GRi Business News 23-04-99

Accra (Greater Accra), 23rd April 

Ghana and Denmark on Thursday signed agreed minutes of their 1999 Annual Consultations on development partnership by which Denmark is providing 28 million dollars for the health, energy, road and agricultural sectors. The amount will increase by two million dollars a year, till 2002. The consultation, the seventh in the series, focused on developing partnership and economically viable relations between Ghanaians and Danes.

Signing the agreement, the Minister of Finance, Mr Kwame Peprah, said the 1999 bilateral consultations is significant, in that it comes at a time when Ghana is strengthening her economic reforms and expressed the hope that Denmark will continue to help Ghana out through this "difficult transition". "We are appreciative of this role by Denmark in fostering strong co-operation in Ghana, especially in the development of the private sector. It is one of the unique means of transferring modern technology within the framework of bilateral consultations", Mr Peprah said. He said government welcomes the usual timely advice and criticisms from the Danish government, saying they have helped in shaping its plans and programmes.

Ms Nanna Hvidt, Head of Department, Ministry of Foreign Affairs in Copenhagen, said she is impressed that after some difficult years, Ghana's economy is now stabilising with falling inflation and interest rates. "This is to a large extent due to the disciplined economic policies the government has undertaken - not without short-term sacrifices. But we are happy to see the priority given to social sectors". She said she hoped that the discipline would be sustained next year and beyond to help pave the way for private sector growth and increase economic growth beyond the present four to five per cent.

She said her delegation recommends an increase in funding for road maintenance through the road fund, adding that the focus on the rural areas is positive. Ms Hivdt hoped that Ghana would be able to gradually increase the level of her own funding of public investments through increased and equitable taxes.

Accra (Greater Accra), 23rd April 

The Commonwealth Development Corporation (CDC) is to become a private equity investor in emerging economies thereby shifting from its traditional role of being a development finance institution. It will, however, still be required to make 70 per cent of its investment in poor countries and take the lead in implementing ethical best practice, a statement issued on Thursday in Accra by the CDC said.

The statement was to announce the arrival of Dr Roy Reynolds, Chief Executive of CDC, in Ghana for a two-day visit. The statement said, "CDC's prospective shareholders would expect commercial returns for the risks taken", which means equity type investments. It said Dr Reynolds will open CDC's new office in Accra and meet senior government and business leaders and representatives of companies supported by CDC.

The statement said Dr Reynolds' visit, the first to the country since the CDC move towards a Public-Private Partnership, reinforces the recognition of "the need to balance development and profit if sustainable development is to be achieved". "In what has been a difficult 12 months for emerging markets, the timing of Dr Reynolds' visit underscores CDC's confidence in the ability of the Ghanaian economy to keep moving forward and the investment opportunities that this presents".

Accra (Greater Accra), 23rd April

Ghana earned a total of 401.7 million dollars from non-traditional exports in 1998 compared to 329 million dollars during 1997 representing an increase of 22.08 per cent, data from the Ghana Export Promotion Council (GEPC) released Friday said. The main areas of increase are agricultural products, processed and semi-processed products and handicrafts.

Comparative statistics indicate that agricultural products for 1998 totalled 77.8 million dollars compared to 57.4 million dollars in 1997. Processed and semi-processed products totalled 317.5 million dollars for the period as against 266.9 million dollars in 1997, while handicrafts fetched 6.387 million dollars in 1998 compared to 4.719 in 1997.

Major earnings under agricultural products came from fish and sea foods which totalled 21 million dollars compared to 18.7 million dollars in 1997. Pineapples fetched 8.76 million dollars, down from 9.6 million dollars, yams earned 4.75 million dollars, up from 4.54 million dollars and bananas fetched 2.68 million dollars compared with 1.834 million dollars in 1997.

Others are raw/lint cotton that leapt to 8.5 million dollars in 1998, compared to a meagre 6,230 dollars, robusta coffee which earned 8.25 million dollars, up from 3.6 million dollars and sheanuts, which earned 7.89 million dollars compared with 6.72 million dollars in 1997.

Of processed and semi-processed products which totalled 317.5 million dollars, wood products covering furniture and parts, veneer, plywood and railway sleepers among others raked in 84.59 million dollars, compared to 70.9 million dollars in 1997 while aluminium products fetched 12.1 million dollars against 5.75 million dollars for 1997.

Prepared foods and beverages, including tuna loins/canned tuna brought in 77.2 million dollars, up from 49.8 million dollars in 1997, cocoa butter fetched 57 million dollars, down from 71.92 million dollars and cocoa liquor earned 11.89 million dollars, down from 14.59 million dollars in 1997. Palm oil earned 19.66 million dollars in 1998 as against 8.68 million dollars in 1997, representing 126.57 per cent increase.

