GRi Newsreel 04-03-99

Accra (Greater Accra), 4 March 

About 100 billion dollars of private capital holdings belonging to Africans have been locked up outside the continent.

The figure represents one-third of Africa's 350 billion-dollar annual gross domestic product.

Dr Ken Kwaku, Director of the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, said this, when he presented a paper on "Private Sector Development through the Promotion of Direct Foreign Investment", at symposium of activities to mark Investment Day at the on-going second ECOWAS Trade Fair.

Dr Kwaku noted that the situation is precarious, saying, "there is capital shortage in Africa and, particularly, this sub-region."

He called on African business executives and others outside the continent to invest their monies at home and assured them of security and guarantee.

Dr Kwaku said it would be difficult for foreign nationals to invest their monies in Africa when Africans themselves are not doing it and suggested to investment promotion agencies, particularly, foreign embassies, to effectively market investment opportunities in the West African sub-region.

Dr Kwaku further urged West African economies to take advantage of the Information Technology and promote partnerships and investment.

Sunyani (Brong Ahafo), 4 March, 

The Brong-Ahafo Regional Minister, Mr Donald Adabre, has called on the Internal Revenue Service (IRS) to introduce a new tax collection culture under which individuals, groups and companies will be encouraged to pay their taxes on their own volition.

He noted with satisfaction that although voluntary tax payment has started to work perfectly with the recent implementation of the Value Added Tax (VAT), other tax agencies such as the IRS are capable of adopting the procedure with better educational strategies.

Mr Adabre was opening a management seminar for IRS staff drawn from the Northern sector at Sunyani yesterday.

The three-day seminar has the theme "The service on the threshold of a new millennium: evolving sustainable strategies".

Mr Adabre said many people expect general improvement in their standard of living without considering the fact that "it is their taxes that are used to finance development programmes mainly due to lack of education".

He, therefore, reminded the public that no serious economic development could take place without adequate revenue mobilisation towards the provision of basic infrastructure facilities.

"Taxes are what the people pay for development and government can only re-double its efforts towards accelerated development if more tax revenue is realised."

He said the government's programme to reduce inflation to a single digit would mean a priority to revenue mobilisation from taxes to reduce reliance on loans and internal borrowings, which attract high interest rates.

Mr David Adom, IRS Commissioner, enumerated some of IRS' goals for the next millennium, which include increased efficiency to collect sufficient revenue to enable the government to balance the national budget and reduce borrowing.

IRS targets to collect one trillion cedis in taxes this year. Last year, it exceeded its project receipts of 785 billion cedis by 30 per cent.

Mr Adom said IRS has established a corporate plan, which would help it to attain the set objectives of Vision 2020 and overcome all the challenges envisaged in the new millennium.

Through education, the IRS would promote greater self-assessment and voluntary compliance with existing tax laws and open up new tax offices in new commercial areas to bring its services to the doorsteps of the people.

Mr Adom said the service has appealed to the Ministry of Finance to make it possible for it to retain cost of tax collection before paying the remaining proceeds into the consolidated fund.

Accra (Greater Accra), 4 March  

The Value Added Tax (VAT) Service has identified non-sale of old stock by registered businesses as the main problem affecting the smooth implementation of the new tax system.

A visit by some members of the VAT Oversight Committee to some businesses in Accra on Wednesday indicated that most businesses are loosing their customers due to the high prices on their old stock, which have been in their shops for more than six months. Only reduced prices of six months old stock would be refunded by the VAT Service.

The visit was to enable the committee to acquaint itself with problems encountered by the businesses since the take off of the new tax system two months ago and to come out with solutions for effective implementation. According to some owners of shops visited, the problem is compounded by public perception that who ever charges VAT does not sell at reduced prices. They said ''the moment they see the VAT certificate, they turn away and we sometimes have to chase and convince them to come and buy from us.''

Some of the business establishments visited included shops at the 31st December market and Okaishie, Melcom, Multistores, electrical shops at the Opera square, spare parts shops at Abossey Okai and manufacturing and warehouse firms including Fan Milk Limited and IMEXCO, an import and export firm.

