Educational reforms would strengthen study of science – President

November 21, 2017

Government is geared to enrol more science students into the country’s educational system to achieve its target of 60 percent science-inclined students in technical institutions nationwide, President Nana Addo Dankwa Akufo-Addo has said.

Thus, as part of the educational reforms being undertaken by his government, the President has directed the Ministry of Education and the Ministry responsible for Science and Technology to draw up programmes that strengthen and upscale the study of Science, Technology, Engineering and Mathematics (STEM) right from the basic level.

Additionally, government has drawn up very elaborate programmes and strategies to strengthen Technical, Vocational, Education and Training (TVET) at all levels of the educational system, President Akufo-Addo said during the 20^th convocation and graduation ceremonies of the All Nations University College at Koforidua over the weekend.

“It is my conviction that TVET is one of the main strategic policies of government aimed at the development of Ghanaian human resources. The major objective of TVET is to prepare people for the job market so they can be productive and of use to themselves, their families and society at large,” he said.

President Akufo-Addo said his administration is committed to increasing the funding for research and development (R&D), saying that in the short- to medium-term, one per cent of GDP will be devoted to that.

“Eventually, this will be raised to 2.5 per cent of GDP in the long-term. R&D funds will be made available for all research activities in both public and private educational and research institutions. It will take some time, but I am convinced that, eventually, Ghana will reap the expected benefits of policies that have been put in place to transform education,” the President said.

The President was fulsome in praise of the university’s launch of a satellite into space, saying: “I come here today with a sense of pride, in view of your recent achievement in launching GhanaSat-I into space. Indeed, your achievement has put Ghana on the map with nations that are venturing into space”.

With the African Union about to set up a Space Agency for the whole of Africa, President Akufo-Addo revealed that he has directed the Ministry of Environment, Science, Technology and Innovation to express strongly Ghana’s readiness to host the Agency and mobilise support to that end.

“Clearly, I was motivated to take that decision partly as a result of your recent successful launch of GhanaSat-1,” he said.

President Akufo-Addo assured authorities of the All Nations University College and other private universities that government has taken measures to lessen the financial burden of operating a private tertiary institution.

“The abolishment of the 25 percent corporate income tax for private universities and the reduction in power tariffs for educational institutions – including private ones – are some of the measures government has undertaken,” he said.

It is the hope of President Akufo-Addo that, “With these reliefs, private universities will plough back their profits into the development of educational infrastructure and improve teaching and learning”.

Highlight of the 2018 education budget

November 21, 2017

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The Education Sector Strategy will be guided by Global Education 2030 Agenda and Targets, defined by Sustainable Development Goal 4: “Ensure Inclusive and Equitable Quality Education for all and promote Lifelong Learning”.

The broad sector policy thrust for Education is Sustainable and Efficient Management of Education Service Delivery, with focus on teacher development and accountability; Improved Quality of Teaching and Learning at all Levels; Inclusive and Equitable Access at all Levels; Skills Development and Training for Employability through Quality TVET; and strengthened Mathematics, Science, ICT and Technology Education.

Basic Education Curriculum Reforms
To improve the quality of basic education and equip the Ghanaian child with basic literacy, numeracy and critical thinking skills, the Ministry of Education commenced the process for reviewing the basic level curriculum to emphasise the 4 R’s (Reading, wRriting, aRithmetic and cReativity). In 2018, the ministry will complete the curriculum reforms and define national pupil standards in literacy, numeracy and creativity. In addition, the common national assessment system will be implemented to measure pupil achievement against set benchmarks.

Teacher Professional Development
In accordance with the Education Act 778, government is implementing measures to ensure Continuous Professional Development (CPD) of teachers through registration and licencing of teachers under the Pre-Tertiary Teacher Professional Development and Management (PTPDM) scheme.

Pre-Tertiary Education bill
The Pre-Tertiary bill approved by Cabinet proposes devolving the management of Basic Schools to the Assemblies, and management of Senior High Schools to Ghana Education Service (GES) and Ministry of Education (MoE) Headquarters. In 2018, the bill will be laid before Parliament.

