supply 20 million free cocoa seedlings to about 16,000 cocoa farmers beginning next week to help restore overage tree stocks, improve yield, and boost national revenue. This intervention for farmers has the potential to position the country to catch up with Ivory Coast, the world’s leading cocoa producer, by 2015 if sustained. The country, the world’s second-largest cocoa producer, purchased 800,000 metric tonnes of cocoa beans in the 2011/2012 crop season. Government had announced the intention of attaining a target of one million tonnes of cocoa production in the 2010/11 cocoa season. “The 20 million cocoa seedlings are ready and we are ready to go to the field next week for onward distribution to the various farmers nationwide,” Mr. Noah Kwesi Amenyah, Public Affairs Manager at the Ghana Cocoa Board, told the Business and Financial Times in Accra. “This programme is expected to span the next six years and will significantly contribute to the regeneration of aged and disease-infected farms for increased yield and sustenance of the livelihood of the farmers,” Mr. Amenyah said. The distribution, which will be done nation-wide in all cocoa-growing regions, including the Ashanti, Brong Ahafo, Central , Eastern and the Western Regions, is part of the national cocoa rehabilitation programme that aims to offer technical support and also increase farmer’s income, as well as controlling diseases and pests affecting the trees. He indicated that farmer-based support including lining and pegging, with fertiliser support as well as general extension services will be made available to help improve the planting material programme. This will increase the average yield of cocoa farms from 300kg per hectare to at least 1,000kg per hectare. “Farmers who seek to take advantage of this programme have been made to register, and will visit the farm to inspect and take it from there. “Farmers who have used the land for the cultivation of cocoa before and have experienced bush fires and want to come back will also be considered,” Mr. Amenyah According to him, “We have already initiated the cocoa diseases and pests control and hi-tech programmes to drive our agenda towards the one million tonnes target.”

Commodity Exchange gains momentum

Ghana Grains Council (GGC) says it is constructing two 500 metric tonne capacity grain warehouses in grain surplus areas of Northern and Brong Ahafo regions to serve more than 5,000 small holder farmers, offering them better storage opportunities. It has also earmarked on 25 of 30 metric tonne capacity warehouses to be constructed in the three Northern regions. “So far six of these are under construction in Tamale and are expected to be completed by close of next month. These warehouses will be used as points of aggregation for farmers and traders,” Mr. Tom Gambrah, GGC Board Chairman told industry practitioners, government officials and bankers in Accra. Speaking under the topic: ‘2012 Year of the Warehouse,’ at its first Annual General Meeting, Mr. Gambrah revealed : “GGC in collaboration with ASI Ghana Arzakinmu project funded by Alliance for a Green Revolution in Africa has trained more than 2,500 farmer based organisation in the Northern region on post harvest handling, reducing warehouse storage losses and warehouse receipting system. It has trained 30 warehouse operators, and handlers under the completion of the first Ghana Warehouse Receipt Rules and Regulations.” This development is targeted at establishing the country’s Commodity Exchange (GCX) and the Warehouse Receipt System, to help ensure price stability, provide sustainable and affordable financing system for farmers. Dr. Joe Annan, Deputy Minister of Trade and Industry assured government’s willingness to collaborate with Ghana Grains Council (GGC) to improve commercialization and competitiveness in the grains industry. Dr. Annan explained that the initiative would serve as a platform to create orderly, transparent and efficient marketing system for the country’s key agricultural commodities and promote agricultural investment. “This would enhance productivity, and encourage market access and fair returns for smallholder farmers and facilitate the formalisation of informal agricultural trading. “While commending GGC for their achievement, he said there was the need to bear in mind that any successful warehousing system depended on the active partnership of partner banks and financial institutions. “I am sure that the experience of GCC in the last few years could be tapped even as we seek to roll out GCX and would count on your positive inputs in the days ahead. “Smallholder farmers were facing agricultural marketing problems, which reduced production incentives contributing to stagnation in agricultural output and productivity” Dr Annan said.. Dr Annan explained that, high food price variability made poor consumers in urban and deficit-producing rural areas prone to food insecurity. “Improvement in the performance of agricultural markets would help enhance the livelihoods of the rural and urban poor in the country. “Government would ensure a sound environment for food production and distribution,” Dr Annan remarked.

