BoG Targets Illegal ‘Susu’ Operators

By Esther Awuah

The Bank of Ghana (BoG) says it would clamp down on activities of microfinance institutions, popularly called ‘Susu’ that are operating without licenses.

The proliferation of Susu institutions in the country, some of whom are not legally registered, has given regulators cause for concern.

Dr. Yaw Gyimah-Larbi, Head Microfinance Unit at BoG told BUSINESS GUIDE after a press conference by the Ghana Co-operative Susu Collectors’ Association (GCSCA) in Accra that Susu companies operating illegally should brace themselves up for sanctions.

“Any Susu operator without a license will be forced to close down and prosecuted where necessary,” he said.

He said some Susu operators had engaged in fraudulent activities to the detriment of their customers and the country’s economy.

He stated that “the elaborate procedures for licensing in the Susu industry will go a long way to build confidence within the system. Therefore any Susu institution or collector who does not take advantage of the licensing would be forced to shut down.”

He announced that the BoG would from this week give the first batch of licenses to about 55 micro finance institutions and publish their names in the media.

Emmanuel Elvis Abougye – Manuh, National President GCSCA, in a speech read on his behalf said, “Since the publication of the Rules and Guidelines by BoG, the association has conducted a series of sensitization exercises across the country to educate both registered and non-registered Susu operators as well as clients.

“It also initiated the registration of all susu operators in the country.”
The initiative, he said, yielded some positive results as it identified and registered over 450 Susu operators.

Due diligence was conducted on the registered members and 246 were recommended to BoG for licensing.

He also urged all unregistered and unlicensed operators to regularize their activities with the Association as soon as possible to avoid arrest and prosecution.

Mr. Abougye-Manuh noted that the Association will issue identification cards to all licensed operators.

“Again in an effort to standardize their operations, we will introduce uniform documentation materials in the form of passbooks to the collectors to be issued to their clients. This will sensitize the clients on credible and trustworthy operators to lodge their funds with,” he added.

He emphasized that flouting any of such provisions will
warrant various sanctions and penalties depending on the offense.

rlg Partners Microsoft

By Esther Awuah

In line with its vision to increase its presence in West African countries by the end of the year, rlg Communications, Africa’s leading indigenous Information Communication Technology (ICT) assembling company, has signed a partnership agreement with the world’s largest software and computer programmer, Microsoft in Accra.

The partnership, which will allow rlg laptops and computers to leverage the huge global market held by Microsoft, will also offer value to the Ghanaian market and make the Microsoft windows more affordable.

Though both rlg and Microsoft are silent on the actual figures, the deal is said to worth millions of dollars.

The Country Manager of Microsoft Anglophone West Africa, Emmanuel Onyeje, told a news conference in Accra that Microsoft places a lot of premium on the rlg partnership, a relationship he described as international.

“The partnership we have entered with rlg is an international relationship because the windows brand is at the heart of both Microsoft and rlg,” he said.

He stated that the partnership is necessary because of the impact Microsoft had in the market environment, coupled with the innovative products from rlg, which could help increase productivity and make e-governance more efficient.

Mr. Onyeje said Ghana’s education sector stands to benefit greatly from the new partnership because of on-going projects by rlg and the Ministries of Education and Science and Technology to offer laptops to schools and teachers.

He said the deal positions rlg to compete aggressively on the international market.
He indicated that the partnership would provide the country with genuine software in protecting property and intellectual rights from criminals, adding that Microsoft would soon launch Window 8 globally.

He expressed gratitude to the management of rlg for the partnership and expressed the hope that it would open opportunities for the country’s market share to grow.

The Chief Executive Officer (CEO) of rlg, Roland Agambire expressed delight at the deal, which he said go a long way to enable rlg continue its leadership role in the Information Communication Technology (ICT) sector.

He indicated that the partnership would increase Microsoft’s market share in the West African Sub-region, as rlg distributes computers using Microsoft’s software.

