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Shea industry wants revamp of Presidential Special Support prog

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Shea farmers and processors in the Northern Region have called for revamping the Presidential Special Support for Shea-nut, an initiative aimed at guaranteeing export earnings from the Shea commodity.

Shea has the potential to generate more foreign exchange for the country and also provide jobs for the teeming youth, as well as women and the aged, in the three northern regions if given the needed government support, they said.

According to the National Association of Shea-nut Farmers, Processors and Buyers of Ghana, renewed interest in the sector from government will help boost output and quality of Shea products to meet growing demand, both locally and internationally, and generate revenue for the country.

“It is through the Shea-nuts that we generate our daily bread to feed our families and also invest in our businesses.

“So, if government can revamp the Presidential Special Support and complete the Aboaba Shea Market, it will be of great help to the farmers, traders and other players. It will ensure an even pricing regime for the commodity,” said Alhaji Hussein Abdul Mayasir Baba, Northern Regional Chairman of the association.

In spite of the increasing demand for Shea-butter, which can be transformed into a wide range of products – cosmetics, textiles, among others – lack of support for the domestic value chain has over the years dwindled its contribution to the national economy.

Government, in 2015, inaugurated a Shea Committee with an earmarked GH¢5million toward development of the industry, which included planting some 2 million Shea-nut trees in the Northern, Upper East and Upper West Regions.

Along with that, 12 Shea-nut processing plants were also to be constructed in the three regions, while 1,000 women were trained to form a pivot of the shea value chain.

However, recent checks by B&FT in the three regions indicate that none of these have be done, which many players say is hampering development of the sector.

The checks also revealed that the industry is confronted with numerous challenges: such as an uncontrolled pricing regime; inadequate information on the crop due to limited research; bush fires; lack of political will to support its development; and extinction due to cutting down the trees for charcoal.

National Coordinator of the Shea Nut Network Ghana, an NGO, Zakaria Iddi told B&FT that his outfit has been able to sell about 500 shea pickers mechanised rollers for collecting the Shea-nuts to farmers to help improve Shea collection.

He added that about 2,000 of the pickers have been received from Australia to support the Shea farmers improve their activities.

He, however, expressed worry over the reckless felling of the Shea trees, saying: “If the practice is not stopped it could worsen the poverty situation in the north, since Shea is the only source of income for many households”.

 Africa’s progress depends on the creative energy of its youth

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Ouided Bouchamaoui, the 2015 Nobel Peace Prize Co-Laureate, has warned that Africa’s growing youth population could be a plus for Africa or a political time-bomb. This, according to her, depends on how leaders anticipate the future.

In remarks she made at the African Development Bank’s Eminent Speaker Series seminar on Monday, January 22 in Abidjan, Côte d’Ivoire, on the theme African Cooperation: Dream or Reality?’, Bouchamaoui argued for a new vision for Africa that is hinged on modernity and progress that goes beyond economic development.

“My message is clear: let’s give priority to the youth, university cooperation, the development of initiatives, networking and institutional capacity-building,” she said, highlighting the need for African leaders to tap into the creative energy of the youth to pilot projects of the future.

Bouchamaoui said integration should include partnerships in academia, the arts, entertainment, science, technology, governance and culture.

Bouchamaoui was the first woman elected to head the Tunisian Confederation of Industry, Trade and Handicrafts (UTICA). She was head of the organisation in 2015 when the Tunisian National Dialogue Quartet – which UTICA had formed with the Tunisian General Labour Union, the Tunisian Human Rights League and the Tunisian Lawyers Association two years earlier – won the Nobel Peace Prize.

The Quartet organised negotiations between Tunisia’s political parties to ensure a successful transition following the ‘Arab Spring’ that led to the fall of President Zine Abidine Ben Ali.

In her presentation, Bouchamaoui called for greater economic cooperation among African countries and a greater focus on academic and vocational training, scientific research, technology, government and culture, which she said have remained largely untapped.

