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Economic importance of Bonus Malus System with high bonus hunger effect: The Insurer and the Insured Perspective

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By Jacob AZAARE (PhD)

An experienced based ratemaking in auto insurance, Bonus Malus System (BMS), was introduced as an alternative to individual credibility model developed by Bühlmann in 1967. It was popularized by Lemaire as the best alternative for individual credibility models since they were not easy to use in practice (2).

BMS also known as penalty-reward system (3), is basically employed in the insurance industry to improve fairness by charging each individual insured/policyholder a premium proportional to his or her representative risk (4, 5).

This system of insurance pricing is used to penalize policyholders by either charging higher or reduced insurance premium based on their post data (6). Furthermore, insurers adapt BMS to signal policyholders to be careful on the road and also, ensures that policyholders who are cautious are compensated with rewards and those who are reckless are penalized.

Thus, Bonus are given to cautious drivers and Malus are issued out to policyholders who are reckless on the road (4, 7). Moreover BMS seeks to improve safety and fairness between the insurer and the insured based on claims history (6, 8).

In developed countries, BMS encourages safety on the road for policyholders as they get to understand that their future premiums depend on the number of claims they report. Further, it enhances customer retention in the various insurance policies as policyholders see it as fair and transparent (8).

In developing countries like Ghana, BMS could potentially be an effective pricing strategy, as it incentivizes customer enrollment by making premiums directly dependent on the frequency and severity of their claims (9).

Strategically, BMS reduces the reporting of false and minor claims (10), because the insured understands that frequent minor accidents lead to a proportional increase in their premium. Thus, BMS ensures a seamless transition of policyholders from one premium level to another based on the number of reported claims (7, 12).

Generally, BMS seeks to reward bonus to policyholders who are cautious by reducing their premiums while penalizing those who are reckless with malus by increasing their premiums (4). This consequently leads to the High Bonus Hunger Effect (HBHE), where policyholders tend not to report minor claims to minimize cost. Thus, policyholders decide not to report minor claims and self-insure claims to enjoy lesser premium cost (bonus) (11).

As (13) posits, Bonus Hunger Effect also known as “Thirst for Bonus”, is about linking the cost of pending claims to the cost of future premium. Implying that, policyholders in effect, bear the cost of minor claims to avoid higher premiums and so will not report claims if the amount is less than the future premium 14).

Economically, BMS has a significant influence on the finances of insurers, insureds and the economy at large.

The BMS With higher Hunger Effect is a determinant of the volume of financial flows between the insured and the insurer, as it directly influences how much premium to be paid and how much claims to be paid.

To insurers, HBHE reduces the administrative cost in processing and paying minor claims and increases short-term profits because there are no or few claims to pay (12, 16). Contrary, HBHE saves policyholders from paying higher premium and sends signal of caution to improve safety on the roads in order to maintain their bonuses on premium charges (11).

Also, it makes insurers more financially solvent; however, it might be quite challenging to determine the exact risk level of policyholders, which is likely to result in an underestimation of premium. The effect of this phenomenon is on both the insurers and the insureds, as they have an interdependent relationship; that is, the outcome from either directly influences the other (7, 12, 13).

When minor claims are not reported, an insurer’s short-term profit increases, while the insured’s trade-off is a lower premium or bonuses. However, insurers might adjust future premiums which could lead to inappropriate pricing (16). Moreover, changes in the driving behaviors of the insured influences how insurance is priced and the profits insurers make (8).

In Ghana, like in most developing countries, the auto insurance pricing system relies solely on risk factors, which have little or no direct effect on cautioning policyholders to drive more safely (18). The insurance premiums are determined by classical factors such as the vehicle’s age, cubic capacity, nature/type, and usage, along with the driver’s age, gender etc., (16, 17). These parameters used in determining premium do not give any inference as to how careful policyholders are on the road.

Moreover, these traditional risk factors do not take into consideration the claims history of individual policyholders and thus, they are neither rewarded for being cautious nor punished for being reckless in traffic (17).

As postulated by (3,12), BMS reduces the financial burden on insurers by lowering the cost of claims processing, as fewer claims are reported when BMS particularly the one with higher hunger effect is employed. Additionally, insurers retain funds that should be used for claims payment and use them for other investment activities and transactions, increasing their financial stability (15).

In summary, with innovation and more equitable methods, the dynamics of auto insurance ratemaking are constantly evolving and hence, Ghana like other developing countries needs to embrace BMS in order to fully maximize its ability of making insurance policies optimal, increase transparency, reducing false and fake claims and the possibilities of encouraging safe driving (1, 12).

More also, when insureds are being cautious, the administrative costs for insurers are reduced, which also helps reduce the number of traffic accidents (11, 16, 17). Consequently, this increases the workforce as insurers’ capacity to expand operations is enhanced due to their enhanced financial solvency, resulting from reduced administrative costs and claims payments, thereby significantly contributing to the growth of the economy.

