Karikari Unhappy With Political Discourse

Prof. Kwame Karikari is a media rights activist

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Accra Tuesday September 11, 2012

Professor Kwame Karikari, Executive Director of Media Foundation for West Africa (MFWA) has expressed sadness at how the country’s democratic discourse has turned into ‘rumour mongering’, ‘superstition’ and ‘hatred’ and says the trend must be reversed without further delay.

“We should look at the content of our democratic discourse. The current situation poses danger to the very democratic system that we are seeking to consolidate,” he complained.

The devoted media rights activist was speaking in Accra yesterday at a forum by MFWA in collaboration with Freedom House Inc. to get the approval of the various political parties on a draft proposal for the amendment of sections of the Criminal Offences Act, Act 29 of 1960.

According to MFWA, the amendment has become possible because certain sections of Act 29 have been identified to be ‘inconsistent’ with freedom of speech as outlined in the 1992 Constitution and it wants the political parties to state their commitment before they are elected into office so that the public could hold them accountable.

In attendance were representatives of political parties including the Convention People’s Party (CPP), People’s National Convention (PNC), Democratic People’s Party (DPP) and the New Patriotic Party (NPP).

However, invited representatives from the ruling National Democratic Congress (NDC), Progressive People’s Party (PPP) and Great Consolidated Popular Party (GCPP) failed to turn up for the forum.

Prof. Karikari said “reckless use of freedom is a process of undermining freedom”, adding “the balancing of responsibility of freedom is important as we go into another election.”

He said recklessness in the media landscape is eroding the democratic gains made by Ghana and the lack of certain media regulations had enabled politicians to use the system to promote their parochial agenda to the detriment of the development of the country.

“We have produced our critique and we are not saying it is beyond critique. We want the inputs of the political actors as well as their commitment to implementing these amendments when they get the chance to rule the country.”

Thomas Nuako Ward-Brew, founder of DPP said the courts did not have difficulty in applying Act 29. However, he said the problem lies with how political parties in power have sought to use the judicial system to apply the law.

He described excesses in the media as “dangerous” development that must be dealt with without hesitation.

Yaw Buaben Asamoah of the NPP said move by MFWA is “a logical extension for the indecent speech project being embarked upon by the foundation and must be encouraged.”

He said the time has come for all stakeholders to look at issues of concern while attempting to liberalise the media landscape saying “further legislation to liberalise the media without first addressing current excesses in the media would add to the problems.”

“It is going to be a hard journey of advocacy but whatever comes up it must stand the test of time and the NPP is fully in support of the foundation’s efforts.”

Nii Akomfra of the CPP said the party’s legal committee is prepared to make their inputs into the draft to ensure that the law serves everybody well.

Justice Francis Emile Short, a former Commissioner of CHRAJ who chaired the forum said Ghanaians should not take freedom of speech and freedom of the media for granted.

In the end, all the representatives of the parties present said the move by MFWA was laudable but said they would need time to study and make their inputs, a suggestion which was agreed by the foundation.

Mills’ Name Deleted From Register

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Friday, September 7, 2012

The name of the late President John Evans Atta Mills has been deleted from the biometric voters’ register.

The deceased president’s brother, Dr. Cadman Atta Mills, asked the electoral officers to delete the late law professor’s name yesterday.

Dr. Cadman Mills took advantage of the ongoing register exhibition exercise to get his brother’s name out of the system.

He arrived at the Regimanuel Phase 1 Polling Centre on the Spintex Road in Accra, where the late president had his private residence, at about 11:50 am with his driver.

After formally making sure that his particulars were intact in the register, Dr. Mills then asked the exhibition officer, Emmanuel Arhin, to delete his brother’s name from the system.

Dr. Mills was then asked to fill in a form, after which the exhibition officer endorsed it.

President Mills, 68, until his death, had Voter ID No 2079018392.

He died at the 37 Military Hospital in Accra on July 24, after spending three years and seven months as president.