He said rlg quality assurance would increase because of its partnership with Microsoft and that the company will soon commence work on a multi-million dollar ICT assembling plant, which would employ about 30,000 youth.

Mr. Agambire announced that most of rlg’s MGS1 laptops would come with in-built modems that require only SIM card to browse.

Phone Dealers Take Over Circle Pavements

By Esther Awuah

The sale of mobile phones and accessories by hawkers on the pavements around the Kwame Nkrumah Circle in Accra appears to have intensified.

Initially, the activities of these traders who sell their wares on trays and tables, was centred at the Tip Toe Lane and the former Vodafone head office area but they have extended their activities to the newly-constructed over-pass and the pavements that lead to Obra Spot.

When CITY& BUSINESS GUIDE visited Kwame Nkrumah Circle yesterday, business was booming as buyers bargained for the best deals.

In an interview with this paper, a shop owner, Steven Aboagye of JIC'5 Phones, said the activities of the hawkers had affected his business for the past four years.

He explained that “most of the phones and accessories that are being sold by these boys are not of good quality and since most people do not know the difference between a quality phone and an inferior one, they would prefer to buy from the boys since theirs are cheaper.”

These boys do not stay at one location so tracing them becomes a problem in the event where the phone develops a problem.

He therefore advised buyers to purchase phones from recognized shops so they could easily change the phones in an event of a problem.

Another mobile phone dealer, Isaac Osei Wusu also attested to the fact that his business was collapsing because of the activities of the phone hawkers.

He stated that “the situation is becoming very worrying, as most of these dealers are also pilferers. Most of the phones they sell are stolen ones, so they can afford to sell them at reduced prices.”

He therefore called on the police to remove them from the pavements since they were operating without permits.

However, Michael Ampomaa, who displayed five phones on a tray, said he was introduced to the trade by a friend.

He expressed the hope he would establish his own shop in future.

Michael, who makes an average sale of GH¢300, noted that he gets most of his genuine and brand new supplies from a friend who buys them from China.

Asked why phones sold on pavements were less expensive as compared to those in the shops, Michael stated that the phones are sold on a “reduce to clear” basis, which attracts more patrons.

There have been several raids by the police and Accra Metropolitan Assembly (AMA) to remove these hawkers from the pavements, but they resurface the next day to engage in the business.

Michael however appealed to the law enforcement agencies to be lenient in dealing with them.

New Cement Factory, October

Ade Coker, Chairman, Gokay Group Ghana Limited

By Esther Awuah
Preparations are underway to open a new cement factory in Takoradi by October.
Gokay Group Ghana Limited, the company initiating the project, said the cement will be imported in its raw state, processed and bagged in the country.

Kobina Ade Coker, Chairman of Gokay, a Ghana-Turkey Consortium told BUSINESS GUIDE that the pace of infrastructural development in the country had compelled them to augment cement production for the sector.

He said the company would invest over $100 million in other sectors of the economy and the cement industry was expected to benefit from it.

He also said the company had acquired a land at Takoradi in the Western region and was hoping to start production by the end of October.

“Cement is an essential commodity, which should be affordable to ordinary Ghanaians. We want to assure that we would help to make the product available for all.”

Concerns have been raised in recent times about the continuous shortage and hike in the price of cement.

In May, distributors and retailers of cement took advantage of the acute shortage of the commodity on the local market to sell the product at exorbitant prices.

This caused panic in the construction sector where some attributed the shortage to the shutting down of Diamond Cement Ghana Limited at Aflao after its production plant broke down.

Even though the company has since re-opened the plant, BUSINESS GUIDE’s checks indicate that ex-factory price of a bag of cement is now GH¢15 while the retail price is between GH¢18 and GH¢20 depending on one’s location.

The leading cement factory, GHACEM holds about a 55 percent share of the cement market while Diamond Cement controls 35 per cent of the market.

However, Mr. Coker said individuals and companies must venture into the production of cement in order to reduce cement prices.

