Thursday, June 28, 2012

Mining vision must tackle widespread poverty

African governments need to set out national visions and policies on mining to tackle the widespread poverty and drive continental development, Dr. Yao Graham, Coordinator of Third World Network (TWN-Africa), has said.
The vision should not only seek to deal with fiscal policies but also a broad range of issues including integration of artisanal mining, community livelihoods and establishing the necessary linkages to enhance the benefits of the resource for mineral-rich countries.

The vision must as well put the continent’s long-term and broad development objectives at the heart of all policymaking concerned with minerals extraction.

Dr. Graham, who was making a presentation in Accra, said mining and mineral resources have been important in the trade investment relations of Africa with the world, and that Africa has been one of the key suppliers of strategic minerals to industrialised countries since colonial times.

“Despite the long history of mining, the continent is yet to fully optimise the potential of mineral resources to catalyse economic transformation. 

“Since the late 1980s, governments of Africa have undertaken series of reforms aimed at optimising the contribution of mining to the national economic development of mineral-producing and exporting countries.

“While the revival of foreign investment has expanded mineral production and exports, its contribution to social and economic development objectives has been far less certain -- and has even been contested in many countries across the continent.”  

Dr. Graham was briefing journalists in Accra as part of an upcoming Africa-wide civil society conference hosted by TWN to improve and deepen knowledge on the African Mining Vision (AMV).

The conference is being convened to facilitate and deepen understanding of the processes and substantive content of the reform agenda, especially in relation to the AMV, its action-plan.

The meeting is also expected to generate common understanding about opportunities and challenges around the African mining reform agenda, and to make inputs and contributions to the Business Plan of the African Minerals Development Centre (AMDC). 

The conference will bring together about 50 participants drawn from representatives of African civil society networks/coalitions and social constituencies from labour movements, mining-affected community groups, artisanal and small-scale mining organisations, gender-groups, the media, and policy officials among others.

The four-day conference, slated for June 26-June 29, will deal with issues such as managing and protecting community livelihoods, human rights and the environment in mining areas, the labour regimes with large-scale mining, mineral-commodity dependence, fiscal policies and the transformation of the mineral economy.

The conference is expected to conclude with the adoption of a plan based on a common position for advocacy on the reform agenda, as well as a set of recommendations to improve the effective functioning of the Business Plan of the AMDC.             

UN promotes sustainable business

United Nations Development Programme (UNDP) has made a strong call on Ghanaian businesses to sign on to the global compact code to ensure sustainable and responsible business practices.
The global compact is both a policy platform and practical framework for companies that are committed to sustainable and responsible business practices. 

It seeks to align business operations and strategies with 10 universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

 “The compact is based on the idea that business as a major and powerful component of every society has a role and a clear responsibility to help address the world’s most pressing challenges.

“Through the Global Compact, businesses can join hands with other partners to find solutions to the myriad of challenges facing humanity.” Mr. Kamil Kamaludden, Country Director, UNDP speaking at the re-launch of the UN Global Compact Local Network in Accra.

The programme was also targeted at announcing the transfer of the ongoing convergence of the global COMPACT and Ghana Business Code, which sought to align the Global Compact principles with the Ghana Companies Code.

He explained that the Compact provides a practical framework for the development, Implementation and disclosure of sustainability policies and practices, offering business participants a wide spectrum of management tolls and resources to help advance sustainable business models and markets and civil society a framework to help businesses accountable.

“I believe the convergence is opportune and will enable us benefit from the experiences of the two initiatives to ensure the nation obtains optimum benefit from the Global Compact.”

He encouraged the private sector including the Ghana Chamber of Mines, Ghana Employers Association and the Association of Ghana Industries to work closely together with the membership of the Network and the business code partners to ensure a smooth transition and convergence of the two initiatives and to the development of a strong and vibrant network.

Ms. Helle Johansen, UN, Private Sector Advisor, UNDP Nordic Officer said the objective of  transferring the Global Compact network administration  to the private sector is to strengthen the impact and sustainability of the network.