“Africa bucks current demographic trends, because 70% of its total population is composed of young people below the age of 25 years – representing a market of over one billion consumers. By 2050 this population is expected to soar to 2.5 billion inhabitants, of which half will be less than 25 years old; and by 2025 there will be 500 million more urban dwellers,” she said.

The first step, she said, is to engage in active and massive training of the youth. She also advocated the establishment of strategic partnerships among African universities as a key to strengthening intra-African bilateral and multilateral relations.

Bouchamaoui observed that leaders must invest in the acceleration of a Digital Africa to help create smart economies, smart cities, smart countries, and subsequently a smart continent.

According to the Nobel Co-Laureate, online learning remains a formidable tool for pooling energies and building bridges of innovative education to the benefit of African students. She reminded the audience that Africans in the diaspora are key to consolidating the linkages between African countries.

Africa should foster economic cooperation by developing new funding sources, growing the labour force, and training and technological innovation.

In her view, African cooperation and integration is possible.

Ouided Bouchamaoui was voted Best Business Woman of the Arab World in 2013, under the auspices of the G8 Deauville Partnerships, and awarded the Business for Peace Award in 2014.

In addition to the Nobel Prize, in January 2015, the Tunisian President, Beji Caid Essebsi, decorated Bouchamaoui with the Grand Officer of the Order of the Republic – First Class. In the same year, His Majesty, the King Carl Gustaf XVI of Sweden, decorated her with the Royal Order of the Polar Star. A month later, former French President François Hollande conferred her with France’s Legion d’honneur.

Bouchamaoui’s vision for Africa includes investing in the creative energies of Africa’s youth through skills development and dynamic partnerships between African universities – including an Erasmus programme to produce the next generation of Africa’s best brains.

The African Development Bank’s Eminent Speakers Lecture Series was launched in 2006. Its goal is to provide a platform for a robust exchange of ideas to meet the challenges of African development.

GNPC’s 2018 Work programme laid before Parliament

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The 2018 Work Programme of the Ghana National Petroleum Corporation (GNPC) is expected to be approved soon, following the laying of paper on the floor of parliament.

The First Deputy Speaker of Parliament, Joe Osei-Owusu, has subsequently referred the work programme to the Mines and Energy Committee for consideration and report.

This was made known on Tuesday in Accra, during the opening of the first meeting of the second session of the seventh Parliament, following almost a month’s break by the 275-member legislative body.

Chairman of the Mines and Energy Committee, Emmanuel Akwesi Gyamfi, is looking forward to working on the document that has been referred to his committee, and is hopeful that barring any delays they will consider it and work on the report for onward submission to the floor sooner than later.

Earlier this month, the government of Ghana and Exxonmobil of America entered into an agreement in respect of the Deepwater Cape Three Points oil block.

The agreement gives Exxonmobil exploration and production rights for the block and marks the first implementation of the mandatory 15 percent carried interest under the new petroleum law, Act 919, held by the Ghana National Petroleum Corporation – alongside royalties, taxes and other payments.

GNPC is the state agency responsible for the exploration, licencing, and distribution of petroleum-related activities in Ghana.

It is also on the verge of establishing a Centre of Excellence in Oil and Gas, to spearhead research into the sector in aid of the country’s development.

All these plans can be actualised if GNPC gets parliament’s approval to spend.

As part of its business strategy, GNPC is aiming to become a stand-alone operator by 2019 and a world-class operator by 2027.

In pursuit of this goal, the corporation adopted the ‘accelerated growth strategy’ in 2012, anchored on four key pillars.

The first is to build capacity and expand activities – investing systematically and prudently in building operating capability to manage a wider portfolio of producing assets.

Another is to replace and grow reserves – investing in high impact initiatives for the replacement and growth of reserves.

The third pillar is efficient capitalisation and optimum participation – securing capital at the lowest possible cost to maintain an optimum level of participation in petroleum operations.

The final pillar is to catalyse local content development – expediting the creation of an appropriate environment for Ghanaian participation in the upstream sector of the petroleum industry.

