Wereko Brobbey calls for economic power tariffs
AFKO Imex paid 3.7 billion taxes in 2000
Accra Bourse index in big gain
Accra (Greater Accra) 22 September 2001 - The Volta River Authority (VRA) on Friday called on power consumers to brace up for economic tariffs necessary to avert the total breakdown of its operations that might result from a looming financial crisis.
Speaking at a media briefing VRA Chief Executive, Dr Charles Wereko Brobby said the continuously low tariffs that it has had to operate with over the years has severely undermined its financial strength.
"Let's pay the right prices now instead of waiting for crisis to hit us and before hurrying to pay a premium for emergency power generation."
Besides the need to recover production cost, VRA also has to urgently pay 70 million dollars external debt including 50 million dollars for power imported from the Electricity Company of La Cote d'Ivoire.
The Ivorians have been on the neck of the VRA to redeem the debt and threatened to stop supply, Dr Wereko-Brobby said. Also VRA needs 180 million dollars to construct the second steam plant at Takoradi.
The briefing was to sensitise consumers on the frustrations of the Authority's current operational and financial position and also outline its plans for the future.
It touched on Hydro and Thermal power production, focusing on the lake levels at Akosombo and the proposed Bui Dam, growth in demand and supply as well as other VRA's investments including the Fibre Optic Communication System.
Dr Wereko-Brobby said while VRA imported power at 4.8 cents per kilowatt hour (KWH) from La Cote d'Ivoire, the Public Utility Regulatory Commission only allows it to charge 2.7 cents per kwh.
Worst of all, the VRA gets only 194 cedis per kwh for power generated locally which it produces at 432 cedis per kwh.
He said unlike the situation before 1985 when the Authority was exporting 70 per cent of power and, therefore, had enough foreign exchange to run, domestic demand alone has now out-stripped total supply.
This has led to the dwindling of the company's foreign exchange reserves while it faced the challenge of sourcing financing complementary systems such as the Takoradi Thermal plant, which are very expensive to run.
Ninety-five per cent of VRA's operations hinges on foreign exchange. Dr Wereko-Brobby said although the level of water in the Akosombo dam has been comparatively low this year, the Authority could provide a reliable and efficient supply from other sources if consumers paid economic tariffs.
"Today, if Akosombo is full, we cannot meet our national demand, let alone export," he said, adding that a full complement of the dam could only provide 65 per cent of national power needs.
He was expressed optimism about the option to expand including building thermal plants.
"We must continue to improve and inject thermal systems into hydro. Thermal complementation is essential and must be carried on," the CEO declared.
Dr Wereko-Brobbey made reference to the five-nation West Africa Pipeline Gas Project saying it was essential to Ghana since it could provide the gas for the firing of thermal plants instead of the expensive light crude oil being used.
Dr Wereko-Brobby also noted that wasting of electricity by consumers was a major contributor to the company's difficulties saying that about 30 per cent of power generated was wasted through inefficient use.
The VRA, he said has decided to adopt the national policy of installing pre-paid metres for its customers in the northern part of the country as a remedy for waste.
On the Bui Dam, Dr Wereko-Brobby said VRA was not shying away from the project because of concerns raised by environmentalists on its impact.
He said the Authority was studying the feasibility of the Bui project and would come out with a final decision after the necessary consultations. Every system including Thermal power generation has its negative impact on the environment, he said.
GRi../
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Accra (Greater Accra) 22 September 2001 - The Ghana Stock Exchange (GSE) is to promote cross border alliances with two sub-regional exchanges as part of a five-year strategic plan to help boost trading activities.
The Exchange Board Chairman, Mr William Panford Bray, told the annual general meeting of the governing council that the Exchange would forge partnership with the Bourse Regionale des Valeurs Mobilieres and the Nigerian Stock Exchange in line with moves towards ECOWAS integration.
He said that as part of its short-term plans the Exchange would liaise with the Ministry of Finance and the Divestiture Implementation Committee to channel the state divestiture process through the exchange.
The Exchange would also step up its promotion activities to prospective listed companies with a view to achieving a critical mass of listed securities. ''The current number of listed equities remained very low'', he said.
There are currently 22 listed equities on the bourse, following the voluntary de-listing of UTC Estates from the official list of the exchange in September last year.
Mr Bray said the Exchange would continue to market current products and services aggressively through expansion of its trading activities beyond Accra. "It shall also research and introduce other products such as metropolitan and municipal bonds."
A lot of preparation had gone on, resulting in the conversion of a significant part of government 91-day instrument into medium-term government bonds, which might be listed on the exchange, he said.
The first auction of the Ghana Government Index-linked Bonds was held in the first week of September. According to the Finance Minister Mr Osafo-Maafo, it would be listed on the bourse in December.
Mr Bray said the Exchange would work closely with the government to re-instate the automation of Clearing, Settlement and Depository project under the World Bank's Non Bank Financial Institutions Project to enhance the Exchange's services and make it globally competitive.
The World Bank cancelled the project last year because of the negative impact the country's economic problems have had on the performance of the Exchange.
It cited the reason for the cancellation as low stock market capitalisation both in absolute terms and as a percentage of Gross Domestic Product, low turnover and high transaction cost that it feared would increase with the proposed investment in new technology.
On the performance of the Stock Market, Mr Bray said its activities were severely affected by the unfavourable macro environment last year.
The GSE-All Share Index rose marginally by 16.55 per cent against interest rate on Treasury Bills of 38 per cent. Turnover Volume of equity transactions totalled 30.72 million valued at 50.6 billion cedis compared to 49.6 million valued at 69.6 billion cedis for 1999.
Total market capitalisation increased at 3,655 billion as at the end of December last year from 3,205 billion cedis in 1999, an increase of 14 per cent.
Mr Bray expressed the hope that the market performance would improve as the exchange vigorously pursued its remedial measures and the hostile economic climate of last year diminishes with improvement in government policies.
GRi../
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Tema (Greater Accra) 22 September 2001 - Afko Imex Limited, sole agents for Samsung electronic products in Ghana, paid a total of 3.7 billion cedis in custom duties and sales tax to the Customs, Excise and Preventive Service (CEPS) last year.
The company, which represents Samsung Electronic Company of Korea, now plans to hit the local electronics market with the best and cheaper products to match other world-class products like Panasonic and Sony.
Mr. J. J. Cho, Chief Executive Officer of Afko Imex, said at the presentation of prizes to award winners of an essay competition for its customers. Samsung ranked among the best electronic products in the world, he added.
GRi../
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Accra (Greater Accra) 22 September 2001 - The Ghana Stock Exchange had a breather on Friday with the GSE-All Share index, the key stock measure, closing stronger by 5.99 points to end recent streaks of poor performances.
The index, which had made only marginal gains at previous sessions during the week, finished trading at 955.40 points from 949.41 points on Wednesday, courtesy gains by Patterson Zochonis (PZ), Unilever (UNIL) and Mechanical Lloyd Company (MLC).
Market activities picked up as traded volumes pushed up more than 10 times to close at 251,400 shares as against 17,300 shares at the previous close.
There were three positive price changes. UNIL went up 95 cedis to close 2,100 cedis, PZ was up 195 cedis at 900 cedis and MLC gained five cedis at 140 cedis.
Market capitalisation closed higher at 3,870.22 billion cedis from 3,858.62 billion cedis.
Below are the closing prices of the listed equities in cedis:
ABL 320
AGC 18,500
ALW 4,300
BAT 600
CFAO 60
EIC 2,900
FML 1,000
GBL 1,300
GCB 1,550
GGL 900
HFC 952
MGL 240
MLC 140 +5
MOGL 20,000
PAF 800
PBC 450
PZ 900 +195
SCB 20,500
SPPC 356
SSB 2,300
UNIL 2,100 +95
CMLT 430
GRi../
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