For a Global compact network to be attractive to the businesses it needs to address the members’ specific challenges with implementing the Global Compact and at the same time, create a forum for sharing of experiences and knowhow. 

The network secretariat is currently looking into which learning events will be offered in the coming time and how the network can create the best conditioned so this sharing of experiences among the members can take place.

It has more than 8,700 corporate participants and stakeholders from 130 countries and with more than 80 local networks around the world.

Dr. Toni Aubynn, Chief Executive Officer of the Ghana Chamber of Mines said: “The support of the UNDP for this initiative has brought a number of local companies, business associations, labour union and NGOs to commit to these universally accepted principles and work hard to ensure their businesses operate within the confines and the noble principles of the compact.”

Losing the energy game

Cheap imports and government aloofness could push the manufacturing of energy-efficient lamps from Ghana to Nigeria 

It’s been a long journey from the dark, power crisis-laden days of 2007 when poor quality and unreliable electricity supplies hit hard the bottom-line of many energy-intensive industries whilst devastating most marginal manufacturing enterprises. 

Now the outlook is brighter, with Ghana poised to become a regional power hub…except for an emerging uncanny lethargy from government threatening to deflate the enthusiasm of local entrepreneurs.

Pragmatic measures, obviously driven by a sense of urgency and aimed at energy-use efficiency and energy conservation, taken by government which included the strict implementation of a raft of legislations banning the importation, distribution and sale of inefficient incandescent electric bulbs, as well as laws on standardisation of electrical products, led to stunning outcomes including savings estimated at US$38.6million annually; a peak electricity load reduction of 124 megawatts (MW)’ and a reduction of 116,000 tonnes of CO2 emissions per annum.

But perhaps the most outstanding development was the opportunity identified and seized by some local entrepreneurs to move into the production of highly efficient compact fluorescent lamps (CFLs), a product promoted by the Energy Commission in its drive towards energy-use efficiency to complement increased investments in electricity generation and distribution capacity to ensure power supply security.

That, obviously, is the ultimate prize for all the efforts aimed at pushing the country into a commanding position in the energy industry of the West African sub-region -- a region notoriously deficient in electric energy supply and use.

Generally, local manufacturing creates more new job; perhaps more than any of the other broad economic activities. Additionally, and more importantly, it provides an opportunity for the country to stay at the forefront of technological developments; as Ghanaian workers stay on the factory floor and hone their skills and gain more knowledge, they will drive innovations; they will be emboldened to explore new frontiers in value addition, and they will control the high value end of the industry.

Ghana, however, is on the verge of losing this ultimate prize to its neighbouring economic juggernaut, Nigeria, which incidentally is Ghana’s most serious competitor in the race for dominance in the energy industry in West Africa.

 Local producers of CFLs may soon move manufacturing operations to Nigeria, a country that hosts about half of the sub-region’s 300 million people.

At least two major reasons account for this. Firstly, the Ghanaian market is increasingly being inundated by cheap CFL imports from China and elsewhere; and secondly, Nigeria has succeeded in effectively blocking its vast market to most Ghanaian manufactures. And worryingly, government’s attitude toward these developments has not been aggressive and decisive enough to inspire confidence among local manufacturers.

Data from the GCNet shows that CFL imports have been growing significantly since 2008, following government’s ban on the importation and sale of incandescent bulbs. The 2008 figure was 14.8 million pieces, increasing to 20 million the following year and rising to 35 million in 2010.

Currently, Ghanaian manufacturers supply to just over one percent of the domestic market -- though their products are of superior quality and their installed production capacity means they could do better.

Locally manufactured CFLS are designed to withstand a wide range of power fluctuation, between 110 and 270 watts, to accommodate the Ghanaian power situation; but most imports, even the good quality ones are manufactured to withstand only a narrow range of fluctuation.

Worse still, the inferior quality types from China are usually not certified and their labeling is mostly falsified. A lamp labelled 30W, for instance, could actually be only up to 10W -- thus not producing the luminescence expected. 

To ensure that CFLs imported into the country are of the expected quality, the Ghana Standards Authority (GSA) has taken delivery of a test facility to facilitate enforcement of quality and standards regulations.

