GRi Business, Economics & Finance 02 – 05 - 2003

1 million minimum balance is unacceptable
UK releases fund for poverty alleviation by 2015
Inability to fully utilise trade opportunities
GOG and CIDA hold bilateral consultations
We have seen no need for change
Civil Servants urged to increase productivity

Cocoa production is sustainable
Ghana is a medium human development country

 

 

1 million minimum balance is unacceptable

Accra (Greater Accra) 02 May 2003- Professor Kwadwo Asenso-Okyere, Vice Chancellor of the University of Ghana, Legon has described the setting of minimum Savings deposit at one million cedis as unacceptable.

Delivering the Ghana Commercial Bank (GCB) 50th Anniversary lectures in Accra on Tuesday, Professor Asenso-Okyere urged commercial banks to bring down the high charges, saying, it could help address the issue of the low savings rate which was adversely affecting Ghana's development process.

He said the practice whereby account holders were charged for withdrawing monies less than 500,000 cedis per transaction should also be stopped since 40 per cent of Ghana's population fell below the poverty line.

Prof Asenso-Okyere noted that the refusal of banks to pay interest on foreign currency accounts was not right as it reduced the capacity of the banks to mobilise more money. "Some banks do not pay interest on foreign currency accounts, but a cursory study of these accounts has shown that foreign currency deposits can expand substantially if depositors are paid interest on their balances."

He asked GCB to enact policies that will help in savings mobilization in the country to spearhead investments for development. He asked the banking sector to provide long-term financing and venture capital needed for the establishment of business enterprises and working capital for the production and distribution of goods and services needed as import substitutes and for export.

"It is only when the productive sectors of the economy pick up that Ghana shall experience real growth and development. With its past record, GCB can be useful in these respects," Prof Asenso-Okyere said.

He outlined the historical growth of the bank from pre-independence, adding that GCB has come a long way from the days when it  made a net profit of 16,000 cedis in 1953 and 3,919,000 in 1973 to 281.908 billion cedis last year.

Prof Asenso-Okyere said even though GCB was doing well in financing manufacturing, mining, construction and especially commerce, it is vital and prudent that "you increase your support to the agriculture sector, which is currently receiving only 0.50 per cent of total distribution of loans and advances for last year".

GCB made a profit after tax of 174.372 billion cedis, after making provision for the National Reconstruction Levy and corporate tax. The bank was the best performer on the Ghana Stock Exchange last year, registering a total return of 153
per cent, made up of 124 per cent in capital gains and 29 per cent income yield.

In comparison to others it made an average yield of 45 per cent on the market. GCB paid a total dividend of 500 cedis per share based on the commendable performance on both the stock market and profitability of the bank.
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UK releases fund for poverty alleviation by 2015

Takoradi (Greater Accra) 02 May 2003- Miss Barbara K Gansah, a staff of Delliote and Touche, on Tuesday said the Department for International Development (DFID) of the United Kingdom (UK) has allocated one million pounds for the Ghana Business Leakage Challenge Fund (GBLSF) and is meant to reduce poverty by 2015.

She said DFID also hopes to improve efforts at basic health care and universal access to primary education by the same year. Miss Gansah said these in an interview with the GNA in Takoradi. She said the UK government White Paper on International Development published in December 2000 reaffirmed this commitment and focuses specifically on how to manage globalisation to benefit the poor.

 

Miss Gansah said the DFID and GBLSF grant covered fees for transfer, use of related skills, cost of travel and accommodation, licensing, royalties, training course fees, and relevant legal and certification. She said the grant was mainly for new businesses but existing ones could be considered, based on their accounting, editing and regular running course since the fund does not cater for such expenses.
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Inability to fully utilise trade opportunities

Kumasi (Ashanti Region) 02 May 2003- A Director of the Ministry of Trade and Industry has stated that the low levels of production of exportable commodities has accounted for the inability of several African countries to fully utilise the trade opportunities opened to them by the United States and European Union (EU).

W. Kofi Larbi, Director, Multilateral Division of the Ministry, explained that the reason why a number of African countries are unable to produce enough commodities to meet demands of markets opened to them in the US and EU is basically because of the lack of adequate funding.

Larbi made the statement when he spoke on the topic, "An overview of the General Agreement on Tariffs and Trade (GATT) and general principles of the World Trade Organisation (WTO)" at a day's seminar organised by the Ghana Standards Board in Kumasi on Wednesday.

The seminar, which seeks to discuss the WATO agreements and sponsored by the UK Department for International Development (DFID), was attended by 60 participants made up of stakeholders in the export industrial concern as well as agriculturists and NGOs in the Ashanti Region.

 It was designed to discuss and educate stakeholders on the WATO agreements and various issues related to international trade. Larbi, however, said, "aware of these obstacles, the government had now instituted a number of measures to address them and possibly remove them".

The measures include the introduction of the Export Development and Investment Fund (EDIF) and schemes to encourage people to produce more non-traditional crops and more tree crops like cashew. Speaking on "WATO agreement on Technical Barriers to Trade (TBT)", Miss Genevieve Baah, a Scientific Officer of the Ghana Standards Board, made it clear that TBT agreements do not operate in isolation but rather they take into account the existence of legitimate divergences of taste, income as well as geographical factors.