Basic Education Programme
The number of basic schools (both public and private) increased at all levels. KGs increased by 5.4 percent, Primary 5.4 percent f and Junior High Schools 7.0 percent between the 2015/2016 and 2016/2017 academic years.

Capitation Grant
In fulfilment of government’s promise to make basic education free and ensure participation by all, the Capitation Grant was increased by 100 percent from GH¢4.50 per capita to GH¢9.00 in 2017. Mr. Speaker, it is worth stressing that this increase by the Akufo-Addo government was the first-ever increase in the Capitation Grant since 2009 – meaning in all the 8 years that our friends, the social democrats, were in office. I am happy to announce that there will be a further increase to GH¢10.00 in 2018 under this government.

BECE Subsidy
Government absorbed 70 percent of the 2017 BECE registration fees as subsidies for all registered candidates in both public and private JHSs. In 2018, government will absorb 100 percent of BECE registration fees for registered candidates from public Junior High Schools.

Basic Science Technology Engineering and Mathematics (Bstem)

The Ministry will next year begin the infrastructural works toward introducing the Basic Science, Technology, Engineering and Mathematics (BSTEM) programme in all basic schools. This initiative is intended to strengthen the foundational skills and generate interest in mathematics, science and technology. This will involve the provision of equipment to over 38,000 public basic schools, training over 38,000 basic school teachers in the delivery of BSTEM, and the establishment of 10 well-equipped Regional BSTEM centres.

Technical/Vocational Education and Training
TVET reforms leading to the alignment of public TVET institutions under the Ministry of Education will continue in 2018. The reforms will include developing occupational standards, training of facilitators and assessors, and strengthening Competency Based Training (CBT).

Teacher Trainee Allowance
Government restored the Teacher Trainee Allowance covering over 49,000 teacher trainees from 41 public Colleges of Education for the 2017/18 academic year. In addition, funds were released for the payment of outstanding Feeding Grants to all public Colleges of Education for the 2015/16 and 2016/17 academic years. In the 2018/19 academic year, a projected number of over 52,000 Teacher Trainees will benefit from the allowance.

Commission of Tertiary Education
A report was submitted for the enactment of a law to establish a unified Commission for Tertiary Education to deal with policy formulation, implementation and accreditation, among others. In 2018, the ministry will begin implementing recommendations that will reform university accreditation and affiliation policies toward introducing equity and fairness in the setting-up of public and private universities.

Are Corporate Responsibility Efforts profitable?

November 21, 2017

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What is a corporate social responsibility strategy?

A corporate social responsibility strategy takes into account customer, employee, shareholder, community, and environmental issues in their business operations. The most effective initiatives lie at the intersection of key societal matters and financial growth.

Why is it important to be socially responsible?

It’s important for corporations to act in socially responsible ways not only for societal value but also because it can drive enhanced employee morale, investor confidence, sales, and brand value. It can also decrease a company’s cost of capital.

Executive Summary

Sceptics of the Value of Corporate Responsibility

As the argument goes, doing what’s best for society is usually at odds with increasing short-term profits. If that weren’t the case, then issues of pollution and poverty would have been solved long ago by corporations seeking to maximise profits.
“Often, cutting corners, ignoring standards, trampling on communities, polluting, screwing the consumer and working staff into the ground can be profitable.”
Berkeley professor Robert Reich asserts that we are living in the age of super-competitive capitalism, or “supercapitalism”. For the modern firm, Reich argues, long-term earnings are irrelevant, and companies under supercapitalism do not have the discretion to be virtuous.

Business Case for Corporate Responsibility

Market value, share price, and risk reduction.Strong CR can increase market value by 4-6%, increase valuation for companies with strong stakeholder relationships between 40-80%, reduce share price volatility between 2-10%, avoid market losses from crises of around US$378million, and reduce systemic risk up to 4%.
Cost of capital reduction.CR has the potential to reduce the cost of equity by 1% and reduce the cost of debt by 40% or more.
Potential value for marketing, sales, and branding.CR has the potential to increase revenue up to 20%, increase the product price premium by up to 20%, increase commitment by 60%, and avoid revenue losses of up to 7% of the firm’s market value
Potential value for human resources.CR has the potential to reduce staff turnover by up to 50%, increase productivity by 13%, and increase employee engagement up to 7.5%.

