New and extraordinary measures taken to stabilise the cedi and rein-in rising inflation must be “reinforced” by government through tighter fiscal policies and accelerated efforts to broaden the country’s export base, said the Bank of Ghana (BoG) on Thursday. Speaking in Accra after an emergency meeting of the bank’s Monetary Policy Committee (MPC) to consider a swift response to the falling cedi and mounting inflation expectations, Governor Henry Kofi Wampah said government must do more to assist the monetary authorities correct the “weak fundamentals” driving price and exchange rate instability.   The MPC, he said, increased the policy rate from 16 percent to 18 percent -- the highest in four years -- to complement earlier steps, including new controls on foreign exchange transactions that the bank has taken to address emerging economic risks.   “[But] all these must be reinforced by ensuring that all the budgetary targets are strictly adhered to for fiscal consolidation,” Dr. Wampah said, adding: “the committee acknowledges the ongoing reforms to improve revenue mobilisation while containing expenditures. However, a lot more is required in rationalising the wage bill.”   Fiscal consolidation in 2013 was slow, he stated, with the projected budget deficit of 10.2 percent of GDP exceeding initial expectations of 9 percent. Finance Minister Seth Terkper has forecast a gap of 8.5 percent this year, but the Governor cautioned that unless government sticks to its fiscal programme, inflation -- which the BoG has targetted to stay within 7.5-11.5 percent by year-end -- could be higher at around 12 percent.Pressure on the cedi is also due to Ghana’s high import profile, the Governor said, agreeing with calls to change the structure of the economy.   “In the medium- to long-term, government must seek to broaden the tax base further, diversify and broaden the export base, reduce imports -- especially of consumption goods that have local substitutes -- and intensify efforts to block foreign exchange leakages such as transfer pricing.”   On Wednesday, the central bank announced new restrictions on the currency market in a bid to boost the cedi, which fell by 7.8 percent against the dollar in January. The measures outlawed foreign exchange loans by domestic banks to customers who do not earn their income in foreign currency, and said offshore currency dealings by resident companies are “strictly prohibited”.   The BoG also directed that export earnings be repatriated by exporters to their banks within 60 days of shipment, and furthered instructed banks to convert the funds to cedis within five working days. It added that banks can buy exporters’ dollars at no more than the average interbank foreign exchange rate plus 200 basis points.   Dr. Wampah defended the rules, saying they will promote transparency, streamline the market, limit leakage of foreign currency and address money-laundering concerns. More importantly, he said, the central bank wants to stress the cedi’s status as the sole legal tender.   In the past year the currency has lost more than a fifth of its value against the dollar, pushing up the price of almost everything: fuel at the pumps, cooking gas, frozen chicken, clothing, furniture, footwear and the wigs that women use for their hair.   Two years ago, when the cedi weakened by 17.5 percent, the government shielded consumers from much of the impact by subsidising petrol, electricity and water -- a decision that contributed to a record budget deficit worth 12 percent of GDP.   This year, however, subsidies have been cancelled, leaving consumers to bear the brunt of the currency’s misfortune. From 8.8 percent in December 2012, inflation picked up to 13.5 percent in December 2013 and the persistently weak cedi threatens to force it higher.   Petroleum products have become especially expensive given their double exposure to the vagaries of the international price of crude oil and the local currency’s exchange rate. Petrol and diesel prices are up 41 percent and 45 percent respectively from a year ago, while liquefied petroleum gas (LPG) and kerosene have jumped by 112 percent and 169 percent in the same period.   The Bank of Ghana has traditionally aimed to keep inflation below 10 percent, but the removal of subsidies coupled with the impact of currency depreciation limits the bank’s ability to keep inflation within its comfort zone.     By Leslie Dwight MENSAH