References:

  1. Virri, M. (2021). Elasticity as a Means of Evaluating Bonus-Malus Systems in Automobile Insurance.
  2. Boucher, J. P. (2023). Bonus-malus scale models: Creating artificial past claims history. Annals of Actuarial Science, 17(1), 36-62.
  3. Henseler, M. (2024). Welfare Implications of Quality-Enhancing Bonus-Malus Systems in regulated Network Industries. Available at SSRN 4758328.
  4. Azaare, J., & Zhao, W.(2020). An alternative pricing system through Bayesian Estimates and Method of Moments in a Bonus-Malus framework for the Ghanaian Auto Insurance market. Journal of Risk and Financial Management, 13(7):143.
  5. Chalkias, K., Jarzabkowski, P., Kavas, M., & Krull, E. (2025). That’s not fair! Navigating the duality of fairness in insurance. The British Journal of Sociology.
  6. Alyafie, A., Constantinescu, C., & Yslas, J. (2025). Evaluating Transition Rules for Enhancing Fairness in Bonus–Malus Systems: An Application to the Saudi Arabian Auto Insurance Market. Risks, 13(1), 18.
  7. Baharad, R. (2025). Essays on the Economic Analysis of Liability Insurance.
  8. Alyafie, A., Constantinescu, C., & Yslas, J. (2023, May). An analysis of the current Saudi Arabian no-claim discount system and its adaptability for novice women drivers. In CAS E-Forum.
  9. Tolvanen, J. (2022). Measuring moral hazard using insurance panel data. SSRN.
  10. Lazam, N. M. (2021). Demonstrating Bonus Malus System (BMS) with Fair Deductibles Amount and Control Mechanism of Claim Amount and Frequency on Medical and Health Insurance Portfolio. Applied Mathematics and Computational Intelligence (AMCI), 10, 237-251.
  11. Molk, P. (2024). Barriers to Insurance Innovation. University of Florida Levin College of Law Research Paper Forthcoming, Yale Journal on Regulation, forthcoming.
  12. Ieosanurak, W., Khomkham, B., & Moumeesri, A. (2023). Claim modeling and insurance premium pricing under a bonus-malus system in motor insurance. International Journal of Applied Mathematics and Computer Science, 33(4).
  13. Khaliludin, N. I. A., Nor, S. R. M., & Juhan, N. (2024, January). The effect of bonus hunger on automobile insurance. In AIP Conference Proceedings (Vol. 3016, No. 1, p. 070008). AIP Publishing LLC
  14. Shouri, S., De la Sen, M., & Gordji, M. E. (2025). Designing a Smart Health Insurance Pricing System: Integrating XGBoost and Repeated Nash Equilibrium in a Sustainable, Data-Driven Framework. Information, 16(9), 733.
  15. Avraham, R., & Porat, A. (2023). The dark side of insurance. Review of Law & Economics, 19(1), 13-45.
  16. Medders, L. A., Parson, J. A., & Thomas-Reid, M. (2021). Gender X and Auto Insurance: Is Gender Rating Unfairly Discriminatory?. Journal of Insurance Regulation, 40(7).
  17. Krippner, G. R., & Hirschman, D. (2022). The person of the category: The pricing of risk and the politics of classification in insurance and credit. Theory and Society, 51(5), 685-727.
  18. Azaare, J., Zhao, W., and Ahia, B. N. K. (2022). Exploring the Effects of Classical Insurance Rating Variables on Premium Auto in ARDL: Is the high Policyholder’s Premium in Ghana Justified? SAGE Open, 12(4). https://doi.org/10.1177/21582440221134219.

Author:                                                   

Jacob Azaare (PhD), Management Science and Engineering,

Senior Lecturer, Department of Business Computing, School of Computing and Information Sciences, C. K. Tedam University of Technology and Applied Science, Navrongo             

-short biographical statement:

Jacob Azaare holds a PhD in Management Science and Engineering, as well as a Master’s in Management Science and Engineering, both from the University of Electronic Science and Technology of China. Jacob has a strong background in teaching and has a multidisciplinary research interests, including Financial Modelling and Insurance, Data Analytics, Financial Risk Management, Digital Marketing and E-governance.

World Teachers’ Day 2025: 15,079 teachers from 139 countries join global British Council TeachingEnglish celebration

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The British Council’s TeachingEnglish programme has marked another milestone in global teacher engagement, welcoming 15,079 English language teaching professionals from across the world to its three-day online conference, celebrating World Teachers Day 2025. The conference garnered 4,498 attendees via Zoom and was also streamed on Facebook and YouTube, garnering 10,581 attendees.

Held from 9–11 October, this year’s event — themed “Global Voices, Future Focus” — brought together teachers, trainers, and teacher educators from 139 countries to share practical insights, innovative classroom approaches, and new perspectives on the future of English language teaching.

Record-breaking participation

Across the three days, live sessions attracted teachers seeking to enhance their professional practice:

“We are thrilled by the enthusiasm and commitment of English teachers from around the world,” said Michael Connolly, Director English and School Education, British Council.

“This year’s event demonstrates the global appetite for accessible, high-quality professional development, and the power of teachers learning from teachers.”