Implementation Recommendations

Choose a strategic cause that aligns well with the organisation.Make CR commitments that fit your company’s core attributes and your key stakeholders’ expectations. The payoffs to companies who align CR into their business model are significantly greater than the cost savings for companies who choose to forgo it.
Don’t launch an initiative just to cancel its effect in another.It’s discrediting when your company launches a socially good initiative, only to cause harm in another. For example, Walmart created shared value in their sustainability practices, only to face allegations of unethical business conduct in Mexico.
Don’t dabble; make a genuine commitment to address CR issues.For a specific CR activity, investors and customers prefer not to have too little or too much; a sweet spot of investment exists. Each company must find the right fit on their own.
Measure and quantify.Develop and manage your portfolio of CR practices as if it were an intangible asset. A part of proper management is continuous measurement of quantitative metrics. Multiple frameworks have emerged, including reporting standards bodies such as GRI, IIRC, SASB, and CDP.

Introduction

For years, a debate has raged: Do corporate environmental and social initiatives drive or distract from financial performance? Can companies really do well by doing good?

In a famous 1970 New York Times Magazine article, economist Milton Friedman asserted that: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits”. However, today, corporations are expected not just to create quality products and services, but also to be good global citizens and active participants in developmental debates. This is the case especially as the private sector provides society with 60% of economic output and 90% of jobs.

Corporate consciousness is on the rise, though it’s evolved. Companies often tout their own efforts to produce healthier foods and fuel-efficient vehicles, or to conserve resources in their operations. According to management theorist Michael Porter, corporations and their relationship with society have changed. First, philanthropy meant companies doing business as usual and then donating a portion of earnings to good causes.

Then corporate social responsibility (CSR) meant minimising harm through sustainable, ethical practices. And now with corporate shared value (CSV), Porter suggests that companies can develop products or processes that meet key societal needs while also creating financial return. An interesting trend is the designation of B Corporations – organisations that meet a threshold of ‘impact’ and agree that shareholder interests are not the only ones they account for. There are already over 2,000 certified B corporations, including Warby Parker, Unilever, and Patagonia.

What, then, are the economics of this increase in conscious capitalism? In this article, we put aside motive—of genuine altruism or self interest—and philosophical debates around moral obligation. Instead, we examine the results of studies around whether corporate responsibility initiatives positively impact profitability; examples of companies that have implemented such measures successfully; and recommendations for those looking to do so. We will refer to corporate philanthropy, CSR, and CSV efforts collectively as corporate responsibility (CR).

How Does Corporate Responsibility Affect the Bottom Line?

There are two major schools of thought on the issue: those who don’t believe in CR’s tangible value, and those who insist that it’s possible for CR to yield tangible benefits. Below, we explore both.

Sceptics of Corporate Responsibility’s Value

Many express scepticism toward the tangible impact that socially-good practices can have on businesses. According to an article in The Guardian: “There is indeed evidence that sometimes, maybe even often, the right thing is also the profitable thing. But often, cutting corners, ignoring standards, trampling on communities, polluting, screwing the consumer and working staff into the ground can be profitable too”.

As the argument goes, doing what’s best for society is usually at odds with increasing short-term profits. If that weren’t the case, then issues of pollution and poverty would have been solved long ago by corporations seeking to maximise profits.

In his paper ‘The Case Against Corporate Social Responsibility’, Berkeley professor Robert Reich asserts that we are living in the age of super-competitive capitalism, or “supercapitalism.” For the modern firm, Reich argues, long-term earnings are irrelevant, and companies under supercapitalism do not have the discretion to be virtuous. To Reich, competition is so intense that corporations generally cannot accomplish social ends at a cost to their consumers or investors, as they will simply find better deals elsewhere.

