Nokia Asha's First Anniversary

At the first anniversary celebration of Nokia Asha in Lagos Nigeria

Me

Some Nokia Executives displaying some of the Asha phones. In front of them is the birthday cake

The Asha Range of phones

Lufthansa Appoints New Country Manager

By Esther Awuah

Kevin Markette

Lufthansa Airlines has appointed Kevin Markette as its new General Manager for Ghana.
He replaces Yannick Aplogan, the current General Manager for Lufthansa in Gabon who worked in Ghana for four and half years.

Prior to his appointment, Mr. Markette served as Regional Manager Marketing & Business Development for Lufthansa in the United Arab Emirates, Gulf and Iraq
He was also the manager in charge of Pricing, Steering, Reservations and Ticketing in Southern and Eastern Africa.

At a media interaction to introduce him, Mr. Markette said “Ghana is a market with very good growth perspectives that is very much on the world’s attention.”

He said Lufthansa remains committed to the growth of the Ghanaian market, adding that he would endeavour to continue with the good work of his predecessor and the team.

Mr. Aplogan said working in Ghana was a pleasurable experience, taking into account the support and collaboration he got from the Airport Authority and his staff.

“I have been amazed at how my colleagues were always willing to go the extra mile to train and upgrade their skills to help make Lufthansa one of the best airlines in Ghana.”

He noted that Mr. Markette is the right person for this market considering his African background and vast experience in the organization.

Claus Becker, Lufthansa Managing Director, West and Central Africa, also commended Mr. Aplogan for his good work and expressed his happiness with Lufthansa’s operation and development in the Region, more especially Ghana.

He said “Ghana has a bright future if it is able to manage and keep its industries running besides the developing oil sector and Lufthansa would like to be part of this bright development.”

GhIPSS Introduces GH-Link Card Today

By Esther Awuah

As part of its mandate to migrate Ghana onto the electronic payment system, the Ghana Interbank Payment and Settlement System (GhIPSS) is expected to launch a new system called Ghana Link (GH-Link) card today November 21, 2012.

Archie Hesse

The infrastructure will interconnect all ATMs in the country, and a bearer of the GH-Link card can redraw money from any ATM, irrespective of the bank they save with.

Visa ATM card holders enjoy this service, but the difference is that all ATMs in the country will carry the GH-Link logo making them fully inter-operable.

Archie Hesse, General Manager in charge of Project and Business Development at GhIPPS, explained that “if I need money, and I am with one bank, I do not have to go round looking for my banks ATM machine. I can redraw money from any ATM available. This will help increase accessibility and create a more convenient way of banking.”

He noted that “the introduction of the GH-Link ATM cards forms part of activities by GhIPPS to improve interconnectivity amongst banks.”

Mr. Hesse, in an interview with City&Business Guide, noted that GhIPPS was working with the banking fraternity to decide on the interbank charges associated with the new system.

He noted that “on a pilot basis, a minimum charge of GH¢0.40 has been set per transaction, but that is subject to review.”

He stated that in the first quarter of 2013, the hybrid Point of Sale (POS) device which would accept every electronic card including the E-zwich and GH-Link Cards would be introduced.

This, he said, was also geared towards supporting and encouraging card payments in the country.

“We have had some challenges with the availability of POS devices and one of the points has been that E-zwich card holders can access it. But with the hybrid POS devices all card holders can access it making it more cost effective for the merchants,” Mr. Hesse explained.

Airlines, hotels and grocery shops are expected to take advantage of the new system. 

Business Confidence Plummets

By Esther Awuah

Nana Owusu Afari, AGI President

The confidence of the business community in the Ghana’s economy is tipped to go down in the final quarter of this year, the Association of Ghana Industries (AGI)’s Business Barometer Indicator (BBI) for the 3rd Quarter 2012 has stated.

The third quarter of 2012 recorded a confidence level of 19.8 which indicates a drop in business expectation over 26.2 recorded in the second quarter of 2012.