Civil works for disinfecting imports underway

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Officials of LCB Worldwide inspecting progress of work at the project site

Government’s plan to eliminate any hazardous or infectious diseases at the country’s ports through import decontamination is on track, Sen Korhan Muharrem, Chief Engineer at LCB Worldwide-the contracting firm to undertake the exercise, has indicated.

He said the company has started constructing scanner-like tunnels at the various gates of Tema Port, and if things go according to plan all imported consignments will be sanitised at the country’s ports before getting to the consignee or onto the Ghanaian market, effective mid-February.

Trucks carrying imported goods will drive through the tunnel and be sprayed with organic chemicals spontaneously before exiting through any of the ports’ gates.

“We have started with the civil engineering works; which includes the construction of steels as well as other electrical and mechanical works; after this, we will start erecting the gates that will be fitted with high-tech equipment to carry out the exercise,” he said.

“The eight tunnels for the Tema Port should be ready and operational by mid-February, including the test runs, although it will be done gate by gate,” Mr. Muharrem said after a visit to the project site.

The International Health Regulations recommend routine and emergency measures at designated points of entry, and these include decontamination procedures at international container terminals, ports, airports and ground crossings.

According to port authorities, the exercise will be extended to the Takoradi Port and offers gains to all stakeholders – serving as a marketing tool and strategy for importers and exporters, who can now assure clients of safe and secure handling of their goods coming into the country.

LCB Worldwide will be working in accordance with recommendations of the World Health Organisation and under direct supervision of the Ghana Health Service.

It is expected to carry out the disinfection exercise at ports and points of entry without any additional delays at the designated places.

According to Mr. Muharrem, spraying activities at the various tunnels will be fully automated to allow for free flow of import carting trucks, and to avoid blockades at the ports’ gates.

The decontamination of imports is in line with laid-down bio-security measures of the International Health Regulations (IHR), and comes at a time when the country needs to be proactive in dealing with the issue of public health.

Ghana, in 2007 – alongside other member-states of the World Health Organisation (WHO) – enforced the IHR, and in 2012 incorporated them into its national laws by virtue of the Public Sector Act (Act 851).

According to the United Nations Development Group, West Africa alone may have lost as much as 3.6 billion dollars per year between 2014 and 2017 – due to a decrease in trade, closing of borders, flight cancellations; as well as reduced foreign direct investment and tourism activity fuelled by stigma.

Mr. Muharrem expressed satisfaction at the pace of work and was optimistic that the project will be completed within schedule.

“As a company, we have a policy of engaging local expertise to undertake the project, and we have done same for this exercise. We are very happy with the workers for their output, and we believe they are up to the task,” he said.

5% local stake in ExxonMobil deal requires openness – PIAC member

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A member of the Public Interest and Accountability Committee (PIAC), Dr. Steve Manteaw, has called on government to ensure transparency in the process leading to selection of a local partner for ExxonMobil in the Deep-Water Cape Three Points (DWCTP) oil contract.

The contract, signed last week, has ExxonMobil – the lead operator – holding 80 percent interest, while the state holds 15 percent as ‘carried interest’; and a yet-to-be named local partner is supposed to hold the remaining 5 percent as required by the new Petroleum Exploration and Production law, Act 919.

 

Speaking to the B&FT on the sidelines of a workshop organised by PIAC in Koforidua over the weekend, Dr. Manteaw said the process for selecting the local partner must be made open and transparent – in a way that avoids any situation of fronting and rent-seeking.

“There is a way we can get value for money by getting the right local investor to partner the lead operator,” Dr. Manteaw said at the workshop which was organised in collaboration with the Institute of Financial and Economic Journalists (IFEJ).

With the agreement subject to ratification by parliament, the PIAC member stated that should ExxonMobil not find any suitable local partner, the remaining five percent of the interest in the oil field should be seeded to the Ghana National Petroleum Corporation (GNPC).

“If we are unable to identify that local partner, in my view, the option will be to assign that five percent to GNPC so as to increase its equity in the project – and that would also count for local content,” Dr. Manteaw added.

