Random thoughts of a rural farmer: Glimpses of pride in being a Ghanaian (Part: 8)

Business continuity: a case for integrated risk management
Photo: Francis Owusu-Achampong,

Ghana has clinched the headquarters of AfCFTA. Laudable as the initiative is, without exploiting the potentials inherent in physically housing the secretariat, we may find ourselves becoming mere spectators as other countries strategize to extract the benefits inherent in this continental partnership with a market potential involving an estimated 1.2 billion population.

Lofty ideas about making the country the bastion of an aviation hub with modernization of some of our key airports have hung in the air for some time. Realistically, I do not consider an airport in Cape Coast as a necessity seeing the uneconomic patronage of flights even to Takoradi. Patrons’ purchasing power and the multi-faceted fixed costs of running a domestic airline must be in strong alignment.

The Ghana Maritime University is carving a niche for itself in the sub region as far as marine engineering is concerned. Ashesi University, from its small but futuristic orientation has become a recognized and relevant global training outfit in tertiary education.

My good friend, Professor Eric Danquah is leading WACCI in making waves with his exploits in Plant Breeding research at the University of Ghana and earning Ghana remarkable international recognition.

The vice president alludes to the significant progress made in the digitization and digitalization agenda, with emphasis on most of this achievement having been undertaken by Ghanaians with potential to be replicated in other countries. Worthy examples of indigenization.

Our electoral systems, notwithstanding the few challenges mischievously exaggerated by which party moves into opposition, remains a credible institution on the continent and beyond. A BBC commentator sarcastically described the institution as conducting “boring elections” on account of the smoothness of the processes employed!

These and a few more, make me a proud Ghanaian, although there is always room for improvement. As someone said, the room for improvement is usually the biggest room in the house.

The roads and railways sector

The Accra- Kumasi road epitomizes our infrastructural deficit. Our neighbours from Cote Di Ivoire are recklessly making long stretches of bumps on the road with their usually over-loaded 26- wheeler articulated trucks. My last trip on that road was uninteresting due to the undulating nature of the road, though I usually drive like a responsible old man with a dependent family.

I wonder what has become of the axle load limit. Even the blind can see wanton breaches of regulation by the drivers of these ill-maintained vehicles in the name of regional integration. I am yet to hear of any penalties levied or prosecution made to enforce regulations in this sphere. Or, some ghost officials are busily building mansions from turning a blind eye to the wanton infractions, just like the hoax of timber inspections?

We could step up efforts to revive the railway sector in a much more significant way to alleviate the stress on our asphalted roads. This would also make them last a little longer. Like Lee Kuan Yew, my greatest wish is to see a government looking beyond its 4-8- year mandate to tackle this infrastructure deficit, even if it means engaging in Build, Operate and Transfer schemes with foreign investors.

Road users will, hopefully be very happy to pay commercial rates to save them time and money unnecessarily dissipated in incessant vehicle maintenance and the avoidance of the appalling high rate of accidents.

If only we could harness our potentials and be less partisan in our approach to real developmental efforts, we could be even more relevant in the global, if not the regional space. It is not enough to harp on past history when our counterparts have leapt into a new and better description of nationhood. (The Asian Tigers on my mind)

Some of my biggest concerns remain the disdain we attach to technical and vocational education and our sub optimal agricultural practices and output.

Positioning Ghana as Africa’s food basket

The Monday, November 8th, 2021 edition of the B & FT newspaper carried a worrying headline…. “Global cereal production poised to hit an all time high, stocks set to decline”.

Reading further, the article spoke of “The world food price barometer surged to a new peak, reaching its highest level since July 2011, the FAO has reported”. The report goes further to state that “the FAO Cereal Price Index, in October increased by 3.2 percent from the previous month, with world wheat prices rising by 5 per cent amid tightening global availabilities due to reduced harvests in major exporters including Canada, the Russian Federation and the USA.”

As a farmer and risk practitioner, my thought processes quickly moved to high gear upon reading the text of that piece. Instead of seeing gloom, my first instincts switched to a grandiose door of opportunity where wealth could be created through the looming shortages and price build up.

Ironically, I am only a small- scale farmer, eagerly waiting for the enabling environment that will attract big ticket agricultural pursuits from investors with the wherewithal. A much stronger government- led stream of interventions across sectors (strategic linkages) is my dream. The turn-around time could be short and rewarding with the right strategies in place.

I dream of Ghana positioning itself to quickly exploit its huge untapped potentials in agriculture to benefit from the impending scarcities.  Food security has become weaponized.

Some countries are now placing self- sufficiency above export consideration for foreign exchange. The scarcities arising from Covid 19 have reinforced this as a source of pride and national security.

A hungry, youthful population weighed down by scarcities and high food prices can be restive and difficult to control. An abundance of quality, low priced food will make people more receptive to new ideas and even less demonstrations and labour strikes.

The country could, at least, position itself to benefit immensely from other countries reeling against the upward trajectory of food prices and climatic change. If, for nothing at all, we could export surplus food output to our Sahelian neighbours from whom we unashamedly import common onions and tomatoes.

