Friday, April 29, 2016

Lawyers urged to incorporate rules of international arbitration

Chairman of the Ghana Arbitration Centre, Nana S.K.B Asante, has urged the Ghana Bar Association (GBA) to incorporate the rules of international arbitration to address the situation whereby cases relating to multilateral trade are handled by foreign counsels.
“International arbitration is very crucial for intra-country commercial transactions, and the failure of the country to embrace and develop skills in arbitration means ceding a major part of modern legal practice to foreign firms.

“The Ghana Bar should not deny itself the opportunity to participate effectively in international arbitration, as it has interesting prospects,” he told lawyers of state-owned institutions in Accra at a two-day training programme organised by the International Chamber of Commerce-Ghana.

Nana Asante also encouraged lawyers in the country to build expertise and delve into the substance underlying international agreements that give rise to international disputes: such as petroleum and mining agreements, joint ventures, procurement agreements, and technology transfer agreements.

He indicated: “Without such expertise, they are relegated to spectators of the critical transactions and commercial arbitrations that invariably affect the country’s destiny.
“This is equally applicable to business executives and government officials.”

According to him, arbitration is part of the dispute settlement mechanisms that are being promoted at the highest level of the country’s legal system -- for the obvious reason that the courts are congested and pace of litigation is slow.  For these reasons, he opined that in commercial disputes arbitration is an expeditious means of commercial dispute resolution that is favourable to both investors and businessmen.

Participants of the training course were drawn from state-owned institutions comprising the Volta River Authority, Ghana Highways Authority, Ghana Oil, National Communications Authority, Attorney-General’s Department, HFC Bank, and the Ghana Airports Company Limited.

One rationale behind re-launch of the ICC Ghana in 2013 was to address the rise in disputes between foreign investors in the country and the state, which usually resulted in judgment debts.

The Chamber was also to promote trade and investments in the country, as well as smoothen operations in the domestic business environment. 

Executive Secretary of the International Chamber of Commerce (ICC) Ghana, Emmanuel Doni-Kwame, in an interview with B&FT on the idea behind the training exercise said: “This is training programme for arbitrators and lawyers in the country, on rules of the ICC Court of Arbitration.”

Fertiliser subsidy could take a hit

…but farmers say “We expect nothing less than 180,000mt”

Once economic challenges affect allocations to other sectors, farmers should expect fertiliser subsidies to take a hit as well, Alhaji Alhassan Yakubu-Deputy Agric Minister, has said -- raising concerns as to whether government will deliver the full complement of the 180,000metric tonnes of the input it promised farmers this year.

The minister’s comments were in response to concerns that although government promised the same quantity of subsidised fertiliser last year, it ended up doing just about half.

The occasion was the launch of a report commissioned by the Peasant Farmers Association of Ghana (PFAG) that looked at the fertiliser subsidy programme in 2015, and points at a number of challenges including undue delays, uneven distribution, and limited number of retail outlets.

Charles Nyaaba, a Programmes Officer of PFAG, told the B&FT that the group finds the minister’s comments “unfortunate”, since government would have done its scrutiny before deciding the amount of fertiliser it subsidises for any given year. 

The Association, he said, expects nothing less than the promised quantities -- especially since suspension of the subsidy programme in 2014 was partly why the crops sub-sector recorded negative growth in 2015, reducing overall sector growth to 0.04 percent.

“This is not like a favour that they are doing us; the money is coming from the annual budget funding amount, which we are entitled to. So we expect 180,000MT,” he said.

The 2016 budget captures the fertiliser subsidy programme as one of government’s key “poverty focused expenditures” -- noting that out of a total allocation of GH¢355.14million for the agric sector, “about GH¢302.46million, representing 85.17 percent, is to be spent on the Fertiliser Subsidy programme and the Agricultural Mechanisation Service Centres, among others”.

In March, Agric Minister Alhaji Mohammed Limuna announced that government was to absorb 26% of the cost of the 180,000 tonnes of fertiliser, so that with effect from 1st April 2016 a 50kg bag of compound fertiliser would sell at GH¢85 while the same quantity of Urea would go for GH¢80
Yara Ghana, one of the key fertiliser dealing companies that pulled out of the programme in 2015 due to the delays, has returned for the 2016 season. 

According to the report on the fertiliser subsidy programme, which was put together by Dr. John Baptist Jatoe of the University of Ghana, both farmers and participating companies are restive about undue delays from government’s side, resulting in the input reaching farmers way later than they need it.

“Subsidised fertiliser became available on the market in the Central and Ashanti Regions in April 2015, whereas there are conflicting reports on its availability in the Northern and Upper East Regions,” the report said. 

“Information from fertiliser distributors in the regions suggest that they took delivery of subsidised fertiliser beginning from July 2015,” it added. 