Guarantee our benefits…local contractors tell Gov’t

Business executives say non-compliance with the Public Procurement Act (Act 663, 2003) hampers the promotion of local content in procurement activities, and have demanded more benefits from resources flowing into the economy. Participants at a one-day seminar made up of tax consultants, legal practitioners, contractors, public-sector executives and private-sector operators wondered why “policy-makers who broker deals [do not] ask for some projects to be executed solely by Ghanaian contractors or in joint- ventures with foreign firms. “Government is guaranteeing the work of foreign parties to the detriment of Ghanaian expertise,” they said. Mr. Ebo Newton, a representative from the Association of Ghanaian Contractors, said it’s about time government made it a legal policy for all firms seeking government contracts to set aside a percentage for local contractors to help promote local content in the projects. The seminar was organised in Accra by AB & David law firm to mark its 15th anniversary of operations in the country. The discussion was to examine how Ghanaians can get a bigger share of the “megabucks” fuelling the new-found middle-income economy. Mr. Eric Victor Appiah, Director, Benchmarking, Monitoring and Evaluation at the Public Procurement Authority, shed some light on the issue by saying: “In respect to public procurement generally, the Procurement Act, Act 663, contains provisions in respect to giving a margin of preference which aims at increasing the income of local businesses and persons; but some of these guidelines and policies are not enforced mandatorily by Ministries, Departments and Agencies (MDAs) and Municipalities, Metropolitan and District Assemblies (MMDAs).” He explained that government, being the largest procurer of goods, services and works, passed the Public Procurement Act to regulate how these services should be procured using public funds. “This it did, knowing that there would be a time when it may become necessary to promote local-content measures.” Mr. Appiah cited Section 40(2) of the Act which allows an entity, with the approval of the board, to advertise its intention to procure from a particular provider in order to promote a policy that is aimed at national development. This can be used to promote local content, he said. “Restricted tendering method[s] can be used to engage competent local providers to render required services. To promote local content, the competition in this instance could be limited to at least three competent local or domestic providers. “The third intervention, which uses margins of preference, basically seeks to assure local or domestic firms that within a certain margin their higher-priced tenders will be recommended for award if they are able to meet all the qualification criteria. “Much as these provisions are strictly captured in the Act, the question of who is to use them has to be addressed,” he said. Lawyer David Ofosu-Dorte, Senior Patner at AB & David law firm, observed that in recent times there has been a lot of talk in West African countries about the need for promotion of local-content policies to boost local economies and create jobs. Nigeria has promulgated a local-content law for the oil and gas industry, while Sierra Leone is reported to have instituted a 35% local-input requirement for most sectors including advisory services. Ghana’s Ministry of Energy has also been promoting a local-content policy for the oil and gas sector. Mr. Ofosu-Dorte indicated that the general complaint is that non-indigenous but locally- incorporated companies appear to benefit more than “real Ghanaian-owned” entities, adding however that there is no data to confirm if this is true. “The Millennium Development Authority was mandated to disburse US$547m between 2007 and 2012 under the Millennium Challenge Compact. “Government has secured a US$3billion facility from China Development Bank (CDB) in addition to other major finance facilities. Between 2012 and the next few years, the public sector is expected to disburse over US$3billion. “How much of these monies will actually become income to indigenous businesses in the industrial and service sectors -- as against foreign but locally-incorporated companies, or direct foreign service-providers? “Megabucks go through the economy, and Ghanaians apparently want a bigger piece of the pie,” Lawyer Ofosu-Dorte said

Cargill gives 100,000 books to schools

Cargill's cocoa and chocolate business in the country is supporting ‘Books for Africa’ to deliver over 100,000 educational books valued at US$77,250 to schools. The books, to be distributed among schools in Tema, are aimed at helping promote literacy in the town and add to the educational resources of 27 schools in the area. They will be distributed with the help of employee-volunteers from Cargill. The books -- which have been collected, sorted, shipped and distributed through the organisation ‘Books for Africa’ -- are predominantly textbooks and have been chosen specifically to support the schools' curricula. Cargill has also sponsored a new Law and Democracy library at the University of Ghana, and as part of this project the university's legal faculty will receive approximately 9,500 legal texts. “We are extremely pleased to be supporting such a worthwhile project, providing key educational resources to schools in our local cocoa communities,” said Kojo Amoo-Gottfried, Managing Director of Cargill Ghana. “Most of the students at these schools have only had limited access to textbooks before; and so by partnering with ‘Books for Africa’ we can take a few steps towards addressing this.” Pat Plonski, Executive Director, Books for Africa, said: “At Books for Africa, we believe that education is the great equaliser in the world, and books are the foundation of a strong educational system. For many children in Africa, the gift of books truly is a gift of hope. Thank you to Cargill; it is company efforts such as this that enable us to continue our mission.” Amoo-Gottfried continued: “Our employees will have the opportunity to work with a local organisation to help distribute the books to some of the schools, which will be a very humbling experience.” Cargill has been operating in the country since 2008, when the company opened a state-of-the-art cocoa-processing facility that employs over 200 people directly -- and many more indirectly. The company had been sourcing cocoa from the country for many years prior to establishing its operations locally, and it has since been involved in a number of projects to support local communities. As part of its sustainable cocoa programme in 2010, Cargill announced a three-year US$5million commitment to support sustainable cocoa in Cote d'Ivoire and Ghana. This includes a partnership with CARE to sponsor a programme of activities that will help improve the livelihoods of cocoa farmers and their families across 110 communities in the Ashanti, Brong Ahafo and Central Regions. In 2011, the company held a football week in Tema -- in partnership with the Chelsea Foundation -- to promote healthy lifestyle-choices for children in the local Tema communities. In February 2012, the company launched an extensive four-year commitment to farmer-training in the country. This educational initiative is just one of the projects that Cargill globally supports to improve access to primary and secondary education for underprivileged children in its workplace communities. Since 2008, the company worldwide has contributed more than US$50million to support schools and educational programmes for people living in communities where it has a business presence. Cargill is an international producer and marketer of food, agricultural, financial and industrial products and services. Founded in 1865, the privately-held company employs 139,000 people in 65 countries. Cargill helps customers succeed through collaboration and innovation, and is committed to sharing its global knowledge and experience to help meet economic, environmental and social challenges wherever it does business.

Wednesday, April 11, 2012

Gov’t explores site for renewable energy

The Energy Commission is exploring potential sites along the country’s coast for development of wind-parks for power generation, aimed at securing a reliable supply of energy to all sectors of the economy.

“The Energy Commission is carrying out a more detailed wind resource assessment of potential sites along the coast for development of wind-parks for power generation.

“Government has a vision for an energy system that will secure reliable supply of energy for all sectors of the economy,” Alhaji Inusah Fuseini, Deputy Minister of Energy, disclosed.

He was speaking in Accra at a West Africa Solar Forum and Exhibition organised in partnership with the Association of Ghana Solar Industries and supported by the Energy Commission and Ministry of Energy.

It was attended by architects, property developers, utility companies, regulatory authorities, public-sector ministries, departments and agencies, investors and financial institutions, installers and distributors.

Other attendees were manufacturers, contractors and non-governmental organisations interested in collaboration toward development of West Africa’s solar industry.