If these countries have been consistently supplying Ghana with vegetables, notwithstanding their relatively harsh weather conditions, then God must be angry with Ghanaians for complaining about shrinking sizes of kenkey and other staples.

Paradoxically, in the same edition of the B& FT newspaper quoted above, there was a front- page news item to the effect that “Fear grips over 2 million peasant farmers… as government hints at gradually removing fertilizer subsidy……. Subsidy already cut twice in 2021 crop season; cost of fertilizer projected to hit GHS.300.00 in open market.”

An FAO report also quoted by the Guardian newspaper of September 2021 suggests that about $540 billion is given in global subsidies to farmers every year.

The report said “repurposing subsidies to beneficial activities could be a game changer and help end poverty, eradicate hunger, improve nutrition, reduce global heating and restore nature.” It goes on to state that “good uses of public money could include supporting healthy food, such as vegetables and fruit, improving the environment and supporting farmers”.

The European Union has its Common Agricultural Policies to deal with subsidies among other strategic interventions. After Brexit, the UK has evolved its own subsidy regime containing characteristics of the EU’s CAP. The UK is said to be shifting its GBP. 3 billion- a- year subsidy scheme towards environmental goals. This includes helping farmers to cope with the increasing extreme impacts of the climatic crises. Even openly capitalist- inclined United States has not abandoned its agricultural subsidies either, in spite of global competition concerns and treasury implications.

These extracts sharply contradict what the Ghanaian government is pursuing in terms of agricultural subsidies to farmers who have been persistently and grossly disadvantaged in comparison with their European and US counterparts.

This writer finds it extremely perplexing when the government makes excuses about a stretched budget that cannot contain agricultural subsidies proportionate to our developmental needs when we all see agriculture as the catalyst for rapid growth and an income distribution leveler.

Our problem cannot be just lack of resources. It is simply the discipline to prioritize our needs, plus the ubiquitous corruption. These require resolute, visionary leadership that will give real meaning to a Ghana Beyond Aid. Year in year out, we read about the Public Accounts Committee reports being replete with wanton dissipation of huge resources that have alternative uses.

Add up the cost of just ten V8 4-wheel drive vehicles in the public space, and you will get over one million dollars. Forget about ministries and agencies that could be merged for efficiency and the sheer costs of cutting sods and commissioning projects, some of which have little relevance and still quoted at inflated values!

Dedicated financial institutions for specific needs?

I doff my hat to the managers of the Teachers Fund for their impressive management of the Fund so far. The unique characteristic of this outfit is pivoted on a sustainable stream of inflows from contributors. This permits managers of the fund the liberty to engage in seamless investments in specific projects to generate profits which are then reinvested.

Quite admirably, splinter groups from GNAT have not succeeded in shaking the foundations of the scheme. It is possible for contributors to the scheme to avail themselves of sub commercial loan interest as a result.

Their investment managers could take equity in existing banks and financial institutions on the stock exchange but stepping out on its own into mainstream banking as 100 % shareholders would rather present a different challenge altogether.

This advice comes on the heels of the difficulties faced by some financial institutions which previously operated with reasonable profits in the savings and loans sector. After obtaining   universal banking licenses, some flopped soon after. This should convince all about the peculiarities of banking business which do not permit sentimentalism or recklessness in the credit delivery chain.

This writer therefore appeals to our GUTA and GREDA friends to be more circumspect in their clamour to establish their own banks to address the perceived difficulties they face in accessing funds for their respective constituents’ operations.

Banking business everywhere reflects the strength of the economy, political, technological, legal framework and cultural practices, among others prevalent in any jurisdiction.  Just one change in the PESTEL factors could whittle down the fortunes of the sub-sectors in which GUTA and GREDA operate. The desire to operate a bank solely to meet sentimental reasons of its promoters could be anchored on straw or a sprint towards financial suicide.

Indeed, accumulating the initial capital is just the tip of the iceberg of challenges in maintaining a safe, profitable and secure bank which now reflects the “big is beautiful” philosophy in finance.

The prospects of such an institution could be hampered by the volume of regular stream of deposits in the short, medium or long-term brackets. The cyclical flow of lending must equally reflect these dynamics of cost, quantum and tenor of funds, else the financial institution could be operating on a slippery slope. The challenges of regulation in the form of capital adequacy levels, liquidity requirements and other corporate governance nuances can be overwhelming.

Managers of these proposed institutions must be keenly aware of the peculiarities of banking business, particularly the high degree of fixed costs, the skills set of the management team and staff, plus the appalling loan repayment culture that negatively impacts profitability.

The inhibitors to cash generation, even by borrowers with altruistic desire to repay such loans, and a government consistently borrowing and technically setting the pace for interest rates to crowd out the real sector from accessing cheap credit can be really daunting for new  and untested bank executives.

The writer is a Fellow of the Chartered Institute of Bankers, an adjunct Lecturer at the National Banking College, a farmer and the author of “Risk Management in Banking” textbook.

Email; [email protected]  Tel. 0244 324181


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