Led by teachers, for teachers

All sessions were led by experienced English language teachers and teacher educators, ensuring the content was relevant, practical, and grounded in classroom reality. Over three days, participants explored key themes including:

  • Professional growth in the digital age – reflection, AI, and storytelling in the classroom.
  • Multilingualism and 21st-century skills – inclusive practices and design thinking.
  • Sustainability and global citizenship – integrating climate action and problem-solving into English teaching.

Through plenaries, panels, and interactive workshops, teachers exchanged experiences, built professional networks, and discovered innovative strategies to bring back to their learners.

Empowering ‘Continuing Professional Development (CPD)’

The conference reinforced the British Council’s commitment to supporting teachers’ CPD — equipping them with the knowledge, confidence, and community connections needed to thrive in rapidly evolving educational contexts.

“TeachingEnglish continues to be a vital platform for teacher collaboration and lifelong learning,” added Alison Devine, Head of TeachingEnglish, British Council. “This success shows that when teachers connect globally, everyone benefits — especially learners.”

About TeachingEnglish

The British Council’s TeachingEnglish programme provides free resources, training, and professional development opportunities for English language teachers worldwide. Through events like World Teachers’ Day, it celebrates the creativity, resilience, and global impact of educators who shape the next generation of learners.

Emotional connections: Series: Marketing Ghana’s One Square Mile project through culture and global icons

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By Sammy CRABBE

In the first two articles of this series, we examined how the One Square Mile Project can be marketed through cultural ambassadors – beginning with Ghana’s diaspora stars who embody both heritage and global influence.

Yet cultural marketing does not stop with ancestry. Equally powerful are the stories of global icons who have voluntarily embraced Ghana, choosing the country as a home, a source of inspiration, or a place of belonging.

These figures – Stevie Wonder, Rita Marley, and even Ed Sheeran – represent what marketers call emotional adopters. They may not share Ghanaian bloodlines, but they share Ghana’s heartbeat. Their presence and advocacy tap into principles of consumer behaviour, emotional branding, and customer advocacy, offering another layer of credibility to the One Square Mile campaign.

Consumer behaviour and the power of identification

In marketing, consumer behaviour is shaped not just by rational calculations but by social identification – the tendency of people to model their choices on figures they admire. When icons voluntarily align themselves with a brand or place, audiences perceive that choice as authentic and aspirational.

Take Stevie Wonder, who recently became a Ghanaian citizen. His decision reflects not a business deal but a heartfelt alignment with Ghana’s values of freedom, creativity, and cultural richness. For global audiences, this signals that Ghana is not just a country to visit but a community to join. That subtle shift – from product to community – is at the heart of consumer behaviour and brand adoption.

Rita Marley, who has lived in Ghana for decades, provides a similar example. Her long-term residency and advocacy for Ghana as a cultural haven validate the nation’s appeal as a place where global icons can build meaningful lives. For audiences, this turns Ghana into more than an economic destination; it becomes an aspirational lifestyle brand.

Emotional branding – Selling the feeling, not the facts

Traditional place marketing often emphasizes rational appeals – tax incentives, infrastructure, and trade agreements. But emotional branding recognizes that decisions are driven as much by feelings as by facts. Ghana’s advantage lies in the emotional narratives these adopters create.

Ed Sheeran offers a unique case. While he has no Ghanaian ancestry, his collaborations with Fuse ODG and his time spent recording in Ghana demonstrate an emotional connection that millions of fans can relate to. For a young audience in Europe or North America, if Ed Sheeran feels at home in Ghana, then Ghana becomes not just a distant place on the map but a place that feels accessible and welcoming.

Emotional branding works because it shifts the message from “Here is what Ghana offers” to “Here is how Ghana makes you feel.” By showcasing the emotional adopters who have chosen Ghana, the One Square Mile campaign can sell not only a digital economy but also a sense of belonging, warmth, and creativity.

Customer advocacy – Turning icons into evangelists

In marketing, customer advocacy occurs when satisfied customers voluntarily promote a brand. Emotional adopters are, in effect, Ghana’s most influential customers. They have experienced the product – Ghana itself – and become natural advocates for its value.

Stevie Wonder can speak about Ghana as a place of personal freedom and cultural acceptance. Rita Marley can testify to its stability and spiritual depth. Ed Sheeran can tell the story of how Ghana influenced his music. These testimonials are more persuasive than government reports or investment prospectuses because they are rooted in personal experience.

By positioning these icons as advocates for the One Square Mile, Ghana transforms them into storytellers who market the project not through transactions but through authentic endorsement. Their advocacy aligns with what modern consumers seek: voices they trust over institutions they doubt.

Why this strategy over others?

One might ask: why emphasize emotional adopters when Ghana already has diaspora stars and local icons? The answer lies in diversification of appeal.

Diaspora stars primarily resonate with audiences seeking cultural reconnection. Local icons resonate strongly with domestic and African audiences. Emotional adopters, however, appeal to a universal market – those who may have no ancestral link to Ghana but who can be persuaded through shared admiration for global icons. This widens the funnel of influence, reaching demographics that might otherwise remain untouched.

