Insurance industry face debt crisis
Highlights of mid-year budget review
Tema (Greater Accra) 09 November 2001 - The country's insurance industry is facing huge outstanding premium debts leaving all insurance companies with non-life accounts in a crisis, Ms Josephine Amoah, Commissioner of the National Insurance
Commission (NIC) said on Thursday.
This has affected their cash flow position making it impossible for them to settle claims and other obligations promptly, Ms Amoah who announced this at the opening of a 255 million cedis newly refurbished and fully computerised office for the Tema branch of the State Insurance Company (SIC) at Tema said the rising customer dissatisfaction and complaints is not helping the image of the industry.
Ms Amoah noted that until 1999, the insurance industry experienced a significant growth, but this slumped, due to the sharp deterioration in the macro-economic environment experienced in the year 2000.
"The high devaluation of the cedi and the high rate of inflation drastically changed the success story," she said.
Miss Amoah said the NIC is to form a committee to come out with guidelines and proposals to tackle the outstanding debt situation and embark on public education and business promotion activities.
She assured the insurance industry that the new management of the NIC would initiate policies that would help strengthen it financially and improve its service delivery.
She reminded them that the NIC's ultimate objective as a regulator is to protect the interest of policy holders and would therefore work to promote customer confidence in the industry.
Miss Amoah announced that early next year, the NIC would start its on-site inspections to detect early warning signals indicating whether a company is under financial stress or is engaging in unacceptable practices.
An on-site supervision expert funded by the World Bank would arrive in the country next week to start preparations for the inspections.
Mr Peter Osei Duah, Managing Director of SIC, said the company has embarked on a journey to make its services more customer oriented. He reminded the staff that putting in a lot of hardware would also require their own personal involvement to make things work.
Mr Duah warned employees who leak information to the media that investigations are being carried out and those found to be involved would be dismissed.
He said the SIC does not intend to engage in any paper war with any body but would rather concentrate on its work to achieve positive results, adding, "whatever went wrong in the past will not happen again."
Mrs Doris Nkani, Tema Branch Manager of the SIC said the company's new information system would facilitate communication within the company and between the company and its policyholders, brokers and agents.
She said the new system is designed to facilitate decision-making and aid its internal and administrative task such as accounting and cash control systems.
Mrs Nkani said the newly designed office is customer friendly for the transaction of businesses such as underwriting, claims, renewals, endorsements, inquiries and queries at one place.
GRi../
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Accra (Greater Accra) 09 November 2001 - A network of special programmes by local radio stations to promote and develop micro and small enterprises (SME) has been launched in Accra.
The MSE special radio programme would assist the government through the provision of information and discussions to identify obstacles to the performance and growth of the small business sub-sector and help in finding solution to them.
Under the programme, which started in Uganda and sponsored by the International Labour Organisation (ILO), FM stations are encouraged to package and produce programmes in local languages or languages easily understood by small scale business people.
The MSE programmes will also examine issues affecting small businesses such as economic conditions, marketing opportunities and trends, and government legislation among others, with the objective of making the small and medium business sector flourish and develop.
Mr Yaw Nyarko-Mensah, Head of Human Resource and Private Sector Development, Ministry of Trade and Industry (MOTI), who launched the programme network on behalf of the sector Minister, Dr Kofi Apraku, said the government welcomed innovations and initiatives that were aimed at increasing productivity and creating vibrant, competitive and innovative industrial sector to compete effectively in the global economy.
He said the government, in a spirit of public-private partnership, would continue to co-operate with the private sector including, non-governmental organisations and provide incentives to support efforts in the private sector.
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Accra (Greater Accra) 09 November 2001 – The Government is on track to achieve its set targets with just about two months to the end of the year, according to a review of the third quarter of the economy by Databank Equity Research.
Interest rates have made a turn around and are heading down, inflation has declined and the rate of depreciation of the cedi has slowed down. The step-by-step research said inflation over the last 12 months went down to 28% as at September from 40% at the end of 2000. Both food and non-food index have shown improvements.
The Government planned to hit 25 per cent by year's end at the beginning of the year but has recently said it will rather hit a single digit. Inflation is currently pegged at 25.6 per cent
Economic analysts and industry watchers however doubt this saying, "it is too early in the day to know exactly how the full impact of HIPC implementation might affect the nation."
The document noted that government is likely to achieve its 25 per cent target by the end of the year on the back of good food harvests; but warned that any increase in utilities, ie, water and power, might reverse the downward trend of the index.
The food component of the index grew at a slower average rate of 1.7 per cent per month during the nine months of this year. "A good harvest due to good rains during the year has resulted in the slow growth in the food index, a trend which we expect to continue for the rest of the year."
The Research said the food-index grew at 2.2 per cent per month. Components of the index that recorded significant growth were housing and utilities 2.0 per cent, medical expenses 2.9 per cent, household goods 2.1 per cent and transport and communications 1.2 per cent.
The stability of the cedi against major international currencies plus the tight monetary policy adopted by the central bank contributed to the slowdown in the rate of inflation.
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Accra (Greater Accra) 09 November 2001 - The Bank of Ghana on Friday granted a request by the Economic Crime Bureau of the Criminal Investigations Department of the Police to take fingerprints of the entire staff of the Cedi House building.
This followed a request the bureau made in the wake of the stealing of 26 computer processors from the bank last week, the second theft in three months.
Sources at the Economic Crime Bureau said the exercise would cover the entire staff in the building including those on leave. The source said the operation, which would begin at 0900 hours on Monday, has the backing of the Security Department of the Bank of Ghana.
The source said the staff register of the bank would be used to ensure that fingerprints of all the personnel are taken. Twenty-six computer processors were stolen, the second time such a theft occurred at the bank. In the first case, processors and hard drives were removed.
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Accra (Greater Accra) 09 November 2001 - The Minister of Finance presented a mid-year review budget on Thursday. Below are some highlights in his presentation:
**Government is owed 180 billion cedis by individuals, companies and other corporate bodies. Only 20 billion cedis recovered. Debt collectors appointed to collect the money for commission.
**Ghana's present interest rate of between 39 and 42 per cent remains the highest in West Africa. In other countries it is between 15 and 22 per cent. Interest rates in Ghana last January stood at 52%.
**Four per cent Gross Domestic Product by the end of December 2001. Related Briefs:
**Thermal power supply to double from 20% presently to 41% next year. Hydro power to decline significantly from the present 76% to 59% in 2002. Current power imports stand at 4%.
**World Bank urges Statistical Service to develop export unit values for gold and cocoa.
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Accra (Greater Accra) 09 November 2001
Currency Buying Selling
US Dollar 7,033.82 7,229.27
Pound Sterling 10,222.95 10,511.36
French Franc 957.50 983.61
Swiss Franc 4,279.18 4,396.77
Deutsche Mark 3,210.32 3,299.86
Canadian Dollar 4,399.62 4,520.82
Japanese Yen 58.47 60.08
Dutch Guilder 2,850.08 2,927.87
S/African Rand 732.64 751.48
Euro 6,280.23 6,451.06
CFA Franc 9.58 9.84
Naira 64.31 66.10
Ecowas/WAUA 8,988.42 --------
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