He said he was hopeful the company would stand the test of time because of the direct investment it had made.

In July, Gokay Group Ghana officially commissioned a $24 million quarry company located at Shai Hills in the Greater Accra region to undertake granite tile mining.

The quarry, which operates via modern technology using a computerized system for the production of various kinds and shapes of precious stones for the construction industry, started operations in April.

MTN Market Share Declines

MTN Ghana CEO, Michael Ikpoki

By Esther Awuah

Telecommunications giant, MTN Ghana has admitted that its market share declined to 51 percent as a result of the entry of a new mobile player.

Although MTN Ghana delivered a strong performance with subscribers increasing by 5.9 percent to 10,76 million, the MTN Group half year results released last week showed a decline in market share.

The report said “as expected, market share declined to 51 percent as a result of the entry of a new mobile player into the market.”

However, despite the aggressive competition in the industry, the company delivered satisfactory results which it largely attributed to attractive segmented promotions across the product portfolio and a well-managed pricing strategy.

MTN Ghana recorded US$734 million revenue in the first half of 2012, representing 22 percent growth.

The rising demand for broadband services and the increasing usage of smartphones also increased data revenue which grew by 193 percent, albeit of a low base.

The 3G market is also becoming increasingly competitive with the five mobile operators investing considerable resources to upgrade or expand their 3G networks.

The report noted that MTN Ghana continued to improve the quality and capacity of the network as well as increase its 3G coverage and capacity.

“During the six months it rolled out 62 2G sites and 21 3G co-located sites bringing total 2G sites to 2,318 and co-located 3G sites to 749.”

It further noted that “MTN Ghana’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margin dipped slightly from 38.7 percent at 30 June 2011 to 37.7 percent due to increased rent and utilities from the leasing of the 400 towers previously sold.

“The 2011 EBITDA margin excluded the profit from the sale of the towers. Reported average revenue per unit (ARPU) decreased 10 percent although local currency ARPU increased 4 percent.”

Its total cedi revenue increased by 22.4 percent, and this was mainly driven by an 18.8 percent increase in airtime and subscription revenue, which benefited from promotions driving usage and spend.

The MTN Group delivered a satisfactory set of results recording a surge in subscriber base of 6.9 percent to 175,997 million.

Group revenue increased by 17.5 percent to R66, 426 million due to solid growth in South Africa, Iran and Ghana of 9.5 percent, 29.9 percent and 19.9 percent respectively.

The contribution of airtime and subscription revenue reduced to 63.2 percent from 66.0 percent in the prior comparative period while data revenue increased its contribution to 10.0 percent from 7.0 percent.

This was mainly attributed to strong data growth in South Africa and Nigeria, which contributed 46.8 percent and 28.4 percent respectively to total Group data revenue.
SMS revenue continued to show positive growth and increased its contribution marginally, which was mainly due to the continued success of SMS in Iran and South Africa.

Brisk Business For Hotels

By Esther Awuah
The funeral for late President John Evans Atta Mills has increased demand for hotel rooms in Accra.

Most first-class hotels in the capital were fully booked for visitors and guests who intend to pay their last respects to the late president.

Hotels that hitherto had rooms available at most times have been compelled to transfer some of the guests to other small hotels.

Managers of the hotels admitted that the final funeral rites of President Mills had attracted several patrons.

CITY & BUSINESS GUIDE’S checks at the Alisa Hotel indicated that the Ministry of Foreign Affairs had asked for the reservation of about 20 rooms for guests who would take part in the funeral service.

Yvonne Izzo, a Manager at Alisa Hotel, confirmed that there had been bookings by guests who would be attending the funeral.

She said “a few of the guests have checked in and we are expecting about eight to check in today.”

She however noted that rooms were available to accommodate the numerous guests.

However, activities at smaller hotels visited by the paper were minimal.

Media reports say hotels such as Best Western Premier and Highgate Hotel are also receiving guests.