Local content

Speaking at last week’s signing ceremony, Chief Executive Officer of GNPC, Dr. K.K. Sarpong, stressed the need for enforcement of local content policies to afford Ghanaians opportunities in the execution of the ExxonMobil contract.

“In terms of local content policies, the laws have been strengthened and the Petroleum Commission is at the forefront of enforcing the laws; and we at GNPC have the sustainability and localisation department, which tries to make sure that we bring our partners’ attention to the mode of operation so we can take advantage to get benefits for our local people – both corporates and individuals,” he said.

Best deal so far

The Energy Minister Boakye Agyarko, speaking at the agreement’s signing, said the deal is among the best compared to other agreements signed in the past, as it is a culmination of lessons learnt in the ten years of the sector.

The minister defended government’s decision for going into direct negotiations with Exxonmobil, instead of opening the block to tender which the law gives preference to, by insisting that Exxonmobile is about the most competent in ‘ultradeep’ exploration.

In any case, government has argued, the block has been relinquished twice – by Vanco Energy and Lukoil – which has increased its risk profile.

Besides, it argues that the DWCTP is one of the ultra-deepwater blocks; and aside from Exxonmobil, not many oil companies have the technological and technical wherewithal to work that deep beneath the ocean.

Wide gap between policy and inflation rates cause of high lending rates—Economist

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An Economist at the University of Ghana, Dr. Eric Osei-Assibey, has said that low lending rates should not be expected anytime soon, as the gap between the central bank’s policy rate and inflation rates remain wide – urging the Bank of Ghana to address the challenge.

Following BoG’s decision to maintain the policy rate at 20 percent, Dr. Osei-Assibey told the B&FT that an 820-basis points gap exists between the monetary policy rate and the rate of inflation, which makes it totally impossible for lending rates to come down in the country.

“For me, although the policy rate was maintained, I think the central bank must still find a way of closing the gap between the inflation rate and monetary policy rate. The monetary policy is an indicative rate that the commercial banks use in setting their interest rates, and if the monetary policy rate remains high, there is no way lending rates will go below the monetary policy rate.

“Now, if you look at the spread between the monetary policy and inflation rate it is still very wide, and the central bank must make frantic efforts to try closing that gap; otherwise, we are not going to see average lending rates coming down,” he said

He added: “If you look at other countries, the gap between inflation and the monetary policy rate is very close; but ours is wide, so frantic efforts need to be made to close that gap. And that means we will record a very sustainable macroeconomic environment so that the monetary policy will come close to the rate of inflation consistently, and that is the only way interest rates can fall”.

The central bank cited inflationary pressures as the main reason it did not clip the policy rate further on Monday.

“While there was a trend decline in headline and core inflation throughout the year – allowing for some 550-basis points policy rate cut – the committee has observed some emerging pressures in underlying inflation in the last two months of 2017, although inflation expectations appear to be well-anchored.

“Under the circumstances, and to ensure that the inflation target horizon is maintained and the medium-term inflation target of 8±2 percent is achieved this year, the committee decided to maintain the monetary policy rate at 20 percent,” Dr. Addison said.

Inflation for December 2017 climbed to 11.8 percent, drifting further away from the end-year inflation target of 11.4 percent. Inflationary pressures were further heightened when the price of petroleum products inched up marginally.

Dr. Osei-Assibey argues that the disconnect between the policy rate and inflation rate comes as a result of weakness in market fundamentals, largely due to the inflation-targeting regime adopted by the central bank.

“The gap is very wide because of the weakness in market fundamentals. Because of the inflation-targeting regime that we have adopted and the inflationary pressures, the central bank is always afraid to reduce the monetary policy rate because it thinks that is going to be inflationary.

“If inflation is falling, then the monetary policy rate should also be seen falling so that the gap can be closed. But if inflation is falling and policy rate is not falling, then the gap will still be wide. So, the Bank of Ghana must start closing that gap if the lending rates are to come down,” he said.