Either this is a bit late in the day, or unscrupulous importers have found a way around this measure as the local market is being flooded with sub-standard CFLs which get spent quickly. Tellingly, consumers are beginning to complain about the wisdom in spending more on CFLs whose retail prices are about five times but last only as long as banned incandescent bulbs. 

Even more worrying, the cheap imports are pushing local manufacturers out of the domestic market.
“Though our products are superior, long-lasting and come with a year’s warranty -- which means any of our lamps would be replaced or repaired should it be spent within a year -- we’re still disadvantaged,” says Mr. Raphael Felli, Managing Director of Wellamp, one of the two local manufacturers of CFLs. 

This disadvantage stems from, first, price undercutting. Importers and distributors of cheap CFLs are able to retail at far lower prices than local products. Secondly, consumers of imported CFLs try to take advantage of Wellamp’s warranty policy by submitting spent foreign CFLs as Wellamp products for replacement. 
The second challenge confronting Wellamp is the difficulty that the majority of local manufacturers generally face in exporting to the ECOWAS market. An underdeveloped export infrastructure and especially cumbersome administrative procedures greatly hinder intra-West African trade.

For instance, Nigeria -- justifiably or otherwise -- has placed an import ban on more than 70 of Ghana’s non-traditional export products, which include most of Ghana’s manufactured products. The Nigerians argue that most of those products are being dumped onto the West African market by Asian countries, notably China. 

While every possibility exists that some items could be exported to Ghana and re-exported to Nigeria as though they were manufactured in Ghana, provisions could and should be made to distinguish genuine Ghana-made products from those manufactured in Asia.   

Of course, at the sub-regional level, measures have been instituted to address such challenges. Under the ECOWAS Brown Card scheme, which allows card-holding corporate bodies to export unhindered, Nigerian officials will have to come and inspect the local manufacturers’ factories to ensure that they are not indeed importing but actually manufacturing what they supply to the Nigerian market. 

This process is however fraught with administrative bottlenecks, making it almost ineffective practically.
Yet another bottleneck is the payment system within West Africa. The banks have difficulty coordinating their activities. The same bank operating in a number of West African countries see their country operations as independent of each other; therefore transactions by a Ghanaian exporter with a bank in Ghana, for instance, would not automatically be picked up by the mother company of the same bank in Nigeria, the destination of the Ghanaian exporter’s products, and vice versa. For the exporter, therefore, transaction costs with the banks are escalated. 
Now, beleaguered Ghanaian manufacturers, confronted with an ever-shrivelling domestic market may buckle under pressure from Nigerian businessmen seeking to partner Ghanaian entrepreneurs to relocate their manufacturing operations into Nigeria so as to have easy access to that country’s huge market.

“Of course, as with most manufacturers in Ghana, we have been approached by Nigerians encouraging us to enter into joint ventures with the aim of moving our factory operations to Nigeria to enable us circumvent the export barriers encountered by most Ghanaian exporters to that market.” 

“We would expect government to play a more meaningful role in preventing this from happening,” Raphael Felli said, explaining that government agencies need to stringently implement standard regulations to ensure that inferior products do not flood the domestic market and thus crowd out local manufacturers.

While at it, government should also use its procurement processes to purchase a substantial percentage of its CFL requirements for public organisations and institutions from local manufacturers.

“We’re not asking to be pampered. We expect government to give us quality and price targets within which local manufacturers produce and sell to government and public institutions.

“Here, an added advantage to creating much-needed jobs and retaining wealth in the country -- as against encouraging the importation of energy-efficient lamps -- is that local manufacturers can give warranties that are otherwise not available, or difficult to obtain, with the imported products. Increasing local manufacturing could also help spawn a new industry of recycling, which is relatively more difficult with imported products,” Felli said.

Obviously Ghana, arguably West Africa’s most efficient economy currently, has a lot more to do to ensure that it reaps the true benefits of its efforts by preventing the migration of its manufacturing enterprises from the country.

