GRi Business, Economics & Finance

GRi Business, Economics & Finance 06 – 06 - 2003

Ghana/Russia Chamber of Commerce launched

Government pays 75% of outstanding absorbed fees

Ghana/Russia Chamber of Commerce launched

Accra (Greater Accra) 06 June 2003 - Ghana on Thursday rejuvenated its relations with Russia in the area of trade and investment when it launched the Ghana-Russia Chamber of Commerce to woo Russian investors.

Kwamena Bartels, Private Sector Development Minister, who performed the launch, said current statistics of business and trade ties between the two countries showed that trade was almost insignificant but expressed the hope that with the formation of the Chamber trade would improve.

The launch was at a day's seminar for a 24-member Russian Parliamentary and Business Delegation in the country to renew relations with Ghana and explore areas of trade and investment.

Providing statistics, the Minister noted that export from Ghana to Russia fell from $17.31m in 1998 to $7.24m in 2002 whilst imports from Russia to Ghana fluctuated between $14.81m in 1998 and $19.98m in 2001 but declined to $15.12m in 2002.

He said the pattern of trade was skewed in favour of Russia, adding, "either the Russia in the market is not known to Ghanaian exporters or Ghanaians are not making enough effort to penetrate the Russian market."

Bartels said the structures of the external commercial orientation of Ghana and Russia showed that it was feasible to do business to the mutual benefit of both countries.

He said the business relationship should not end only at trading and commercial activities, but should also involve investment in each other's country. He said cross-border investment was not only a mechanism that integrated markets but also linked production systems of countries.

Bartels urged the delegation to consider investing in gold refinery in the country, which used to be one of the main areas of interest during relations with the former Soviet Union.

He said government had put in place policies to make trading smooth and friendly and the investment climate congenial. Bartels urged the delegation to consider the formation of joint ventures with Ghanaian entrepreneurs, who know the local terrain better.

Artur Nikolayevuikh Chilingarov, Leader of the Russian Delegation, pledged his country's commitment to re-visiting all trade and business relations that the former Soviet Union had with Ghana.

He said they were also interested in cultural relations. Chilingarov said the delegation was interested in agriculture, fisheries, mining and the mineral processing.

Kwasi Abeasi, Chief Executive of Ghana Investment Promotion Centre (GIPC), who chaired the seminar, said currently the Centre was reviewing trade laws to make them more investor friendly.

He said the GIPC was also being converted into a one-stop office for both local and international investors.

He announced that at present only seven Russian businessmen had registered with the Centre and were doing business in Ghana with estimated annual earnings of about $5m.

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Government to set up recovery fund

Accra (Greater Accra) 06 June 2003 - Government is to set up a special fund to bail out local distressed companies to ensure that they were equipped and became operational.

The Fund to be known as the Special Purpose Recovery Trust would be used to help local companies, which had become incapacitated not necessarily because of managerial inefficiencies but through the poor performance of the economy.

Beneficiary companies under the programme would get financial assistance from government to overhaul their operations in exchange for government acquiring equity shares in them.

The government shares would gradually be off-loaded to the companies once their operations had become viable and they were in the position to pay off the money.

Alan Kyerematen, Minister of Trade, Industry and President's Special Initiatives, announced this at a meeting with members of the Governing Council of the Ghana Academy of Arts and Sciences in Accra on Thursday.

The meeting was to discuss ways through which Fellows of the Academy could bring their research findings to bear on government policies and the country's development agenda.

Kyerematen said this arrangement was a very good way to get the companies hit by the economic downturn to bring their activities back on stream.

He said as much as the government sought to create new industries, it also had the firm belief that old industries that were in distress must be revived to create more jobs as well as play a proactive role in the country's development agenda.

The meeting also touched on the strategies that the Ministry was pursuing to accelerate economic growth and to reduce poverty.

Kyerematen said apart from the focus on export-led industrialisation, the government was also actively adopting an aggressive import substitution drive to reduce the import bill by cutting down on the import of all non-petroleum products by 70 per cent.

There are also plans to cut by half all agriculture products that are imported into the country. The Minister said the targets could be achieved by focusing on government procurement since it was easy to control.

"Besides we need to develop competitive industries for the items that we could produce at home." He said the export strategy was predicated on agro-processing through the mass mobilisation of rural communities.