UNCURABLE DISEASE: Ghana’s hierarchy of healthcare horrors

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Esther A. Armah

Health-care and our hospitals. Two issues on Ghana’s mind this week. Our Vice-President Dr. Bauwmia was flown to London to seek emergency medical treatment. That news ignited a flurry of headlines, social media engagement and a series of discussions and disturbing revelations about the state of our health systems.

There are questions, numbers, ironies and issues to this.

The numbers: news of the VP’s flight prompted Citi FM to run a series of discussions detailing incomplete hospitals, abandoned hospitals, and completed hospitals minus patients or doctors. In districts, regions and right here in Accra, the list of unused and unusable but completed and/or abandoned hospitals is long.Citi FM online reported that ‘a number of health projects undertaken by successive governments costing the taxpayer several millions of dollars, have been abandoned.

The major ones are the $217 million University of Ghana Medical Centre, the Bank of  Ghana Hospital, the solar-powered medical Centre at the Volo Digital Village in the Volta Region, as well as the GHc320,000 CHPS compound at Teshie.With the University of Ghana Medical Centre, although the first phase has been completed, there is a tussle between the University of Ghana and the Health Ministry, regarding who should manage the facility. The government claims it needs an additional $6 million to make it operational.’’

The numbers sound like the GDP of multiple African nations.

There are other numbers to think about. There is an extraordinarily high patient to doctor ratio; and yet doctors languish at home post their long education, as the Ghana Health Service fails to place them, and they refuse postings at deprived areas. At the Ghana Medical Association’s 59th annual General Conference in November 2017, the GMA president lamented the GHS failure to place doctors across the 10 regions.The Ghana Health Service struggles with consistent accusations regarding mismanagement and slowness. Such Ministries – and their Ministers and Deputies – are quick to defend themselves, play the blame game or accuse others – but ultimately they offer few concrete responses and little to no progress.

The questions: Hospitals are built. They stand. And yet they are unoccupied and unused. In each of these incidences, it would be fair to conclude that hospitals are built due to demand. Who called for the hospitals to be built? What specific need was identified to justify building it? Who sanctioned the contract? Who carried out the work? How much money were they paid? How did the politics of these contracts work? The failure by successive governments, the incompetencies of successive Ministries of Health and the lack of political will to do the work to transform this particular sector – and the millions who would benefit from such transformation – is the real incurable disease.

I issue a call to investigate. I would like to see Our Newly Appointed Special Prosecutor, Mr Martin Amidu, formally investigate the contracts that led to the building of these unused and abandoned hospitals. The public has a right to know who paid, who profited from the building of such hospitals.

The ironies: The VP has flown to the land of the British, our former colonizers, to get treatment. In that nation, there is a National Health Service (NHS). It guarantees you treatment if you are sick. It is not without myriad issues – rampant racism being one of the major ones. It does not suffer the particular issues we have heard reported across Ghana radio and in the news this week.There are numbers that connect Ghana and London’s NHS too. It grew and became staffed because of primarily Black nurses and medical professionals from Ghana, Jamaica and Nigeria. In 2005, a report by Save the Children reported the medical brain drain from sub-Saharan Africa was ending up in the NHS and propping up that system. Between 1999 and 2004 the number of doctors registered in the UK and trained in Ghana doubled from 143 to 293.There were 40 new registrations of Ghanaian nurses in 1998/99, but by 2003/04 an estimated cumulative total of 1,021 had registered. It was estimated that the UK has saved 65 million pounds in training costs by recruiting nurses and doctors trained in Ghana alone, with services delivered by these workers valued at 39 million pounds per year. More numbers that look like the GDPs of African nations. To be fair, post the release of these disturbing numbers, measures were put in place to ban active recruitment. That was, however, long after the fact.

The hierarchy of horrors is Ghana offers politicians elected by the people escape from its own medical nightmares; but the people have no escape. Numbers paint partial pictures. Stories paint complete pictures. Mr Bauwmia was flown to London due to a medical emergency. I am thinking of the daily millions of health emergencies for Ghanaians. Millions of ordinary people who have neither the luxury nor are part of a hierarchy that will usher them out of the horrifying halls of a Korle Bu or 37 and whisk them away on a plane to the land of their former colonizers to get health care.