This implies that the fourth and final quarters of 2012 are expected to be affected by the development.

The report stated that irregular power supply was the topmost constraint to the growth of businesses in Ghana.

This development, according to the report “could be attributed to the load shedding exercise embarked upon by the Electricity Company of Ghana over the last four months.”

It noted that depreciation of the cedi and high level of taxation were ranked second and third respectively as obstacles restraining expansion of businesses in the country in the third quarter of 2012.

Low access to credit and cost of credit placed fourth and fifth positions respectively. At the tail end of the table are inflation, low purchasing power and competition from imported goods were ranked eighth, ninth and tenth respectively.

The report additionally notes: “this is the first time since the inception of the AGI Business barometer Survey that competition from imported goods is being ranked tenth. It is normally ranked at mid or upper end of the table. This shows how realistic the AGI Business Barometer is, as it always identifies the most pressing challenges facing the business community.”

The AGI BBI measures the level of confidence in the business environment and predicts short-term business trends. It expresses the state of the business climate in one number, ranging between +100 and –100. It is calculated out of “current” business mood and “expectations” for the future.

Decreasing business confidence often implies slowing economic growth because business owners are likely to decrease their investment.

It emphasizes: “Whilst about 57 percent of the Chief Executive Officers (CEOs) interviewed in the second quarter of 2012 said they expect the performance of the business environment to improve in quarter three, only about 52 percent of the respondents interviewed in third quarter of 2012 feel same about quarter four.”

It further added that “the reasons assigned by the optimists are an improved market, increase in output of labour force and availability of raw materials.”

However, those who expect their businesses to perform poorly in quarter four 2012 compared to quarter three 2012 based their assertion on expected: depreciation of the cedi, increase in inflation and increase in the level of tax rate.

Zenith Bank, DStv Launch Direct Debit Scheme

By Esther Awuah

Daniel Asiedu (right) in a handshake with Oscar Mensah after the launch  

Zenith Bank Ghana Limited, in collaboration with MultiChoice Ghana, operators of DStv, have introduced a scheme that will allow DStv subscribers to pay their monthly subscription without visiting the MultiChoice office or payment points.

Known as the Direct Debit Scheme, the product is designed to provide all DStv subscribers nationwide as well as customers and non-customers of the Bank with an automated interbank direct debit platform.

The scheme is supported by the Ghana Interbank Payment and Settlement System (GhIPPS) and therefore non-customers of Zenith Bank are expected to benefit from it as well.

Speaking at the launch, the Chief Executive Officer (CEO) of Zenith Bank, Daniel Asiedu said the relationship between the two companies has evolved to enhance subscription payments to deliver uninterrupted service to subscribers.

He said “today we are gathered here to launch yet another innovative product leveraging on available technology whereby subscribers can sign up for automatic monthly deductions, irrespective of the bank they save with and enjoy uninterrupted service.”

He noted that the bank was determined to continue to provide value to all its customers and the general public at large through innovative product collaborations.

Oscar Mensah, Head of Operations at MultiChoice, said the scheme “was borne out of the commitment of MultiChoice to ensure subscribers enjoy uninterrupted service in a convenient manner whether or not they have an account with Zenith Bank.”

He explained that when a subscriber signs up for the scheme, his or her account will be debited monthly and the money paid to MultiChoice Ghana.

This immediately reflects on the MultiChoice payment monitoring system and the subscribers DStv account is credited.

To sign on to the scheme, subscribers are required to complete mandate forms at the MultiChoice office and all Zenith Bank branches.

Power Outage Batters ECG

By Esther Awuah

The on-going load shedding exercise is taking a heavy toll on equipment of the Electricity Company of Ghana (ECG).

Robert Dwamena

Robert Dwamena, Director of Procurement at ECG, who disclosed this to CITY & BUSINESS GUIDE, stated that the frequent power outages had weakened most of ECG’s network gadgets such as transformers and switch gears, thereby causing operational changes.