Ayariga Under Fire

Hassan Ayariga is leading the PNC to contest December 2012 general elections.

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Accra, Thursday September 6, 2012. 

Hassan Ayariga’s fondness for the ruling National Democratic Congress (NDC) as opposed to pursuing his own party’s agenda for the impending general elections in December has ruffled the feathers of the leadership of the People’s National Convention (PNC).

An apprehension about a possible sell-out to the NDC by Mr. Ayariga has incensed PNC Caucus for Strategic Progress, (PCSP) led by its National Coordinator, Atik Mohammed who are demanding his resignation.

The suspicion is grounded on the fact that the PNC flag bearer is reportedly preparing to declare his unflinching support for President John Mahama-led NDC in the December contest a plan described as a political sellout.

Observers are wondering why a flag bearer could concentrate more on enhancing his relationship with a particular party instead of leading his own party to victory in 2012.

A party which produced the first northern President in 1979 has lost touch completely with the electorate while Mr. Ayariga has become an object of suspicion by the rank and file of the party and even some sections of the public.

Coincidentally, it was the Provisional National Defence Council (PNDC) which metamorphosed into the NDC (with whom Ayariga is flirting) that overthrew the PNC-led government on 31^st December 1981 in a coup d’ etat.

There is no doubt that Mr. Ayariga’s continuous flirtation with the NDC is widening the wedge between him and his party executives but he has most of the time returned ‘fire’ to his accusers by justifying his actions.

For instance when then President John Evans Atta Mills returned from ‘routine’ medical check-up in the United States, he was one among many NDC ministers and appointees that met the ailing Prof Mills on arrival at the Kotoka International Airport.

He later justified his presence at the airport by insisting that he was helping to deepen democracy, an explanation which some of his party executives took with a pinch of salt.

According to Atik Mohammed, the PNC Caucus for Strategic Progress has had enough with their flag bearer and was ready to move “to save the PNC from deterioration”.

“The PNC-CPSP wishes to indicate its unconditional desire to save the PNC from deterioration in the hands of its flag bearer whose actions are quickening the party’s gravitation towards political irrelevance.

“The flag bearer has been engaged in practices that are not only treasonable to the party’s survival, but also mocks its followers who have for years held it together.

“We demanded, as a measure to curb this destructive journey the Flag bearer had embarked upon an apology or resignation within two weeks from the Flag bearer,” he said.

He said the attempt by the caucus to force the flag bearer out of his position stalled because of the untimely death of President Mills.

“The deadline for the ultimatum was supposed to expire on the 26^th of July, 2012 after which the Caucus would take a decisive action. Unfortunately, former President Mills passed on two days earlier, thus stalling the Caucus’s activities.

“However, the funeral and all other matters have ended and the Presidential Candidate has still not done as demanded. We have therefore decided to resume action this time with renewed vigor more especially that, he has doubled his efforts at cheapening the party and expanding the opportunities for its ‘possible sale’ to the highest bidder,” he added.

Atik Mohammed said they have petitioned the National Executive Committee of the PNC for immediate action and failure to honor the petition “will leave us with no option but to resort to other equally effective remedies.”

“We wish to inform the NEC that their action on this petition and swiftly so, is imperative for the salvation of our dear party. And need we remind them that, our teeming supporters and sympathizers whose hope Ayariga has nibbled away are watching with curious eyes about what they do or fail to do.”

The caucus said it was affirming its support for as many PNC parliamentary candidates as they could afford in order to maximize the party’s representation in the next parliament.

A cynic has remarked “when a flag bearer of a political party is on the payroll of a more endowed grouping and receiving logistic support from it what do you expect? These are interesting times in the history of the PNC. Principled men like Atik and others would have to expedite their intended action before the man embarrasses by the weird declaration”.

Mahama Blames Cedi Fall On Global Currency Volatility

President J. D. Mahama

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Accra, Thursday September 6, 2012.