I think of Adolf Lawson. He is a father.  In July 2017, he buried his daughter due to our inadequate health service. He was a card carrying blood donor, as was his 21 year old daughter. She needed a blood transfusion. He was told by a technician it would cost GhC340. He did not have that much cash. He begged this man. He pleaded with him. To no avail. Mr. Lawson ran from hospital to hospital seeking blood he could afford. He finally found it for GhC120. By the time he returned to the hospital where his daughter was waiting for the blood – she was dead. His child died for a lack of GhC340. But hospitals to the tune of millions of dollars stand completed and abandoned. This horror reveals a health system that mirrors that of the US – no money, no treatment. Had the system reflected that of our former colonizer; and the current location of the VP’s medical treatment, this father’s child would have been treated. I think about Mr. Adolf Lawson going to his child’s grave. She was 21.

Our system turned his child into a corpse. There are no cemeteries of incompetence where the loved ones of those ranked at the top of our hierarchy will be buried – that is for the ordinary citizenry to weep and wonder and wail at their children’s tombstones raging at such avoidable despair.

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And then there are the connecting issues: our recent Presidential Media Encounter did not offer one question on health. It is one of the 5 areas targeted as priority by this current government. As evaluation of that exchange made headlines, and there was critique about the poverty of too many in our profession’s performance regarding question quality; I think of fathers like Adolf Lawson. He deserved better from our profession. He and millions of others deserved that we demand answers and raise the issue on his – and millions of other Ghanaians – behalf. Our failure to do so is inexcusable, given some of the irrelevant questions asked of the President.

When we connect the dots and do the maths, the picture is bleak.

This is a litany of loss and a legacy of brokenness. It should also be recognized and reimagined as lives that could have been saved.

We wish our VP a full and speedy recovery.

Health is about our nation’s citizens and their loved ones at vulnerable moments in our lives.

There is no hierarchy in vulnerability. There should be no hierarchy within our humanity.  We must end healthcare’s hierarchy of horrors.

Our hands are tied over GITMO 2 – Foreign Affairs Minister

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The Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchway, has stated that the two  former Guantanamo Bay detainees cannot be repatriated back because they were granted refugee status under the Mahama government in July 2016.

“Our hands are tied because they have been granted a legal status to stay but we are still going ahead to explore options, when you have people who have been surveilled for two years, you just don’t cut them off, definitely you have to continue the surveillance” she told Parliament on Wednesday.

According to her, the agreement signed between the government of Ghana and United States of America indicated that, while the US has no obligation to the detainees after the initial two-year agreement, Ghana has the responsibility to integrate the two into the Ghanaian society.

The two detainees of Yemeni nationality, Mahmud Umar Muhammad Bin Atef and Khalid Muhammad Salih Al-Dhuby, who were in detention for 14 years after being linked with terrorist group Al-Qaeda, were brought to Ghana in January 2016, for a period of two years.

“The government at the time granted the two detainees refugee status. This followed a request by National Security to the then-Chairman of the Ghana Refugee Board. They were issued a decision letter dated 21st July 2016, recognizing their status as refugees,” she said.

The Minster explained further that “the implication is that, in accordance with the United Nations Convention on the Status of Refugees of 1951, and the 1967 protocol on the Status of refugees as well as the provisions of the Refugee Law (1992) PNDC Law 305 (d) of Ghana, the two have attained the status of refugees in our country.”

She noted that the essential component of the refugee status in Ghana “is protection against return to a country where a person has reason to fear persecution.”

“Accordingly, government is constrained to explore any further options at this time, and will await an in-depth examination of the matter by the appropriate agencies,” Madam Ayorkor Botchway added.

Brussels Airlines cuts fares for its European destination

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Brussels Airlines, a unit of Lufthansa, has introduced a new promo dubbed “Super Fares” in its bid to increase passengers for the Ghana Europe route.