To deal with the delays in releasing the fertiliser, the report said: “Government and other stakeholders need to re-visit the timing of the programme to ensure that the subsidised fertilisee are available for distribution in good time”.

It added that: “The scheme should target getting any such subsidised fertiliser to distributors and retailers by the time farmers begin ploughing their fields. This calls for more commitment to the process and early confirmation of orders with the suppliers”.

For 2016, the programme was launched in March -- a move the farmers see as being “early” and commendable, although disbursement is yet to take place. 

“The development is a good news to farmers and we hope disbursement will follow soon,” Abdul-Rahman Mohammed, President of the PFAG said at the launch of the report in Accra on Tuesday. 
Other challenges identified by the report include limited number of retail outlets, large-scale farmers getting more fertiliser than their quota allows, and the fact that some farmers still consider the subsidised price to be high.

“To help address these challenges, they suggested increasing the retail outlets for subsidised fertiliser, reducing the prices of subsidised fertiliser further, and prompt disbursement of subsidised fertiliser,” the report said. 

From approximately 43,000mt in 2008, the quantity of fertiliser distributed under the subsidy programme increased steadily to 176,278mt in 2011, before declining to 166,807mt in 2013. 

Following a break in 2014 the 2015 fertiliser subsidy programme was relaunched on April 30, 2015.
Under the programme, participating companies are required to import, clear from the ports, pay all charges and deliver allocated quantities of various types of fertiliser to their designated Regional/District distributors.

Selected and registered sales agents then sell to the farmers through an established elaborate Waybill/Receipt System. On their part, farmers are required to purchase fertiliser using passbooks issued by MoFA. 

Government projects that the agriculture sector will record an average growth rate of 3.5 percent for both 2016 and 2017, to compensate for the 2015 dismal 0.04 percent outturn it has been flayed for variously.Source:B&FT

Economy grows slowest in 15-yrs

The size of the Ghanaian economy grew by 3.9 percent in 2015, the slowest in 15 years, on the back of a slump in commodities prices and energy supply deficit, the national statistics office has reported.
According to figures from the Ghana Statistical Service, the last time the economy recorded growth below 4 percent was in 2000 when GDP, which measures the value of final goods and services produced in the country, decelerated to 3.7 percent.

The latest GDP figures, albeit provisional, are expected to serve as an encouragement to government of a rebound in economic activities, as Finance Minister Seth Terkper in June last year announced to Parliament that government had revised its expectation of economic growth for 2015 from 4.1 percent to 3.5 percent.

The Deputy Government Statistician, Baah Wadieh, at a press briefing in Accra on Wednesday said that the economy’s biggest growth period was recorded in the last three months of 2015, following improvement in the erratic energy supply challenges which forced businesses to cut production output.

He said the GDP figure for the fourth quarter was 4.9 percent, which is more than the 3.7, 3.3 and 3.6 percent recorded for the third, second and first quarters respectively. 

The sector that performed highest in the fourth quarter was Industry, which recorded negative growths in the previous two quarters. The sector grew in the quarter by 7.2 percent, the highest for the sector in any quarter of a year since the second quarter of 2013.

This was followed by the Services sector which recorded a growth rate of 5.2 percent in the fourth quarter, with the Agricultural sector trailing behind with a growth rate of 4 percent.

According to the Ghana Statistical Service, at current market prices the Ghanaian economy is now worth about GH₵139.9billion. However, when adjusted for inflation, the value of the economy is a little above GH₵34.8billion in constant terms from 2006.   

Government is hopeful that this year economic activities will rebound with a projected real GDP growth of 5.4 percent -- despite the International Monetary Fund, which is helping in management of the economy under a three-year Extended Credit Facility programme, lowering Ghana’s economic growth in 2016 to 4.5 percent as a result of the continued fall in prices of commodities on the world market.

However, the country’s fiscal managers are confident improvements in energy supply will boost economic activities and cause businesses -- which performed at half their capacity or shut down completely at the peak of the energy crisis last year -- to ramp-up output. 

According to government officials, the economy would have recovered from the commodities price shock experienced last year and expanded faster than it did had the energy challenges been addressed earlier.

This is underscored by Mr. Wadieh, who opined that “but for the energy crisis, the industrial sector would have grown beyond the 7.2 percent”.

It is worthy to note that industry’s performance last year largely depended on the water and sewage sub-sector, which contributed 26.9 percent to the industrial sector with construction taking 6.2 percent, while oil and gas contributed the least with 0.3 percent.

Health and social work also contributed 18.2 percent to the Services sector; with public administration, defence and social security contributing 17.1 percent, while education and finance recorded 10.5 percent and 7.2 percent respectively; thereby taking the sectoral contribution to GDP to 49.6 percent. Source:B&FT