  The Atuabo Free Port project, aimed at providing support services to offshore oil and gas activities both in Ghana and in the wider West African sub-region, is set to begin in the second quarter of the year as parliament is expected to soon ratify the deal. Cabinet has already approved the US$650m project, which is expected to create some 1,500 jobs in its logistics supply bases, warehouses and fabrication yards, among other activities. The project is being wholly funded by Lonrho, a UK logistics company, but has 45% Ghanaian interest.The government is said to have negotiated for Ghanaian institutions like the Volta River Authority and SSNIT to participate in the project. The chairperson of the port will be nominated by the government of Ghana.As an equity shareholder in the project, the government is also expected to earn dividend and royalty payments. A memorandum of understanding was signed between Lonrho and the government of Ghana in August 2011 under the late President Atta Mills for the project. Lonrho has since spent some US$15m on feasibility and preparing the ground for take-off. In an interview with the B&FT, CEO of Lonrho Geoffrey White said financing for the project has already been secured; indeed, he said debt equity financing for the project was “oversubscribed” due to investor confidence in Ghana. No funding, guarantees or subsidies are required from the government of Ghana for the project, he said. The project offers Ghana a strategic opportunity to become a regional hub for support services in the West Africa sub-region, which is becoming increasingly important for oil and gas production, he added. La Cote d’Ivoire, Liberia and Sierra Leone have all seen increased exploratory activity in recent times. The Atuabo Free Port will include Logistics supply bases including warehouses, storage facilities and offices. It also includes a fabrication yard for sub-sea fabrication companies to build various components for the oil and gas field infrastructure, as well as rig and vessel repair facilities. According to Lonrho, “The new facility is uniquely located to capitalise on the growth in deepwater exploration in West Africa, with an expected increase of 300 offshore supply vessels in the region over the next five years”. The company adds that: “Atuabo Free Port provides an attractive location for Ghanaian companies to become involved in the wider West African oil and gas industry and not just the Ghanaian market.” Phase one development of the project, Lonrho said, calls for an investment of approximately US$600m to construct and equip the free port, which will include local content spending in excess of US$150m. “The project will stimulate training for Ghanaians to offer the necessary skills for the companies operating at the port,” the company said. By Basiru ADAM

  Insurance companies are weighing their options including a legal action against government if the directive to Ministries, Departments and Agencies (MDAs) to do business with only wholly- or partially-owned state insurance companies is not reversed, B&FT has been told. Insurance companies are awaiting a response from government after expressing their dismay at a decision geared toward boosting the business fortunes of institutions partially- or wholly-owned by the state. Government’s silence on the matter is causing uneasiness among insurers. The president of the Ghana Insurers Association (GIA), Kwame-Gazo Agbenyadzie, has told the B&FT in an interview in Accra that the Board of the GIA -- the trade association of insurance and reinsurance companies -- will meet next week Tuesday to among other things consider what actions to take toward reversing the directive. He said the Association will go to court as a last resort to seek interpretation on the legality of the directive following passage of the Insurance Act 2006, which repealed PNDC law 227 and its provisions that required all government agencies, statutory bodies or corporations where the government owned more than 50 percent interest to be insured with SIC. Currently, there are 43 companies in both the life and non-life insurance sectors which are all competing in a market where insurance penetration is less than two percent. Mr. Agbenyadzie explained that the directive will adversely affect the financial performances of most private insurers that have huge business portfolio with some MDAs. He said attempts to create a monopolistic situation for a particular company should be resisted and condemned. According to the GIA the directive is anti-competitive as much as it is illegal, which sends a wrong signal to both local and foreign insurance markets -- while in some African markets they have started retaliatory actions against the government’s directive by reconsidering their business dealings and treaties with any Ghana government-established insurance/reinsurance firm. Already, private insurance companies in Cameroon have expressed their misgivings about the directive and resolved to avoid doing business with Ghana Re -- a state-owned reinsurer which has set up an office in that country. “There are retaliatory actions underway which are affecting other state companies in the insurance business, especially in the Cameroon market, and it is not going to stop there,” Mr. Agbenyadzie said. In December last year, the government in a letter signed by the Executive Secretary to the President, Dr. Raymond Atuguba, directed all MDAs to with immediate effect purchase or renew any insurance cover required in the course of government business solely from insurance companies wholly- or partially-owned by the state. The directive required any MDA that had cause to do business with a private insurance company to seek permission from the government. It is understood that the directive is intended to especially boost the business fortunes of SIC Insurance and SIC Life.     By Elliot Williams & Evans Boah-Mensah