“Our equipment are not designed to be switched on and off like we do currently and this is sometimes responsible for unplanned outages due to unit trips from the generation and transmission sites.”

The irregular power supply, which is expected to end in the first week of December, emerged as a result of a damage caused to the West Africa Gas Pipeline (WAGP) by a vessel in August, this year.

WAGP’s gas supplies to Ghana’s Volta River Authority (VRA) are used to generate electricity from its thermal plants.

Mr. Dwamena, who spoke on the sidelines of a news conference organized by the Ghana Grid Company (GRIDCo) and the Volta River Authority (VRA) in Accra recently, told this paper that the problem had caused its network gadgets to age faster than anticipated.

“Because we are subjecting them to the frequent on and off activities, we are hastening the ageing of these equipment. We therefore need to retire them, which will also affect the availability and quality of electricity supply.”

He said such equipment must be quickly replaced before something untoward happens.

“These assets would require a quick replacement within a very short time. This also has placed a huge financial burden on ECG because we need heavy investment to replace them,” Mr. Dwamena emphasized.

Though he did not disclose when the equipment would be replaced and the financial implication, he added that “immediately the load shedding exercise ends, we would commence the replacement programme.”

In an address, Chief Executive Officer (CEO) of VRA, Kweku Awotwi, explained that his outfit was aware of the challenges that industries and households were facing as a result of the load shedding programme, and gave the assurance that steps were being taken to quickly address the problem.

“Because of the current challenge, it is expected that the load shedding would end by December should all the additional generation come into service as scheduled,” Mr. Awotwi indicated.

‘CSR Must Be For Profit’

By Esther Awuah

Corporate organizations have been asked to see Corporate Social Responsibility (CSR) programmes as an innovative way of deriving profits rather than for philanthropy only.

Ivy Arcos, Africa Representative of the Canada Export Centre, who stated this, said “Contrary to widely-held belief in our part of the world, CSR is not philanthropy. Neither should it be seen as a burden or drain on an organization’s resources. Rather it should be seen and embraced by organizations as an innovative means to maximize profits and value. Corporate entities need to rethink and review their understanding of CSR in this regard."

CSR is commonly described by its promoters as aligning a company’s activities with the social, economic and environmental expectations of its “stakeholders.” 

Most corporate entities in Ghana engage in various CSR initiatives like provision of bore holes, building schools and libraries for deprived communities.

But Ms Arcos emphasized that “CSR is not just about what a company does with the profits it makes; it is about how a company makes its profits in the first place.”

Ms Arcos was speaking at the 2nd Annual CSR Conference in Accra, which was on the theme “Mainstreaming Emerging Issues of Corporate Social Responsibility into Organizational Behavior”.

She stated that by making local communities a part of their supply-chain, many organizations had reduced and removed bottlenecks associated with their operations and increased productivity in the process.

Through such involvement, she noted, local communities feel a sense of ownership in an organizations success, adding that such cooperation ensures the effective resolution of issues and misunderstandings associated with an organization’s operations.

She noted that companies should not let their CSR agenda restrict them to only the communities, but must have equal responsibility to its employees, government as well as customers.

“It is for this reason that an organization must incorporate very good labour standards as well as ethical behavior in its operations. On the labour front, organizations should be able to incorporate into their human resource programs, policies on gender, disability, occupational & healthy & safety issues etc.,” Ms Arcos emphasized.

She called on corporate organizations to honour their tax obligations to government and also comply with guidelines from government institutions like the Environmental Protection Agency (EPA), Foods & Drugs Board and Ghana Standards Authority.

She also advised government to put in place policies to make it attractive and worthwhile for organizations to engage in CSR.

She said “instead of treating corporate entities as "cash-cows", ready to be milked, governments should see corporate entities as developmental partners, with the resources and capabilities to help government fulfill its social obligations to its citizens.”

Joseph Emmanuel Allotey-Pappoe, Board Chairman of CSR Foundation Ghana, organizers of the conference, said the event would be an annual one where there would be a national dialogue on the role of CSR in Ghana. 

