GRi Business News 16-02-99

Accra (Greater Accra) 16 Feb.

Government is actively collaborating with the Micro Finance Institutions Action Research Network and other stakeholders to develop and strengthen the sector to enable it to complement the efforts of the traditional banking sector.

 Mr Moses Asaga, Deputy Minister of Finance, noted that poverty is a long-term problem and called for an institutional framework with a long-term objective to address it.

 At the opening of a three-day West Africa Regional Workshop on Micro Finance in Accra today, under the theme : "Capacity Building for Micro Finance Networks In Africa - Sharing Our Experiences", Mr Asaga said the increasing level of activity in the sector emphasises the government's commitment to work with stakeholders to fully develop the sector.

 It also shows that government recognises the sector as a strategic tool for poverty alleviation.

 Mr Asaga said the sector has seen wide ranging reforms which have resulted in significant liberalisation of the economy.

"We have sought to rationalise and re-structure the financial systems to ensure that it can continue to deliver effective and efficient services to all Ghanaians".

 The Ministry of Finance has committed over 100 million cedis to support the development of a comprehensive Innovations and Capacity Building Fund for micro finance institutions.

 "Other institutions like the Association of Rural Banks and Credit Union Association are also being strengthened. The role of government is to co-operate with donors ... to facilitate a process to harness ... the development of the industry".

 Mr Asaga commended the Metropolitan and Allied Bank for its innovation in enhancing the development of the susu system and urged other banks and similar operators to support the idea.

 Micro Finance Institutions (MFIs) are non-bank financial institutions that provide finance to small- and medium-scale entrepreneurs.

 The workshop, organised by the Ghana Network, is being attended by 65 managers and directors of micro- finance institutions from Ghana, Nigeria, Benin, Niger, Burkina Faso, Cameroon and Kenya with funding from the World Bank. The rest are Cote d' Ivoire, Guinea, Togo, Senegal, Mali and South Africa.

 The Net work has the objective of developing data and sharing of information on micro finance industry, sharing emerging lessons from micro finance institutions operating locally and abroad. It also facilitates institutional capacity building of members, researching and developing micro-finance products.

 The micro finance sector serves up to 80 per cent of the economically active population.

 Ms Shimwaaye Muntemba, an official of Action Research Programme of the World Bank, suggested the expansion of national networks at the next phase of development to enable them to participate meaningfully in global financial initiatives.

 She said micro finance institutions exist for poor clients and urged them to make the poor their target.

 Ms Muntemba said networking in this area will involve challenges but called for resoluteness in approach adding that "... in the long run the benefits might well outweigh the short-term apparent difficulties. The meaningful challenge is how to turn difficulties around into benefits".

The workshop will receive country reports and share experiences encountered by MFIs.

Accra, (Greater Accra) 16 Feb.

The Value Added Tax (VAT) Service today reminded all registered businesses to submit their returns for the period December 30, 1998 to January 31, by February 26 or pay a penalty of one million cedis.

It said defaulters would also pay 5,000 cedis for each day the return is not submitted.

Mr Victor Obeng Ampah, head of VAT publicity department, said in Accra today that VAT returns sheets have been distributed and registered businesses should ensure that they receive and complete them.

 This is because businesses cannot hide behind non-receipt of returns sheets as excuse for not filing. It is their obligation to make sure they receive and submit them on time to avoid any sanctions.

 The VAT law states that "a return shall be submitted to the Commissioner not later than the last working day of the month immediately following the month to which the return relates."

 In default, the law states that "a taxable person who without justification fails to submit to the Commissioner his tax return on the due date shall be liable to a pecuniary penalty of one million cedis and a further penalty of 5,000 for each day that the return is not submitted."

Mr Samuel Tetteh, officer in charge of receiving and processing of returns at the North Kaneshie Local VAT Office (LVO), said some entrepreneurs, mostly service providers, have started filing their returns.

 He said as at the beginning of last week, they were receiving an average of 10 returns a day. This has doubled and they expect it to increase to about 250 a day from next week.

 Mr Tetteh advised businesses which may not have received the return sheet because of late registration to file their returns through the "unaccompanied return procedure" which requires that they fill a "VAT 23 form" at the VAT Service and pay cash where applicable.

 Nii Aryee Ayittey, Acting Head of the Adabraka LVO, said his branch has distributed about 80 per cent of the returns sheets. It has 2,000 registered businesses.

 The rest have not been distributed due to difficulty in locating business premises, he said, adding that ''we expect them to come for the forms themselves because it is their obligation.''

 At the close of business last Friday, about 37 traders had filed their returns there.

 Nii Aryee described it as "very encouraging" saying ''most of the time, traders prefer to re-invest their turnover for more profit and will therefore want to file their returns later in the month.''

Accra, (Greater Accra) 16 Feb.

 Japan today granted Ghana 21 million dollars in two separate agreements signed in Accra towards increased food production and support of the structural adjustment programme.

 Three million dollars will go into food production while 18 million dollars, in the form of a non-project grant aid, is earmarked for the structural adjustment programme.

 The Japanese Ambassador in Ghana, Mr Shosuke Ito signed for his government while Mr Victor Gbeho, Minister of Foreign Affairs initialed for the government of Ghana.

 Mr Ito said his government appreciates the nation's efforts to reduce budget deficit and rate of inflation without which any development programme would not be meaningful and private activities would not be re-vitalised.

''My government, therefore, appreciates the strong commitment of the Ghanaian government in the implementation and management of macro-economic policies.''

 The non-project grant aid would enable the government to acquire indispensable materials and machinery for development and economic activities.

 Mr Gbeho said this gesture ''clearly demonstrates the Japanese government's understanding of the direction in which Ghana is trying to move and the obstacles in our path.''

 He said the grant represents only a small fraction of the tremendous effort which the government of Japan has been making in diverse ways to help Ghana move our economy forward.

 ''The people of this country fully appreciate the positive impact that the friendly people of Japan have made on their lives through these facilities.''

Accra, (Greater Accra) 16 Feb.

A 10-member technical committee to make proposals for the financing of tertiary education has been formed in Accra. The committee is made up of representatives from the National Council on Tertiary Education, non-banking institutions, banking institutions, Ministry of Finance, insurance companies, SSNIT and the Ministry of Education.

 This follows discussions between the Ministries of Education and Finance and representatives of financial institutions yesterday on how the institutions could support the government to finance tertiary education.

 It will be recalled that government initiated a series of forums and workshops between 1995 and 1998 with Administrators of Tertiary Institutions on the funding of tertiary education.

 The technical committee will recommend what form the fund should take, who should contribute and manage it.  Those present at the meeting included representatives form the National Council of Tertiary Education, EcoBank, Trust Bank, Merchant Bank, Standard Chartered Bank, Ghana Commercial Bank, Donewell Insurance and officials from the Ministry of Education.

Addressing the meeting, Mr Ekwow Spio-Garbrah, Minister of Education, called for support from the public and private sector financial institutions towards financing the students loan scheme to make it sustainable into the future.

 ''Public and private sector sponsorship of tertiary education should be encouraged to help reduce the burden on the central government and the Social Security and National Insurance Trust (SSNIT), to prevent the loan scheme from collapsing'', the minister added.

Mr Spio-Garbrah said: ''While the payment of user fees by students seems to have been partially settled, the greatest problem that faces tertiary education, that is the student loan scheme, is yet to be fully examined to determine its sustainability''.

 Mr Spio-Garbrah said funding of tertiary education in the universities is projected to increase from 207 billion cedis in 1999/2000 to 273 billion cedis by 2000/2001, while that of the polytechnics will rise from 17 billion cedis in 1999/2000 to 28 billion cedis in 2000/2001.

 The Minister announced that a report submitted to government by SSNIT, made it clear that the student loan scheme is on the brink of collapse and that only between eight per cent to nine per cent of annual social security receipts could be made available.

 Dr Mohammed Ibn Chambas, Deputy Minister of Education responsible for tertiary education, said one aspect of the loan scheme which poses problem is the huge government subsidy element of the interest rates which, he described as ''a big drain'' on tertiary institutions.

 He said although government budgeted for seven billion cedis to support the students loan scheme last year, it ended up paying nine billion cedis adding that putting in more money to expand the loan scheme is now a big problem as government is unable to invest in other equally important projects under his ministry.

 The participants accepted to take up the challenge to support the loan scheme but they were worried at the poor rate of loan recovery due ''to inadequate loan recovery mechanisms''.

 They said before any serious commitment is made, the government should ensure that deficiencies in the administration of the scheme are corrected and payment of realistic interest rates are introduced.

 They also called for a package of incentives to attract private sector participation and underscored the need for an employee and employer education levy which should start from those in the formal employment sector and gradually to envelope those in the informal sector to sustain the loan scheme in the future.

Accra (Greater Accra), 16 Feb.

 Ghana Club 100 (GC100), the nation's multi-sectoral grouping of the top 100 companies, will mark its first anniversary and the launch of the 1998 GC100 on Wednesday, February 17.

A statement issued by the Ghana Investment Promotion Centre (GIPC) yesterday said the launch will be performed by the Vice President, Professor John Atta Mills.

The statement signed by Mr. Cletus Koisiba, Deputy Director Public Relations, said members of the 1998 GC100 will be presented with awards.

"GC100 is being set as a bench-mark for ultimate achievement in corporate business and entrepreneurship, showcasing the strength and peculiar positions of companies and contributions to Ghana's economic fortunes", the statement added.

Tickets for the function can be secured from GIPC at 250,000 cedis each".

Accra (Greater Accra), 16 Feb.

 The see-saw performance of the stock exchange continued today as the main market index, the GSE All-Share index, went down in thin trading after a steep rise last Friday.

The GSE All-Share Index, weighed down by the loss in four equities, lost 0.72 points to close trading lower at 883.56 points thus eroding the 9.59 points gained in Friday trading.

Total volume traded fell sharply to 17,950 from 235,600 mainly due to the refusal of investors to reduce their offer prices.

Offers closed at 3.2 million ahead of bids of 381,550. There was a huge offer of 2.9 million shares of Pioneer Tobacco Company (PTC) at a last price of 400 cedis and no one was ready to pick any.

Market capitalisation finished lower at 3,360 billion cedis down from the 3,393 posted on Friday.

In the broader market, five equities saw price changes. There were four decliners and one gainer.

AGC declined by 300 cedis to end at 18,700 as a result of the falling world market price of gold while Fan Milk Limited (FML) was down 50 cedis to close at 1,500 cedis.

CFAO lost three cedis at 52 cedis and SPPC lost five cedis to end at 245 cedis.

The only gainer on the market was Unilever (UNIL) which made 20 cedis to finish at 1,700 cedis.

The following are the last prices of listed equities :

ABL 800

AGC 18,700 -300

ALW 2,600

CFAO 52 -3

EIC 2,000

FML 1,500 -50

GBL 1,700

GCB 1,100

GGL 1,150

HFC 750

MGL 225

MLC 250

MOGL 20,000

PAF 400

PTC 400

PZ 850

SCB 24,000

SPPC 245 -5

SSB 2,200

UNIL 1,700 +20

UTC-E 125

Sekondi-Takoradi (Western Region), 16 Feb

 The Shama-Ahanta East Metropolitan Assembly, has drawn up a scheme estimated at about 12 billion cedis to develop the site earmarked for an export processing zone.

Announcing this at the second meeting of the first session of the assembly in Sekondi yesterday, Lt. Col. Kaku Korsah, Metropolitan Chief Executive, said the provision of access roads, extension of water, electricity and telephone facilities to the zone would cost about 10 billion cedis.

A further two billion cedis would be required to pay compensation to landowners and farmers, whose crops would necessarily have to be destroyed in the course of the implementation of the project.

Lt. Col. Korsah said the assembly plans to invite the banks, private investors and the Free Zone Board to contribute towards the execution of the project as well as selling bonds to raise capital for the project.

Lt. Col. Korsah said the assembly is still pursuing its policy of involving the private sector in revenue mobilisation and an aerial survey has provided up-to-date data on all property in the metropolis and their revaluation.

He said bills prepared and issued to property owners have however, attracted a number of petitions from landlords, adding that investigations during the last executive committee meeting revealed that the rates have increased by 15 per cent over that of 1998, based on agreement reached with the Landlords Association before the revaluation of their property.

Lt. Col.. Korsah said comments from the Land Valuation Board suggest inconclusive consultations and in the view of the assembly this needs serious legal consideration, even though, the rateable values of most of the property are considered to be too low.

After careful consideration, the executive committee decided that the property rate bills be withdrawn to enable the general assembly deliberate over the issue and take a decision.

The assembly is of the view that until the new rateable values are approved by the Land Valuation Board, the old rateable values should be used.

Lt. Col. Korsah said a total of 5.7 billion cedis will be disbursed through the Department of Urban Roads for road works within the metropolis.

Kumasi (Ashanti), 16 Feb.

 Ghana earned 171 million dollars from the export of 415,700 cubic metres of timber and wood products last year, a Forest Products Inspection Bureau (FPIB) report has indicated.

This showed an increase of three per cent in value and a decrease of six percent in volume over the 1997 exported value of about 170.5 million dollars from 442,078 cubic metres, indicating that the government's policy of adding value to timber is on course.

The FPIB export permit report released for last December indicated a recorded value of about 15 million dollars from 36,475 cubic metres of wood products representing 1.7 per cent increase in value and 2.5 per cent increase in volume over that of November last year.

The report said comparatively, figures achieved last year for veneers, kiln dried lumber, and other tertiary wood products such as furniture parts, profile boards, dowels and broomsticks showed appreciable increases over 1997.

It said "this was in conformity with the Government's policy to encourage downstream processing and export of value-added products", adding, "the year ended with signs of positive development in the timber industry".

During the year under review, the major wood products exported was kiln dried lumber which recorded about 46 million dollars, in value followed by air dried lumber about 44.6 million dollars and veneers about 45 million dollars.

Others were furniture parts about eight million dollars, dowels about 1.1 million dollars, profile boards about 740,277 dollars, broomsticks about 170,157 dollars and curls about 498,849 dollars.

It said a major destination for Ghana's Wood Products were Germany, Ireland, United Kingdom, Italy, USA and France.

Others were Belgium, Holland, Saudi Arabia, Spain, Hong Kong and Burkina Faso.