Ghana’s economic outlook points to “a stable and bright future,” Finance Minister Seth Terkper declared yesterday, calling on investors to take advantage of opportunities in various sectors by partnering government. Speaking at the Ghana Economic Outlook and Business Strategy Conference in Accra -- attendees of which included investors from across the globe -- the Finance Minister said the country’s corporate tax ceiling of 25 percent is one of the most competitive investors could have. The recent tax increases, the Minister said, are temporary and will be removed when the economic situation improves. Although Ghana is viewed as being largely dependent on natural resources, Mr. Terkper said the services sector is actually the largest sector of the economy, adding that government is keen on having an even stronger services sector -- including strong banking and insurance industries. He added that instead of government bearing the debt-burden of corporations like the Volta River Authority as has happened over the years, projects should be “self-financing” -- which calls for public-private partnerships. “We expect to have more diversification, and we expect to have more value-addition.”Government, he assured, is mindful of and is working to address not just the volatility of commodity prices but also energy, among others. Trade and Industry Minister Haruna Iddrisu said value-addition is the hallmark of the country’s future in terms of manufacturing, adding that the Mahama administration has earmarked the Western Region as the next industrial hub, aside from Tema, due to its many natural resource endowments. He reiterated government’s intention to play the role of an enabler, creating the necessary business climate for the private sector to grow and create jobs. To the visiting investors, the Minister said: “Ghana remains a place to do business. Do not ask the second question, ‘where to invest’. Invest in Ghana. We have established both the regulatory and legal regimes that protect your investment. The macro-economic environment has improved, infrastructure has improved. The Ghana you knew in 1993 is not the same Ghana today. Apart from that, we have a stable political and social order. Ghana remains a safe and secure business destination in the West Africa sub-region, with enormous investment opportunities.” The two Ministers’ comments echo sentiments expressed by President John Mahama when he met journalists at the Flagstaff House earlier this month to answer questions on governance and his management of the economy. At that meeting, President Mahama defended tough measures -- including the removal of energy subsidies and tax hikes -- which have been taken by government to stabilise the fiscal situation following blown-out deficits in 2012 and 2013. The President pledged more jobs through increased infrastructure investment as his government works to consolidate Ghana’s middle-income standing. By Basiru ADAM

  Ghanaian officials and their Ivorian counterparts are scheduled to meet on February 17 to start negotiations on delimiting the maritime borders of the two countries. The area in dispute is the oil and gas-rich maritime region off the west coast of Ghana and to the east of the Ivorian border. Both countries are claiming ownership of the territory, which energy experts say holds an estimated two billion barrels of oil reserves and 1.2 trillion cubic feet of natural gas. Alhaji Inusah Fuseini, the Minister for Lands and Natural Resources, said the two parties will start negotiations aimed at solving the prolonged dispute next month. “On February 17, 2014, we will be in Ivory Coast to start engaging them on how to delimit our maritime borders. We have been working on documents as this matter has to be decided or negotiated based on international best practices, or conventions and practices that prevail in the West African sub-region. “We gave them documents that we are relying on and they also gave us documents they will be relying on, just like it happens in court. We are synchronising the documents. Where we have objections to the documents they are seeking to rely on, we have pointed that out to the Ivoirians.” The area in dispute had never been in contention until 2010, when Ivory Coast petitioned the United Nations to complete the demarcation of the Ivorian maritime boundary with Ghana. Ghana has since passed the Ghana Boundary Commission Bill that established a commission with the purpose of undertaking negotiations in order to determine the country’s land and maritime boundaries. “Here in Ghana, we have also been meeting as the technical committee to look at our chances; we have done the simulations and we still think that our claim to that area is well founded. Since 1977 Ivory Coast has respected the maritime boundary, the customary line between Ghana and the Ivory Coast,” Mr. Fuseini said. The impact of the ongoing dispute Energy expert Dr. Charles Wereko-Brobbey has warned that the speedy resolution of the matter is crucial in order not to deter future investments in the country’s oil sector. “As this thing draws out, it’s going to affect the development of our own oil business because potential investors fear risk, and so long as