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Rich Men in London Still Deciding Africa’s Future

Posted by Business in Ghana on March 29, 2015

By Colin Todhunter, Global Research

Some £600 million in UK aid money courtesy of the taxpayer is helping big business increase its profits in Africa via the New Alliance for Food Security and Nutrition. In return for receiving aid money and corporate investment, African countries have to change their laws, making it easier for corporations to acquire farmland, control seed supplies and export produce.

Last year, Director of the Global Justice Now Nick Dearden said:

“It’s scandalous that UK aid money is being used to carve up Africa in the interests of big business. This is the exact opposite of what is needed, which is support to small-scale farmers and fairer distribution of land and resources to give African countries more control over their food systems. Africa can produce enough food to feed its people. The problem is that our food system is geared to the luxury tastes of the richest, not the needs of ordinary people. Here the British government is using aid money to make the problem even worse.”

Ethiopia, Ghana, Tanzania, Burkina Faso, Côte d’Ivoire, Mozambique, Nigeria, Benin, Malawi and Senegal are all involved in the New Alliance. Read the rest of this entry »

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Qatar National Bank increases stake in African lender Ecobank

Posted by Business in Ghana on September 18, 2014

By William Wallis in London (Financial Times)

Qatar National Bank has become the dominant shareholder in pan­African lender Ecobank Transnational after increasing its stake to 23.5 per cent in a sign of growing Gulf appetite for African assets.

The Gulf’s largest lender said in a statement it had raised its stake in Ecobank after spending $283m to buy an additional 11 per cent share in the lender on Monday.

The Qatari bank earlier this month bought a 12.5 per cent stake in the bank worth about $220m from Nigeria’s Asset Management Corporation, the vehicle set up by the Central Bank of Nigeria to absorb non­performing loans in the wake of a 2009 banking crash.

Some Ecobank shareholders were unnerved by the Qatari buying spree, which they fear could dilute the bank’s African character while putting other large shareholders whose capital is restricted in a disadvantageous position.

South Africa’s Public Investment Corporation, PIC, was hitherto the bank’s leading shareholder but its capital is restricted by a 20 percent cap. QNB’s unexpected acquisitions could disrupt the plans of South Africa’s Nedbank, which has had a strategic partnership with Ecobank since 2008 and has options this year to convert debt of $285m and buy equity also capped at 20 per cent. Read the rest of this entry »

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IMF Mission Starts Discussions with Ghanaian Authorities on Possible Program

Posted by Business in Ghana on September 18, 2014

Press Release No. 14/424

September 16, 2014

At the request of the Ghanaian authorities, a team from the International Monetary Fund (IMF) will visit Accra on September 16–25 to conduct discussions on a possible IMF-supported program. On August 8, IMF Management received a formal request from the Ghanaian authorities to initiate discussions on an IMF-supported program. Discussions will continue during the coming weeks, including at the Annual Meetings of the World Bank and IMF in Washington DC in October.

The IMF mission, led by Mr. Joël Toujas-Bernaté, will meet with government officials, private sector, and the donor community.

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First National Obtains Universal Banking Licence

Posted by Business in Ghana on June 18, 2014

First National Savings and Loans Company Ltd has obtained a provisional licence from the Bank of Ghana (BoG) to operate as a universal bank.

To be known as First National Bank Limited under the new operational licence, the feat has largely been as a result of the fast growth the company has chalked up, with its expansive network across major capital cities, rural and urban centres around the country.

This has endeared the company to many traders, small and mediums scale enterprises.

The new license allows the company, which will soon announce its re-branded status, to deliver a vast array of financial services such as trade financing, all forms of deposit taking, foreign exchange services, issuance of cheques and settlement of cheque transactions.

The Chief Executive Officer of First National, Mr Patrick Anumel, told the Daily Graphic shortly after a press briefing in Accra last Tuesday that the bank was now in a position to help its customers better by providing them with enhanced services.

