Apraku calls for review of Ghana's trade
policy
HFC records more profit
Accra (Greater Accra) 28 April 2000
The Home Finance Company Limited (HFC) recorded a profit after tax of 4.7 billion cedis in 1999 as against 3.6 billion cedis recorded in 1998, Mrs. Stephanie Baeta Ansah, Managing Director of the Company, said its ninth annual general meeting in Accra on Thursday.
She said this was achieved through the company's resolve to diversify the mortgage portfolio, which was increased by 27.2 billion cedis to 89.2 billion cedis for 1999.
"With a balanced mortgage portfolio and our commitment to innovation, cost discipline and professionalism, your company shows healthy financial results."
Dividend for the year under review increased by five cedis or 20.8 per cent from 24 cedis in 1998 to 29 cedis in 1999.
Over the period under review, HFC's share price on the Accra bourse remained unchanged at 750 cedis.
Mrs. Baeta Ansah singled out the Construction Finance Facility of the company as doing "very well," and said under it,
under the scheme, real estate developers are provided with financing to construct houses especially for buyers who become mortgage customers.
She said during the year, the company worked with a team of experts from the ABN AMRO Bank under a technical assistance programme funded by the International Development Agency, the soft loan arm of the World Bank to prepare the company for diversification into new business areas and to upgrade its information technology.
The Managing Director said HFC's two managed funds, the HFC Unit Trust and HFC-REIT held their own on the market. They posted yields of 25 per cent and 20 per cent respectively.
She explained that HFC-REIT more than realised its target by overcoming the rate of inflation, which averaged 15 per cent in the year under review.
"We expect competition in the future as the Securities Regulatory Commission (SRC) gears up to license other funds. Being the first in the field, however, we are determined to keep our lead in the business and assure our investors of satisfactory returns on their investments."
Mr. Samuel Kortei Botchway, Chairman of the Board of Directors, said housing deficit in the country continued to increase from previous years to a current annual supply deficit of an estimated 133,000 units.
Out of this, only 25,000 housing units are provided annually as "only a few banks in Ghana offer mortgage finance."
He said HFC, being the dominant housing finance institution, increased the number of mortgages from 2,839 in 1998 to 3,241 at the end of 1999.
The total assets of the Company also increased from 81.3 billion cedis to 119.2 billion cedis as at December 1999. This represents a 46.5 per cent increase in the assets.
Mr. Botchway said the company continues to place emphasis on recruiting talented young professionals and equipping them with first class training programmes both locally and overseas to be able to stay in competition.
Highlights of the financial results include a total dividend of 1.6 billion cedis as against 1.4 billion cedis in 1998.
Growth in shareholders' funds rather declined by a huge margin from 144.4 per cent in 1998 to only 23.1 per cent. Stated capital remained at 8.02 billion cedis at the end of 1999. Mr. Ken Ofori-Atta and Mr. Henry Dei were re-elected to serve on the board.
GRi../
Tema (Greater Accra) 28 April 2000
The Tema Oil Refinery (TOR) made a total loss of 160 billion cedis in 1999. 103 billion cedis of this amount was due to the fast depreciation of the cedi against major foreign currencies.
Mr. W. S. Parker, Chief Executive of the Refinery said "the refinery's only hope of recovery from this huge financial loss is the stabilisation of the cedi against these major foreign currencies and pricing of its products to reflect the actual cost of production".
Mr. Parker, disclosing this to newsmen at Tema on Wednesday said other losses came mainly from payment for haulage and incentives to workers.
He said since September 1996 when it was decided that the refinery must procure its own crude oil for processing, TOR has been facing problems with working capital.
"TOR is not a subvented organisation and to run a 300 million dollar outfit without any capitalisation, is difficult," he said adding that the company was able to raise some capital but it faced cash flow difficulties and had to resort to the banks "and that has not been easy".
Mr. Parker said TOR is a first class refinery with a capacity of two million tonnes per annum and if it gets its prices right it would make profits but its prices are subject to the approval of the Ministry of Mines and Energy.
The current ex-pump prices being charged by TOR do not allow the company to recover its full cost of production.
For instance the current petroleum prices being paid by Ghanaians is based on the exchange rate of 4,000 cedis to the dollar, he said.
Mr. Parker said it is for some of these reasons that when the price of crude oil drops on the world market petroleum prices in the country could not be reduced by the same margin since there are other factors that go into determining the price locally.
"It is not as simple as people think", he said, adding , " liquefied petroleum gas (LPG) is not a by-product, which must be sold cheaply even though it was flared in the past."
He said LPG is the most expensive of the products in the petroleum industry explaining that the lighter the product the more expensive it is.
For example in March, this year "Super" petrol was 370 dollars per tonne on the world market and LPG sold at 459 dollars per tonne.
He said at the time TOR was flaring the LPG it did not have storage facilities for it, now two of such facilities have been constructed. However, the refinery is now burning ethane, which it cannot store.
Ghana's LPG consumption is currently estimated at 45,000 tonnes per annum from 4,000 tonnes a few years ago.
GRi../
Apraku calls for review of Ghana's trade
policy
Kumasi(Ashanti) 28 April 2000
Dr Kofi Konadu Apraku, the Minority Spokesman on Finance, has called for a comprehensive review of the country's trade policy to give a lifeline to the economy.
It has become necessary to modify the "status quo" of the trade policy in the light of the high interest rates, high inflation and the depreciating currency that have combined to render the Ghanaian local manufacturer non-competitive, he said in reaction to
the package of economic measures announced by Mr. Kwame Peprah, Minister of Finance, to help salvage the economy.
Mr Apraku who is also MP for Offinso North said the acceptance by the government that there is indeed a crisis and the virtual acceptance of every recommendation made by the New Patriotic Party (NPP) at its recent press conference in Accra is a vindication and confirmation that "we are not alarmists".
He said what the opposition parties now want to see is the concrete and specific way the government intends to cut down its expenditure.
Dr Apraku said generalisation is not "what we need but specificity", adding, "we want to see that expenditures are within limits approved by Parliament".
He observed that the measures announced by Mr. Peprah did not go far enough to adequately address the issue of capital flight, which he said, is a mark of lack of confidence in the economy.
The Minority ranking member said the nation could not overcome its economic crisis without restoring confidence in the economy. The NPP would like to see specific action on corruption.
"We are not amused by the contradictions of the government, which in one breath says that it is in control of the economy and in another blames external forces for causing the economic havoc".
GRi../