President John Mahama says the free fall of the cedi free should be blamed partly on global currency volatilities.

He explained that the situation led to the near collapse of the Eurozone and also affected the fiscal stability of most emerging economies including India, saying “in the first half of this year we have had concerns about the depreciation of the cedi. This has resulted from a combination of factors.”

The daily depreciation of the Ghana cedi against major currencies has become a major headache for economic managers of the country.

Statistics show that the cedi has lost over a third of its value since Ghana began producing oil in November 2010, trading currently at around 1.98 and 2.1 per dollar.

While some analysts attributed the decline to the surging demand for the dollar and other currencies by both local and foreign investors and businesses mainly to cover import bills, others have blamed the currency weakness on trade with China, as many traders are accumulating actual paper cash in dollars due to the lack of effective transfer channels for the Yuan in Ghana.

Renaissance Capital has even predicted another 5% to 10% depreciation before end of 2012.

To stem the situation, the Central Bank raised interest rates by 250 basis points, starting from February, to halt the currency from further weakening but that did not fully address the cedi-dollar relationship.

President Mahama, delivering his ‘Critical Policy Actions - September to December 2012’ in Accra Tuesday, said the bill for non-oil import doubled and also put more pressure on the country’s foreign exchange reserves.

“Last year we spent twice as much foreign exchange on non-oil imports as the year before. This put pressure on our reserves of foreign exchange as our import bill continued rising. This must give us pause for thought.”

 He said in spite of the weakened cedi “we have made tremendous strides in bringing down the rate of inflation to single digits.

“We have increased productivity and more value-added in agriculture and improvements in road infrastructure, especially in rural areas have meant more stable prices of food with positive consequences for inflation.

“However, we remain a substantially importing country, a situation which has consequences for our foreign exchange resources. 

The President said his economic team had managed to “arrested the decline in the value of the cedi and it is gradually stabilizing against major foreign currencies.”

 “The measures that the Bank of Ghana has instituted in respect of foreign capital movements are legitimate, long-overdue exercise, and full compliance from all financial institutions would establish a more stable and predictable regime for the  stability of the cedi.

He said he had instructed the Economic Management Team to take immediate steps to consolidate and sustain macro-economic stability by holding down inflation, halt cedi depreciation and maintain discipline in government expenditure.

Food Price Shocks Imminent - UN

Ban Ki-moon - UN Secretary-General

Accra, Wednesday September 5, 2012

By William Yaw Owusu

United Nations (UN) food agencies are warning of food price shocks and have called on world leaders to take ‘swift’ and ‘coordinated’ action to stem the tide.

A joint statement issued in Rome, Italy yesterday and signed by José Graziano da Silva of the Food and Agriculture Organization (FAO), Kanayo F. Nwanze of the International Fund for Agricultural Development (IFAD) and Ertharin Cousin of the World Food Programme (WFP), said that swift international action could prevent a renewed food crisis.

According to the agencies, global alarm over the potential for a food crisis of the kind seen in 2007/08 has escalated as drought in the United States Midwest had sent grain prices to record highs.

“The current situation in world food markets, characterized by sharp increases in maize, wheat and soybean prices, has raised fears of a repeat of the 2007-2008 world food crisis. But swift, coordinated international action can stop that from happening. We need to act urgently to make sure that these price shocks do not turn into a catastrophe hurting tens of millions over the coming months.”

The release said the situation was fuelling a six percent surge in the U.N. FAO's July food price index and added that “two interconnected problems must be tackled.”

“The immediate issue of some high food prices, which can impact heavily on food import-dependent countries and on the poorest people; and the long-term issue of how we produce, trade and consume food in an age of increasing population, demand and climate change,” they said.

They said in responding to the challenges, we are better placed today than five years ago. We have developed new policies and new instruments, like the United Nations High-Level Task Force on Global Food Security and AMIS, the G20's Agricultural Markets Information System, which improves transparency in global markets.