the boundary issue is not resolved nobody is going to invest more money into exploration. “The longer it draws out the more negative the effect it will have on us in terms of new investors coming into the sector.” Enlightened self-interest Dr. Wereko-Brobbey said: “enlightened self-interest” is one of the ways in which the negotiations can be undertaken for the mutual benefit of the two countries. “This means that at the end of the day we are fighting Ivory Coast for the right of a third party investor. But on the land side of the territory in dispute, there are Fantes and Nzemas. We need to think outside the box. “It is in the interest of Ghana and Ivory Coast to maximise all the returns they can get so that they can raise revenue to look after their people. “What about looking at it from the point of view of the self-enlightened interest of Ghana and Ivory Coast, and saying that we will manage this together, and we will invite investors and divide up the spoils.” By Dominick Andoh

The Controller and Accountant-General’s Department (CAGD) must take the lead in the adoption of the e-zwich payment system for public sector workers if it is to eradicate the rising incidence of payroll fraud, Archie Hesse, Chief Executive Officer of the Ghana Interbank Payment and Settlement Systems (GhIPSS), has said. This year, Ghana’s public wage bill is estimated at GH¢11billion or about 10 percent of GDP, and proposed moves to tame the rising bill include the cleansing of government’s payroll of so-called ghost names. According to Mr. Hesse, the e-zwich biometric payment platform provides an easy route for the CAGD to sanitise the payroll.“If we are all paid via e-zwich, everybody who’s paid can be uniquely identified. It will eradicate all these issues [double payments and ghost names] we all hear about,” Mr. Hesse said in an interaction with the media yesterday. He added that while it is mandatory for all financial service providers -- particularly banks and savings and loans companies -- to offer e-zwich services, non-compliance by some of these institutions makes it difficult for the CAGD to go ahead with its plans of full-scale implementation of e-zwich. “If I am paid on an e-zwich card and every bank I go to doesn’t offer the service, why should I restrict myself to a form of payment that would hinder me?” he asked. The defence given by most banks for not offering the service, according to him, is the malfunctioning of the Point of Sales (PoS) terminals. That excuse, he said, is not tenable as by law the banks are required to ensure maintenance of the infrastructure. “They should have their own support mechanisms. It is not our (GhIPSS) responsibility; they should own it,” he said, referring to the e-zwich payment system. That notwithstanding, Mr. Archie said GhiPSS will be deploying more PoS terminals to enhance the usage of e-zwich as well as other local payment systems such as the gh-link, a national switch that allows holders of local debit cards access to any ATM outlet they come across. “Local card-holders have access to ATMs of all the 27 banks and five savings and loans companies. Soon, rural and community banks will also be added to further increase the number.” GhIPSS, he stated, is working to ensure that local card-holders are not disadvantaged. “It will be better customer service if more bank customers are issued with the local cards to enable them enjoy lower transaction cost and access to more ATMs, POSs and do online shopping.” Ghana and Nigeria are working closely to integrate their national payment systems, Mr. Hesse added. When this is completed, local cards in Ghana will work on ATMs, PoSs, the Internet and mobile money systems in Nigeria and vice versa. Eventually, this will be extended to cover the Francophone West African countries, giving added advantage to local debit cards. By Richard Annerquaye ABBEY & Benson AFFUL

  Mr. Gilbert Sebik, Regional Trade and Industry Officer, MOTI has urged stakeholders to strive to harness youth contributions toward achieving Ghana’s national development programme. Mr. Sebik said ensuring financial protection and empowerment of children and the youth will require forging innovative partnership to achieve the desired impact. He stressed that seeking to expand the frontiers of financial inclusion to the youth through a multi-stakeholder approach is appropriate and timely, as it will contribute to the improvement of the financial landscape of Ghana. It is gratifying to note that many actors and stakeholders share the view and show commitment toward enhancing opportunities of providing financial services to the youth -- who form the critical mass of the population and the pivot for the expansion and diversification of Ghana’s financial sector Mr. Sebik added. The Regional Trade and Industry Officer who disclosed this to the B&FT in an interview noted that it will also help reduce the unemployment rate when the youth acquire entrepreneurial skill with the necessary funds to achieve their aim without depending on the government for job, or migrate to the south to search for non-existing jobs -- which ends with more of them in a bad situation. He said government needs to take steps to develop a national