"For this reasons, the agreement accords to members a high degree of flexibility in the preparation, adoption and application of their national technical regulations", she stressed.
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GOG and CIDA hold bilateral consultations

Accra (Greater Accra) 02 May 2003- The Canadian International Development Agency (CIDA) has shifted its support to the Government of Ghana from project lending to programme lending to enable government to work within its priorities for the Poverty Reduction Programme.

This forms part of CIDA's revised programmes to assist the Government to improve on its Poverty Reduction Strategies. Canada has designated Ghana as one of the nine countries selected in the world to receive her concentrated assistance.

This came up during bilateral consultations between CIDA and Government of Ghana (GOG) on Wednesday to review the CIDA programme and ensure its integration with government's agenda.

The main areas highlighted during the consultations included decentralisation, public sector compensation, accountability and good governance and to enhance capacity at the district level to ensure the channelling of increased resources through the District Wide Assistance Approach.

Participants also stressed the need to specifically feed into the annual budget and activities of the Ministries' Department and Agencies (MDA's), poverty reduction priorities for areas, including the three northern regions and to increase the sense of  responsibility and transparency by all parties.

Yaw Osafo Marfo, Minister of Finance and Economic Planning said the decision of Canada to strengthen her aid delivery effectiveness through the new programme was commendable and consistent with Ghana's vision and strategy to channel the bulk of external aid through the Multi Donor Budgetary Support Mechanism to reduce transaction costs and enhance the predictability and timeliness of aid delivery.

The observance of a mutually agreed code of conduct by government and the Donor Partners under the Broad Budgetary Support Framework would also ensure compliance on both sides, he added.

 

Osafo Marfo said the bilateral consultations, the first to be held after a break of almost six years, showed the commitment of the two countries to ensure that Canada's programmes dovetails into the NPP government development agenda.

He said government is working hard at the macro economic front to ensure that its visions materialised, adding, "we have put in place a public management finance system to have a proper control over government expenditure''.

Osafo Marfo said for transparency and accountability, government had put four bills before parliament including procurement, finance administration and central internal audit to which, when passed would improve the public administration system and strengthen the donor budget.

He said the link between some of the Ministries and the districts were missing making information flow on how monies are used from the HIPC fund inaccessible adding for instance that the Ministries of Health and Education had to depend on the Ministry of Local Government and Rural Development for their statistics. "Government is putting resources together to make the District Assemblies function effectively" he added.

Archie Book, Regional Director of CIDA, said an Action Plan was being designed to initiate and improve on the donor budget to make it effective. He called on government to make a distinction between regional and district spending to make its donor budget coherent.

Book said the implementation of the Ghana Poverty Reduction Strategy (GPRS) programmes must reflect in the budget and bridge the gap between spending at the national level and the district level.

Jean-Pierre Bolduc, Canadian High Commissioner, called on participants to avoid supporting sector programming that involved creating parallel delivery mechanisms which otherwise did not respect the roles and mandates of regional, district and sub-district bodies.

He said the district and community counterpart funding requirement must be rationalised and harmonised to ensure they did not become constraints to project and programme implementation.
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We have seen no need for change

Accra (Greater Accra) 02 May 2003- The National Petroleum Tender Board (NPTB) on Wednesday said it has seen no reason for a change in the ex-pump prices of petroleum prices after one month of work.

 

"We have looked at the trend for this month. At this stage, we have not seen any reason whatsoever that there will be any need to have a change in prices," Professor Ivan Addae-Mensah, Chairman of the Board, said at a meeting in Accra attended by the Energy Minister, Dr Paa Kwesi Nduom and senior officials of the Ministry.

He said the Board, as part of its task, is to announce quarterly price adjustments and would look at the averages for the period so as not to have big adjustments Prof. Addae-Mensah said the Board has done a lot of work in less than a month since it was inaugurated and it is still collecting information on the sector that would inform its decisions.

Dr Nduom noted that the energy sector is a difficult one whose performance has affected the financial health of the country and threatening some banks. Ghana Commercial Bank is particularly overburdened by the debt at the Tema Oil Refinery.

He said the Board has a task of turning around the situation in the energy sector, although, he said, it could be a difficult one. Dr Nduom said the liberalisation of the sector is on course and would be continued.

He said, he could foresee a day when crude purchases would not be done by the government, oil marketing companies would bring in their own refined products, fuel prices would be displayed for everybody to see and that the refinery business would not be confined to government alone.

Dr Nduom said the government made several promises when it announced new petroleum prices in January and these promises have to be kept. They include the promise that this would be the last time government would announce fuel prices and that the NPTB, which would review the situation quarterly, would be constituted.

On the TOR debt, The Minister said several steps were being taken to clear it but he could not say how long it would take to clear it. He said over the next three weeks, there would be discussions on the issue after which government could indicate how long it would take to clear it and at what cost.