A popular 2005 Economist spread also makes its case against corporate responsibility efforts. The article declares: “Most CSR, in fact, is probably delusional; meaning that it reduces both profits and social welfare”. It argues that since almost all efforts have some cost, if those managing the efforts merely go through the motions, delivering no new resources or giving employees and stakeholders no reason to think highly of it, it leads to a net loss of welfare.

One can’t deny that CR initiatives don’t always work in practice. Consider Indra Nooyi, Pepsi’s former CEO. Nooyi believed that a shift toward healthier products would be beneficial for both society and for Pepsi’s profitability, acquiring healthier brands like Tropicana and Quaker Oats. However, during her tenure, Coca-Cola’s stock price doubled while Pepsi’s stagnated. Pepsi even lost its number-two position in the cola market to Diet Coke in 2010. Consequently, Pepsi eventually announced management changes.

The Business Case for Doing Good

Still, there is a growing volume of the data that supports the view CR efforts yield positive effects. In general, ‘doing good’ can result in cost and risk reductions, a stronger competitive advantage, branding wins, employee retention, and increased sales. Many of the world’s biggest and most successful companies are partaking.

A meta analysis of 300 studies conducted by Project ROI has concluded that corporate responsibility initiatives have tangible value for businesses. Project ROI statistically analysed over 300 studies of existing academic and peer-reviewed sources, as well as interviews with executives and CR practitioners. The analyses indicate a positive causal relationship between CR performance and financial performance, not just correlation.

This central claim is echoed by the OECD, which asserts: “Research shows that companies do well by doing good”. A 2004 report that conducted a meta analysis of 52 studies – including a total sample size of 33,878 observations and eventually won the famed socially responsible investing Moskowitz Prize – also supported these findings.

CR’s Potential Value for Market Value, Share Price, and Risk Reduction

Investors are paying attention. They respond to sound CR management practices by viewing CR as an indicator of strong management, competitive differentiation, employee morale, and innovation. According to the 2015 EY Global Institutional Investor Survey, investors are using companies’ nonfinancial disclosures to inform their investment decisions. In a survey of over 200 institutional investors, 59% of respondents view nonfinancial disclosures as “essential” or “important” to investment decisions – up from 35% in 2014.

CR’s Potential Value for Cost of Capital

The findings show that CR has the potential to reduce both the cost of equity and debt. A Harvard study corroborates these findings by explaining two reasons why this might be the case: 1) Superior CSR performance captures the firm’s commitment to stakeholders, which can lead to reduced agency costs, transaction costs, and costs associated with team production; and 2) Firms with superior CSR performance are more likely to publicly disclose their CSR strategies by issuing sustainability reports, lending themselves credibility, reducing informational asymmetry, and resulting in lower capital constraints.

CR’s Potential Value for Marketing, Sales, and Branding

The quality, management, integration, and communications of your company’s CR approach affects sales and reputation outcomes. If properly aware and engaged, customers will increase their commitment to the company. Consumers, millennials in particular, will trust the brand more and are willing to pay a premium. In fact, Unilever’s “brands with purpose” are growing at twice the rate as others in their portfolio.

CR’s Potential Value for Human Resources:

Research finds that strong CR performance increases the motivation, fulfilment and morale of employees. This increased engagement and CR continually reinforce one another to enhance productivity, financial performance, brand value, and innovation.

Case Studies in Profitable Corporate Responsibility

TOMS

TOMS is a great example of social entrepreneurship. Its now-famous business model was unorthodox at its inception over 10 years ago: For every pair of shoes a customer bought, TOMS would donate a pair to a child in need. TOMS is a for-profit organisation, and was recently valued around US$392million. CEO Blake Mycoskie said the average retail price for a pair of TOMS is US$55, while the notorious canvas shoes cost about US$9 each to manufacture. According to BCG research, 50% of their customers are aware of and motivated to buy based on the element of social good. In 2014, Bain Capital acquired a 50% stake in TOMS and will continue the one-for-one business model.