Items in the handicraft sector that earned 6.38 million dollars included basket ware, rattan/cane products, wood carvings and kente.

Accra (Greater Accra), 23rd April

The following are the average inter-bank exchange rates of the cedi to the dollar and other derived rates for other currencies as against the major foreign currencies for today, Friday, April 23, as announced by the Ghana Association of Bankers:

Currency Buying Selling

US Dollar 2,419.73 2,454.82 cedis

Pound Sterling 3,913.19 3,972.39 "

French Franc 393.82 399.58 "

Swiss Franc 1,613.15 1,636.01 "

Deutsche Mark 1,320.73 1,340.26 "

Canadian Dollar 1,635.95 1,659.10 "

Japanese Yen 20.25 20.54 "

Dutch Guilder 1,172.24 1,189.37 "

S/African Rand 397.84 402.74 "

Euro 2,583.99 2,621.00 "

CFA Franc 3.94 4.00 "

Naira 28.21 28.62 "

Nsawam (Eastern Region), 23rd April

Mr K.S. Osei-Bonsu of the Banking Supervision Division of the Bank of Ghana (BOG), has described rural banks as the main agents for mobilising resources for economic growth. He was opening the Nsawam agency of the Akuapem Rural Bank Limited at Nsawam on Thursday.

Mr Osei-Bonsu said the banking system was undergoing fundamental changes with new challenges and opportunities are being created on a daily basis in the domestic market which is characterised by competition. He reiterated the need for deposit mobilisation by the rural banks, stressing that the economy has remained a cash based one with a lot of currency outside the banking system.

This phenomenon shows that there is room for banks to mobilise deposits and be effective vehicles to promote savings for economic growth. The BOG, he said, would encourage banks to adopt savings mobilisation measures to increase national savings for investment.

The chairperson of the Board of Directors of the bank, Dr (Mrs) Gloria Nikoi, said the bank with 1,280 shareholders has a share capital of 56.2 million cedis. It has also mobilised a total of six million cedis from the Nsawam agency since its operations began last November. Mrs Nikoi said the bank, through a variety of loans and overdrafts, has helped a number of entrepreneurs to improve their production and incomes. "The bank's mission is to demystify banking, develop the banking culture and make banking part and parcel of everyday life of the people on the Akwapim Ridge", she said.

Accra (Greater Accra) 23 April

Vice-President John Evans Atta Mills on Friday urged local entrepreneurs to develop business programmes that would attract investment assistance from development finance institutions. Too often, micro enterprises lack technical and financial advice and most importantly, capital, which are vital for accelerated growth.

Opening the new offices for the Commonwealth Development Corporation (CDC), a British development finance institution, and its subsidiary, Venture Fund Management Company (VFMC) located within the premises of Regimanuel Gray at La, the Vice President said Ghana needs such institutions for accelerated growth.

Prof. Mills said government has gone to great lengths to attract foreign direct investment by informing the world of opportunities and expressed the hope that local entrepreneurs will come out with the right proposals to meet investors. "We have the men and women with ideas, skills, the ability to recognise the opportunities and the determination and creativity necessary to succeed."

Vice-President Mills said CDC's long history in Ghana is an indication of its confidence in the country's economic potential and "the momentum of positive change taking place in the climate of business and investment".

CDC, which was established in the United Kingdom in 1948, commenced business in Ghana in 1955. Its efforts were redoubled in the late 80s with loan advancement to some major companies in the energy and mining sectors. It has been lending support to agribusiness, financial service, property and the telecommunication sector. Mr Robin Blackburn, CDC Country manager, said between 1995 and 1998, the corporation's investment in Ghana averaged 11.8 million pounds (19 million dollars) yearly.

The Corporation played a leading role in establishing the first venture capital fund in Ghana that is yet to be inaugurated. It is also helping to pioneer the concept of leasing with the setting up of Ghana Leasing Company. Mr Blackburn said the Corporation now has a portfolio in excess of 81 million dollars supporting some 16 businesses.

The net surplus from its operations by 1998 would place it among the top 20 companies, he said. Mr Blakburn said the Corporation's target is to maintain a similar level of investment over the next three years, "but the challenge will be to move the balance of the portfolio from the safer haven of secured debt towards risk capital". He urged aspiring and established entrepreneurs to go forward with robust proposals to the Corporation for the necessary restructuring and subsequent growth.

Mr Roy Reynolds, CDC Chief Executive, said the worldwide portfolio of CDC was 1.5 billion pounds as at last December adding that Africa is its priority area. "We have a self-imposed target to place 50 per cent of new investment in Africa and Asia." Currently, he said, 29 per cent of the Corporation's total portfolio is spread over 170 investments and loans in Africa, and is administered from 12 offices in the region.

The CDC also manages 182 million dollars in nine countries in Africa.