Making a presentation under the topic ‘The Brighter Way Forward’, Alhaji Fuseini disclosed that government’s vision is to achieve at least a 10% contribution of modern renewable energy services in the electricity generation mix by 2020.

He revealed that the Volta River Authority will set the pace when it installs the first two-megawatt solar facility for integration into the national electricity grid by 2015.

“As part of government’s commitment, the Ministry has upgraded the Renewable Energy Unit at the Ministry to a Directorate similar to the Petroleum and Power Directorates.

“This new directorate will formulate, plan and monitor policies and strategies for the promotion of all forms of renewable energy resources in the country to achieve the intended 10% contribution of modern renewable energy services in the electricity generation mix by 2020,” he said.

Alhaji Fuseini indicated that a renewable energy bill has been passed by Parliament to provide the regulatory framework and fiscal incentives to attract private-sector investment to the renewable energy sector.

“Advantages of solar power and solar products could be many, but they all follow the same basic business and investment model of high upfront cost with payback over time.
“Everything, from large solar panels to simple solar pond pumps, has a break-even point where the device begins to pay for itself.

“This is probably the biggest advantage of solar energy products: they are one of the few consumer products that actually pay for themselves if built reliably enough,” Alhaji Fuseini said.

Dr. Nii Darko Asante, Technical Director, Ghana Energy Commission, said: “The solar technology has great promise but with a price. It is the most expensive form of renewable energy. This is the major problem militating against its widespread use.”

He observed that the country is endowed with abundant sunshine, but it is not making good use of the solar technology early to power its electricity generation due to the initial cost involved.

“Renewable energy is expensive and capital intensive, and that accounts for the reason most developing countries are not using the technology.

“We all have a responsibility to advocate the promotion of solar energy, and it is up to our policymakers to shape people’s minds for the brighter future,” Dr. Darko remarked.

BoG could hold rate MPC decides Friday

The Bank of Ghana could adopt a wait-and-see approach as its monetary-policy committee (MPC) meets today, ahead of the announcement of its policy-rate decision on Friday.

At its last meeting in February, the MPC raised its benchmark lending rate by one percentage point to 13.5% to avert inflationary pressure associated with a weak currency in a country that guzzles billions in imports annually.

“Barring any significant developments on the pricing front, we expect the monetary-policy committee to maintain the policy rate at 13.5%,” said Nii Ampa-Sowa, Head of Research at Databank Financial Services Limited.

While inflation remains low and stable, the Central Bank may face pressure to hike interest rates for a second time this year to further support the cedi, which in the first quarter of this year has lost nearly as much of its value as it gave away in 2011.

“There may be pressure to review [the rate] upward following the GHS/USD decline so far this year, but the committee will resist the urge to revise it as the full effect of the 100-basis-point policy-rate bump kicks in,” Nii Ampa-Sowa said.

He said he expects the cedi’s stability, the bank’s reserve position, and the government’s local borrowing needs to feature prominently in the MPC’s deliberations. The committee will also be mulling over how to shore-up the cedi against further decline.

Rising foreign-exchange demand to sate the country’s appetite for imports has been putting pressure on the currency, analysts have said. Ghana’s breakneck economic growth of 13.6% in 2011 and 9.4% forecast for this year has also been fuelling spending by households and businesses.

The country’s import bill rose to US$15.9billion in 2011 -- an increase of almost two-fold in just two years -- contributing to a widening of the country’s trade deficit by 8% to US$3.2billion.

Boosted by oil, exports soared by 60.6% to US$12.7billion -- but were not enough to trim the external deficit. The Bank of Ghana has said the oil sector has been responsible for both significant dollar inflows and outflows since production began in December 2010.

The bank has supported the cedi to the tune of at least US$1billion this year, and pushed up yields on Treasuries and bonds to attract dollar inflows. The yield on the 91-day bill rose to 13.21% at the last auction on March 30, the highest for more than a year.

Meanwhile, March inflation data expected to come in today could reveal what impact the cedi’s slide may have had on price changes. In February, price-growth slowed marginally to 8.6% from 8.7% in January.

Source: Bank of Ghana data

Source: B&FT

Weak cedi casts shadow on bond

The Bank of Ghana will sell a five-year bond in June that could see the country’s borrowing costs rise because of a weak currency and uncertainties in an election year.

The sale will seek to raise GH¢200 million at fixed interest from local and offshore investors, Adams Nyinaku, Head of Treasury at the bank, told the Business & Financial Times.

The yield on the bond could potentially be higher than the 14.25% coupon rate on the last sale in August and December 2011. This is due to the falling cedi and the Central Bank’s readiness to hike interest rates to stem the slide. Uncertainties relating to the elections in December could also be a factor pushing up yields.

In February, the government’s three-year borrowing costs rose from 14% to 15% during an auction that came in the wake of a steep decline in the value of the cedi to the dollar. Yields on short-term government debt have also risen at recent auctions: the 91-day bill rate rose to 13.21% from 12.61% at the last auction on March 30.

The local unit has been falling over high corporate dollar demand and rising imports which cost 43% of Ghana’s GDP in 2011, up from 35% in 2010. Between January and March 2012, the cedi slumped by 8.5% against the greenback, reaching new lows on several trading days in the foreign exchange market.

On Tuesday, the Central Bank quoted the USD-GHS rate at 1.68 among banks and 1.75 in the forex bureau market.

The cedi’s weakness has persisted despite an interest-rate hike by the Central Bank on February 15, which Governor Kwesi Amissah-Arthur said was purposed to rein-in the fall by attracting investors to cedi-denominated assets.

The bank’s policy-setting committee will determine at its meeting this week whether the cedi’s continued fall warrants further support before it triggers an inflation debacle. Consumer inflation has so far shrugged off the impact of a weak cedi, dropping slightly to 8.6% in February as both food and non-food price-increases slowed. The bank raised its policy rate by 100 basis points to 13.5% at its last meeting.

Though the government had said in its 2012 budget that it would introduce seven- and 10-year bonds to the capital market this year, Adams Nyinaku said the issue calendar for the next six months does not include any such sale.

“I know the Finance Minister mentioned it in the budget, but what we have on the calendar from now to September is a five-year bond,” he said.

Asked whether a seven- or 10-year bond would be feasible this year, Deputy Finance Minister Seth Terkper told the B&FT: “This is part of our long-term infrastructure plan. And as for the Minister saying the bonds will be sold this year, we’re only four months into the year, so we should wait and see.”

Answering a question about what yield the government would be targetting if it sold a seven- or 10-year bond, Mr. Terkper stated: “We’re looking for the lowest yield possible.”

He said the government is reviewing the way debts of state-owned enterprises (SOEs) are accounted for and managed as part of ongoing fiscal reforms.

“Gone are the days when we secured a loan for a state-owned enterprise and put it on the budget. Now, we want them to be responsible for their debts. That’s why we make sure the commercial loans that we contract are put into projects that pay for themselves.”

Last year, the government’s budget-deficit shrank to 4.3% of GDP from 6.8% in 2010 after spending was kept within target and revenues exceeded projections, which authorities said was evidence of tax-reforms beginning to bear fruit.


GCCI to showcase local businesses at 2012 Olympics

Ghana Chamber of Commerce and Industries (GCCI), in collaboration with the African and Caribbean Chamber of Commerce and Enterprise (ACCCE) based in London, is to showcase some Ghanaian businesses and industries at the 2012 Olympics Games.

The programme, scheduled for 2nd to 11th August 2012, is christened ‘The African and Caribbean Business Experience’ and aimed at providing a platform to showcase African and Caribbean businesses to the global audience using the London’s location as a strategic business hub.

Mr. Emmanuel Doni-Kwame, acting Chief Executive of GCCI speaking at the official media launch in Accra, said the partnership will deliver innovative and creative business that will bring together African, Caribbean and Diaspora businesses to support the development of enterprises and economic growth.

The target is to begin changing the way we do business and the perception about Africa, he said.

Em Ekong, Secretary of the ACCCE, said: “The Olympics will present a great opportunity for businesses because it is regarded as the world’s single-largest networking experience.

“Timed to coincide with and capitalise on the Olympics, the African and Caribbean 2012 Business Expo will present a once-in-a-lifetime opportunity to showcase African and Caribbean business opportunities.”

She explained that the programme will as well help connect Africans, Caribbean, and United Kingdom and Diaspora businesses to form joint-ventures in London.

Ekong said the London Olympics will serve as a great platform for business networking since it will attract an estimated 280 million TV viewers, over 250 global Chief Executive Officers, 160 Heads of States and over 35,000 journalists.

“This programme will change the perception people have about Africa and help us tell the true story of Africa and its businesses.”

The programme, expected to attract business executives, entrepreneurs and world leaders, will be a mixture of seminars, fairs, workshops, networking and meetings discussing business growth and opportunities in doing business in Africa.

She encouraged registered businesses and members of the GCCI participate to enjoy the opportunities and grow their businesses.

“We should all join to show the world that African businesses have come of ages,” Ekong stressed.

Gov’t eyes agribusiness investment

Agriculture and agribusiness have been identified as the ECOWAS sub-region’s comparative advantage.

“The development of agriculture to sustainable levels can provide jobs for the youth, create wealth, reduce poverty through improved incomes, and enhance the quality of life of our rural populations -- the majority of whom are in the agric sector.

“As government, we believe prudent agricultural policies will eventually create new opportunities and avenues for both domestic and international investors whilst providing the much-needed jobs for the youth,” Vice President John Mahama told investors in Accra.

He revealed that the Ministry of Food and Agriculture (MoFA) has partnered with the World Bank and United States Agency for International Development (USAID) to prepare the Ghana Commercial Agriculture Project (GCAP) to improve access to land, private sector finance, and a clearing house for small-holder farms in the Accra Plains and targetted areas of the Savannah Accelerated Development Authority (SADA) zone.

The project, he said, is valued at US$145million of which US$100million is being provided by the World Bank and the remainder from USAID, aims at increasing farm productivity and value addition in selected value chains to scale-up the development of commercial agriculture nation-wide.

“The commercial agriculture project seeks to facilitate access to land, strengthen Ghana’s investment promotion infrastructure for attracting agri-business investors, and promote public private partnerships and small-holder linkages in the Accra Plains and SADA Zone,” he said.

Government is currently implementing a nationwide food and agriculture sector development policy (FASDEP II -- 2010 2015) focusing on six priority themes: namely, food security and emergency preparedness, increased growth in incomes.

Other areas are increased competitiveness and enhanced integration into domestic and international markets; sustainable management of land and environment; science and technology applied in food and agriculture development; improved institutional coordination.

The Commercial Agricultural Project has been designed to support implementation of strengthened investment promotion infrastructure and facilitating secure access to land.

This will promote a secure investment climate that clarifies and strengthens the rights and obligations of investors, government and affected communities.

It is also to support an improved mechanism for facilitating access to land by reducing search costs to potential investors through the expansion of a database of land suitable and available for investors, and by building on promising mechanisms for actively matching potential investors with suitable landowners.

Kwesi Ahwoi, Minister of Food and Agriculture, said the project directly supports the governments commercial agriculture agenda, and is a key pillar in efforts to modernise agriculture.

“The Accra Plains, the SADA Zone and other ecological belts in the Western and Eastern Corridors have huge potentials which we need billions of dollars to fully harness.

“While the project will be housed in the Ministry of Food and Agriculture, we shall foster an active partnership between the Ministry, the Lands Commission, the Ghana Investment Promotion Centre, the Environmental Protection Agency and the SADA to ensure smooth implementation,” he stated.

OMCs to improve industry transparency

Four committees with the aim of ensuring integrity, probity, accountability and transparency in the pursuit of business objectives by members of the Association of Oil Marketing Companies (AOMCs) have been inaugurated in Accra.

The committees include the Product Security and Operational Committee, which has as members Mr. Augustine Osei-Bonsu, Shell; Mr. Oliver Peeter, Total; Mr. Paul Tagoe, GOIL; Mr. Stephen Ansah Adu, Modex Oil Company; and Mr. Gabby Kumi, Trinity Oil Company.

Members of the Technical Committee are Mr. Augustine Osei-Bonsu, Shell Ghana Limited; Mr. Marina Perez, Total Petroleum Company; Mr. Patrick Akorli, GOIL Ghana Limited; Mr. John Amuachie, Strategic Energies; and Mr. Yaw Asare Berkoh, Trade Cross.

Other committees include the Legal and Ethics Committee with Ms. Abena Owusu of Total; Mr. Steve Yaw Gyaben, GOIL; Mr. Michael Bozumbil, Pacific Oil Company; Mr. Kissi Appiah, Unity Oil Company; and Mr. Ben Nimako, Virgin Petroleum Company.

Membership of the Strategic Oversight Committee includes Mr. Agbeko Lotsu, Engen; Mr. Eric Turkson, Dukes Petroleum; Mr Michael Bozumbil, Pacific Oil, Mr. Frederick Appertey, Petrobay; and Mr. Gabby Kumi, Trinity Oil.

Mr. Emmanuel Abledu, Managing Director Agapet Ghana Limited and Chairman, AOMCs, said the Association will continue to encourage the development and practice of a safe, healthy and environmentally-acceptable professional petroleum downstream industry.

He said the Association will seek to promote responsible, accountable and legitimate oil-marketing companies.

Mr. Kwaku Agyemang Duah, Industry Coordinator, AOMCs, said the Association is injecting a quality management system for customer-focused interventions at filling stations across the country.

“The quality management system involves all employees in pursuit of the continual improvement of all aspects of customer-relations and service provision, and using effective communication to integrate the quality principles into the culture and activities of the Association,” he said.

Source: B&FT

Thursday, April 5, 2012

Delays cost infrastructure devt -- PV Obeng

Paul Victor Obeng, Chairman of the National Development Planning Commission (NDPC), has observed that public sector developed infrastructure suffers from delays, cost escalations, quality challengers and financing hiccups in Africa.

“Many infrastructure development projects by the public sector alone go beyond the standard tenure of four years of many governments, and many suffer from policy and budgeting instability as governments change; mainly in countries going through democratic transitions and learning experiences.

“In the process infrastructure development, delays incur avoidable excessive contract costs including pressures from labour and material prices indices,” Mr. Obeng told participants at the African Investment Forum 2012 held in Accra.

Making a presentation under the topic “Public-Private Partnership for Infrastructure Development,” Mr. Obeng said: “With the right policy and facilitating frameworks in place it should be possible to tap into the resources capacities of both the domestic and external private sectors to complement that of sovereign states.”

This, he suggested, will create a greater pool of financial, technological, human capital and entrepreneurial resources to aid the development of national infrastructure.

“In the midst of available world-wide pool of investable human and material for infrastructure development, there should be no reason why countries should squat over poor infrastructure and remain behind in the global race for competitiveness and development in the global village environment.”

He indicated that the partnerships the public and private sectors are forging, and should continue to forge, in the area of infrastructure development will require the two sectors to enhance the efficiency of human and material resources mobilisation and development, avoidance of waste, and efficiency of projects and management.

Outlining some innovative funding strategies for regional infrastructure projects, he explained development of vibrant capital markets in the sub-Saharan African countries is meant to serve as a platform for mobilisation of funds for investment in infrastructure.

“Considering that the poor suffer more from the infrastructure gap, countries may negotiate for grants and soft loans from development partners to go into financing infrastructure which benefits the poor such as water, social housing, and transport among others.

“The infrastructure needs of countries are of various types within the economic and social sub-sector; these include energy, multi-model transport systems, ICT Backbone, water management and supply systems, social housing, health and educational facilities, and justice facilities and many more.

“The sum total of the investment costs for all the components are very high and go beyond the capacities of national; public sector budgets,” Mr. Obeng remarked.

Sir Alan Collins, Director General Commonwealth Business Council who was chairman of the session, urged African countries to focus on the development of infrastructure, small-and medium-scale enterprise development as well as skills, and access to financing to make African countries more attractive to investors.

Mr. Marc Whittingham, President and CEO of the Canadian Commercial Corporation, explained that the benefit of employing PPP will include cost savings in efficiency and innovations from the private sector: public money does not begin to flow until the asset is fully operational, well-maintained and efficiently operated at the lowest cost possible.

He revealed that the Canadian government has established a PPP with US$1.2billion to help promote the development of the its PPP market, and that Canadian expertise in the PPP market cuts across a wide variety of sub-sectors, with particular emphasis on healthcare, education and transportation.

“PPPs create bilateral partnerships built on projects of mutual economic significance. This allows for development and prosperity of industries surrounding the project. It also helps in the opening up of non-traditional sources of supply, facilitating the creation of new markets, and creating and sustaining new employment with long-term implications on GDP,” Mr. Whittingham remarked.

ADB gears up for GSE

The Agriculture Development Bank (ADB) is getting its act together to enable it list on the Ghana Stock Exchange this year.

The Managing Director of ADB, Mr. Stephen Kpordzih who dropped the hint, said as a 100 percent state-owned bank, government is studying the proposals and will make a definite statement on the matter.