In marketing terms, emotional adopters help Ghana achieve market expansion – extending the reach of the One Square Mile campaign into new geographies and psychographic segments. This layered approach ensures that the brand message does not become one-dimensional but resonates across diverse consumer bases.

Linking forward – From adopters to local anchors

So far, we have seen how diaspora stars and emotional adopters can market the One Square Mile globally. But for the project to succeed, it must also secure buy-in at home. Marketing is not just about external appeal; it must also build domestic legitimacy.

This is where Ghana’s homegrown talent – its musicians, actors, and cultural leaders – play a vital role. Figures like Sarkodie, Stonebwoy, Jackie Appiah, and John Dumelo can turn the One Square Mile into a symbol of national pride, while also extending its reach across Africa through their pan-African influence.

The next article will explore how these local icons can function as nation-builders, creating internal momentum for the One Square Mile while projecting Ghana’s creative identity across the continent.

>>>the writer is a PhD researcher specializing in blockchains and decentralized finance at the University of Bradford. He holds an MBA in International Marketing and a post-graduate certificate is research from the International University of Monaco. Sammy was the first president of the Ghana Business Outsourcing Association and developed Africa’s first data entry operation and Ghana’s first medical transcription company. He can be reached via [email protected]

Dubai pushes human-centered AI Agenda

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… as UAE aims to lead global Artificial Intelligence race by 2031

The United Arab Emirates (UAE) has unveiled an ambitious plan to attract 10,000 artificial intelligence (AI) companies within the next five years, as part of its long-term strategy to establish itself as the world’s leading hub for technology-driven innovation.

Minister of State for Artificial Intelligence, Omar Sultan Al Olama, disclosed this during a fireside chat with Yasir Khan, Editor-in-Chief of the Thomson Reuters Foundation, at the Expand North Star 2025 event in Dubai. The discussion, themed “The Next Decade of Startup Innovation: Positioning UAE as the World’s Startup Capital,” highlighted the UAE’s holistic approach to technological advancement – one that places people’s welfare, safety, and quality of life at the centre of innovation.

“The government’s goal is to attract 10,000 AI companies into the UAE over the next five years,” Mr Al Olama stated. “We already have over 1,500 pure AI companies, which is the highest in the region. But we don’t believe we’ve reached the endpoint. This is just the starting point.”

He emphasised that the UAE’s boldest policy decision was not merely adopting AI or blockchain technology, but choosing to prioritise human well-being and societal benefit as the foundation of its innovation ecosystem.

“Most people think we did something extraordinary by developing a blockchain and AI policy, but the boldest policy decision we made was to focus on what matters to people; safety and security, and ensuring an equal playground for everyone,” he said.

According to the Minister, the UAE’s AI agenda is underpinned by a long-term, people-focused vision that integrates technological development with quality-of-life improvements. Citing Dubai International Airport’s smart gate system as an example, he explained how AI is seamlessly enhancing everyday experiences.

“Anyone with UAE residency or citizenship can pass through Dubai Airport without showing a passport or interacting with a human being. You simply walk through the smart gate, look at the camera, and continue your journey,” he said. “That is a use of AI that enhances quality of life, not one that seeks attention or spectacle.”

He added that the UAE’s approach to AI is guided by the principles of safety, equality, and longevity, with strong oversight from the National Cyber Security Council to ensure AI models are safe, reliable, and responsibly deployed.

“We are focused on applications that work quietly in the background – secure, efficient, and people-centric,” Mr Al Olama noted.

The Minister also highlighted sectors where AI is already yielding tangible benefits, particularly in infrastructure, where it has helped save costs, boost efficiency, and improve safety standards. He further noted the UAE’s cautious approach to AI integration in tourism, balancing innovation with privacy and data protection.

“AI allows us to complete projects faster and more efficiently while enhancing safety,” he said. “We’re also exploring applications in tourism, though we are proceeding cautiously to avoid privacy and data misuse concerns.”

Beyond policy and deployment, attracting top global talent remains central to the UAE’s AI strategy. “To create this ecosystem, we need a flywheel effect where the best and brightest minds can come and work for the UAE,” Mr Al Olama said.

He explained that the UAE’s success as an innovation hub is built on three core principles – safety and quality of life, equality of opportunity, and a forward-looking mindset. The government, he said, invests in AI not with a short-term view but through multi-decade planning cycles.

“Abu Dhabi began investing in AI as far back as 2008, when it was still an emerging idea,” he noted. “We invested in chip companies and AI ventures because we think in terms of the next 10, 50, and even 100 years.”

Reflecting on the nation’s AI ambitions, Mr Al Olama said true success will be defined not by flashy technological displays but by meaningful improvements in people’s lives.

“Success to me, in terms of the pursuit of AI ambitions by the UAE government, is where AI leads to improving the quality of life for people by an order of magnitude,” he said. “On the other hand, failure would be deploying robot dogs and gimmicks that don’t actually make people’s lives better.”

He further asserted that the UAE aims to demonstrate how even small nations can lead global technological transformation through consistency, openness, and collaboration.