The Super Fares which is an Europe promo is ongoing from now until 17 February 2018.

Brussels has seen air fares cut down by between 10 to 15 percent to destinations like Paris, London, Brussels, Milan, Frankfurt among others during this promo.

The Belgian carrier, which Lufthansa took full control of in December 2016, has already reduced costs by 15 per cent in the past three years through savings on staff and more efficient baggage and catering operations.

Currently under the promo which is also known as the “Fly to even more European destinations in 2018” has seen return tickets from Accra to Brussels begins from $808, Milan is from $630, Landon begins from $699, Paris start from $604 and Frankfurt is also from $658.

Chief Executive Officer Bernard Gustin in an earlier interview with newsmen said that though premium had to be kept to a minimum, we need to bring our costs down by at least 10-15 per cent. 2017 already they have fallen by 5 per cent.

According to the airline, its plans to cut its costs in the promo is in order to remain competitive with low-cost rivals.

in 2017 Brussels Airlines welcomed 9.1 million passengers on board its flights, an increase of 17.2% compared to the previous year.

The passenger load factor grew to a record average of 78.5% throughout the year which saw Brussels Airlines close 2017 with a total of 9,077,178 passengers, a record in the company’s 15-year history.

The 1.3 million additional passengers were welcomed throughout the entire network.

All sectors showed significant growth, with the highest increase recorded on the European network (+16.7%), followed by the Middle East (+14.3%), North America (+14.0%) and Africa (+13.2%), where the airline passed the 1 million passenger mark for the first time.

With Mumbai, Brussels Airlines opened its first Asian destination in 2017, the new route attracted 80,450 passengers since the first flight on 30 March of the same year.

Book-keeping Tips for a Startup Business – The Accountant’s Perspective

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Most start-up businesses face several difficulties which sometimes shut down their startup business in the initial years of operation. It could be failure to meet tax requirements, failure to identify leakages in cashflow, failure to identify creditors or recognise deficiency in financials. This is because most startup business owners overlook the role of financial information or book-keeping at such stages of their business, and recognise it as only a need for the ‘big’ business.

Book-keeping is a subset of accounting or financial management, but it plays an integral role especially for small business owners who desire sustained business growth. Book-keeping (in accounting) is all about keeping and maintaining financial books. Some of the books and records you should be keeping are:

  • Cash Book
  • Inventory / Stock book
  • Assets Record
  • Profit and Loss accounts
  • Payroll records
  • Sales invoice
  • Cash receipt
  • Credit book
  • Credit purchases / Debit book
  • Cash payment vouchers
  • Bank transactions

Relevance of Book-keeping in Business

  • It helps to plan for your business. With records of inventory available, for instance, a business owner can easily tell the time to re-stock, what quantity of stock is available to assist future purchasing plans.
  • It helps small business meet deadlines and to make timely payments of loans, rent, bills, taxes and so on. Absence of book-keeping could result in a penalty due to default in rent or loan agreements, underpayment or non-payment of taxes etc.
  • Effective cash flow management is possible with proper book-keeping, and no business can stand the test of time without effective cash flow management.
  • It helps to evaluate the performance of a business, to know if one’s business is stagnant, depreciating or growing. Where proper book-keeping is maintained, you will know the performance level of your business so you can strategise and make certain adjustments on it.
  • It helps you forecast the future of the business, set projections and goals for the business.
  • It helps to know for instance when it’s time to increase labour or capital. Book-keeping will help you know if your business can foot the extra expenses incurred by bringing in new employees.

However, no matter the stage of any business – because most startup business owners are not of a finance background – it becomes prudent for some common mistakes in accounting or book-keeping to be avoided by considering the below:

#1. Engage skilled book-keeping professionals

Being a Jack of all trades, they say, makes you a master of none – hence, business owners should avoid the habit to frequently undertaking the book-keeping themselves or instructing an untrained worker to do so.  Such actions usually divert the business owner from focusing on business aims because of the attention they require. Some also do not assess the cost of their time against the lower cost of outsourcing to a professional who is trained in book-keeping, accounting and tax. Hiring a skilled bookkeeping staff or a professional firm with bookkeeping services can improve accuracy, speed and proactive tax planning.  You might say it is costly, but a cost-benefit analysis of such will make a lot of revelations to you as a startup business owner.