He said the focus of the bank had, however, not changed as it was still aimed at serving the ordinary Ghanaian, including farmers, market women, students and operators of SMEs.

Mr Anumel noted that the depreciation of the cedi and the rise in inflation rate had affected the cost of doing business in the country.

He stressed the need for the bank to improve on its services with a diversified range of services.

“If you have a diversified range of services, then it means that your source of revenue is also going to be diversified and therefore favour you,” he explained.

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Fitch Warns Ghana On New Eurobond

Posted by Business in Ghana on June 10, 2014

By Sudip Roy, FT

Fitch has warned that Ghana will find it “increasingly challenging” to sell its new Eurobond due to mounting fiscal and external vulnerabilities.

The West African nation is rumoured to have hired Barclays, Deutsche Bank and Standard Chartered for an up to US$1.5bn Eurobond, though the timing of the deal has yet to be determined.

A successful deal may ease immediate external funding pressures. But even though Ghana, as with other emerging markets, has seen its outstanding debt rally significantly over the past few weeks with its 2023 notes trading at just under 8% compared with more than 9% at the end of April, Fitch reckons the cost of any bond “would likely be high.”

The ratings agency has highlighted the country’s vulnerabilities in a new note published on Monday, especially the central bank’s role in funding Ghana’s budget deficit in the first quarter.

“Printing money to finance the deficit will aggravate already high inflation (14.7% in April 2014) and contribute to further cedi weakness,” said the note, adding the currency has fallen 21% since the start of the year. Read the rest of this entry »

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Zambia’s lesson for Ghana: call the IMF

Posted by Business in Ghana on June 10, 2014

by Javier Blas, Reuters

When Zambia last week approached the International Monetary Fund for financial help, another cash-strapped African country was surely watching: Ghana.

Lusaka and Accra face similar problems: runaway fiscal deficits – the result of electorally-driven increases in public sector salaries – and a swelling current account deficit that is pressuring the exchange rate.

The market response to Zambia’s request should convince Ghana to seek help, too.

By all accounts, the fiscal problem is more severe in Ghana than in Zambia. The ruling National Democratic Congress introduced in Ghana a new public sector salary structure in 2010. After a wave of salary hikes, the government’s wage bill now consumes roughly 70 per cent of the country’s tax revenue.

The market was expecting that Ghana would first approach the IMF. Instead, Zambia last week asked the IMF to discuss “an economic programme that could be supported by a fund arrangement.” The market reaction has been very positive, officials say.

The Zambian currency, the kwacha, has appreciated sharply against the dollar. At one point this year, it was down 27.5 per cent against the US dollar since January, making it the worst performing currency in Africa. But after rallying strongly over the last week as rumours of the IMF plan surfaced, it has cut its losses to 16 per cent. Read the rest of this entry »

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The only free cheese…

Posted by Business in Ghana on April 23, 2014

By Charles Wereko-Brobby (Dr), Chief Policy Analyst. Ghana Institute for Policy Options (GIPPO)

I got into a spot of bother recently for ‘putting the knife’ to one of our sacred cows. I put our civil society organizations (CSOs) into the same field as our politicians, opining that they only call on others to act instead of them taking charge and leading. Now I find it necessary, nay imperative, that I must return and train the full bores of my double-barreled guns onto the civil society organizations again, but without a hinge of apology this time, no matter what brouhaha ensues

Last Thursday, the Government of Ghana organised a stakeholder consultation on the Economic Partnership Agreement (EPA) with the European Union. Arrogating themselves to the role of our stakeholders, the CSOs thronged the meeting with an assortment of politicians, producers, and the Great and the Good of Ghanaian ruling classes to do what our leaders always do best, namely to shout over the rafters about what we do not want, but without offering any alternatives whatsoever.