“We are proving the impossible. It’s not just about the UAE succeeding but also about showing that anyone, anywhere, can achieve the same. We don’t claim to be the best, but we claim to be the best students and the best listeners,” he averred.

The UAE, which became the first country in the world to appoint a Minister of Artificial Intelligence in 2017, continues to strengthen its global leadership in responsible AI development. It launched the world’s first dedicated AI research university in 2020 and introduced Falcon, a top-rated open-source large language model, in 2023.

Under its National AI Strategy, the UAE aims to become a global centre for AI development and deployment by 2031, using technology not as an end in itself, but as a tool to enhance human life and drive sustainable progress.

About Expand North Star 

Expand North Star, the world’s largest startup and investor connector event, is an annual technology startup event organised by the Dubai World Trade Centre and hosted by the Dubai Chamber of Digital Economy.

Expand North Star showcases startups in front of tech industry professionals from more than 100 countries worldwide.

This year’s event marks the tenth anniversary of the Expand North Star having started since 2016.

The event has enabled thousands of digital startups to secure multi-million-dollar investment deals and forge strategic partnerships to accelerate their global growth.

The event has become a vital launchpad for startups, connecting innovators with capital and markets, and reinforcing Dubai’s position as a capital of the digital economy.

Over 2,000 international startups, 1,000 investors, 70,000 attendees and 350 distinguished speakers participated in this year’s event.

As a flagship initiative of the Dubai Chamber of Digital Economy, Expand North Star supports Dubai’s ambition to become a global hub for innovation and technology.

AI, digital trade, and the future of U.S.–Ghana Business

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 AmCham Business Bridge

By Doris Kafui AFANYEDEY

The commercial relationship between the United States and Ghana has long been rooted in traditional sectors: Energy, Mining, and Trade. However, as Ghana seeks to solidify its position as a digital leader in West Africa, the next chapter of our partnership would have to be written in code, driven by Artificial Intelligence (AI) and Digital Trade.

For the American Chamber of Commerce (AmCham) Ghana, the future lies in leveraging this digital transition to accelerate growth and prosperity in both nations.

Ghana’s Digital Readiness and US Investment

Ghana presents a fertile ground for AI-driven investment. The country boasts one of Africa’s most active digital economies, supported by soaring mobile money transactions and a robust fintech sector. This digital foundation is why major American tech giants, like Google, have established AI research centres in Accra, signalling a strong confidence in Ghana’s technical capacity. Others like Microsoft are supporting cloud adoption and cybersecurity readiness, and Oracle and IBM are enabling companies to scale operations through powerful digital infrastructure.

AI’s potential here can be transformative. U.S. technology solutions can enhance productivity across Ghana’s critical sectors:

  • Agriculture: AI-driven diagnostics for pest and disease identification, improving crop yields and food security to support the Feed Ghana program.
  • Fintech & Financial Inclusion: Deploying machine learning for fraud detection, secure analytics, and expanding services to the unbanked, complementing Ghana’s high mobile money adoption rate.
  • Healthcare: AI-powered diagnostics and drone delivery systems, pioneered with US firms can optimize the supply chain for essential medical supplies as by Zipline Ghana
  • Environmental Governance: AI-powered satellite imagery analysis could offer innovative ways to track illegal mining activities (galamsey) in real-time, helping the government protect vital water bodies and forest reserves.

The Chamber consistently works to bridge local expertise with U.S. technology providers through forums and events, promoting the adoption of AI solutions across various industries.

Two of these events have been held in the past month, the first in collaboration with Google Ghana at their new AI Community Centre on the history and overview of AI and the risks and opportunities of AI in the Business environment.

The second, an AmCham hosted breakfast meeting with the University of Buffalo School of Management on the transformative potential of Artificial Intelligence (AI) in driving innovation, operational efficiency, and policy advancement.

The Critical Role of Regulatory Predictability

To translate this technical capacity into substantial commercial investment, regulatory certainty is non-negotiable. American companies require assurance regarding how their data and intellectual property (IP) will be governed, particularly as AI models rely heavily on large datasets.

The ongoing work by the government on an Emerging Technologies Bill is critical. By creating a clear, balanced regulatory framework for AI, Ghana can position itself as a safe and predictable hub for AI development.

AmCham is committed to advocating for an environment where this regulation balances innovation with security. Clarity around compliance, IP rights, and data governance is the bedrock upon which significant US investment can be built.

Gateway to Continental Digital Trade (AfCFTA)

Ghana’s status as the host of the African Continental Free Trade Area (AfCFTA) Secretariat places it at the centre of Africa’s digital commerce ambition. The recently adopted AfCFTA Digital Trade Protocol seeks to harmonize digital rules across the continent. U.S. firms operating in Accra are strategically positioned to leverage AI and digital services to access this massive $3.4 trillion market of 1.3 billion people.

By investing in Ghana’s digital infrastructure and talent now, U.S. companies are not just investing in a single country; they are investing in the digital backbone of the world’s largest free trade area.

When all stakeholders: government, industry, and academia collaborate on developing the necessary skills and infrastructure, we could solidify Ghana’s competitive advantage. Through smart policy and partnership, we can ensure that AI and Digital Trade become the most dynamic engine for U.S.–Ghana prosperity in the decade ahead.