Expresso, Tigo Make Gains

By Esther Awuah

Telecom companies, Expresso and Tigo, increased their market shares, according to the latest mobile subscriber rankings released by the National Communications Authority (NCA) for June.

Though the current report shows marginal increase in subscriber base for all the telecom companies, Expresso and Tigo in May recorded decreases of 195,670 and 3,457,427 respectively making their performances in June quite significant.

In the recent rankings by NCA, Expresso and Tigo obtained 227,396 and 3,553,274 subscribers, representing 1 percent and 15 percent of the total market share respectively.

It would be recalled that Tigo, the third ranked mobile company in the telecom sector, has since October 2011 experienced a decline in market share and subscriber base.

However, the company introduced attractive consumer driven offers such as low tariffs and unlimited internet access packages in its quest to increase its subscriber base.
Though Expresso has the lowest market share, it continues to give its new and existing subscribers reasons to be on the network.

Meanwhile, market leader MTN recorded a marginal increase maintaining its position as the market leader with a subscriber base of 10,757,974, representing 46 percent of the total market share.

This represents a 1 percent decline in May despite recording an increase in actual number of subscribers.

Vodafone maintained its second position with a subscriber base of 4,819,700, representing 21 percent of the share.

Airtel increased its subscriber base to 3,021,863, representing 13 percent of the total market share, to place fourth on the table.

New entrant Glo Ghana, which started operations in May 2012, finished the month with 468,508 active subscribers, representing two percent of the market share.

Glo continues to surge forward with attractive products and services.

In June, it recorded 990,566 subscribers, representing four percent of the total market share, to rank fifth in the country’s telecommunication sector.

Cashless Economy Distant - Researcher

Kofi Bentil, IMANI Ghana

By Esther Awuah

A lead researcher and Vice-President of IMANI Centre for Policy and Education, Kofi Bentil says he does not believe the country will experience a cashless economy anytime soon.

He said “efforts being made by Ghana towards a cashless economy will not materialize if illiterates who form the bulk of the informal sector are not given the opportunity to fully benefit.”

A cashless economy is an environment in which money is spent without being physically carried from one person to the other.

The advantages of a cashless economy are enormous; cost of transportation and the threat of carrying huge sums of money will possibly reduce.

According to Mr. Bentil, the various electronic payment platforms geared towards a cash-free society are not user friendly, therefore most rural folks who cannot read or write cannot access them.

He noted that “electronic payment systems that have been introduced do not suite our particular context because majority of the informal sector cannot access or use the platform.

“And if this is not critically looked at, at best we will end up with a cashless society for a certain segment of our population in certain towns and forget about the villages.”

Mr. Bentil disclosed this at the MTN Mobile Money roundtable discussion in Accra.
The programme, which forms part of activities to mark the MTN Mobile Money Month celebrations, was on the theme: “towards building a cashless economy in Ghana – prospects, challenges and way forward.”

He emphasized that “all the electronic platforms including the mobile money service, which have been introduced require pre-registration which is necessary probably because of regulations but the point is that these also constitute the bottlenecks which make it impossible for us to have a truly cashless society.”

He said the way forward is to create a versatile form of electronic platform which will be convenient to use.

“The electronic platforms must be a truly more convenient than cash, until that happens people will continue to rely on cash,” Mr. Bentil indicated.

Managing Director of Fidelity Bank, Edward Effah also called for appropriate policy and regulatory frameworks which will strongly support the drive towards a cashless economy via mobile money.

“Central Bank must review regulatory policies that will aggressively promote mobile money to as many people as possible,” he stated.

Ebenezer Asante, MTN Sales and Distribution Executive, in his presentation, indicated that “Mobile money services have transformed the way in which people handle their finances, allowing people to transfer money, make purchase and pay bills with a few key strokes on their mobile phones.”

He added that the service had given millions of unbanked Ghanaians access to banking services and improved the banking culture of both urban and rural population.