Apart from the non-sale of old stock, most of the shop owners complained that prices of their wares such as cloth, flour, rice and spare parts are most of the time a little higher than the non-registered businesses who usually allow their customers to bargain.

Agya Adu, a registered spare parts dealer, complained bitterly that out of the about 700 spare parts shops in his area, "only about five are registered and our customers who used to buy from us on credit have stopped coming".

He attributed this to the fact that under the VAT system, it is difficult to deal with customers on credit basis.

Mr Ezekiel Asamoah, Acting VAT Commissioner, said, even though, the Service cannot force people to register, the Oversight Committee would sit on the matter and deliberate on some of the issues raised, especially, the issue on whether the six months for the old stock can be extended.

Only officials of Multistore, Melcom, Fan Milk and IMEXCO said they have so far not encountered any problems.

Mr George Amissah, Chief Accountant at Multistore and Mr Daniel Annan, Finance Manager of Fan Milk said prices of their goods and products remain the same in spite of the reduction of the 15 per cent sales tax to 10 per cent VAT.

They said this is due to other economic factors, which go into the fixing of their prices.

Accra (Greater Accra), 4 March,  

The first phase of the 125 mega watts (mw) power barge being constructed by the Ghana National Petroleum (GNPC) in the Western Region will be ready by September this year.

The barge, which is being constructed with a 110 million-dollar grant from the Japanese government, is the first of two barges being constructed on the eastern part of Effaso in the Western region.

The second is being sponsored with funds from the US Maritime Administration and is valued at 65 million dollars.

Mr. George Aggrey, an official of the GNPC Tano Project who said these on Wednesday, noted that the barge is located in the Tano Basin, adding that associate transmission lines and sub-stations are being built to tie in into the national grid.

The project became necessary because of the increasing electricity consumption occasioned by the success of the Economic Recovery Programme. Low rainfall levels have also adversely affected generation capacity of the two dams on the Volta Lake.

It has become clear that Ghana cannot depend entirely on hydro-power. The natural gas turbines to be located on barges in the Tano area will be the first gas-fired power generation in Ghana.

Mr Aggrey said the barges, which were originally meant for Effaso, had to be re-located at the eastern end of the village of Effaso because of the high noise level, on the advice of EPA. He said "the good thing about the barges are that, they can be run on oil and gas. "Therefore, when the West African gas pipe lines are ready, we will benefit from it".

He said there are two transmission routes. The first goes through to Elubo, while the other goes through Asiamah, both in the Western region. GNPC is building a sub-station near the Ghana Ivorian border to tap power from the barge onto the Ghana-Cote d' Ivoire lines.

Mr. Carl Okpatta, a geologist, said a project is currently being developed to introduce about 260 mw of additional generation capacity in Ghana, fuelled by indigenous natural gas resources.

"Oil and gas reserves in the Tano Fields, situated at 20 kilometres and 35 kilometres offshore south-east of Ghana, are being developed".

He said the corporation has since its establishment actively promoted Ghana's hydrocarbon potential to oil companies.

The GNPC is currently working in association with Hunt Oil, Sante Fe Energy, Dana Petroleum, Nuevo and YuKong, as well as West Oil who have signed petroleum agreements for oil exploration in Ghana.

Mr. Okpatta said Ghana has a few blocks along its coastline, which have not been licensed. They are Saltpond, on-shore parts of Tano and a vast area of the Voltaian basin.

"GNPC is, therefore, looking for investors to participate in the programme of developing them into viable and profitable ventures", Mr. Okpatta added. Mr. Okpatta said 953 billion cubic feet of gas is being explored to increase the power generation capacity of the country.

Earlier, Mrs Esther Cobbah, Public Affairs Manager of GNPC, said for several years, the corporation was the lone importer of crude oil, adding, "it was something we endured and not what we enjoyed".

She said it is sad that a lot of people do not know about GNPC's operations, while others give it bad publicity because of what they personally hold against certain personalities.

"The nation must strive at its own agenda and desist from looking at personalities to determine how a body or individual is treated".

Ms Cobbah said GNPC is also linking up with countries in the sub-region to establish a strong power generation source.