Privatisation process must be without blemish - Governor
Market starts week on slow note
Privatisation process must be without blemish - Governor
Accra (Greater Accra), 19th October 99
Western African governments were on Monday urged to ensure that privatisation of state-owned enterprises are undertaken with transparency and integrity so that shareholders will have confidence in the process.
Dr. Kwabena Duffour, Governor of the Bank of Ghana, and Mr. Chris O. Itsede, Director-General of the West African Institute for Financial and Economic Management (WAIFEM), stressed this at the opening of a 11-day course on Privatisation and Infrastructure Development in Accra.
"No region in the world is in greater need of new and more efficient investment, maintenance and operation of its infrastructure than in Sub-Saharan Africa.
"However, we must not delude ourselves into believing that although popular and desirable, privatisation is a simple operation," said Dr. Duffour.
Dr. Duffour, whose speech was read by Mr. Emmanuel Ossei-Kumah, Deputy Governor, said: "for privatisation to be credible, politically acceptable and economically sustainable, the process must be seen to be transparent and devoid of abuse and corruption".
He identified the relatively small and unattractive size of the Africa market, inefficient legal and regulatory framework, non-commercial risks and the low rate of local financing as challenges to be addressed to improve privatisation.
The Governor underscored the benefits of privatisation, which, he said, attracts foreign direct investment, encourages technology transfer, promotes productivity and efficiency among other things.
"The poor level of infrastructure services in the sub-region reflect the poor performance of public utilities, which is attributed to unclear and ill-defined mandates, unsustainable pricing policies, managerial and technical weaknesses and poor initial project design and financial structure.
"It has been documented that on the average, only 48 per cent of households in Sub-Saharan Africa have access to electricity, with wide disparities across countries.
"Most electricity companies report system losses averaging 17 per cent. In the case of water, only 44 per cent of the population have access to safe drinking water with system losses estimated at about 30 per cent".
Dr. Duffour said statistics for the provision of roads and telecommunications are no different with the number of telephone mainlines per 100 people averaging 1.2 per cent and the density of paved roads per million people averaging 339 kilometres.
Mr Itsede said the process of privatisation should balance economic and political goals in a way that would yield maximum benefits.
"A panoply of factors determine the institutional framework approach to the whole programme: how to structure each particular divestiture, the steps that need to be taken in preparation for sale and how to manage the negotiation and sale.
"At each point, there must be political transparency to maximise the perception of level playing field by stakeholders".
Mr. Itsede gave the background to privatisation on the global level, pointing out that countries like Poland, Hungary, Zambia and Mozambique had made significant gains from privatisation.
He noted that a total of 1,165 state-owned enterprises in Africa operating mainly in the food processing, alcoholic beverages, textiles, finance and distributive agriculture had been sold off by mid-1998.
Mr. Itsede urged the participants, who are from Central Banks and other financial institutions in Ghana, Nigeria, Liberia, Sierra Leone and the Gambia to come up with strategies that would facilitate infra-structural development through privatisation.
The 26 participants will discuss the principles and practice of privatisation, regulatory framework for public utilities and infrastructure, legal issues in project finance, regional infrastructure development among other things.
WAIFEM was established in 1996 by the Central banks of the five-member countries to improve the capacities of their staff for macro-economic management.
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Market starts week on slow note
Accra (Greater Accra), 19th October 99
The Ghana Stock Exchange (GSE) All-Share Index on Monday opened trading weaker as bearish sentiments shrouded market activities.
The All-Share Index dropped by 0.44 points to close trading at 763.11 points from 763.55 points while market indicators declined by heavy margins compared to figures recorded on Friday.
Change in the year to date stood at 12.12 per cent.
Total shares traded went down from 3.7 million to 138,500 shares while demand fixed at 435,200 shares, down from 4.4 million shares.
Shares on offer also opened the week lower at 1.5 million shares from 6.2 million shares.
Market capitalisation closed trading at 3,243.37 billion cedis lower than the 3,244.08 billion cedis registered at the close of last week's trading.
In the broader market, there were two price changes - both decliners.
Aluworks Company Limited (ALW) lost three cedis to begin the week at 2,495 cedis with Pioneer Aluminium Factory (PAF) also finishing trading down by a 40-cedi loss at 250 cedis.
The following are the last prices of listed equities in cedis:
ABL 396
AGC 18,700
ALW 2,495 -3
BAT 440
CFAO 40
EIC 1,880
FML 1,000
GBL 1,600
GCB 850
GGL 990
HFC 750
MGL 220
MLC 170
MOGL 15,900
PAF 250 -40
PZ 800
SCB 19,750
SPPC 180
SSB 1,980
UNIL 1,870
UTC-E 125
CMLT 420
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