  Ghana Manganese Company (GMC) Limited, Shipping Management and Transport (SMT) Limited, a Dutch shipping company, and the Ghana Ports and Harbours Authority (GPHA) have outdoored a new transshipment vessel -- “MV GDANSK” -- at Takoradi Port to facilitate export of manganese ore. The new transshipment vessel is an improvement to the current operations in terms of efficiency and quick turnaround of vessels’ operations in the midst of ongoing port expansion project development. Also, it is to maximise the use of available facilities until the completion of the new bulk berth under the expansion of the project. Jurgen Eigendal, Managing Director of GMC, at the unveiling of the vessel at Takoradi explained that the new transshipment vessel is a new innovative way of improving upon the sector. He said it is expected that the new transshipment vessel will increase export volumes, and increase revenue at the Port for GMC and the government of Ghana. Again, he said it is to enable GMC be in operation and able to go beyond the 2 million tonnes of manganese exported last year -- “We are expecting our tonnage to increase to between 55 and 60 million tonnes during this new transshipment. “We are here to officially start loading -- GMC is now exporting low-grade manganese and our biggest client is in China which is a long way, hence the need for this new transshipment vessel,” he said. Captain James Owusu Koranteng, Acting Director of the Takoradi Port, said the transshipment vessel marks the beginning of a new and improved transshipment mode to facilitate export of manganese ore. “This innovative project seeks to transship large volumes of manganese within the shortest possible time -- as a leader in the maritime industry, GPHA will strive to achieve maritime operational efficiency,” he said. Mr. Alfred Ekow Gyan, Deputy Western Regional Minister, pointed out that the region is endowed with rich resources which have value for money -- and one of such is the manganese ore. He noted that export of manganese over the years has made significant gains for the country’s economy in the area of bulk shipment through Takoradi Port. However, he said, in order to maximise bulk exports through the port, government is supportive of any specialised form of shipment innovation -- the pressing trade and economic demand of the ever-growing international market can no longer be sustained at a water depth that cannot meet bigger vessels requirements. “I am of the conviction that the new shipment project will therefore augment government’s efforts in encouraging trade and investment to help reduce the cycle of employment,” he added. He said government will therefore continue to increase an enabling environment to support the private sector for investment gains.     By Juliet DUGBARTEY, Takoradi

A new organic compost -- Biochar -- to improve on the yields of agri-businesses as well as reduce the poverty rate in the north has been introduced to farmers. Biochar is a natural fertiliser made from rice-husk, chicken manure and charcoal, which is mixed to form compost with no chemicals applied to it. It is organic compost that does not contain any poisonous chemical and has no side-effects on the crops. Rather, it drives away pests and the land can be used the following year without more fertiliser. The project to introduce the fertiliser, which started in 2011, has made lots of impact because it has a component that holds water and contains nutrients needed by the plants to grow well. Mrs. Kathrin Roessler, a scientist from the Free University of Berlin, Germany, where the fertiliser was developed, told the B&FT in an interview that research has shown that soil fertility in the three northern regions has decreased, making it difficult to harvest well every year. She noted that with the use of the fertiliser, plant nutrients hardly wash away and the leaves of the plants also look greenish and healthier. According to her, the project is done annually with free distribution of the fertilisers to farmers. She stressed that annual data is collected to ascertain the impact of the fertiliser and how to improve on it. She encouraged farming unions to join to make the project a success and ensure good yields annually. The B&FT visited some of the beneficiary farms and observed that they had been divided into two: one part where Biochar had been applied and resulted in good greenish leaves, and the less verdant part where the fertiliser had not been applied. Mr. Peter