Load Shedding Extended To December

By Esther Awuah

Kweku Awotwi, VRA Boss

Ghanaians will have to wait a little longer as the on-going load shedding programme, which was scheduled to end in November this year, has been extended to the first week in December.

Last week, Minister of Energy, Dr. Joe Oteng-Adjei, announced at a news conference in Accra that the off-peak load shedding exercise, which occurs from 6am to 6pm, would end on Monday, November 5, 2012 as a result of the completion of additional generation projects.

The peak time outage, which lasts from 6pm to 11pm, was also expected to end on November 30, 2012.

But this cannot materialise as the Volta River Authority (VRA) is facing crude oil supply challenges from its supplier in Nigeria.

Ghanaians have for the past months experienced irregular power supply due to damage caused to the West Africa Gas Pipeline (WAGP) by a vessel in August this year.

WAGP supplies gas to some thermal plants to generate electricity.

However, Chief Executive Officer (CEO) of VRA, Kweku Awotwi, explained that because of the current challenge “it is expected that the load shedding would end by December should all the additional generation come into service as scheduled.”

The additional generation projects are the steam turbine unit for Takoradi 1 Thermal Plant, Tema Cenit Thermal Power Plant (TCTPP) owned by CENIT Energy, a subsidiary of Social Security and National Insurance Trust (SSNIT) and two gas turbines for the Takoradi 3 thermal project.

Mr. Awotwi further stated that supply of crude to support the CENIT project would delay, hence the extension of the end of the load shedding programme.

He noted that “the date for the end of load shedding was given based on the assumption that crude oil would be in constant supply. But we all got to know three days ago that crude oil from Nigeria will not be supplied by November 15, 2012 as expected.”

He said the cost of importing crude was negatively affecting the Authority, explaining that now crude oil is supplied every 20 days, instead of the former three-month period.

Also, it costs about $50 million to take delivery of one consignment.

Giving an update on the current generation status, Mr. Awotwi said that all six units in Akosombo and four thermal units in Aboadze are all running at full allowed capacity.

He added that the steam turbine in Aboadze was also running with 50 megawatts (mw) full capacity.

He further noted that there is sufficient crude oil to run the plants in Aboadze, and once CENIT receives its own parcel of crude oil it can run base load at 100 mw.

He gave the assurance that “gas supply from Nigeria is expected to be restored by December so that Sunon Asogli shall begin to generate, bringing in 170 megawatts capacity.”

The news conference was organized in collaboration with Ghana Grid Company (GRIDCo) and the Electricity Company of Ghana (ECG).

Financial Expert Advocates For Tax Credit Scheme

By Esther Awuah

Samuel Adam, Executive Director of Integrity and Excellency International, a management and financial consultancy firm, has called on government to adopt the Tax Credit Scheme (TCS) to facilitate the development of infrastructure in mining communities.

TCS scheme allows government to use Resource Developers as “Contractors” to implement infrastructure projects without appropriation from the Treasury.

Mr. Adam explained that “with the scheme, approved government projects are funded, managed and implemented by the developer and expenditure thereof set-off against tax payable by the developer/company for the year.”

He noted that when adopted the TCS would help address the growing discontent among the youth, chiefs and communities in resource development areas for lack of infrastructure development.

He added “the general perception that the country is not getting its fair share of benefits from the exploitation of its abundant mineral, oil and gas resources would be eliminated if the TCS is effectively adopted.”

Mr. Adam was speaking at the 2nd Mining for Development forum organized by the Ghana Chamber of Mines in Accra on the theme, ‘Mining for Development: Thinking outside the box.’

Dr. Tony Aubynn CEO Chamber of Mines 

In his address, Dr. Toni Aubynn, Chief Executive Officer (CEO) of the Ghana Chamber of Mines, stated that the absence of a national mining vision and policy over the years has also contributed to the perception that mining communities are not receiving enough of developmental projects.

He said despite the huge taxes that mining companies pay to government they are committed to ensuring that host communities and the country as a whole benefit from the rich resource.

