Economic community urged to form body to promote mining
Produce Buying Company to recapture market
Ashanti agrees to Lonmin debt plan
London (UK) 03 July 2002 - The lesson from West Africa: good computers and fast modems don't matter if you can't get a dial tone and the power keeps going out. In the West African country of Ghana, one of the world's poorest places, the busy signal is a reminder of the unfulfilled promise of the Information Age. Making a telephone call here requires persistence. Roughly half don't go through because of system failures, but that's only the start of Ghana's telephone woes.
The country has a mere 240,000 phone lines - for a population of 20 million spread across an area the size of Britain. Moreover, telephone bills are inaccurate, overcharges common, and the installation of a new line can cost a business more than $1,000, the rough equivalent of the annual office rent. Lines are frequently stolen, sometimes with the connivance of employees of Ghana Telecom, the national carrier.
Phones go dead, and remain unrepaired, for months. Some businesses hire staff for the chief purpose of dialing numbers until calls go through.
The spread of mobile phones has only worsened telephone gridlock. There are more mobile phones in Ghana than wired ones-about 300,000, as of March-but the network is clogged because of a shortage of cell stations. Customers are bedevilled by what operators term "dropped calls." Besides, calls are costly. The price of a one-minute wireless conversation, under the most common plan, is ten times higher than it would be in the United States.
"The situation has come to a point of crisis," says Kwesi Nduom, the country's minister for economic planning.
Ghana's telecom mess limits the utility of the Internet, raises the costs of information services-and suggests that the country is mired in the Stone Age, technologically. But the situation here, as in much of sub-Saharan Africa, defies such straightforward conclusions. There is another side to the country's technological profile, a burgeoning homegrown technology culture that explodes assumptions about the inherent backwardness of Africa and the nature of the so-called digital divide.
That there is a gap in the use of information technology between Africans and most people in the United States, Europe and other wealthy regions is unsurprising. After all, development experts have long presumed that lags in technology, much like lags in medicine, stem from poverty-and only reducing poverty can close the technology gap. In the late 1990s, the pioneers of the personal computer, the mobile phone and the Internet saw their technologies as a fresh chance for Africa, an opportunity to leapfrog over what would normally be decades of conventional development.
Luminaries such as Microsoft's Bill Gates and Kofi Annan, secretary-general of the United Nations, began campaigning to close the digital divide. Influential international organisations, such as the G8 group of nations and the World Economic Forum, commissioned blueprints for raising the technological level of poor nations, in Africa especially.
So far, these plans have come to little or nothing. In the main, the rich have dropped boatloads of computers onto the poor with no awareness of the environment in which the machines will (or will not) be used. With results lacking, technophiles are starting to recognise what development experts have long known-that no magic wand solves poverty-and to accept that they need to know much more about how people in developing countries live, and what they need and want, in order to close the digital divide.
These are some of the questions that have brought me to Ghana several times in the last two years, first as a foreign correspondent for the Wall Street Journal, and later as a visiting professor at the University of California, Berkeley, Graduate School of Journalism.
In my visits, I've seen information technologies changing the landscape in unexpected ways. The people I've met are more adept at using these technologies, and are hungrier for them, than most experts believe. But their efforts to put advanced technologies to work in Ghana are often thwarted by the failings of much older infrastructure technologies-the phone system, the electric grid, even the roads. - Technology Review
Send your comments to viewpoint@ghanareview.com
Accra (Greater Accra) 03 July 2002- President John Agyekum Kufuor on Tuesday called on the Chambers of Mines in member countries of the Economic Community of West African States to form a collective body to promote the development of the mining industry in the Sub-Region.
In a speech read for him at the opening of the fifth West Africa Mining, Power and Water Exhibition and Conference in Accra, President Kufuor said the creation of a Sub-Regional Body to oversee mining operations was important to give real meaning to the promotion and harmonisation of mining policies and legislation to facilitate continued development in the sector.
"One way of approaching it is to follow the example of the West African Gas Pipeline Project," the President said in the speech read by Mr Jake Obetsebi-Lamptey, Minister of Information and Presidential Affairs.
President Kufuor said there were potential opportunities for development and growth of a viable mining industry, which would continue to attract skilled nationals of ECOWAS member countries and to also enhance investments for the benefit of all.
The President lauded the exhibition and conferences, saying it afforded investors, exhibitors and participants' options to enable them to make informed decisions in supporting the mining, power and water industry.
Nana Prah Agyensaim IV, member of the Council of State, tasked the conference to look at mining vis-à-vis its impact on the environment, saying that it was incumbent on all stakeholders to ensure good practices to enable the sector to survive.
The fifth Mining Expo and conference would run concurrently with the West Africa Electrics and Water and Sanitation Exhibition and Conference under the theme: "Challenges of Modern Mining." It would renew the need to ensure efficient mining methods and the use of more proactive equipment.