When the assembled folks found the Head of the EU Delegation in Ghana in their midst, they turned their guns onto him and bayed “Dzulo” ( Thief) with the shrillness and excitement that normally leads to a mob lynching without guilt being established. Claude Maerten, one of the gentlest souls I have met, had to be bundled and hurried out of the meeting like a cat on a hot tin roof; by a mob led by the representatives of the CSOs. Read the rest of this entry »

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In An Unequal World, We Need Inclusive Growth

Posted by Business in Ghana on April 22, 2014

By Jim Yong Kim

For a very long time, the rich have known to some extent how the poor around the world live. What_s new in today’s world is that the best-kept secret from the poor, namely, how the rich live, is now out. Through  the village television, the Internet and hand-held instruments, which a rapidly increasing number of the poor possess, life-styles of the rich and the middle class are transmitted in full color to their homes every day.

Last year, when I traveled with President Evo Morales to a Bolivian village 14,000 feet above sea level, villagers snapped pictures on their smart phones of our arrival. In Uttar Pradesh, the state in India with the highest number of poor people, I found Indians watching Korean soap operas on their smart phones.

We live in an unequal world. But while the rich world may be blind to the suffering of the poor, the poor throughout the world are very much aware of how the rich live. And they have shown they are willing to take action.

Inequalities hurt everyone. Women_s low economic participation creates income losses of 27 percent in the Middle East and North Africa. Inclusive growth, in contrast, builds a stronger, more robust social contract between people and their government _ and builds stronger economies. If we raised women’s employment to the levels of men, for instance, average income would rise by 19 percent in South Asia and 14 percent in Latin America. Read the rest of this entry »

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Decade after debt relief, Africa’s rush to borrow stirs concern

Posted by Business in Ghana on March 22, 2014

BY TOSIN SULAIMAN, JOHANNESBURG

(Reuters) – Nearly a decade after Nelson Mandela and anti-poverty activists Bono and Bob Geldof persuaded the rich world to forgive Africa’s crushing debts, many countries’ debt levels are creeping up again, which could undermine the region’s growth boom.  As African states line up to join the growing club of dollar bond issuers, economists and analysts warn of a slide back into indebtedness that could undo recent economic gains and create a “Eurobond curse” to match the distorting “resource curse”.  “Eurobonds have become like stock exchanges, private jets and presidential palaces.  Every African leader wants to have one,” said one investor, asking not to be named.

In 2007, Ghana became the first African beneficiary of debt relief to tap international capital markets, issuing a $750 million 10-year Eurobond.  Since then, previously debt-burdened countries, such as Senegal, Nigeria, Zambia and Rwanda, have also put their names on the list of bond issuers.  Governments seeking to replace declining foreign aid and pay for infrastructure are also taking concessional funds from multilateral institutions, more expensive commercial bank loans and bilateral financing from lenders like China and Brazil. Read the rest of this entry »

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World Bank support for development of Public Private Partnerships (PPP) in Ghana

Posted by Business in Ghana on November 17, 2013

The Ghana IDA Public Private Partnership (PPP) Project for $30 million became effective in December 2012. The World Bank_s counterpart for this project is the Public Investment Division within the Ministry of Finance and Economic Planning (MoFEP). The project comprises of three components: Component One: Institutional, Fiduciary, Legislative, and Financing Capacity Building – focuses on developing in-house capacity within the Government of Ghana to identify, assess, develop, implement and manage PPP transactions. Furthermore, the component provides Legislative, Regulatory, Policy and Guidelines Development Technical Assistance; provides resources for the development of a Framework for Managing PPP Fiscal Commitments; and finally, supports a framework for a Long Term Financing for Infrastructure. Component Two: PPP Pipeline Preparation and Transaction AdvisorySupport _ focuses on supporting the Government of Ghana to develop a commercially viable PPP pipeline of competitively-bid PPP projects to financial close. Component Three: Project Management and Monitoring &Evaluation _ focuses on financing specialized consultant services to assist MoFEP in project implementation. Read the rest of this entry »

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