According to Mycoskie: “For many retailers, their profit margins are low. They spend lots of money on advertising – whether it’s paying celebrities to endorse your product or taking out significant billboards. Toms doesn’t have any ad-spend – a big portion of our spend goes on giving. But by giving, we build a community and people recommend through word of mouth and on social media”.

GlaxoSmithKline (GSK)

GSK is a pharmaceutical giant looking to serve not just wealthy nations but also citizens of emerging countries. The company spent three decades developing a vaccine for malaria, which has ravaged much of sub-Saharan Africa. GSK has also partnered with the government of Botswana on an ambitious HIV treatment programme. GSK prices drugs on the GDP of the 150 countries where it does business—and in dozens of the least developed nations, it reinvests 20% of profits in local health care infrastructure and worker training. Significantly, GSK makes money—nearly US$16billion in total operating profit for 2015.

GSK leadership is bullish on its strategy of slim margins on most products in the developing world and huge, growing sales volume. CEO Andrew Witty says, “Look at India, which I think is a brilliant example…Around 30% of everything we manufacture in our pharmaceutical business we sell in India…And it accounts for about 1% of our global revenue, and a little less than that of our profits…that business has gotten bigger and bigger and bigger. It makes more and more profit. And more people have access to fantastic medicines. We think that’s an entirely sustainable model”.

IBM

In 2008, IBM launched its Corporate Service Corps programme. As part of the programme, 500 IBM employees every year bring their core competencies in project management, strategic planning, or engineering to an entrepreneurial company based in an emerging market such as Brazil, China, or Ghana. IBM Corps teams tackle issues ranging from public safety to urban agriculture.

IBM states the programme produces a US$600million return on a US$200million investment. While the regular staff turnover rate is around 12% per year, the rate for employees in the Corporate Service Corps is less than 1%. The company also highlights benefits such as talent attraction—the programme is the third most influential factor; skills and competency development; and new market creation.

Implementation Recommendations

Overall, it seems that corporate responsibility can improve the bottom line, but those efforts by themselves will not guarantee success. Companies must execute them well; and as with every aspect of business management, some CR investments will succeed while others will fail. CR practices cannot replace the quality of your products and services. They also can’t fully compensate for strategic and managerial deficiencies. However, the findings suggest that well-designed and managed practices can drive value in multiple ways. Below are some recommendations for effective implementation:

Choose a strategic cause that aligns well with the organisation.Make CR commitments that fit your company’s core attributes and your key stakeholders’ expectations. According to the Federal Bank of St. Louis, the payoffs to companies who align CR into their business model are significantly greater than the cost savings for companies who choose to forgo it. These companies generate higher perceived value and buying intention, whereas unrelated efforts may decrease sales volumes.
Don’t launch an initiative just to cancel its effect in another.This might seem obvious, but it becomes discrediting when your company launches a socially good initiative only to cause harm in a different area. For example, Walmart created shared value in their sustainability practices improving fuel efficiency by 87% between 2005 and 2014, only to face allegations of unethical business conduct in Mexico.
Don’t dabble; make a genuine commitment to address CR issues.The market seems to respond positively to severe laggards with overall poor CR performance, but it responds even more positively to those that achieve high levels of CR. However, the market tends to punish those companies it perceives as putting forth a half-baked effort. For a specific CR activity, investors and customers prefer not to have too little or too much; a sweet spot of investment exists. It’s important to note that there’s no standard level of investment. Each company must find the right fit on their own.

Measure and quantify. Develop and manage your portfolio of CR practices as if it were a valuable intangible asset. Companies and their managers are able to exert some choice and control over the benefits that their CR initiatives will deliver. Companies should develop business-aligned and integrated CR strategies. A part of proper management is continuous measurement of quantitative metrics. Multiple frameworks have emerged, including reporting standards bodies such as GRI, IIRC, SASB, and CDP.

Parting Thoughts

It’s true—profit and public interest do not always align. It’s also true that corporate responsibility makes for good public relations and that initiatives aren’t always effective or profitable. It would be difficult for all companies to prioritise solving for prevalent societal issues over efficient business operations.