He noted that with the right infrastructure, policy, security and cultural resistance and education, Ghana’s drive towards a cashless economy would be feasible.

Expert Explains E-zwich Glitch

Kwame Ansah, Head of Payment System Oversight (BoG)

By Esther Awuah

Kwame Ansah, Head of Payment System Oversight at the Bank of Ghana (BoG), says e-zwich payment system is not functioning as expected because of the lack of infrastructure needed to make it work.

He said, “Unfortunately, the e-zwich has not done well mainly because at the time that BoG was advertising and getting people to be interested in the system, the necessary infrastructure like the point of sale terminals (POSs) and ATMs had not been adequately put in place.”

In 2008, the BOG rolled out the e-zwich, a national payment and settlements system that was meant to create an electronic clearing house for all banking and financial institutions, as well as biometric smartcard for paying for goods and services.

The POS and ATMs across the country were supposed to support the system, but unfortunately the platform encountered challenges due to consumer’s inability to access the POSs.

Mr. Ansah however noted that the Ghana Interbank Payment and Settlement Systems (GhIPSS), the body set up to, among other things, set up and operate the national switch with smartcard payment system, had imported some POS devices and ATMs to promote interoperability.

“We are hoping that not too far from now, the e-zwich is going to take off in a better way,” he reiterated.

Mr. Ansah was speaking at the MTN Mobile Money roundtable discussion in Accra.
The programme, which forms part of activities to mark the MTN Mobile Money Month celebrations, was on the theme: “towards building a cashless economy in Ghana – prospects, challenges and way forward.”

Kofi Bentil, Vice-President, IMANI Ghana, sharing his views on the failure of e-zwich said “apart from the occasional technical hiccups with faulty machines, one of the reasons why e-zwich is staggering in its performance is the lack of creative marketing to increase patronage.”

He was hopeful that the platform could be revived with innovative initiatives which will attract consumers.

Ebenezer Asante, MTN Sales and Distribution Executive, in his presentation indicated that “Mobile money services have transformed the way in which people handle their finances, allowing people to transfer money, make purchase and pay bills with a few key strokes on their mobile phones.”

He added that the service had given millions of unbanked Ghanaians access to banking services and improved the banking culture of both urban and rural population.

He noted that with the right infrastructure, policy, security and cultural resistance and education, Ghana’s drive towards a cashless economy would be feasible.

MTN CEO Predicts Cashless Economy

Michael Ikpoki, MTN CEO

By Esther Awuah

An economy in which mobile phone subscribers will use their handsets to transact business is imminent, according to Michael Ikpoki, the Chief Executive Officer (CEO) of MTN Ghana.

Since MTN Mobile Money service was launched in July 2009, about 2 million people have enjoyed the convenience of transacting business without cash, a development the CEO described as the next big thing that will gradually take Ghana towards a cashless economy.

He said, “It has been three years now since MTN Mobile Money was launched and we are quite impressed with the level of interest people have shown in the service. However we believe we can do better at getting more people to use the services and this calls for an intensive consumer education aimed at drawing attention to the importance of Mobile Money service.”

Mr. Ikpoki disclosed this to CITY & BUSINESS GUIDE in an interview at the launch of first ever MTN Mobile Money Month in Accra.

He indicated that MTN will hold engagements with stakeholders and policy makers to drive the right interventions to ensure a cashless economy.

“MTN is committed to supporting the economic development of the country and we believe that the country will benefit immensely if we work towards making Ghana a cashless society.”

The theme for the month-long celebration is “MTN Mobile Money creating a cashless economy with your mobile phone.”

According to the CEO, the launch of the Mobile Money Month is to enable more people know about the importance of the service.

He was confident that “at the end of the month of August more customers would have been hooked on to the service and educated about the many benefits Mobile Money offers and certainly transactions on this platform would see some significant improvements.”

Some activities lined up for the event include a float through some major cities across the country, a public forum and other engagements with MTN subscribers and staff.