Billa, Project Coordinator of the Abokobi Society of Switzerland in Tamale, said the organisation sponsors the project and educates farmers on how to apply the fertiliser to help achieve its purpose. He said 20 farmers benefitted from the project last year, and they hope to assist 120 farmers next season. He said the organisation further inspects the farms of the beneficiaries to ensure that the right thing is done to prevent any problems to the farmer and the crops. Mr. Yussif Hamza, a beneficiary who the B&FT met on the field, commended the organisation for the kind gesture, saying the fertiliser has made them harvest about 10 bags of maize this year as compared to the previous year, when he harvested about four 4-5 bags. Some of the beneficiaries included Maltiti Farmers Union, Tungteya Farmers Union, Suguru Viella Women, Franz Zemps Neighbourhood Farmers, Taimako Farmers Union, Karaga Framers Union, Nyon Farmers Union, Presbyterian COG Mile 7, SARI, as well as five 2012 Best Tamale Women Farmers.     By Samuel SAM, Karaga

  Women who collect and sell shea-nuts at Tamaligu -- a farming community in the Savelugu-Nanton District of the Northern Region -- have returned to active business after it slowed down drastically for several years. According to the farmers, the road they use to transport the nuts deteriorated and virtually becomes unmotorable during the rainy season, making their work difficult. This particular stretch of road is a 4.5km feeder road that links the community to Kukuobila, another town in the district that is located off the Tamale-Bolgatanga highway. Luckily for the women and the entire village, the Northern Rural Growth Programme (NRGP) intervened and awarded the road on contract for rehabilitation. The NRGP is an eight-year agricultural project jointly funded by the International Fund for Agricultural Development (IFAD), African Development Bank (AfDB) and the Government of Ghana, and is being implemented by the Ministry of Food and Agriculture (MoFA). Following completion of rehabilitation works on the feeder-road the women are happily back in business, and have begun transporting several bags of shea-nuts to market centres. Mma Azara Issah, one of the shea-nut collectors, said because the road has been put in good shape, buyers now prefer bringing their trucks to the village to buy the nuts. “So we do not even go to the market because they come here for the nuts,” she said, adding that it has made life easier for them and their families.   Mma Azara is the second wife of her husband and has seven children, the youngest of which is three. She said apart from the two older ones, the rest are in school and that she supports her husband in the upkeep of the home from the income she makes in her business. Each year, she is able to gather about 80 bags of shea-nuts, which she buys from other women in the community who go into the bush to pick the nuts. “Last year, we sold a bag of shea-nuts at between GH¢25 and GH¢40. Even though this is not so good, it is better than nothing,” she said. In addition to the shea-nut business, Mma Azara also cultivates maize, groundnuts and soya beans on a three-acre land. “I use the maize and some of the soya beans and groundnuts to feed the family and sell the rest.” The leader of women in the community, Mma Lamisi Yakubu -- also known as the “magazia”, said the rehabilitation of the road has not only improved their shea-nut business but also improved their well-being. “When the road was bad, travelling to Kukuobila was very difficult. Anytime somebody was sick, we had to put the person on a bicycle and push it through the muddy road to get to Kukuobila before we could get a car,” she lamented. “Now, we use motorbikes without any difficulty; and when we need cars, they come into the village without hesitation,” she further stated. Mma Lamisi commended the NRGP and the government for rehabilitating the road.She however entreated government to extend electricity to the community and thus enable them to establish a grinding mill. “With a grinding mill, we can also process the shea-nuts into oil and butter,” she said. The rehabilitation of feeder roads linking farming communities is part of the infrastructural component of the NRGP. The other components are focused on strengthening commodity value-chains, providing matching grants to farmers for equipment purchase, and building the capacity of financial institutions to provide financial services to actors in the value-chains. From Samuel SAM, Tamaligu