The exhibition would also showcase new developments in the industry. Exhibitors and Participants from India, South Africa as well as countries in the Sub-Region are taking part in the four-day event.
GRi…/
Send your comments to viewpoint@ghanareview.com
Committee set up to facilitate investment
in Saltpond Ceramics
Mankessim (Central Region) 03 July 2002- The Central Regional Minister, Mr Isaac Edumadze, on Tuesday set up a committee to oversee the conduct of feasibility studies on the Ghana Ceramics Industrial manufacturing company, formerly Saltpond Ceramics, with the view to marketing its potential to attract more investors.
The membership of the committee comprised the MP for the area, Mr Jacob Arthur, Mr Kwamena Amoasi-Andoh an investment analyst and representative of the five paramouncies in the Mfantsimen District, the district assembly and the management of the factory.
Mr Edumadze announced this at a stakeholders meeting to deliberate on ways of making the factory more vibrant towards employment generation and socio-economic development at Mankessim.
The factory was initially set up by the government of Ghana in partnership with a consortium of financial institutions, including the Ghana Commercial Bank, National Investment Bank, but was liquidated in 1988, due to numerous operational problems. It was re-acquired in 1990 by a Chinese firm based in Ghana and renamed.
The meeting was necessitated by concerns over the gradual collapse of the factory whose initial labour force of about 1000 has been reduced to 40. The Minister stressed the importance of the factory to the socio-economic development of the district and the region as a whole and said it was therefore, imperative to explore all possible investment avenues by effectively packaging its potential.
A director of the company, Mr Joseph Yeung, said the factory needs additional investment of between two and three million dollars to make it fully operational. According to him, the management of the factory, which at present, also faces financial problems, as well as the problems of obsolete machinery, is open to negotiation for a partnership or complete take-over. He said the factory needs modern plants and machinery to enable it to make in-roads into the nations real estate development industry, specifically through the production of floor tiles.
The Nifahene of Nkusukum Traditional Area, Nana Baah the VII had earlier told the meeting that the youth in the area are to protest next month if no steps are taken to revitalise the factory. He was therefore, hopeful that the studies would be expedited to attract more investment.
In a welcoming address, the District Chief Executive, Mr Kofi Wilson also bemoaned the gradual collapse of the factory, which he described as the lifeline of the district economy.
GRi…/
Send your comments to viewpoint@ghanareview.com
Accra (Greater Accra) 03 June 2002- Despite the rippling effect of the devaluation of the cedi in the year 2000, affecting operating expenses of Mobil Oil Ghana Limited in the following year, the company has proposed a final dividend of 2,536 cedis per share before tax for the year 2001. Mr Olumide Onakoya, the new Chairman and Managing Director of the company, announced the dividend at the 26th Annual General Meeting in Accra on
Friday.
He said the Mobil Board paid an interim dividend that was considered prudent to retain the cash in the business to support investment in Retail and Industrial segments during the year 2001. "Our industry, as indeed other sectors of the economy, also suffered from the irregular products supply situation in fuels. Our volumes dropped by 5.4 per cent but we still fared better than the industry drop of 7.5 per cent. The potential gains from the nominal increase we had on fuels unit margins were eroded by the devaluation of the cedi.
"In the face of this rather difficult environment our net profit after tax fell from 27.2 billion cedis in 2000 to 13,7 billion cedis in 2001, a drop of 49.6 per cent. However, we still retained our position as the premier Oil Company in Ghana and continue to lead the Retail segment of the industry." The fuel supply dropped by 5.4 per cent, against the industry's drop rate of 7.5 per
Mr Onakoya said the company's focus for the year 2002 and beyond was to grow the business and improve its profitability in the fuel and lubricants segments of the industry. He expressed the optimism of the board about the business environment and said it was encouraged by the downward inflationary trend and the relative stability in the cedi so far.
He said the company had had discussions with the Ghana Government to improve fuel margins as a means of addressing supply shortages and stimulate investment in the oil sector. He said the company would introduce double-walled underground tanks in its retail stations during the year to provide greater security against product leakage as better means of protecting the environment against spillage.
The Mobil Board Chairman announced that the company had implemented the Operations Integrity Management System, under the Safety, Health and Environment (SHE) management system of Exxon-Mobil Corporation.
The system ensures that all the company's employees and contractors were provided with regular training, information and disciplined approach to conducting operations in its facilities in a manner that safeguarded people and property including those in communities where it operated.
The meeting approved the appointment of Mr Onakoya, who replaced Mr Craig Murphy now with Exxon-Mobil, Tunisia. It also approved of the appointment of Mr Thomas Walter to replace Mr Philip Docherty, who has resigned as a director of the company. Messrs John Saka Addo and Adenkule Alli were re-elected as members of the board. The Directors accepted to consider a suggestion from the meeting to separate the position of the Managing Director from that of the Chairman.