“We also have the AMIS-related Rapid Response Forum, set up to facilitate coordinated policy responses by major world producers and traders of key cereals and soybeans in the event of market upheavals.

“We have learned that not all are affected in the same way - the urban and rural poor and people in food import-dependent countries are most vulnerable to international commodity price increases when these are transmitted to local markets because they spend the largest proportions of their incomes on food.

“We have also learned that smallholder farmers, many of whom are also poor and food insecure can be enabled to benefit from higher food prices and become part of the solution by reducing price spikes and improving overall food security.”

The release urged countries to avoid panic buying and refrain from imposing export restrictions which, while temporarily helping some consumers at home, are generally inefficient and make life difficult for everyone else.

“We must understand that high food prices are a symptom, and not the disease. So while the international community must take early action to prevent excessive price increases, it should also move to act on the root causes behind such surges.

“In moving to prevent a possible deterioration of the situation, we need to remain vigilant and prepare for the worst in the short run, while working on sustainable solutions for the long haul. Not to do so would inevitably mean that the world's poorest and most vulnerable pay the highest price. Getting this right will help us respond to the ‘Zero Hunger’ challenge set by UN Secretary-General Ban Ki-moon of eradicating hunger from the globe.”

Senior G20 officials held a conference call last week on rising food prices, but leaders will wait for September's crop report from the U.S. Department of Agriculture before deciding whether to take join action on the issue, Reuters quoted France's farm minister as saying recently.

Cocoa Revenue Falls

Tony Fofie - Chief Executive, Ghana Cocobod

Posted on: www.businessguideghana.com

Accra, Tuesday September 4, 2012

By William Yaw Owusu

The Ghana Cocoa Board (COCOBOD), Chief Executive, Tony Fofie has admitted there would be a shortfall in cocoa production this year.

“By all means there would be a shortfall. The weather has not been very kind to us around the west coast and we expect a slight shortfall in our production.”

COCOBOD had targeted cocoa production of 1.2 million tonnes for 2012 after it was able to cross 1 million tonnes for 2011, but from all indications it is not likely to attain the above-mentioned target.

Mr. Fofie disclosed this to BUSINESS GUIDE at the launch of the 7^th Alliance of Cocoa Producing Countries (COPAL) day celebration to be held at Agona Swedru in the Central region on October 1.

He said apart from poor weather conditions, a ‘plummeted’ global price for cocoa is also going to affect production.

“The global price is definitely going to affect our revenue this period because apart from the fact that there is reduced production, the global prices have also plummeted to such an extent that it is negatively going to affect our production,” he said.

Mr. Fofie further said, “Normally there is what we call fatigue. If the trees bear so much over the year, fatigue sets in and they don’t actually bear the way we want it.

“The issue is not just having good weather, the distribution of rainfall pattern is very important. If you need rainfall at a particular point in time for the development of the tree and you do not have water, it means you are creating a stifling effect on the trees itself. There is a stress at a certain point,” he explained.

He stressed the need to add more trees to the existing population to boost production, stressing that COCOBOD was working towards to attain that feat.

“We have a lot of interventions in place including the right use of chemicals to stem diseases and application of fertilizers to boost production,” he added.

He said COCOBOD usually do not disclose figures including the tonnes produced before close of season, saying “We don’t normally give out figures on how many tonnes we are expecting. It depresses the worker so we are cautious about that.

“I know that there are quiet a number of people who go around cocoa farms to do forecasts and this information is actually fed unto the global market and that actually have a negative impact on global prices,” he explained.

As part of efforts to recover revenue loss, Mr. Fofie emphasized the need to increase production by encouraging consumption of the product, particularly when research showed that there were a lot of health benefits in the consumption of cocoa.

Commenting on reports that some European chocolate manufacturers who trade cocoa beans in Ghana were threatening to source the beans elsewhere due to prolonged dry weather and heavy rains, coupled with pest attacks, Mr Fofie said the quality of Ghana’s beans makes it difficult for manufacturers to resist them.

Ernst Tanner, CEO of Lindt & Spruengli, a leading Swiss manufacturer for instance announced last week that although Lindt gets about 50 percent of its cocoa beans from Ghana, the bad weather conditions meant they (Lindt) could buy cocoa in countries such as Ecuador or Madagascar.

However, Mr. Fofie said: “In some countries like Ecuador, they produce cocoa under very large plantations but in Ghana we have peasant type of agriculture so our management system is different from them.

“In everything, we produce the best quality of cocoa. In fact in Japan, most of their processing companies source about 70 percent of their cocoa from Ghana and they are very strict in the certification procedures and other things.

“Lindt also is a very important manufacturer in Switzerland who also gets cocoa from Ghana. Let’s get it clear: the fine flavour bean is from Latin America. We use bulk beans and Lindt would not have any alternative. Ours is what they take over there.

He said: “We believe that if we encourage people to consume much more cocoa we won’t leave it to outsiders to do it for us. That is why we are at their beck and call and they are able to tell us how much they can buy it from us.”

Agric Sector Declines

Kwesi Ahwoi Minister of Food Agriculture

Posted on: www.businessguideghana.com

Accra, Tuesday August 28, 2012

In spite of the significant expansion in the cocoa sector, Renaissance Capital says growth in the agriculture sector has declined.

In its August Macro-Economic Update, analyst Yvonne Mhango explained that agriculture grew by a weak 0.8 per cent in 2011 and contracted by 2.9 per cent year on year in first quarter of 2012, compared to growth of 5.3 per cent in 2010 and zero growth in first quarter of 2011.

“We struggle to understand how agriculture declined in first quarter of 2012 when the sub-sectors that represent 95 per cent of its production recorded growth. Nevertheless, the agriculture growth numbers suggest weakness.”

Renaissance Capital noted that in the four sub-sectors it was only the fishing sector that declined but crops production, which makes up over 75 per cent of agricultural output, grew by 5 per cent year on year while cocoa production grew by 14.0 per cent.

According to the report, the Ghana Statistical Service (GSS) attributed agriculture’s underperformance in 2011 largely to “the contraction of the forestry and fishing sectors and a slowdown in crop production’s growth to 3.7 per cent in 2011 from 5.0 per cent in 2010.”

It said Ghana’s economy expanded by a sizeable 14.4 per cent in 2011, its first full year of oil production and continued to exhibit strong growth in first quarter of 2012 when it grew by 8.7 per cent year on year, up from 3.0 per cent year on year a year earlier.

“The double-digit growth in 2011 largely reflects the strong performance of the industrial sector, which grew by 41 per cent in 2011.”

“Aside from the extractive sector (mining and oil production) that propelled growth to over 200 per cent in 2011, manufacturing and construction also demonstrated strong growth of 13 per cent and 20 per cent respectively.”

It said the industrial sector’s performance “is masking the under-performance of some significant non-oil sectors in our view.”

“Strong growth implies scope for further monetary policy tightening however, growth is less-than-stellar outside of industry and oil-related sectors,” it noted.

New GH¢50 Out...20m Pieces In Circulation

Dr. Henry K. Wampah displays a new note. Pix by Christopher Scotti 

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Wednesday August 22, 2012.

The Bank of Ghana (BoG) yesterday officially launched the improved GH¢50 into circulation, but the Central Bank failed to disclose the cost of the entire exercise.

Although there are speculations that the government is spending US$30 million to print the new GH¢50 notes, the acting Governor Dr. Henry Kofi Wampah was unable to disclose the cost of the exercise.

H said: “I cannot tell you how much was involved…maybe later.”

The upgraded GH¢50 denomination, which would replace the notes currently in circulation, has been introduced to curb what the Central Bank termed as counterfeiting.

The number 50 at the bottom of the front on the new GH¢ 50 is now green instead of gold and it bears the signature of Paa Kwesi Amissah-Arthur, the previous Governor who became the Vice President.

At a short media encounter in Accra yesterday, Dr. Wampah said the new GH¢50 had secure features to avoid a general loss of confidence in the denomination, which is Ghana’s highest note.

He said it comes with a public recognition feature called spark in the form of a green cocoa pod at the bottom right hand corner of the banknote and that feature replaces the hologram on the older note.

“It has arrived and today we are undertaking the inaugural issue,” he said.

The acting Governor said the old notes would run concurrently with the new notes until September 30, 2012. Thereafter the old notes will cease to be legal tender and can only be exchanged in the banks.

He defended security features on the new notes, adding, “You do not have to strain your eyes to see it clear. It would be difficult for people to counterfeit the new notes.”

He said education on the new currency would continue for some time and urged that the notes be kept clean to maintain currency durability.

Catherin Ashley, Head of Currency Management Department at the BoG, said approximately 20 million pieces of the new note are currently in circulation across Ghana.

She also said about 11 million pieces of the old notes were in the system and they were working hard to phase them out.

Gov’t Spending Weakens Cedi

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Wednesday August 22, 2012.

Renaissance Capital has attributed the continuous weakening of the cedi against major international currencies partly to early government spending.

“While we expected an increase in financial outflows as the December elections approached, we had not anticipated them to begin so early in the year.”

In the firm’s August Macro-Economic Update, analyst Yvonne Mhango said the subsequent drop in foreign exchange reserves explains the 20 per cent depreciation of the Ghanaian cedi in July 2012 to GHS1.96 against $1.

The report said the weak cedi partly reflects financial outflows of the country, adding “we are of the view that financial outflows increased significantly during this period, particularly short-term money.”

“We expect this to have contributed to the widening of the current account deficit during this period in addition to the increase in services and income payments, which comes with the new oil industry.”

It said in their view, the sharp decline in Ghana’s foreign reserves is partly due to the widening of the trade deficit in May 2012 by 57 per cent to $937million, owing to a high international oil price that inflated the import bill and lower-than-expected oil export volumes that undermined export earnings.

Ghana’s gross international reserves declined by $1.1bn to $4.3bn or 2.5 months of import cover in May from $5.4bn or 4 months of import cover at YE11.

“Typically, economies with import cover of less than three months are considered to be vulnerable to external shocks such as a sharp increase in the oil price,” it said.

In order to stem what the Bank of Ghana (BoG) viewed as “speculative activity” in the interbank currency market that was exacerbating cedi failing, the BoG implemented measures that would ultimately stem cedi weakness.

Some of the measures included hiking the policy rate by 250 basic points (year to date) and reducing the limits on net open forex positions of banks, reintroducing BoG bills to provide additional avenues of cedi investment.

Others were revision of application of the statutory reserve requirement so that banks maintain the mandatory 9% reserve requirement on domestic and foreign liabilities in cedis only as well as requiring all banks to provide 100% cedi cover for their offshore account balances to be maintained at the BoG.

The think tank said “we have noted the retracement of the cedi to 1.94/$1 from mid-August, suggesting that a combination of the afore-mentioned policies may be taking effect.”

They however said “as it is still a few months to elections, we project some further weakness to GHS2.0/$1 at YE12.”

91-Day Bill Yield Raises Concern

Bright Simons is a researcher at IMANI Centre for Policy & Education

Published on www.dailyguideghana.com

By William Yaw Owusu

Accra, Wednesday August 22, 2012. 

The announcement by government last week that the yield on its 91-day treasury bill had risen to 22.91 percent from 22.80 percent at the last public sale is raising concern.

According to Bright Simons, lead research at IMANI Centre for Policy and Education, the expansion of borrowing requirements of the government are driving up yields on treasury bills.

He said pressures of mopping up cedis to support the currency's value against the dollar were also contributing to the widening of the yield and must be checked.

He told CITY & BUSINESS GUIDE that managers of the economy were engaged in what he called “the bluffing game” with the market when it put in place some measures to counteract the rise in the value of the dollar.

“The idea is to make the dollar less appealing as a reserve currency for risk-shy investors but at the same time the government is looking to the use of short-term debt to plug the growing budget gaps.”

He said “the result of that exercise was a failure that was quickly transitioned to assaults on forex holders in the form of ad hoc restrictions on forex-based transactions in the economy.”

Mr. Simons, who is also the president of Mpedigree, also noted that already there were signs that the strategy had failed to work, thereby putting what he called “even greater cyclical pressure on the latest, more orthodox approach of using the government securities markets.”

“The problem is that these thrown-together activities create the impression of government finances slowly unraveling and just one step away from out-of-control.”

But with inflation rising at the same time and the policy rate rising in response, the government is fast running out of the maneuvering room.

He said unless actual austerity measures were pursued “the market will see through the gimmickry and begin betting against all the critical rates. That will spell continuing gloom for the Cedi, interest rates and the budget deficit.”

According to BoG, it sold 256.33 million Cedis ($132 million) of the 91-day paper out of a total 324.07 million Cedis of bids tendered on August 9.

Double-Digit Inflation Coming

Dr. Kwabena Duffuor, Minister of Finance and Economic Planning

Posted on: www.businessguideghana.com

By William Yaw Owusu

Accra, Tuesday August 21, 2012

Renaissance Capital has predicted a double-digit inflation before the end of 2012.

“We expect inflation to rise into the low double-digit region by year end 2012 due to the proposed increase in government spending and base effects.”

In the firm’s August Macro-Economic Update, analyst Yvonne Mhango said “we think a more stable cedi in second half of 2012 on the back of the raft of policy measures that the Bank of Ghana (BoG) implemented in first half of 2012 is positive for the inflation outlook.”

The report said acceleration of Ghana’s inflation had been significantly slower than expected.

“Headline inflation increased to 9.5 per cent year on year in July from 8.4 per cent a year earlier despite the cedi’s 30 per cent depreciation against the dollar over the same period, to GHS1.96/$1.”

It acknowledged that low food inflation had helped to keep headline inflation in the single-digit region and added that “however, food inflation also has edged up over the past 12 months to 5.8 per cent year on year in July from 3.3 per cent a year earlier.”

“That said, we expected most of the inflationary pressure to stem from non-food items, particularly from housing and utilities’ costs and transport prices, owing to particularly high oil prices in first quarter of 2012 and from clothing and furnishings, given that significant shares of these goods are imported.”

The think tank said non-food inflation only increased to 12.4 per cent year on year in July from 11.3 per cent at year end 2012, explaining that “all this points to downwardly sticky inflation, which has delayed its return to the double-digit region in our view.”

On the budget deficit, the report attributed fiscal slippage to wage costs saying “Ghana has a history of running up bigger-than-targeted budget deficits in elections years, particularly in the post-military-rule period.”

It said the only exceptions were 2000 and 2004, the year before Ghana qualified for debt relief, 2005 when the authorities worked hard to narrow the deficit to improve the country’s prospects.

It added that one of Ghana’s worst fiscal slippages was during the last election in 2008 when the outgoing New Patriotic Party (NPP) government ran up a budget deficit of 8.5 per cent of GDP, which was significantly bigger than the target of 2-3 per cent (under the rebased GDP).

“The National Democratic Congress (NDC) administration managed to narrow the deficit until 2011 when the budget deficit came in at 4.4 per cent of GDP, below the target of 5.1 per cent.

However, in July, Finance Minister Kwabena Duffuor proposed a supplementary budget of GHS2.6bn ($1.34bn) that would allow for an increase in spending of 1.9 per cent of GDP and a wider budget deficit of 6.7 per cent of GDP.”