Still, this doesn’t detract from the fact that these programmes and goals can work, especially when operational and socially good goals converge. Ultimately, it’s crucial for individual organisations to conduct analyses around what initiatives could be strategic, value-add, and will be lauded by stakeholders, customers, and employees alike.

AIG reiterates support for good governance and high performing public sector

November 21, 2017

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Founder and Chairman of the Africa Initiative for Governance (AIG), Mr. Aigboje Aig-Imoukhuede, recently visited Ghana as part of activities to strengthen AIG’s work and impact in the country.

AIG is a not-for-profit founded to inspire the transformation of Africa’s public sector. AIG works with governments, academic institutions and other partners to improve governance and promote the emergence of a high-performing public sector. AIG’s pioneering initiative brings proven private sector innovation, leadership and funding to the public sector in a private-public partnership that seeks to attract, inspire and support future leaders of Africa’s public sector.

AIG’s leadership consists of eminent West Africans, including Chief Olusegun Obasanjo, former Head of State and former President of Nigeria who serves as the Chairman of AIG’s Panel of Advisors; and Mr. Ken Ofori-Atta, Minister of Finance for Ghana who serves as a member of the AIG Panel of Advisors.

As part of his visit, Mr. Aig-Imoukhuede paid a courtesy call on President Nana Akufo-Addo, during which he briefed the President on AIG’s activities – particularly in relation to Ghana. Opportunities for collaboration in the area of capacity building for public servants were also discussed.

Mr. Aig-Imoukhuede also met with Justice Mrs. Georgina Wood (Retired), immediate past-Chief Justice of Ghana and current Africa Initiative for Governance (AIG) Fellow.

In October 2017, Justice Mrs. Wood (Retired) was announced the 2017-2018 AIG Visiting Fellow of Practice at the Blavatnik School of Government, University of Oxford. The AIG Fellowship is awarded each year to an individual from West Africa who has demonstrated evidence of outstanding contribution to the public good, through exemplary leadership in public service. The stay at Oxford provides AIG Fellows the opportunity to further develop their understanding of specific policy issues and solutions, and reflect on practices in other countries. Following the Fellowship period at the School, AIG Fellows will help drive AIG’s vision for transformational public-sector leadership across the African continent.

In their discussions, Mr. Aig-Imoukhuede and Justice Mrs. Wood (Retired) restated their shared visions for building the capacity of public servants and committed to collaborating in this regard for the strengthening and development of Ghana’s public sector.

As part of her AIG Fellow appointment, Justice Mrs. Wood (Retired) will also serve as a mentor to AIG Scholars. In June 2016, AIG signed a partnership with the Blavatnik School of Government at the University of Oxford, under which AIG will fund five scholarships every year for talented young West Africans from all backgrounds for graduate study at the Blavatnik School over a five-year period. The inaugural AIG Scholars were announced in August 2017. The selection process for the 2018 – 2019 AIG Scholars is currently underway.

AGI welcomes key budget initiatives

November 21, 2017

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The Association of Ghana Industries (AGI) has lauded the 2018 Budget, saying, some of the policies and initiatives introduced will result in growth of the country’s industrial sector.

Outgoing president of the business lobby, James Asare-Adjei, singled out the power tariff reductions for praise – although he said they expected it to be more.

Government has proposed the following power tariff reductions: residential 13 percent; non-residential 13 percent; special load tariff—low voltage 13 percent; special load tariff—medium voltage 11 percent; special load tariff—high voltage 14 percent; and high voltage 21 percent.

“AGI lauds the 2018 budget. In fact, we welcome key initiatives of the budget, particularly when it comes to the proposed reduction in the cost of tariffs on electricity. It is a good initiative in ensuring that industry becomes more competitive.

“Largely, the budget is building on the stability that has been achieved in the year 2017. It gives the dimension of growth to the economy. So, AGI lauds the budget because it specifically looked at certain areas that will stimulate the economy,” he said.

He however urged government to provide an energy mix that will make power even cheaper to industry in order to help it compete with others in the sub-region and in the world at large.