The American Chamber of Commerce (AmCham) Ghana is the leading representative of U.S. business in Ghana.

Gov’t enforces single biometric platform

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  • to cut cost and boost data integrity
  • all state agencies directed to merge with NIA database

The government has imposed an immediate moratorium on the procurement and use of independent biometric Automated Fingerprint Identification Systems (AFIS) by Ministries, Departments and Agencies (MDAs), as well as Metropolitan, Municipal and District Assemblies (MMDAs).

This forms part of a renewed effort to streamline identity management, eliminate duplication, and enhance data security across the public sector.

The directive, issued from the Office of the President at Jubilee House and signed by the Secretary to the President, Dr. Callistus Mahama, is part of the government’s commitment to ensuring efficient resource utilisation and standardisation of biometric identification systems nationwide.

The moratorium takes effect immediately and prohibits any MDA or MMDA from procuring, developing, or operating independent biometric systems outside the framework managed by the National Identification Authority (NIA).

The directive also bans new biometric-related contracts without express presidential authorisation and requires agencies currently operating such systems to integrate with the NIA’s National Identification System within six months.

The decision, the government said, is intended to ensure the exclusive use of the NIA’s biometric infrastructure, which serves as the backbone of the National Identification System and the Ghana Card scheme.

The NIA, established by the National Identification Authority Act, 2006 (Act 707) and the National Identity Register Act, 2008 (Act 750), is mandated to register Ghanaians and legally resident foreign nationals, maintain the National Identity Register, and issue national identity cards.

According to the directive, the proliferation of biometric systems across government institutions has led to inefficiencies, security vulnerabilities, and unnecessary costs associated with maintaining parallel databases.

The Presidency stated that the establishment of a unified national biometric system will eliminate duplication, improve interoperability, and strengthen national verification mechanisms.

The moratorium also references the Data Protection Act, 2012 (Act 843), which requires that all personal and biometric data collected by public institutions be secured and processed lawfully.

By centralising identity data under the NIA, the government seeks to safeguard the confidentiality, integrity, and security of citizens’ biometric information.

“All MDAs are prohibited from operating parallel biometric databases to the NIA and from verifying the identities of persons using only visual inspection of the Ghana Card without biometric authentication,” the directive stated.

It further warned that any procurement in violation of the moratorium would be deemed illegal and a direct disregard of presidential authority.

Institutions that require specialised biometric systems due to operational needs must now submit formal justification to the Office of the President for written approval.

The NIA has been tasked to provide technical support to MDAs to facilitate data harmonisation and integration into the National Identity Register and the Identity Verification System platform.

The Minister for the Interior, Muntaka Mohammed-Mubarak has been designated to oversee implementation of the directive and to take enforcement action where necessary.

The new measure reaffirms an earlier presidential moratorium issued in June 2014 on similar grounds, which sought to prevent fragmentation in biometric data management.

When good policy meets practical complexity: The case of USD mortgage repayments under the FX regime

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By Carla OLYMPIO

“It’s one of the things I would want to be remembered for, that I came, I solved that problem, I made the local currency the currency of choice.” Dr Johnson Asiama, Governor of the Bank of Ghana (BoG) reportedly said recently.

This sentiment, and the Bank of Ghana’s current efforts to reverse the ‘dollarisation’ of our economy, are both lawful and laudable. Under the Foreign Exchange Act, 2006 (Act 723), the Ghana Cedi is declared the sole legal tender for transactions within Ghana.

The Bank’s recent  notices reflect this: for example, Notice No. BG/GOV/SEC/2022/04 (5 April 2022) reminded companies and individuals not to price, advertise, receive or make payments for goods and services in foreign currency without authorisation.

There is no doubt that reducing the tendency to price local goods and services in dollars, from our ports to car rentals, will help to ease pressure on the local currency and thus on ordinary citizens.

Nevertheless, a troubling inconsistency has emerged in the treatment of USD-denominated mortgages and loans. Over the years a number of banks – with the BoG’s approval – have issued USD-denominated mortgages and maintain approved foreign-currency (USD) accounts for customers.

The issue arises when a customer with a duly authorised USD-account (and a USD-denominated mortgage) is prevented from paying that mortgage via a USD cheque drawn on their account.

The customer is instead compelled to withdraw the USD  in cedis at a relatively unfavourable rate, pay in cedis, and have the loaning bank reconvert to USD in order to credit the USD mortgage. The practical effect is a double loss: conversion out of USD, then reconversion back into USD.

This approach surely contradicts the logic of the BoG’s own exemptions permitting USD loans and accounts in the first place, and risks alienating borrowers who are caught in this regulatory quagmire.

The BoG has affirmed that cheques may continue to be issued on Foreign Exchange Accounts (FEAs) and Foreign Currency Accounts (FCAs) (Notice BG/GOV/SEC/2025/14), yet banks are insisting on additional exemption authorization for payments servicing approved USD loans.