The mining industry in 2011 contributed about $540 million to the Ghana Revenue Authority, representing 27.61 percent of total Internal Revenue collections in 2011.

According to Dr. Aubynn, the sector voluntary contributed an amount of about $27 million to their communities and the general public.

He indicated that “companies returned about $3.1 billion, representing 75 percent of their mineral revenue through the Bank of Ghana (BoG) and the Commercial Banks in 2011 against statutory requirement of 25 percent. About 80 per cent of all mineral proceeds are retained by the Central Government and less than 10 per cent goes to mining communities.”

He said mining revenue and royalties go directly into the Consolidated Fund thereby making it difficult to effectively track the revenue.

He therefore called for collaborative effort by stakeholders in the mining industry to ensure that mining projects and developmental programmes are properly communicated to the populace.

VRA, ECG Support Toxic Equipment Ban

By Esther Awuah

The Volta River Authority (VRA) and the Electricity Company of Ghana (ECG) have backed a move by the Environmental Protection Agency (EPA) to ban the importation of equipment which contain polychlorinated biphenyls (PCBs).

PCB, a chemical belonging to a class of compounds known as Persistent Organic Pollutants (POPs), is used in industrial and commercial applications including dielectric fluids in transformers and capacitors.

PCBs have a range of toxicity and have indeed been established to cause cancer.

They also threaten the immune system, reproductive system, nervous system and endocrine system if not handled properly.

Though there are currently no specific regulations pertaining to PCBs in Ghana, inventories on production, export, import and use of PCB containing equipment complied in 2003 indicate that ECG as well as VRA and their clients are the major holders of PCBs.

However, these institutions have supported the EPA and its funding agencies to reduce and eliminate the use of PCBs.

At a media briefing in Accra to explain the details of the project, John Pwamang, Director of Chemicals Control and Management at the EPA said “the EPA, in partnership with the United Nations Institute for Training and Research (UNITAR), undertook a project which sampled and analyzed 9,000 transformers in all 10 regions of Ghana, and found out about 10 percent contained PCBs.

The transformers found to contain PCBs would be discarded and replaced with new ones.”

He explained that though there is no specific legislation that formally prohibits the importation of PCBs and equipment containing PCBs, such imports are clearly in contravention of the Stockholm Convention.

Ghana ratified the Stockholm Convention in May 3, 2003, which is an international environmental treaty that aims to eliminate or restrict the production and use of POPs so as to protect human health and the environment.

Mr. Pwamang said PCB Project is aimed at strengthening the capabilities and capacity of government officials and other stakeholders to address PCB identification and eliminate them would end in 2013.

He indicated that under the project draft legislation on the control and management of PCB had been developed.

He noted that with the assistance from the Global Environment Facility (GEF), United Nations Development Programme (UNDP) and UNITAR the EPA as part of its capacity building project presented the VRA, ECG, the Ghana Grid Company and the Customs Excise and Preventive Service (CEPS) with L-2000 PCB analyzers each amounting to $40,000 to enable them check imported dielectric fluids and potential PBC-containing equipment such as transformers.

 “All these coupled with the development of PCB management plan would help ensure Ghana successfully eliminates PCBs by 2028,” Mr. Pwamang noted.

In a speech read on his behalf, Jonathan Krueger, Manager, Chemicals and Waste Management programmes UNITAR said so far the project has been able to establish a steering committee which meets quarterly to review the project progress and provide guidance for future project activities.

He thanked the various stakeholders for their support in ensuring that Ghana becomes PBC-free by 2028.

Telcos Spend GH¢10m On Cable Cut Repairs

By Esther Awuah

As at the end of September 2012, telecommunication operators in the country had spent over GH¢10 million to repair cable cuts which were mainly caused by road construction works and excavations.

During the period there were more than 600 incidents of cuts to these cables. This number has increased nearly three-folds for the same period in 2011. 