Dr Ndoum said he has given himself 12 months to do what he could at the Ministry because in July next year serious politics towards the 2004 elections would have begun. The first three months should be used to take every difficult decision, he said, adding that if the bulk of the work in terms of decisions, plans and initiation of action are done, the following six months would not be wasted.
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Civil Servants urged to increase productivity

Accra (Greater Accra) 02 May 2003- The National Secretariat of the Civil Servants' Association of Ghana on Wednesday reiterated its the call on its members for increased productivity, which leads to increased dividends and a better standard of living.

In a statement issued in Accra the Association said it has taken cognisance of the myriads of social and economic problems affecting the well- being of Civil Servants in the country. These problems, it said, could be attributed to both internal and external factors such as the recent increases in price of fuel, and its corresponding effects on the cost of domestic goods and social services, thus playing havoc with the standard of living of workers in general.

"We are confident that Government would take positive measures in order to ameliorate the suffering of its workers," the statement said. This year's May Day is under the theme: Democratic Workers Participation And Improving Incomes: Dividends Of Good Governance".

The Association said in order to make it possible for civil servants to continue to feel proud and active Government should heed their call for the urgent correction of all the distortions that have crept into the Ghana Universal Salary Structure (GUSS).

"As employees of Government, we find it unacceptable that we Civil Servants are being sidelined when it comes to the issue of wages and benefits. That is why we are also calling for the restoration of the CAP 30 Pension to Civil Servant."

The Association said it is "proud" that this year's salary negotiations were concluded in an atmosphere of mutual give and take and that Government had kept its word, which is one of the marks of "Good Governance".

"As agents of social change in the society, the Association will continue to champion the legitimate cause and aspirations of Civil Servants through concrete and meaningful discussions and dialogue with Government; the continuous consultations between us and Government, which to us is a healthy way of relating to each other.

"That is why we are not happy that we were not consulted in the matter of the use of our 2.5 per cent of our SSNIT contributions towards a National Health Insurance Scheme." The Association said laudable as the Government may view this proposal, they still feel that as stakeholders and eventual beneficiaries of the proposed scheme, consultation and participation should guide its implementation.

"As our Employer, we also expect Government to keep to its pledge of ensuring a positive and realistic change in the conditions of service of Civil Servants to enhance their standards of living."

It called on Civil Servants and workers "to continue with the show of solidarity so far displayed and to positively rally without fail behind their leadership so that together we will be able to achieve our desired objectives."
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Cocoa production is sustainable

Accra (Greater Accra) 02 May 2003-Hope Sona Ebai, Secretary-General of Cocoa Producers Alliance (CPA) said World cocoa production was sustainable, considering the amount and nature of research work currently underway all over the world.

He said notwithstanding the European Union's directive that about 25 per cent of chocolate should be from butter substitutes, it was imperative that producers devise a management scheme in production to ensure that the market was not flooded if a certain production quota did not favour them.

Ebai said an initial analysis by CPA showed that between 150,000 and 200,000 tonnes of cocoa could be displaced if the EU market continued its directive. He was briefing Journalists on the forthcoming 14th Cocoa Producers Alliance to take place in Accra on 14 May this year.

The event offered host countries the opportunity to showcase what they have in the industry and how far they have grown in the industry. Researchers from Ghana's Cocoa Research Institute are reported to be presenting about 39 research papers, the second after Brazil.

The Conference, held every three years, is for researchers, producers, manufacturers and technocrats to discuss current findings of the cocoa industry and the way forward. Participants drawn from Ghana, Togo, Cote d'Ivoire, Nigeria, United Kingdom, Brazil, Cadbury and the CPA Secretariat, would also dilate on the future of the industry.

It is estimated that over 500 participants from all over the world would converge in Accra for the Conference, which is on the theme: "Towards A Sustainable Cocoa Economy". Ebai said the chain of cocoa production ought to be sustained, adding, "this must start from the farmer right down to the consumer. We must be careful that these segments in the cocoa chain derive satisfaction through the application of genetics, oral deliveries and breeding.

"It is important that farmers especially, improve upon their tools and efficiency to increase their productivity and find cheaper ways of production," he added. Ebai said Ghana was hosting the event at the invitation of the Ghanaian government, "it was due for the African region anyway."

Ghana and Nigeria bid for the event. He said new and numerous uses of cocoa have been found ranging from new uses of cocoa flour, biscuits and pharmaceutical among other uses, and this must be harnessed adequately and new uses were being identified.
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Ghana is a medium human development country

 

Accra (Greater Accra) 02 May 2003- The United Nations Development Programme (UNDP) has rated Ghana as a country with medium human development. In its Human Development Report for the year 2002, Ghana was placed at the 76th position out of 84 countries in the medium human development division after Zimbabwe, Myanmar, Botswana, Swaziland and India.

The Human Development Index on which the report was based measured a country's achievements in terms of life expectancy, educational attainment and adjusted real income. The index assessed 173 countries, and put them into three categories of high, medium and low human development. Ghana placed 129th position with Burkina Faso Mozambique, Burundi, Niger and Sierra Leone taking the last five positions.

The report classified 29 African countries, out of 36 as countries with low human development. Norway took the premier position in high human development countries, followed by Sweden, Canada, Belgium, Australia and the United States of America.
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