This cannot reasonably have been the policy intention. It undermines fairness, creates needless hardship and introduces legal and commercial uncertainty for both borrowers and institutions.  To refuse to honour BoG authorised USD cheques from BoG approved USD accounts to service BoG approved USD mortgages seems both counter-intuitive, and somewhat punitive.

A pragmatic way forward that preserves the Bank’s stabilisation agenda while protecting commercial and contractual fairness could be to issue a clarifying directive. Where a USD-denominated loan has been approved under the authorised framework, repayments may be made directly in USD from the approved account (via cheque or transfer) without requiring a separate transaction-specific exemption. This restores coherence to policy enforcement, and protects borrowers who have operated within the rules.

In short: monetary discipline is necessary – but it must be consistent, fair and practically workable. Ghana’s monetary-stabilisation agenda is better served when the policy is internally coherent, legally sound and sensitive to the commercial realities of authorised USD-facilities. Such regulatory certainty shores up consumer confidence, resulting in a reduced need for commercial actors to rely on “safe haven” dollar balances in the first place.

Reversing dollarisation remains a legitimate aim, and one broadly supported by the Ghanaian public, but a regulatory framework that is consistent and predictable as well as empathetic can only enhance the central bank’s stabilisation agenda – not detract from it.

>>>the writer is Managing Partner of Agency Seven Seven, a Ghanaian lawyer advising corporate, technology, and creative sector clients on regulation, workplace rights, and cross-border transactions. She writes about the intersection of law, business, and social impact in Ghana. She can be reached via [email protected]

The malnutrition of modern minds

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“Seeing rain clouds in the sky is not the same as getting wet.” – Kenyan proverb

 We live in a time of unprecedented abundance of credentialed professionals. Across every conceivable field of expertise, we witness a proliferation of degrees, certifications, and specialized qualifications. This expansion reflects humanity’s deepest aspiration: the pursuit of knowledge and intellectual development.

Education represents our collective belief that through structured learning, we can achieve comprehensive personal growth and unlock our capacity to appreciate the world’s inherent beauty and complexity. All things being equal, education serves a purpose beyond our individual enrichment. It functions as the cornerstone of human advancement. The rigorous processes intellectualism demand allows us to refine our minds and character and afford us the capacity to engage meaningfully with complex ideas and nuanced understanding.

This is a phenomenon that should, by all accounts, benefit our collective progress. However, a troubling reality emerges upon closer examination. Despite the credentials of the majority of our educated professionals, many of us possess remarkably limited knowledge beyond our narrow specialisations.

What is more concerning still, is our apparent lack of curiosity about subjects that fall outside our immediate professional interests. This intellectual myopia poses significant risks to both individual development and societal progress. When education becomes merely a pathway to economic gain rather than genuine enlightenment, we witness the construction of intellectual cages rather than the liberation of human potential.

Contemporary educational institutions are increasingly aligning themselves with corporate interests, and designing programs that serve market demands while neglecting broader intellectual development. This trend is moulding what amounts to an intellectually malnourished population.

We are becoming a bunch of individuals fed a restricted diet of specialized knowledge while starving for comprehensive understanding. The modification of education into a business enterprise controlled by special interests represents a fundamental shift from emancipation to indoctrination. Rather than fostering critical thinking and independent inquiry, modern educational systems are increasingly prioritizing conformity to established power structures.

This evolving trend deserves some serious contemplation, yet many of us remain largely indifferent. We express concern about illiteracy rates while ignoring the systematic narrowing of educational scope that perpetuates existing hierarchies.

As the ‘Black Eyed Peas’ observed: “What’s wrong with the world, mama? People livin’ like they ain’t got no mamas… Only attracted to things that’ll bring you trauma.” We know the current intellectual trends are revealing a disturbing selfishness that demands urgent attention.

It is helping us to nurture a cynical society consumed by self-interest, and we are abandoning our foundational ideals of dignifying everyone. Interestingly, rather than questioning the objectives presented to us, we have passively accepted education as a means to wealth and status.

The traditional pursuit of knowledge for its own sake, which was a hallmark of our fathers and forefathers, has been replaced by instrumental learning designed to legitimize dominance and serve narrow self-interest. This short-term thinking has transformed education from a tool of enlightenment into a weapon of social stratification.

It has not just made us obsessed with immediate benefits, but it has systematically undermined the spirit of inquiry and critical analysis within us. We have become repositories of information rather than generators of insight, conformists rather than innovators. This shift toward intellectual conformity has generated many short-term profits, but it is gradually extinguishing our creative and independent thought.

We have become fixated on reputation over character, connections over competence, and it has pushed us to create a culture that prioritizes political correctness over truth. We have lost the essential distinction between individual development and social responsibility, and this is slowly contributing to the degradation of our collective intellect.

In medical terms, we are suffering from intellectual kwashiorkor. This is a form of malnutrition caused not by lack of access to knowledge, but by consuming an inadequately diverse intellectual diet. It is time to question why we are closing ourselves to the vast spectrum of available knowledge? Why are we limiting our learning to subjects that serve our employers rather than expanding our minds and enriching our characters?