financial inclusion strategy of which the Ghanaian child and youth would be at the centre.He said the strategy would also seek to broaden access, awareness and appropriate use of a range of financial services through tailored financial capability programmes. The Regional Officer stressed that there is need to raise awareness on the range of financial products and services available to consumers to help them better understand and manage their personal finances to achieve financial security. He said experience in most developed economies had shown that early financial education in a person’s life leads to financial independence and sound investment decisions. He said knowledge, understanding, skills, motivation and confidence are the basic principles that enable individual’s to make financial decisions in their personal circumstances. He lamented that Ghana’s population consists of a large proportion of children less than 15 years who need support in becoming productive in order to contribute to national development efforts. He urged stakeholders to intensify their various advocacy actions to ensure that children and the youth are included in the proposed National Financial Inclusion Strategy. In a related development he called for intensified farmer education by government and other stakeholders in the cotton industry on the new methods of farming to boost production. He said the low level of literacy among farmers has made it difficult for them to adapt to modern technology to increase yields, thereby resulting to the falling standard of the textile industries in the country. According to the Regional Officer, most of the textile industry depends on the cotton to increase the production of the local textiles which also creates some job employment for the youth and also the government generating some revenues to embark on developmental projects to reduce the unemployment rate among the youths.  Mr. Sebik noted that the gradual collapsing of the textile industries in the country is paving the way for importation of the foreign textiles, which is rather creating jobs and revenue for the foreign investors only and not the nation at large. He stressed that climate change, threats of diseases and pests, sales and application of unapproved chemicals on cotton are some of the factors that retarded progress in the cotton sector in the country. He said effects of climate change are being felt in most of the cocoa growing areas due to the change in rainfall patterns, which was also affecting the application of fertilisers and incidence of cotton trees. He urged farmers to develop simple and effective labour-saving technologies to curb physical labour, and focus on intensive rather than extensive cotton cultivation practices with the application of fertiliser in a responsible manner -- adding that this will enable them to achieve their target as well as help the industry to expand and absorb more of the youth. By Samuel SAM, Tamale

Dwadifo Adanfo, a microfinance company, has launched its redesigned website at the company’s head office at Asylum Down, Accra. The website, www.dwadifoadanfo.com, according to the company Chief Executive Charles Amonoo is more user-friendly, gives clients easy accessibility to the staff -- especially relationship managers, and has a 24/7 online support system. “The new website helps us interact with our staff, clients and other stakeholders. There is 24/7 customer service support. During working hours we are online to respond to any request; and when we are not working you can send a message and leave your telephone number and email, and as soon as we get to work we respond to the request,” he said. “If we have vacancies, the website has a system that allows for job-seekers to apply for the positions online, and the applications go straight to the HR department for processing,” he added. Another enhanced feature is the use of symbols to communicate the company’s products and services, and what clients stand to benefit when they sign on. “For example, on every product or service page we have a dedicated number that links you to a relationship manager you can contact for that specific product if you are interested,” he said. Speaking about the outlook, he stated: “Our key target this year is to grow our loan portfolio and improve our relationship with clients. We want to have a deeper insight into what our clients do, so we can help them grow their businesses in the right direction. The launch of this website is the first of many steps to achieve this objective”. Mr. Amonoo added that Dwadifo Adanfo is looking at expanding its customer base by moving into the Eastern and Western Regions and other parts of the Greater Accra Region, including Tema and Ashaiman. He noted that the major challenge facing the industry is the cost of capital. “If we can get capital at a cheaper rate, then we can also lend at a cheaper rate and that will be comfortable for everybody in the market.” He lauded efforts by the central bank to place a cap on the issuance of microfinance licences. “I think the BoG’s move to place a cap on registration of MFIs is a good one. Anything that the regulator will do to bring back confidence in the sector is welcome.”