“We would have wished that a lot more reduction could have been applied to the tariffs. You know, at the moment we are competing with companies in the sub-region or globally where energy tariffs are way down. While we are paying over 20cent/kwh, some are paying 15cent/kwh or less. In places like China, they are paying 3 or 4 cents/kwh.

“So, while we applaud government’s bold initiative of really proposing to reduce the energy tariffs, we should look critically at dedicating cheaper sources of power like hydro to industry – because that is what will make businesses competitive,” he said.

Government also announced in the budget that it will set up a development bank to help address the financing challenges of businesses, and here, too, the AGI president was full of praise.

“Let me also mention that government’s decision to set up a development bank is in line with AGI’s initiative of promoting an industrial development bank – of which an initiative has been taken in applying for a provisional licence.

“AGI will be much prepared to partner with government in establishing a development bank of that nature. One of the challenges that industry faces in the country involves accessing medium- to long-term capital. So, it is a bold initiative from government,” Mr. Asare Adjei said.

“Dumsor” in Tamale as GRIDCO Control Room catches fire

November 21, 2017

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The Control Room of Ghana Grid Company (GRIDCo) at Choggu in Tamale of the Northern Region has been gutted by fire, leading to a total power outage in the region.

The incident which occurred around 7:00pm Monday evening, saw most of the equipment in the control room destroyed after being razed down by fire. As a result, several communities in the Tamale Metropolis are likely to be in darkness for some time.

Corporate Communications Manager for the Northern Electricity Distribution Company (NEDco) Mr. Maxwell Kotoka said that the incident was unfortunate and called for residents to remain calm as they seek a solution to the power outage.

According to him, plans are also underway to replace the damaged gadgets as a matter of urgency.

“Meanwhile we are trying to break some of the lines from the 34 kV which is supplying the Tamale Teaching Hospital, the Ghana Water Company and other emergency offices,” he stated.

He apologised to the affected residents for the inconvenience and assured them that they are working urgently to restore power within the shortest possible time.

The cause of the fire is still unknown but authorities from the Ghana National Fire Service (GNFS) have begun investigations into the matter. The fire was brought under control with the swift intervention of the GNFS to prevent any further damage to property in the area.

Meanwhile, efforts have been made by the Volta River Authority (VRA) to restore power in certain parts of the Metropolis while the repair works are being conducted.

However, a source close to the B&FT indicated that the power outage is likely to last for the rest of this week as repair works are being carried out.

Salaries swallow education budget

November 21, 2017

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As has always been the case in the education sector over the years, the bulk of 2018’s budget allocation will go into paying salaries – leaving little for infrastructural development.

Although the education sector budget increased by 11 percent from GH¢8.33billion in 2017 to GH¢9.26billion in 2018, much of the increment went into payment of remuneration compared to goods and services and capital expenditure.

The share of allocation to remuneration increased significantly, from 91.4 percent in 2017 to 98.5 percent in 2018.

This development raises serious concerns about government’s commitment to deal with infrastructural and logistical constraints that contribute directly to educational outcomes.

Civil society organisation ‘Send Ghana’, in its preliminary assessment of the 2018 budget said the implementation of free SHS that saw about 400,000 students gaining admission into second cycle institutions exposed the sector’s infrastructural deficit and logistical challenges.

Government’s allocation to capital expenditure and goods and services are insufficient to address this situation, it said.

“Expenditure on the policy is likely to be more than double for 2018. Unlike the 2017 budget, the 2018 budget should provide a clear plan for sustainable sources of funding for the programme.

“It should also address the infrastructure gap by providing the percentage of capital expenditure government intends to spend on doing so,” it said.

Government, in the 2017 budget, made an allocation of GH¢400,000 to kick-start implementation of the free Senior High School programme.

But the funding seems not to be enough as the second cycle institutions across the country are faced with infrastructure challenges, which need to be addressed for the successful implementation of the policy.

Concerns have, however, been raised by some stakeholders about the sustainability of funding for the programme.