Kwaku Sakyi-Addo, CEO Ghana Chamber of Telecommunications

This is beside the loss of potential revenue to network operators, the serious damage to the reputation of network operators and above all, the incalculable inconvenience to subscribers due to avoidable network downtime.

To find a lasting solution to the problems facing operators in the industry, the National Communications Authority (NCA), Ghana Chamber of Telecommunication and relevant stakeholders in the road sector met in Accra to discuss ways to mitigate the problem.

The forum also discussed issues on Right of Way (RoW) management.  

According to the Kwaku Sakyi-Addo, Chief Executive Officer (CEO) of the Ghana Chamber of Telecommunications, going forward network operators must take responsibility for laying cables as approved by permitting agency, including the use of appropriate markers and other standard precautionary measures to demarcate position of cables.

He indicated that another challenge is the issue of cable relocation cost.

“Until late 2011, network operators bore the cost of cable relocation during roads projects even if permits were within the validity period.”  “Collaboration between roads agencies and network operators working through the Chamber of Telecommunications has reduced this source of tension.”

He stressed the need for various stakeholders to discuss and institutionalize procedures for cable relocation, and also review procedures and clarify responsibilities for cable relocation.

George Aidoo, an official from the Ministry of Roads and Highway, said it was unfortunate to tag the road sector as the major cause of the challenges facing the telecoms industry.

He said “there are road expansion projects going on all over the country and cables are sometimes cut due to the telcos’ inability to follow laid down procedures.”

He explained that the Ministry had developed a manual on the RoW and how deep cables should be laid but the problem is enforcement and compliance.

The forum proposed a closer collaboration among relevant stakeholders in the sector in the execution of their mandate.

Off-Peak Load Shedding Ends Today

By Esther Awuah

Users of electricity who endure power outages during daytime can now heave a sigh of relief.

This follows an announcement by the Ministry of Energy that off-peak load shedding exercise, which occurs from 6am-6pm, would end today, November 5, 2012 as a result of the completion of additional generation projects.

Dr. Joe Oteng-Adjei, Minister of Energy 

However, peak time outage, which lasts from 6pm to 11pm, is expected to end on November 30, 2012, according to the Volta River Authority (VRA).

Ghanaians have for the past months experienced irregular power supply due to damages caused by a vessel on the West Africa Gas Pipeline (WAGP) in August this year. WAGP supplies gas to some thermal plants to generate electricity.

Dr. Joe Oteng-Adjei, Minister of Energy, who disclosed this at news conference in Accra said, “Our target is to eliminate completely the load shedding programme for off-peak from Monday, 5^th November and that for the peak period whenever the full complement of fuel supply arrives in the country.

“While government was waiting for the West African Gas Pipeline Company (WAPCo) to complete the repair works associated with the gas pipelines, the Ministry has been working with other stakeholders to complete on-going generation addition projects.”

He noted that the steam turbine unit for Takoradi 1 Thermal Plant, which had been shut down since 2010, had been restored and would increase the available capacity by 110 megawatt (mw).

Additionally, the Tema Cenit Thermal Power Plant (TCTPP) owned by CENIT Energy, a subsidiary of Social Security and National Insurance Trust (SSNIT), has commissioned 126 mw project.

Dr. Oteng-Adjei added that “finally the two gas turbines for the Takoradi 3 thermal project have been commissioned to deliver 72 mw.

He was hopeful the full complement of the fuel required to integrate the system would arrive in the country by November 15, 2012.

He said this would enable the contractor working on the steam component of the project commission the steam unit by November 30, 2012 to ensure that the plant delivers 132 mw to the system.

This, he noted, would go a long way to help bring the load shedding programme to an end.

‘Mining Coys Not Responsible For Dev’t’

By Esther Awuah

Nana Prah Agyensaim VI, Omanhene of Assin Kushea has stated emphatically that mining companies are not solely responsible for undertaking developmental projects in areas in which they operate.

He noted that Corporate Social Responsibility (CSR) has become a form of escapism for politicians who do not perform their duties, thereby inciting inhabitants of some communities to revolt against the mining companies.

He said “mining companies are always expected to build schools, clinic, roads and all manner of things. If people expect mining companies to provide all these things, what then is the duty of government?”

He indicated that even though mining companies undertake CSR projects, it does not mean they are mandated to do so.

He added that “it was about time the Ghana Chamber of Mines state clearly to government that mining companies are not the government. When the government is aware of that then it can come down to the level of the ordinary  person and explain things to them.”

Nana Prah Agyensaim was speaking at the 2^nd Mining for Development forum organized by the Ghana Chamber of Mines on the theme, ‘Mining for Development: Thinking outside the box.’

The Omanhene also noted that irrespective of their contribution towards national development, mining companies were constantly being bashed for no reason.

“If they get the bashing even from the unfortunate rural illiterates, one could understand it. But sometimes the government, who is supposed to know better rather does that.”

He therefore called on the Chamber to be more proactive in executing its mandate.

“The Chamber of Mines has in the past been too friendly with the government. They must begin to recognize that they are there to serve the interest of mining companies,” Nana Prah Agyensaim emphasised.

In advising mining companies, Nana Prah Agyensaim said “mining companies are managing a commodity that cannot be replenished. They therefore have a morale duty to ensure a different form of replenishment – which is educating and training young men and women in their host communities with employable skills.”

Dr. Toni Aubynn, Chief Executive Officer (CEO) of the Chamber of Mines, in his presentation, said the perception held by most Ghanaians that the country was not benefitting enough from its mineral wealth was wrong.

He said “we are the second leading producer of gold on the continent after South Africa, but most Ghanaians think the country is not getting a fair share of the resource. This can be attributed to the lack of knowledge and understanding of how the industry operates.”

He noted that despite the huge taxes that mining companies pay to government they were committed to ensuring that host communities and the country as a whole benefit from the rich resource.

The forum, which attracted civil society groups and stakeholders in the mining industry, created the platform for discussions on issues related to mining and proposed alternative solutions with the aim of positioning the mining industry as a catalyst for development.     

‘Stop Privatizing SOEs’

By Esther Awuah

Ekow Afedzie, Deputy Managing Director of the Ghana Stock Exchange (GSE) has stated that the common practice whereby government sells it shares in non-performing State Owned Enterprises (SOEs) must be avoided.

He suggested that such companies should be allowed to raise capital by listing on the stock exchange.

“The agenda the Securities and Exchange Commission (SEC) and GES have been trying to sell to government is not to necessarily privatize SOEs by selling its shares, but allow these companies to go raise capital from the stock market probably through bonds. It achieves the same thing,” Mr. Afedzie noted.

Speaking at the media launch of the 2012 Capital Market Week, Mr. Afedzie indicated that one of the key objectives for setting up the Stock Exchange in 1990 was to use the market to privatize SOEs but only a few companies have listed on it.

“Since the establishment of the GSE, we have not had more than 10 SOEs being privatized through the stock exchange. It is sad to hear SOEs collapsing because it is mainly state. We heard about the State Transport Company (STC) -  if they had gone public some years ago, I am sure they would have had some private investors or shareholders in it, and we would not have seen what is happening today.”

He therefore called for a paradigm shift where policy makers would consider reviving non-performing SOEs through the stock exchange.

Adu Anane Antwi, the Director General of the SEC, who launched the week’s celebrations, also stated that instead of using pension funds from the National Pensions Regulatory Authority (NPRA) for equity investment the corporate bond market should rather be developed.

He stated that “strictly speaking, pension funds should not be invested in equities because of the risky nature of equities; pension funds will normally invest in fixed income securities where you can budget for the incomes that you are going to receive each year and therefore you know your cash flow.”

He therefore emphasized that “the key areas that pensions will have to develop for us are the bonds market therefore we must develop our corporate bond market to make sure that we have investment products for this pension funds.”

The week celebrations will commence on 29th October 2012 and end on 4th November 2012.