For the past two years ADB has charted a new strategic path that has seen it produce better-than-expected results consistently.

Mr. Kpordzih said: “We are purging the system in readiness for the stock exchange.”
Its 2011 financial results show another stellar performance by the bank, revealing remarkable strengths in a number of performance indicators.

He explained that certain initiatives undertaken by the bank have underpinned the strong performance.

“We have managed to block some income leakages, and managed costs very well. For instance, last year our costs only grew by 8%. We have strengthened our treasury and opened 22 more branches to a total number of 76 currently. We don’t intend to open a branch this year.”

He described last year as “an extremely good year, looking at the heat we took.”
ADB had to clear outstanding balances of a negative GH¢32million that had remained on its books since 2002.

The bank also had to address the issue of GH¢92million toxic assets on its books. However, Mr. Kpordzih explained: “It’s not like we have given up on those debts. We have set up a team which is ensuring the recovery of those debts through the courts and other means.”

The bank posted a profit before national stabilisation levy of GH¢51.1million, showing a 301% rise over the previous year’s figure.

The increase in profit was against a backdrop of considerable expansion in the balance sheet of the bank as assets rose from GH¢968.2million in 2010 to GH¢1.2billion in 2011, showing 25.4% growth.

Major earning assets included loans and advances, which went up from GH¢557.0million to GH¢678.6million, registering a growth of 17.6 percent.

Customer deposits grew significantly from GH¢536.1million to GH¢827.7million, representing a growth of 54.4% during the period.

Mr. Kpordzih explained: “This happened because of the pragmatic, strategic initiatives the bank has been implementing since 2010, thus responding to customer needs and providing attractive, quality and efficient customer service.”

The bank transferred GH¢25.0million from its stated capital account, which increased its stated capital from GH¢50million to GH¢75.0million. This enabled it to fully comply with the regulatory minimum capital requirement of GH¢60million ahead of the 31st December 2012 deadline given by the Bank of Ghana for full compliance by indigenous Ghanaian banks.

With regard to agricultural financing, ADB made financing arrangements for the sector during the year under review. The agric sector had total new lending amounting to GH¢141.7million, compared to GH¢100.1million in 2010.

The bank also made some new interventions in the agro-processing sub-sector and invested a total of GH¢84.5million.


Universal Motors launches 2012 Porsche

Universal Motors, official distributor of Porsche in the country, has launched the new 911 Carrera S Porsche at its showroom in Accra.

This follows a spectacular regional premiere for Middle East enthusiasts at the Dubai International Motor Show.

The icon, highly anticipated by sports car aficionados and now available in its seventh generation, has undergone a complete redesign.

The new 911 Carrera has a flatter, stretched silhouette, exciting contours and precisely- designed details. Its wheelbase is now 100 millimetres longer, sits lower to the ground and consequently offers even better handling dynamics for more driving pleasure for 911 connoisseurs.

Mr. George Wills, Managing Director, Porsche Middle East and Africa FZE, said “It is a moment that marks a new era for our brand-vehicle, a re-definition of what a sports car should be.

“Our customers and Porsche fans have already been amazed at the new model, and now they can finally buy the vehicle that says so much about the sheer pleasure of driving.”

Mr. Wills said 90% of all components are either new or have been fundamentally revised.

“The aim of building ‘the best 911 ever’ has been fulfilled, proven by the new lap time of just 7 minutes 40 seconds on the famous Nürburgring’s Nordschleife circuit -- 14 seconds faster than the previous model.

“With a history spanning five decades, the new 911 remains, unmistakably, Porsche’s iconic sports car.”

Mr. Subhi Accad, CEO of Porsche Centre, Accra, said there has been excitement surrounding the release of the new 911.

“We have had a great deal of interest, and I fully expect we will be working extremely hard throughout 2012 to meet customer demand. With the nearly endless options available through Porsche Exclusive and Porsche Tequipment, each one of the Porsche 911 Carrera models you will see in our market will be as individual as its owner.”

He said with the new 911 Carrera the span of apparently contradictory attributes that have typified the Porsche 911, such as performance and efficiency, sportiness and everyday practicality, has been even further extended.

The new 911 Carrera offers a blistering top-speed of 289 km/h for the standard version. It is the first passenger car in the world to feature seven-speed manual transmission. It is also the first sports car equipped with an auto-start/stop function, electro-mechanical power steering, and a new ‘coasting function’ in vehicles equipped with the Porsche Doppelkupplungsgetriebe (PDK).

The new electro-mechanical power steering offers even better precision and response, while increasing efficiency and reducing general fuel consumption.

The athletic 350hp 3.4-litre boxer engine on the 911 Carrera consumes a mere 8.2 litres of fuel per 100 kilometres: that’s 16% less than its predecessor. And with an emission level of 194g/km CO2, it is the first Porsche sports car to make it below the 200g/km mark.

The Carrera S, featuring a 3.8-litre boxer engine, produces 400 hp and manages to accelerate from nought to 100km/h in 4.3 seconds. Pressing the ‘Sport Plus’ button on the optional Sport Chrono package cuts that to 4.1 seconds.

Porsche Dynamic Chassis Control (PDCC) is now available in the Carrera S and Porsche Torque Vectoring (PTV) makes its debut in the 911 Carrera S as standard.

The all-new lightweight body is an intelligent aluminium-steel construction, providing an overall weight reduction of up to 45kg and significantly greater rigidity.

Aerodynamic optimisation measures including a wider, variably extending rear spoiler means the lift of the new 911 Carrera is further reduced.

Veep promises stability

Government has assured the investor community of a peaceful and stable democracy after this year’s election.

“Ghana will continue to remain stable and democratic after elections; prospective investors therefore need not adopt a wait-and-see attitude before making any investments in Ghana, and for that matter in ECOWAS.