    Endeavour Mining plans to produce at least three tonnes of gold annually from Agbaou in Ivory Coast, and will start marketing bars from the mine by the end of the first quarter, officials said. Canadian miner Endeavour, which owns 85 percent of the mine, on Monday officially launched production at the plant about 200 km northwest of the capital Abidjan. Neil Woodyer, Endeavour Mining's chief executive officer, said the company invested US$160million to build the mine which has a lifespan of about eight years. Woodyer said the firm is looking to extend it beyond that. "This mine, the fourth in our group, will allow us to produce about 400,000 ounces per year in total," he said at the launch ceremony. The company has other mines in Mali, Ghana and Burkina Faso which currently produce around 300,000 ounces in total. Mines and industry minister Jean-Claude Brou said production from Agbaou will boost Ivory Coast's output by about 20 percent. The Ivorian state holds a 10 percent stake in the mine, while its mining development company Sodemi owns 5 percent. "With the start of production at Agbaou, three tonnes of gold will be added annually to the country's production," Brou said.Ivory Coast, the world's top cocoa producer, aims to increase gold output to diversify its sources of income and boost the economy. Randgold's Tongon mine, Newcrest's Bonikro and La Mancha's Ity are the other gold mines operating in the country.Ivory Coast's total gold production stood at around 12 tonnes last year, and the government has forecast annual output will reach around 25 tonnes by 2015 as new mines come on stream. Reuters

Businesses operating in the country are deliberating on the tax and business implications of the renewed focus of the Ghana Revenue Authority and the Ministry of Finance and Economic Planning on transfer pricing (TP). Transfer pricing refers to how related parties within a group business price their transactions with one another and how intra-group income from the transactions are shared. Amanda Layne, the Manager of International Tax Services, Transfer Pricing, at Ernst and Young (EY) said: “We are finding that TP documentation requirements are becoming more and more across the board. The G20 has placed TP as a major global focus. Profit-shifting is a major concern for most jurisdictions, and Ghana is no exception to that”. Ms. Layne, who was speaking at an EY-organised transfer pricing workshop in Accra for businesses, said the workshop was organised “because of the focus globally, regionally, and locally on transfer pricing. “Because we found that the Ghana Revenue Authority (GRA) and the Ministry of Finance and Economic Planning have placed such a priority on transfer pricing, it’s important that companies operating in Ghana understand the implications TP will have on their operations.” From the GRA’S perspective, by focusing on TP in an audit they are able to determine whether or not they are really receiving their fair share of a multinational’s profit, and they adjust the income when they feel the TP is not appropriate. Ghana, as with many other countries, is seeking ways in which to deal with a large fiscal deficit and TP is a way of ensuring that government gets what is due it, Ms. Layne said. The country’s budget deficit was 10.2 percent of GDP last year, and the government has said its plans to cut the gap to 8.5 percent of GDP this year. Patrick Oparah, an Associate Director of Tax Services with EY, said Ghana and Nigeria are well-placed to enforce transfer pricing regulations -- but warned of seeking a balance between securing the country’s tax base and creating a conducive business environment. “Because TP regulations in Ghana and Nigeria have recently been introduced, they have the benefit of looking at how it’s done elsewhere. So their regulations have been drafted based on best practices elsewhere. Those regulations put the Ghanaian and the Nigeria authorities in a strong position to enforce transfer pricing regulation,” he said “There is a balance that has to be found in every country by protecting its tax base and creating a conducive environment for business,” he added. The challenges, tax experts note, are the resources and the skills to dedicate toward transfer pricing regulation enforcement. “Drafting legislation may be the easiest step; the next step is actually enforcing it,” Mr. Oparah said. By Dominick Andoh