#2. Keep well-managed business records

Properly keeping records can help with early information on the most profitable trends, such as identifying the biggest and smallest customers; but the absence of such could hinder same. With effective bookkeeping records, businesses can show how much is owed to suppliers, customer bad-debt, tax to be filed, and the performance of employees.

#3. Maintain meaningful and transparent filing systems

To ensure smooth audits or settling of dispute with customers, or at the court with regard to records, an efficient filing system must be maintained and should differentiate between payables, receivables, bank statements and tax information. For instance, purchase orders, quotes, invoices, and receipts should be filed preferably by job. Once year-end is completed, all files need to be archived in a secure, off-site location.

#4. Proper reconciliation of bank statements

It is a common mistake to use the same account(s) for business and personal activities, and this is usually associated with poor cashflow issues. A business needs to provide transparent business records that are distinct from its owners’ personal transactions. A generally accepted practice (esp. for audit purposes), is to have the business’ bank accounts (using the bank statements) reconciled with its cash book to identify and eliminate potential banking mistakes.

#5. Establish policies and processes

The existence of relevant accounting or bookkeeping policies ensures consistency and accuracy in transactions, and they must contain procedures with embedded checks to ensure they are adequate and are followed. The policies must be clearly outlined and made available for every employee with associated responsibilities, if any. Incorporating such a culture early on in a new business means procedures will be intact once the business grows – and hence is in greater need for set processes within a larger workforce.

Conclusion

As I indicated earlier, owners of start-up businesses need not become ‘Jacks of all trades’ and end up ignoring the core of its business existence. Book-keeping has become a vital factor in helping startup businesses sustain their growth and ensuring financial accountability. Startups should consider hiring professionals with skills in book-keeping or an accounting firm, and should always ensure that the accounting system encompasses not only daily transactions but also procedures on how records are filed, archived, and backed-up.
Credit: www.ezinearticles.com

About the Author

He is a Financial Reporting/Analysis, Audit and Tax professional, a Consultant at Danisa Consult (Accounting, Audit & Tax) and a Facilitator for Accounting, Tax and Audit at Global Institute of Resource Development (GiRD) – a Capacity Development and Training Institution. He is also a member of the Institute of Chartered Accountant, Ghana; Chartered Institute of Taxation, Ghana; Association of International Accountants, UK; International Association of Accounting Professionals, UK; Association of Certified Fraud Examiners, US; Southern African Institute for Business Accountants, SA.

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From tragedy to turning point: Why Ghana must get serious about youth jobs and...

By Stephen GYASI-KWAW  Country Founder/MD, Global Entrepreneurship Network (GEN) – Ghana The stampede at El-Wak Stadium during a military recruitment exercise—which claimed at least six young...

Editorial: Enhancing domestic revenue mobilisation

In  an effort to promote voluntary tax compliance, enhance domestic revenue mobilisation and expand financial inclusion within the informal sector, Ghana Revenue Authority (GRA)...

2026 Budget: Expert warns against ‘unguarded spending’ due debt relief gains   

By Kingsley Webora TANKEH As Finance Minister Dr. Cassiel Ato Forson prepares to present the 2026 Budget Statement in parliament today, a finance expert has...

Curbing gold smuggling could save US$2bn annually – GoldBod

By Kizito CUDJOE With illegal gold trading and smuggling estimated to be draining about US$2billion from national coffers each year, the Ghana Gold Board (GoldBod)...

Mandatory ethics training will define nation’s banking future – CIB Ghana

Plans by the Chartered Institute of Bankers (CIB) Ghana to make ethics and professional certification mandatory for all banking professionals represent one of the...