For while tackling the phenomenon of an influx of cheap, sub-standard products from China and elsewhere may indeed be daunting, allowing the few surviving manufacturing concerns to be persuaded to relocate outside the country would be suicidal to an economy that is battling with extremely high unemployment rates.

“Thankfully, Ghana enjoys a lot of goodwill in the sub-region. It is now imperative for government to leverage on that to open up the ECOWAS market to Ghanaian manufactures. 

Government needs to intervene and have bilateral arrangements to certify some Ghanaian goods that are easily taken into Nigeria,” Felli opined.

While this may be easier said than done, it is the growing belief among an increasing number of Ghanaian entrepreneurs that it is the logical step toward ensuring a thriving, efficient economy. It is time for Ghana to play hardball.   

Source: B&FT

Rubber exports seen soaring to US$250m

Ghana is confident of earning nearly US$250million from the export of rubber by 2020, increasing the country's foreign-exchange revenue from the crop.

Presently, 35,000 hectares of land are under cultivation, expected to produce 63,000 tonnes of the crop. As of 2009, approximately 11,255 hectares of land were under cultivation, producing over 16,000 metric tonnes. The rubber plant has a productive lifespan of 35 years.

The country has moved from 1,200 hectares of rubber plantations in 1995 to 35,000 hectares, helping to create employment for some 100,000 people.

About 95 percent of the country’s rubber produce is exported to France, Turkey, East Africa and South Korea. Ghana also exports to neighbouring Burkina Faso.

Currently, the traditional rubber-growing regions are the Western and Central Regions, but the northern parts are also being explored for their potential to cultivate the crop.

Mr. Joseph Baidoo-Williams, Head of the Perennial Crops Development Unit at the Ministry of Food and Agriculture (MoFA), in an interview with the B&FT, said: “The rubber sector is doing fairly well due to the ready market for the raw material, coupled with government's support for the farmers.

 “Government has identified the rubber sector as holding tremendous potential to create jobs and reduce poverty and as such is giving it the necessary support to enable it contribute to the development of the economy.

“Recent trends in world prices suggest that rubber production when properly nurtured could easily become a major foreign exchange earner for the country.”

He explained that 7.4 million euros has been disbursed to the National Investment Bank (NIB) to finance the cost of development of out-grower plantations, while 757,400 euros has additionally been disbursed to the Agricultural Development Bank (ADB) to maintain and ensure sustainability of the farms.

“The contribution of rubber cultivation to employment-generation is enormous as it currently provides employment for over 37,083 farmers through its Rubber Out-grower Scheme. It has a potential of employing an additional 2,250 tappers for every 9,000 hectares, of which 25 percent will be females.”

He said 10,500 hectares of rubber trees are envisaged to be planted between 2010 and 2014, and this is expected to employ an additional 2,750 farmers. “The rubber industry has minimised the rural urban drift, increased income levels of farmers and their relatives, regularised the rainfall pattern, and created employment opportunities.”

Figures at MoFA indicate that in 2006, rubber exported to France was 13,618.36 tonnes, rising to 15,318.16 tonnes in 2007. It however fell to 14,132.12 tonnes in 2008 due to the cutting down of the old rubber trees and their replanting by the Ghana Estates Limited (GREL), the main industrial operator in the rubber industry.

Government has been sourcing financing to support the industry. In August 2006, it secured a loan from the Agence Francaise de Development (AFD), a French development agency, and Kreditanstalt fur Wiederaufbau (KfW), a German development bank.

AFD provided 23 million euros while KfW provided 6 million euros to support the out-grower project in the country. The money is to be used to finance the third phase of a 7,000-hectare rubber plantation project. It will also be used to offer credit lines to about 1,800 farmers over a five-year period.

The first phase of this project started in 1995 and ended in 1999 after 400 farmers planted rubber trees on more than 1,200 hectares of land. The second phase was for 500 farmers who planted over 2,800 hectares of the crop.

Part of the fund will be used for the construction of 210 kilometres of farm roads and 77 kilometres of feeder roads to improve access to project areas and ensure easy access to production and marketing areas.