“Even though we’re in an election year, government will continue to manage the macroeconomic variables for the enhancement of business operations,” said Vice President John Mahama at a two-day Africa Investment Forum aimed at promoting trade and investment in the ECOWAS sub-region.

The 2012 Africa Investment Forum, hosted by the Ghana Investment Promotion Centre in collaboration with the Commonwealth Business Council and other sponsors, is targetted at enhancing collaboration between the private sector, the international community and governments to attract higher levels of foreign direct investment into the continent in the face of global economic challenges.

It is also to provide a platform for bringing investors and projects together to explore public private partnerships, and facilitate business partnerships which can support the economic growth required to enable Africa achieve sustainable economic development.

Speaking under the theme ‘Partnering with ECOWAS to Accelerate Investment in the Sub- region’, Mr. Mahama said: “We are determined to reform the public service to improve its efficiency and increase our attractiveness as a destination for business.”
He said government’s economic development strategies are aimed at encouraging private sector participation in the country’s development.

“Government is currently promoting Public Private Partnerships (PPPs), which are key to the delivery of infrastructure and services through leveraging public assets and funds with private sector resources from local and international markets.

He observed that one sector the sub-region has comparative advantage in is agriculture and agri- business.

“The development of agri-business to sustainable levels can provide jobs for the youth, create wealth, reduce poverty through improved incomes, and enhance the quality of life of our rural populations -- the majority of whom are in agriculture,” Mr. Mahama remarked.

Sir Alan Collins, Director General, Commonwealth Business Council, observed that interest in Africa from international investors is growing.

“The Western economies may be showing some signs of recovery, but we can see that investors are looking at other markets.

“Investing here in Africa now makes more sense than ever before. In addition to the ECOWAS countries, there are representatives from the United Kingdom, Canada, India and South Africa, as well as the Middle-East, China, Russia and South America.”

Sir Alan explained that foreign investment can facilitate and accelerate economic development, adding: “It is Africa and the African private sector that will drive growth and create jobs. Entrepreneurship and the private sector are the only sustainable drivers of growth in Africa and emerging markets.”

To achieve this, he proposed that African countries have to work together to increase intra-African trade and boost indigenous entrepreneurs and businesses.

“As intra-African trade accounts for just 10% of Africa’s overall exports, we can see that an important opportunity is being missed.

“Regional integration is an effective way to harness the benefits of larger markets and tap comparative advantage of different countries. This further reinforces the need for the work that structures in ECOWAS are undertaking.”

Managing Director of Access Bank Ghana, Dolapo Ogundimu, said: “Investment growth is on the agenda of all countries, particularly Ghana where the economic growth rates are impressive and one of the highest in the world.

“We at Access Bank believe that we can foster a network of relationships between business and governments in the sub-region to identify and raise investment opportunities using platforms such as these.”

Monday, April 2, 2012

AngloGold worried over illegal miners

AngloGold Ashanti (AGA) Ghana Limited says it is currently faced with a growing number of illegal mining activities within its Obuasi and Iduapriem concessions.

“The issue of illegal mining has in recent times become a major challenge to deal with in our operational areas, especially at the Obuasi mine with illegal miners encroaching on the mining concessions.

“It is a very dangerous practice and it is affecting our operations,” Mr. Peter Anderton, Senior Vice President, AGA (Ghana) told B&FT in Obuasi.

The impact of illegal mining activities, he said, comprise sinkholes, collapse of surface infrastructure, destruction of retaining pillars underground, and potential flooding due to arbitrary holes.

Others include damage and corruption of potential or remnant resource/reserve for future mining, destabilisation of mine infrastructure, and the disruption of production by theft of water, compressed air and electrical lines.

Mr. Anderton revealed that AGA is currently collaborating with the Minerals Commission and the Chamber of Mines to curb the menace of illegal mining operations on its concessions.

“We have adopted a regional workshop to help the youth acquire skills-training to be absorbed by the AGA. This is expected to provide the way forward for halting the dangerous illegal mining operations in the Obuasi mine and its affected areas.”

He said under AGA’s social investment plan, its core mandate is to help improve lives and livelihoods, foster support and promote businesses in the community so that citizens will not be over-dependent on the mine.

Mr. Anderton explained that the company’s values enjoin management to actively work in collaboration with the communities and the municipal authorities to physically develop Obuasi as a safe and livable municipality.

“One of the areas where we can help is to create alternative jobs; through the private companies operating in Obuasi and our own sustainability efforts.

“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,” he remarked.

Last year, gold production from the activities of small-scale gold miners -- both legal and illegal -- totalled approximately 800,000 ounces, with the subsector estimated to employ between 100,000 and 300,000 people -- mostly unskilled rural labour.

There have been arguments about the activities of illegal mining operations, which provide livelihood opportunities for poor people and therefore must be approached as a developmental issue, not only a security problem. This is the challenge that all stakeholders in the sector, government, and civil society face.

Industry watchers have observed that illegal small-scale mining activities have always resulted in encroachment on large tracts of community lands, depriving poor and marginalised communities of their land-surface rights. This has deprived many communities of their sources of livelihood.

Dr. Toni Aubynn, Chief Executive Officer of the Ghana Chamber of Mines, in a recent statement called on the government to strengthen its resolve in tackling the nuisance of illegal miners.

“Illegal mining should no longer be considered business as usual; and while the Chamber supports the participation of Ghanaians in the mining value chain, the illegality around a large number of their operations and the negative impact on the environment is totally unacceptable,” he said.

PBC considers offshore facility

Produce Buying Company (PBC), the country’s largest-buyer of cocoa beans, says it is considering accessing offshore facilities to reduce the cost of raising capital to finance its operations.