Nana (Dr) S.K.B Asante, President of the Academy, said the Academy was seeking new ways of improving its communications with government and institutions so that it could help to shape the country's policy and economic direction.

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Home Finance Company holds AGM

Accra (Greater Accra) 06 June 2003 - The Management of the Home Finance Company (HFC) is exploring options to improve demand for houses by investing in expandable housing units for the average income earner in the local and non-resident markets.

Addressing the seventh annual general meeting of Home Finance Company in Accra on Thursday, Kwaku Botwe, Operations Manager, recounted improvement in the national economy, which he said would help in the growth of the company's future investment.

He said as the economy stabilized and all legal difficulties on on-going projects were dealt with, the HFC Real Estates Investment Trust (HFC-REIT) would become more attractive to institutional investors for the tax-exempt it provided.

He said due to this expectation, the Company was looking forward to an increased demand for new homes. Giving the financial performance of the Company for the year 2002, Botwe said the fund's value increased from ¢18.6bn to ¢22.7bn while the net income was 859.8 million cedis as against ¢704m in 2001.

The Company, however, gave a total dividend of ¢249.7m to its investors as compared to ¢465.6m in 2001. The Company's other investment, the HFC-Unit Trust also increased in value from ¢30.6bn at the beginning of the year to ¢50.5bn at the close of 2002.

This followed an increase in the number of unit holders from 4,950 in 2001 to 5,759 in the year under review. Botwe explained that, the 12-month yield of 20 per cent was lower than that of 2001, which was due to the impact of a legal dispute over the Company's portion of land over which ownership was battled in court for four years.

He said the dispute had now been settled in favour of HFC and that would provide the needed impetus for the enhanced performance of the Fund.

He said the Company currently held seven residential units in Accra and Kumasi but due to the low yields on rental properties, the units were to be sold out to create the needed liquidity for on-going projects and related new businesses to provide higher returns.

"Our joint venture project at Batsona is near completion. We have completed the provision of all infrastructural services on the land. "The sales of service plots have commenced in earnest whilst 15 two-bedroom expandable houses have been completed", he said.

He, therefore, urged its shareholder to continue to support the Company to make a greater impact on the investment market to be able to provide the needed returns for them.

Over 100 Unit holders of the HFC, and the Management and Board Members of the Company attended the AGM and voted for the acceptance of the annual report, audited statement of income and expenditure and the distribution statement of HFC Unit Trust for the financial year ended 31 December 2002.

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Government pays 75% of outstanding absorbed fees

Kumasi (Ashanti Region) 06 June 2003 - The Ministry of Education has paid 75 percent of the total outstanding fees absorbed by the government to Senior Secondary Schools (SSS).

The remaining 25 percent would be paid before the end of the third term. James Berko, National President of the Conference of Heads of Assisted Secondary Schools (CHASS), who made this known to the Ghana News Agency (GNA) in an interview in Kumasi on Thursday, said cheques for the money were released to schools on Monday, 2 June.

He, however, could not immediately give the figure representing the 75 percent of the total outstanding fees. He said even though CHASS demanded 100 percent payment of all outstanding absorbed fees, it took into consideration financial difficulties facing the government and decided to accept the 75 percent in the meantime to run the schools.

Berko said the release of the funds had enabled the schools to pay off some of their debts to suppliers and ensured the smooth running. He observed that CHASS did not close down schools on 31 May as was indicated in their resolution adopted at their last extraordinary meeting due to the assurances by the sector Minister that the money would be released by the first week of June.

Berko said the Headmasters were not interested in sending students home but just wanted the money to ensure smooth running.

He noted that CHASS had faith in the assurances by the Minister, Kwadwo Baah-Wiredu that a technical committee was being set up to ensure timely release of the absorbed fees.

The CHASS President expressed the hope that the remaining 25 percent would be released on time to ensure uninterrupted academic work.

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Inter-bank exchange rates of the cedi

Accra (Greater Accra) 06 June 2003 – These are the latest Inter-bank exchange rates of the cedi:

Currency Buying Selling

U.S. Dollar 8,575.91 8,749.45

Pound Sterling 14,012.18 14,300.98

Swiss Franc 6,503.38 6,633.11

Canadian Dollar 6,312.65 6,439.27

Danish Kroner 1,347.21 1,374.35