Instead of cultivating broad intellectual foundations that would enable us to synthesize insights across disciplines, many of us are pursuing hyper-specialization designed to earn applause at professional gatherings. This approach makes us intellectually sicker, trapping us in an increasingly narrow lane of educational indoctrination.

The world has grown weary of intelligent individuals who merely echo conventional wisdom. We need intellectuals who can cure themselves of this malnutrition and engage in genuine intellectual discourse rather than providing reflexive approval of corporate mandates.

Our nation craves intellectual leaders who can bring elegance to our rough edges, meaning to our confusion, and clarity to our chaos. We seek individuals with the conviction to step forward and articulate the difficult truths of our time.

Men and women with the courage to nourish our minds with the full banquet of human knowledge rather than subsisting on the thin gruel of specialized training. Let us understand that the cure for our malnourished intellectualism begins with recognising our condition and choosing to feast on the rich diversity of human understanding available to us all…

Editorial: Increased smuggling undermining revenue generation

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A drop in container traffic through the country’s ports has again raised concern over an increasing trend of smuggling across borders.

The Food and Beverages Association of Ghana (FABAG) is disturbed that this trend is losing the nation billions of cedis each month to illicit trade.

According to Executive Chairman-FABAG Mr. John Awuni, recent data show that containers arriving through Port Tema  have dropped from an average 2,000 containers per month to about 1,000 in recent times – indicating a 50 percent reduction.

Conversely, volumes of container at Togo’s ports have increased – indicating that importers are re-routing goods through neighbouring countries and smuggling them into Ghana to avoid duties and taxes.

“Different kinds of goods are being smuggled through the Ivorian and Togo borders into the country,”  Awuni notes.

For instance, Managing Director-Coca-Cola Mr. Felix Gomis drew the attention of Ghana Revenue Authority in Aprli to overUS$700,000 – which is about 150,000 crates of Coca-Cola – being smuggled from Nigeria into Ghana per month.

Acting Commissioner-General Ghana Revenue Authority, Anthony Sarpong, has indicated that the Authority is putting in place measures to clamp down on smuggling of products from neighbouring ECOWAS countries.

The ramifications of smuggling not only disrupt the economy but also contributes to fluctuating prices, undermines local businesses and erodes public trust in regulatory systems.

Although Ghana’s Port Tema  processed about 1.67 million containers in 2024, generating an estimated US$10billion in potential Customs revenue, FABAG maintains that the country is losing “hundreds of millions of cedis every week” to smuggling.

The association revealed that intelligence from their partners in border communities and industry stakeholders have identified essential commodities such as rice, cooking oil, sugar, alcoholic beverages and textiles as being extensively smuggled into the country.

Ministry of Finance data in July 2025 corroborate this concern. It disclosed that Ghana recorded a Customs revenue deficit of GH¢1.6billion in first-half of the year.

This shortfall was attributed to under-declaration, misclassification of imports and smuggling, while a task force also revealed that the loss of goods routed through neighbouring ports is contributing to the current growing fiscal gap.

Editorial: GEF discusses currency volatility

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Vice President Professor Jane Naana Opoku-Agyemang graced the 14th Ghana Economic Forum (GEF) organised by Business and Financial Time in Accra yesterday – stating that the country’s recent economic recovery will not be sustained unless Ghanaians resist short-term fixes and instead consolidate recent gains through discipline, productivity and long-term value creation.

Economic stability is not accidental and cannot be treated as a momentary relief, but must be intentionally built through strong institutions, consistent policy choices and local value addition, she added.

For decades, Ghana’s overdependence on raw commodity exports and excessive import reliance had weakened the cedi’s fundamentals and exposed the economy to shocks, the Vice President said.

Prof. Opoku-Agyemang further said ongoing fiscal consolidation and financial sector reforms are gradually restoring confidence in the economy, noting that macroeconomic indicators are improving.

“These are not miracles, they are the outcomes of deliberate, disciplined choices,” she added.

For his part, Chair of the Ghana Economic Forum (GEF) Edward Annan noted that sustainable growth cannot be achieved through rhetoric or policy intention alone, but needs practical measures that channel capital, innovation and productivity into homegrown enterprises that create jobs and retain value locally.

“Ghana stands at a crucial turning point where global economic pressures, supply chain disruptions and currency volatility continue to expose the vulnerabilities of import dependence.”

According to him, the conversations around currency stability must go hand in hand with strategic reforms that boost productivity, improve competitiveness and support local manufacturing.

Organised by B&FT, the Forum was held with the theme ‘Currency stability: A reset for sustainable economic growth’ to bring fresh impetus in the country’s ongoing economic recovery efforts.

Mr. Annan used the platform to call on policymakers and the business community to ensure that commitments made at the Forum translate into real economic transformation, since it remains a marketplace of ideas which should move beyond discussion to measurable outcomes.

He urged government, the private sector, academia and civil society to deepen collaboration and align efforts toward actionable reforms that translate into job creation and export expansion.

The GEF Chair reminded participants that economic resilience is not built overnight, but through consistent implementation of evidence-based policies and a disciplined reform agenda.

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