GRi…/
Send your comments to viewpoint@ghanareview.com
Accra (Greater Accra) 03 July 2002- The Produce Buying Company said on Friday that it was adopting cost cutting strategies and measures to increase the volume of cocoa purchases to recapture its market share lost to competitors.
Nana Timothy Aye Kusi, Board Chairman, announcing measures the PBC was adopting to achieve its target at the company's maiden Annual General Meeting in
Accra on Friday, stressed the urgent need to re-capitalise the company.
He said in that connection, the company was working to expand its sources of guarantee to ensure adequate and timely receipt of seed fund. "There are also arrangements to boost freight earnings from secondary evacuation through the use of the company's articulated trucks to cart produce purchased."
In addition, the company was taking steps to access needed working capital to buy more cocoa so as to utilise the full capacity of its storage facility, which could now handle over 60 per cent of the national output.
He said the company's reliance on very old vehicles and tractors and its inability to get commercial banks to provide adequate seed fund guarantee for Ghana Cocoa Board's produce loan were impacting negatively on performance.
Nana Kusi said the company's market share dropped from 43 per cent in 1999/2000 to 38 per cent in the 2000/2001 financial-year and its tonnage purchased fell from 190,314 tonnes during 1999/2000 to 146,366 tonnes.
"The prudential limitation on the Commercial Banks restricted the company's access to seed fund at the beginning of the season, which reduced its ability to make significant initial impact on the market," he explained.
Nana Kusi said the working capital problem was making it difficult to finance initial crop purchases while the company was in the process of negotiating with banks for seed fund guarantee. Despite this limitation, he said, the company registered gross profit of 5.724 billion cedis compared to the previous year's net loss of 4.803 billion cedis.
Nana Kusi said a reduction in staff cost through retrenchment, lower operating cost as well as an upward review of buyers' take over margins in the main crop season enhanced the company's profitability. No dividend was paid to shareholders. PBC went public in 1999 when government divested some of its shares in the company. It was consequently listed on the Ghana Stock Exchange.
GRi…/
Send your comments to viewpoint@ghanareview.com
London (United Kingdom) 03 July 2002 - Lonmin, the platinum producer, has succeeded in persuading Ashanti Goldfields to change its debt restructuring plans in a move that could see it invest up to $116m in the Ghana-based gold miner. London and New York-listed Ashanti agreed to Lonmin's plan on Friday after dropping an alternative proposal that it had been working on for a year.
Lonmin could end up increasing its stake in Ashanti from 32 per cent to 45 per cent under the new plan but insisted it was not attempting to acquire Ashanti by stealth. "This will protect our stake in Ashanti from dilution but there has been no move away from our strategy of being a focused platinum producer," said
Edward Haslam, chief executive.
Ashanti was forced into debt restructuring after almost going bankrupt in 1999 because of its disasterous hedging policy. An unexpected spike in the price of gold prompted hedging counter-parties to demand margin payments of $280m in case Ashanti failed to deliver gold sold forward.
Analysts said Ashanti would receive a net $316m under Lonmin's proposal, allowing it to clean up its balance sheet and putting it on a stronger financial footing. The proposal crucially includes margin-free trading agreements with hedge book counter-parties that will avoid punitive margin calls being made again in the future.
The previous restructuring plan would have involved swapping $219m of convertible bonds, due to mature in the spring, for a mixture of new equity and convertible bonds due in six years time. Lonmin objected to this because bondholders would have received shares representing about a quarter of the debt at a price of $3.70 a share compared with Ashanti's current share price of $5.00.
The new plan involves the issue of $75m of mandatory exchangeable notes to Lonmin convertible at a maximum price of $5.40 a share when Ashanti holds a rights offer in the next 18 months. The Ghanaian government, which holds 20 per cent of Ashanti, has the right to buy up to $28.4m of the shares from Lonmin but is not expected by analysts to do so.
The plan also involves the early exercise of warrants held by hedge counter-parties and an agreement by banks to increase Ashanti's revolving credit facility from $55m to $200m. Lonmin has given warrant holders the option to sell 13.6m shares back to Lonmin at $3 a share between April 2004 and April 2005. Its stake in Ashanti would only reach 45 per cent if all warrant holders exercised this option and no other shareholders participated in the rights issue.
Bondholders are understood to be unhappy with the new plan, despite an undertaking by Ashanti to pay them back at par. "A few noses have been put out of joint by this but we don't believe there are any grounds for litigation against Ashanti," said one person close to the deal. Lonmin was advised by Morgan Stanley and Ashanti was advised by Close Brothers. - FT
Send your comments to viewpoint@ghanareview.com