“The board and management have put in place a number of measures, including accessing offshore facilities at relatively lower cost, to supplement local funding sources to bring our finance cost to an acceptable level.

“The huge sums of money involved in our operations tend to expose the company to a number of operational and financial risks such as interest-rate risk, as well as market and security risks.

“Finance costs, which constituted about 25.6% of gross operational earnings [in 2011], continue to pose a challenge to the company’s financial performance,” Dr. John Frank Abu, Board Chairman of the company, said at its annual general meeting in Accra.

“PBC’s cost of sales grew by 109.6% from GH¢556.67million in the previous year to GH¢1.17billion, due mainly to the increase in producer price and jump in the quantity of cocoa purchased,” he said.

Making a presentation, Dr. Abu said the company increased its cocoa tonnage purchases by 56% from 238,967 tonnes in 2009/10 to 374,858 tonnes during the year 2010/11, and achieved a market share of 37%.

This development impacted on the company’s revenue, which rose from GH¢632.9million to GH¢1.3billion.

The significant increase of 105.7% was mainly due to the increase in the quantity of cocoa purchased, the producer-price paid to farmers, and freight earnings from secondary evacuation activities.

In 2011, the company achieved a profit after tax of GH¢27.65million, against GH¢14.1million in 2010. The balance sheet also showed a strong growth and resilient financial position as shareholder’s equity rose by 100.5% from GH¢23.63million to GH¢47.4million.

The company’s total assets grew by 62% from GH¢169million to GH¢274.3million. This growth was mainly led by inventories, trade and other receivables as well as property, plant and equipment which respectively grew by 21%, 87% and 26%.

Basic earnings per share increased by 95.9% from GH¢0.0294 in 2010 to GH¢0.0576 in 2011. The company’s net worth improved from GH¢23.62million in 2009/10 to GH¢47.37million in the year under review, representing 100.5% growth. This was largely due to improved profitability and a sound retention policy, Dr. Abu said.

“The company looks into the future with confidence and optimism, and hopes to achieve more successes in its operational and financial performance. In the coming year, we intend to improve our operational activities, increase supervision of field staff and increase our storage facilities to help bolster our market share, become more competitive and continue to be the market leader in the industry.”

Produce Buying Company’s main business is to buy, collect, store, transport and deal in cocoa, coffee and shea nuts produced in the country on behalf of the Ghana Cocoa Board.

PBC was ranked number-one in 2010 in the Ghana Club 100 rankings, up from the 34th position in the previous year.

GRA schools diplomats on tax-reforms

The Ghana Revenue Authority (GRA) says it is in discussions with the diplomatic community and international organisations to deepen tax-compliance and revenue mobilisation.

“The Authority is currently in discussions with the diplomatic community and international organisations to see how they can collect taxes from their staff on behalf of the Authority.

This is part of the on-going taxpayers’ registration and re-registration,” Mr. Paul Kwakye, Project Manager for the e-gov project, said in Accra.

He was speaking at a seminar organised by the Authority for members of the diplomatic community to educate them on the new tax identification number (TIN) system, on tax administration and the re-registration of taxpayers.

In a speech read for him, Commissioner-General of the GRA, Mr. George Blankson, said: “As members of the diplomatic community, it is important that the GRA interacts with you so that your understanding will be enhanced to enable you take advantage of the new system, especially in clearing imported goods.

Businesses and individuals that re-register are allocated new taxpayer identification numbers which enable them to clear goods from the ports.

The registration and re-registration process is aimed at improving the quality of customer records and service delivery, facilitating access to a variety of online government services -- such as filing of returns, payments, appointment scheduling and reducing tax-compliance costs.

Mr. Blankson explained that the interaction also formed part of the e-gov project being implemented to modernise key ministries, departments and agencies; computerise business registration; enhance revenue mobilisation; and provide citizen-friendly services.

“The e-gov project has been designed such that the GRA will be electronically linked to Registrar General’s Department (RGD) to enable it have access to their database to assess details of registered businesses for easy tracking and for tax purposes,” he said.

The e-gov project is a public-private partnership between Ghana Community Network Services Limited (GCNet) -- a customised electronic system established for processing trade and customs documents in Ghana -- and the government, which gave GCNet the mandate to design, finance, build, operate and transfer ownership of an electronic government system to the RGD and GRA.

Producer inflation jumps to 16.1%

Annual producer-price inflation rose by more than one percentage point to 16.1% in February from 15% the month before, according to the Ghana Statistical Service.

The rise in producer inflation was mainly driven by rising gold prices on the world market.

Prices in the mining and quarrying sector increased at an annual rate of 39.3% in February, up from 28% in January. Within the month, mining and quarrying prices rose by 8.3%.

“This is largely due to an increase in gold prices on the world market,” Dr. Philomena Nyarko, acting Government Statistician, told a media conference in Accra.
Spot gold prices were up by 26% year-on-year in February, trading at an average of US$1,741.

Manufacturing price inflation, a sector which constitutes more than two-thirds of the producer basket, decreased marginally to 13.7% from a rate of 14.3% in January. The utilities sector saw producer inflation rise slightly from 9.3% to 9.4%.

Manufacture of machinery and equipment recorded the highest inflation rate of 38.1% in the manufacturing group, while manufacture of motor vehicles, trailers and semi-trailers recorded the lowest rate of 0.75%.

Six out of the 16 major groups in the manufacturing sector recorded inflation rates higher than the sector average of 13.70%.

During the 12-month period from February 2011 to February 2012, the producer inflation rate rose steadily from February 2011 (22.29%) and peaked in April 2011 (24.29%). It declined between May and June, and resumed the increase until September 2011 (19.59%).

It again declined in October 2011 and increased slightly in November 2011, recording a rate of 17.28% before declining to an end-year rate of 13.65%.