The Trades Union Congress (TUC) has called on government to convene a meeting of the National Tripartite Committee to discuss the TUC's proposal for upward adjustment of the Daily Minimum Wage without any further delay. The TUC says: "Given the hardship facing the working people of the country, it is unthinkable that government can even contemplate a wage freeze in the public sector." The Union believes once consultation on the national minimum wage is concluded, the negotiation for review of the base pay and relativity on the Single Spine Salary Structure will commence. "A significant upward adjustment of wages is required to cushion workers from the current economic hardship. Workers of Ghana have been stretched to the limit; we cannot contain any further burden imposed on workers due to economic mismanagement," the TUC proffered. These and other pertinent economic discussions formed the basis of a statement released to all media houses on the general economic situation in the country. The TUC noted in the statement that since 2005, the Union and civil society organisations have made annual submissions on the economic and social policies for consideration of the Minister of Finance and Economic Planning in the annual budget statement. "At the heart of all our submissions has been the call for a national dialogue and consensus building on the nature of an economic policy and economic management that can create employment and reduce poverty which has afflicted millions of Ghanaians." However, the TUC says managers of the economy have chosen to ignore their advice and other brilliant suggestions put forward by civil society. It accuses government of relying on advice from the International Monetary Fund and the World Bank. Thus in the last three decades, the Union says, economic policy has been heavy neo-liberal in character: privatisation of strategic national assets, unbridled liberalisation of international trade, and the ruthless deployment of market forces as evidenced by the removal of subsidies on utilities and fuel. "These bad economic policy choices have been exacerbated by pervasive corruption, cronyism, incompetence, and extreme partisanship," the statement stated. The Union says views are converging that the economy is failing or has failed, and that times are really hard for Ghanaians. The statement further went on to say that out of desperation, government has now resorted to increases in VAT -- which is a well-known regressive form of taxation. On the issue of the local currency’s sliding value, the Union puts the blame squarely on the policy of unbridled trade liberalization -- or more appropriately, import liberalisation -- which has compelled the nation to virtually live on imports. "Our increasing appetite for imports means that our demand for foreign currency, particularly the US dollar, is growing exponentially." The problem, it notes, has been compounded by the over-liberalisation of our external payment system; thus allowing for transfer of foreign currency of any amounts out of the country by foreign companies operating in Ghana. The TUC shares the view that dollarisation of the economy is partly to blame for the current messy situation, but it equally accuses government of being most guilty since state agencies like the Tema Development Corporation sell land at dollar-indexed prices. These and a raft of other anomalies cited by the Union account for the situation the economy finds itself in today. The Union agrees that there is no easy solution to the current situation, but believes the country requires immediate short-term remedial measures to ameliorate the plight of Ghanaians. First, it wants government to roll-back some of the taxes; second, government must re-introduce subsidies on utilities and fuel, and rid government machinery of corruption and corrupt elements. By Konrad Kodjo Djaisi

Minister of Energy Emmanuel Armah Kofi Buah says government is determined to ensure that challenges within the power sector are brought under control. According to the Minister, the annual energy demand which stands at 12 percent -- up from 10 percent-- presents enormous challenges which must be tackled head-on if the country is to attain a marked level of development. Mr. Buah was speaking at the inauguration of the boards of the Bui Power Authority and the Energy Commission yesterday at the Ministry. Chairman of the Bui Power Authority, Johnson Asiedu Nketiah, said the board will ensure the 400 megawatt facility's contribution to the country's energy supply is enhanced. "We will put in efficient operation capacity so the nation benefits from its investment," Mr. Nketiah said after being sworn in. He said government must harness the capacity of the artisans used in construction of the dam for other hydroelectric dam projects, rather than allow such expertise to dissipate. Other members of the board include Theresa Nyarko-Fofie, Kwame Twum Boafo, Joseph Akati Saaka, Kwasi Agyeman Gyan-Tutu, Dr. Kofi Nketsia Afful and Jabesh Ammissah Arthur. President John Mahama last year inaugurated the US$622million Bui Hydroelectric Dam, which will contribute a further 400MW to the country’s energy supply. The Minister also inaugurated a six-member board of the Energy Commission headed by Dr. Kwame Ampofo. The other members of the board are Dr. Syvana Rudith King, Innocent K.A. Akwayena, Dr. Isaac F. Mensa-Bonsu, Stephen Duodu and Dr. Ofosu Ahenkorah. By Richard Annerquaye Abbey