In relation to this, the Institute of Economic Affairs (IEA) Ghana has suggested government should increase the 17.5 percent VAT by one percent in order to provide a more sustainable means of funding the programme.

“Given the important nature of this initiative for our country’s sustainable development, we are therefore calling on government to revisit its funding arrangement for this essential initiative…We believe that more sustainable funding should be pursued domestically.

“For example, just as we did for the NHIS, increasing the VAT rate by say 1 percent and ring-fencing it for exclusive funding of the Free SHS would be very ideal. Domestic tax revenue provides a more stable and predictable source of financing expenditure for important public programmes such as free education,” the IEA said in its mid-year budget review statement.

Meanwhile, President Nana Akufo-Addo while addressing some traditional leaders at the Flagstaff House recently promised to ensure the free Senior High School (SHS) programme is sustained despite teething challenges.

“Everything new, when it starts, has problems. But if you don’t start you can’t progress, so we have taken the first step. The issues about infrastructure, school classrooms, logistics – we are going to deal with those. But we can only deal with them because we have started,” he said.

Minimum capital for Savings and Loans seen rising above GH¢50m

November 21, 2017

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Governor, Bank of Ghana — Dr. Ernest Addison

There are speculations that Savings and Loans Companies, one of the sub-groups of the Non-Bank Financial Institutions (NBFIs), could see their stated capital increased to GH¢50million from the current GH¢15million.

With the central bank recently increasing the minimum capital for commercial banks from GH¢120million to GH¢400million, which is a 233 percent increment, players in the savings and loans space believe it could be their turn very soon.

“We believe that just as banks have gone up to such a level, we could be heading in the same direction. When banks were moved to GH¢60million, we were moved from GH¢7million to GH¢15million,” the managing director of one of the savings and loans companies told the B&FT.

Although there has been no official communication from the central bank in this regard, industry players speculate that an increase in their minimum capital could be between GH¢50million and GH¢70million.

Managing Director of Commerz Savings and Loans, Dr. Edem Bart Williams, also noted that there are shareholder engagements going on – so that savings and loans will be ready when the central bank makes the announcement.

“We have been engaging shareholders and we have had discussions that they have to be ready to raise the capital. Anytime they raise that of the universal banks, they raise that of the savings and loans. We are all playing in the same market,” he said.

He noted that although everyone is getting ready, not every player will be able to meet the requirement – and so some will have no option but to consolidate. “Some are struggling to meet the current one, so they have no option but to consolidate and that will shrink the numbers in the industry,” he said.

Governor of the central bank, Dr. Ernest Addison, has been talking tough about the need for adequate liquidity in the financial intermediation space. He told journalists in September that any commercial bank that could not meet the required stated capital could downgrade to a lower-tier deposit-taking financial institution.

“If you think that you are operating in a niche that does not require you should have a GH¢400million level of capitalisation, you can choose to go for a savings and loans licence,” he said.

Savings and loans companies, which are currently 38 in number, saw their capital increased to GH¢4million in 2011 and then move up to GH¢7million a year later. In 2014, the central bank asked them to double it to GH¢15million without a specific deadline.

The 2016 annual report by the Bank of Ghana stated that the NBFIs sector ended the year with a total asset value of GH¢9.6billion, up by 31.4 percent from GH¢7.3billion in 2015.

The growth was underpinned by 54.1 percent and 25.5 percent increases in investments and loans & advances respectively. The major source of funding was deposits, which stood at GH¢5.8billion at end-2016 – accounting for 60.2 percent of total assets.

Deposits grew by 44.7 percent year-on-year in December 2016, compared to the 30.3 percent recorded in 2015. The high deposit growth can be attributed to the aggressive deposit mobilisation effort and high interest rates offered particularly by the S&L category.

Vodafone CEO scores gov’t 8/10 in economic performance

November 21, 2017

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The Chief Executive Officer of Vodafone Ghana, Yolanda Cuba, has scored government 8/10 for its stabilizing the economy with almost all the macroeconomic indicators moving in the right direction.

Ms. