Mobil Oil registers 100 cedis gain on GSE

AGC produces more gold at lower cost

Set up broader-based Economic Management Team - Dr Kwakye

Accra (Greater Accra) 27 Jan. 2000

Mobil Ghana Limited (MOGL), the third highest priced equity, on Wednesday registered a 100-cedi gain in price to push the GSE All-Share Index up to 740.36 points.

The All-Share Index, the main market indicator, has for the past two trading sessions of last Friday and Monday recorded no gain at 740.07 points as none of the 22 listed equities appreciated in price.

The market index thus gained 0.29 points on the strength of the gain in MOGL at mid-week trading to bring the change in the year to date to 0.57 per cent.

Market capitalisation closed the day higher from 3,211.56 billion cedis to 3,212,04 billion cedis.

Other market indicators recorded higher volumes but brokers say the figures are still on the low level.

Total shares traded shot up from 11,600 to 153,600 shares with almost all the listed equities making a total offer of 558,090 up from Monday's 361,260 shares.

Total demand fixed at 164,050 compared to only 26,750 shares demanded at the previous session.

In the broader market, there were three price changes - two up and one down.

MOGL gained 100 cedis at 14,000 cedis with Guinness Ghana Limited (GGL) adding a cedi to its price to reach 951 cedis.

The only loser was Pioneer Aluminium Factory (PAF). It lost three cedis at 295 cedis.

The following are the last prices of listed equities in cedis:

ABL 470

AGC 18,700

ALW 2,489

BAT 467

CFAO 38

EIC 1,880

FML 930

GBL 1,450

GCB 770

GGL 951 +1

HFC 750

MGL 200

MLC 150

MOGL 14,000 +100

PAF 295 -3

PZ 800

SCB 19,200

SPPC 150

SSB 1,988

UNIL 1,850

UTC-E 125

CMLT 420

GRi../

Accra (Greater Accra), 27^th January 2000

Ashanti Goldfields Company says it achieved a record group gold production of 1,561,536 ounces last year, despite the Obuasi illegal strike action and exceptional rains at Siguiri in Guinea.

It produced eight per cent more gold at reduced cost during the fourth quarter of last year compared to 1998.

Group gold production in the fourth quarter of 437,178 ounces was a record and an eight per cent increase on the fourth quarter of 1998.

The fourth quarter cash-operating cost of 190 dollars per ounce, (unaudited) represented a 10 per cent reduction in 12 months.

A release from the Ghana Stock Exchange (GSE) on Wednesday said gold production for the same period in 1998 was 421,573.

The total gold production in 1999 of 1,561,536 ounces exceeded the revised target of 1,545,000 ounces and was slightly higher than 1998's 1,540,751 ounces.

The total gold production in 1999 was at a cash operating cost of 206 dollars per ounce while that of 1998 was produced at a cash operating cost of 218 dollars per ounce.

The release described the 1999 figure "as a significant improvement in terms of cash costs compared to the revised 1999 target produced at a cash operating cost of 220 dollars per ounce.

"This strong production and cost performance was achieved, notwithstanding, an illegal strike action at Obuasi and exceptional rains at Siguiri".

The release noted that during the year, two major production changes occurred in which the Siguiri expansion project was completed. This increased the annualised gold production by around 150,000 ounces from the fourth quarter.

The other was the suspension of the Obuasi oxide treatment plant operations due to the depletion of ore reserves while a rationalisation plan was prepared to optimise the NPV of the Obuasi mine.

The net effect of the suspension and the rationalisation plan will be the reduction in the 1999 target of 729,000 to 700,000 ounces in 2000.

The current production plan for 2000 is expected to be at a lower cash operating cost than that achieved in 1999 even though the impact of the two major changes would "roughly cancel each other out" in terms of ounces produced.

The full year cash operating cost of 206 per ounce recorded in 1999 reduced by six per cent.

Giving details of expectations for the year 2000, the release said, Ashanti's production is targeted to increase from 1.56 million ounces achieved in 1999 to include production from Geita project in Tanzania after it has been commissioned at the end of the second quarter of 2000.

This is in view of a 50 per cent completion of the Geita project which commenced in April last year.

The commissioning date of the project was however, brought forward to the second quarter of 2000 pending the Company's ability to secure a proposed new money facility.

Geita is planned to produce 150,000 ounces in 2000 and a subsequent production of 500,000 ounces per annum.

GRi

Accra (Greater Accra), 27^th January 2000

Dr John K. Kwakye, Deputy Head of the Research Department of Bank of Ghana has called for the establishment of a broad-based Economic Management Team (EMT) to ensure a sound, rapid and sustainable macro-economic growth.

The team should comprise representatives of the government, academia, policy and research institutions and civil society that "will help consensus building and acceptability of policies devoid of sectional or parochial interests."

Dr Kwakye, presenting a paper on the macroeconomics of rapid and sustainable growth at a seminar by the Institute of Statistical, Social and Economic Research (ISSER) in Accra, said to ensure adherence to fiscal and monetary policy rules and targets," it may be necessary to institute a kind of oversight role for parliament" over the Central Bank.

"Indeed, it behoves the general public to be vigilant watchdogs over the conduct of fiscal and monetary policies."

Dr Kwakye said the best means of ensuring discipline in monetary management is to strengthen the independence of the Central Bank "which will require statutory caps on the Bank's lending to government in amount and duration".

"There must be statutory provisions ensuring the freedom of the Central Bank to use its instruments for achieving price stability as a primary goal and the need for a clear separation of the monetary policy and fiscal agency roles of the Bank''.

Dr Kwakye said to reduce budgetary deficits to bearable limits in the shortest possible time, the capacity of revenue organisations must be strengthened to maximise tax collections.

Budget deficit could also be avoided through pruning expenditures to the absolute necessities to ease pressure on the budget.

A good practical way of ensuring fiscal discipline "is by instituting a cash-budget system whereby expenditures are based strictly on collected revenues".

He said the current conventional wisdom in economic policy is that growth-oriented governments should concentrate on providing an enabling macro-economic environment within which private enterprise can flourish.

"The public sector must refrain from engaging in activities where it is less efficient and which can be more efficiently performed by the private sector.

"By so doing not only do they help to reduce macroeconomics instability, but they also help directly to enhance the growth potential of the economy".

Dr Amon Nikoi, former Governor of Bank of Ghana, who chaired the function, called for massive patronage of such seminars and lectures since they provide the forum for sharing ideas.

GRi