Cedi Depreciation Hits Telcos Hard

Philip Sowah, MD of Airtel

By William Yaw Owusu

Accra, Tuesday August 21, 2012

Philip Sowah, Managing Director of Airtel has stated that the depreciation of the cedi against the major trading currencies, particularly the dollar, is affecting the telecoms industry.

“We are taking a hit for the depreciating cedi. A lot of our contracts are dollar-based. It had been very tough for us but we are confident that things will get better,” he told senior business and finance editors in Accra last Friday.

He said while prices of goods and services had been increased generally, the keen competition in the telecoms sector had ensured that tariffs remained stable in the sector.

The development, according to him, had forced them to top-up production cost without meaningful returns.

“For us at Airtel, we are building a sustainable business. We are not in a hurry to make money. We want to stay in Ghana for a very long time and we are investing in the right infrastructure to get us there.”

He said currently, Airtel is deploying 100 additional cell sites across Accra alone to expand its 3G services, adding “we want about 20 per cent of our revenue to come from data provision services and from what I see, we are getting there.”

“We are expanding heavily in the data network. Our 3G service has become strong and we are moving to get Accra blanket coverage.”

Mr. Sowah said the process whereby the companies share masts, commonly referred to as co-location, was becoming increasingly significant in the industry.

“We currently have over 1,000 cell sites across the country and the co-location process has further expanded our reach. We want to continue to intensify the co-location agenda.”

He described the Mobile Number Portability (MNP) as the best run project in the sector, stating that Airtel would take advantage of the project to reach more people.

“We have crossed the 3 million subscriber mark. We have a high number of customers who use our services and about 80 per cent of them use the services we provide in any 30-day period.”

Mrinal Roy, Chief Operating Officer said Airtel has the best data speed currently and they were constructing more infrastructure projects to ensure that the company continues to maintain its leadership as data service provider.

“We want to be the most transparent network and our corporate social responsibility is giving us satisfaction to do more, he said, adding that Airtel was committed to ensuring affordability and accessibility.

Oare Ojeikere, Development and Marketing Manager, said Airtel Money, the most strategic project of the company, was enriching lives.

Global Access Ends Training for Staff

GASL manager with intructors

By William Yaw Owusu

Accra, Tuesday August 21, 2012

Global Access Savings and Loans (GASL) has ended a five-day programme aimed at training the company’s management and staff to detect fraud in their operations.

The programme was held by Quest Service Limited, a risk management centre, that has trained over 1,500 personnel in the banking and financial sector.

According to Richard Kumadoe, a fraud management consultant, money laundering has become a sophisticated business and it needs well-trained people in the sector to tackle it.

“The truth is that technology has come with all kinds of gadgets and criminals are taking advantage of the situation to perpetrate crime. The banking and financial sectors have to be positioned to withstand fraud.”

He said the operators in the sector must coordinate their efforts to check incidence of money laundering, terrorists financing and other suspicious transactions, adding “we should help to make Ghana and the sub-region a safe haven for financial malfeasance.”

Ama Amoah, Marketing and Public Relations Manager of GASL, said the company was determined to provide its staff with relevant skills and techniques in detecting and reporting what she termed unusual and suspicious transactions that expose the bank to financial loss, increased expenses or reputational risks.

She said the training of the staff also forms part of efforts to assist the bank to “assess the appropriateness and comprehensiveness of the bank’s customer due diligence policies, procedures and practices.”

“We want to provide our staff with the technical know-how in adapting the risk-based approach in the risk assessment processes of specific products, services, customers, entities and geographical locations unique to the bank.”

Ms. Amoah said GASL was determined to build what she called “a bank-wide control environment that adheres to safe and sound practices with regard to the bank’s compliance with statutory and regulatory requirements.”

GASL is the second most patronized money transfer services provider with products including Western Union, Vigo, Money gramm and Sika ye mogya.

Currently they have 14 branches in Accra, Kumasi and intend to expand to other areas of the country by next year.

Ms. Amoah said GASL intend to become a universal bank in five years’ time, stressing that they were putting the necessary measures in place to get there.