The 18th International Trade Fair, which is expected to be patronised by over 500 exhibitors and attract 250,000 visitors, has been launched. The fair, from 27th Feb to 3rd March, will focus on development through trade and investment, and will look at showcasing innovative initiatives from Ghana to the rest of the world. The Deputy Chief Executive Officer of the Ghana Trade Fair Company (GTFC), Nana Kwame Ofori Amanfo, said the fair will give people from all over the world an opportunity to converge and trade in Ghana with their Ghanaian counterparts. “It will also give Ghanaian businesses opportunity to show the rest of the world what they also have to offer, and to look for partners in various market jurisdictions. “The International Trade Fair remains the only fair that gives Ghanaian businesses the opportunity to come face to face with their old and prospective clients both within and outside the country, as well as business partners and investors.” Mr. Amanfo said fairs are not only meant for businesses to sell their products, but rather to build networks with other businesses and partners. “Our marketing objective is to rebrand the focus of the International Trade Fair on the platform of being an exhibition and not mainly a sales point.” He therefore advised business people to use the platform to create more business networks with foreign partners. He said this year’s fair will promote made-in-Ghana goods and services as well as create and build awareness for the local businesses. He said the frequency of organising domestic, regional and international fairs has enabled the company to expose available domestic products and services to the international market. Through this, the G.T.F.C. facilitates the creation of export trade linkages between Ghanaian businesses and their foreign counterparts. In addition, he said, the fairs offer local businesses the opportunity to assess, evaluate and appreciate product-quality standards required by foreign markets, and hence encourage exporters to improve on the quality and standards of their products and services so that they can effectively compete on foreign markets. By Benson AFFUL

Businesses in the country have not made the most of the enormous opportunities that the United States government’s African Growth and Opportunity Act (AGOA) presents, Haruna Iddrisu, Trade and Industry Minister, has said. AGOA is the US government’s trade initiative with 39 sub-Saharan African countries. There are over 7,000 products that are available under the AGOA and Generalised System of Preferences (GSP) list to enter the United States duty-free. The programme has spurred the export of processed agricultural products, manufactured goods, apparel and footwear from qualifying nations. However, the country, according to the Trade Minister, “has not made the most of the existing AGOA opportunity”. Compared to peer-countries, Ghana’s exports to the US under AGOA have not been significant. In 2012, the country exported US$245million under AGOA to the US, which was only one-quarter of Côte d’Ivoire’s exports of US$995million. Kenya, an economy that is about the same size as Ghana’s, exported US$355million in the period. In the first 11 months of 2013, Ghana’s export value was US$293million, compared to Côte d’Ivoire’s US$805million and Kenya’s US$384million. Ghana’s exports have also fallen from a peak of US$748million in 2011. Mr. Iddrisu made his comments at a stakeholder forum on the National Crusade Against Trade in Pirated Ghanaian Textile Designs and Trademarks held in Accra. The forum was attended by textile producers, retailers, the Ghana Revenue Authority (GRA), the Ghana Immigration Service, and other stakeholders to fashion out ways of addressing the nagging issue. The Minister described the influx of copied local textile designs as a “threat to the national textile industry”, which also presents an imminent national crisis that must be dealt with in all its facets. Takoradi Port was in 2006 designated as the only entry point for the importation of textiles. However, this was expanded to include the Kotoka International Airport and the Tema Harbour, but later reviewed again to allow entry via all borders. This, the anti-piracy taskforce contends, opened the floodgates for an influx of pirated textiles. Mr. Iddrisu urged security personnel manning the borders to be vigilant and stop the entry of pirated textiles. “There is no government policy to ban textile importation but to regulate it through approved routes for statistical purposes, and to ensure only genuine designs are imported. We respect intellectual property rights.” The anti-piracy taskforce was created by the Ministry of Trade and Industry in 2008 and reconstituted in June last year. A committee was also instituted to vet any design that an importer intends to import for sale in Ghana.  By Dominick Andoh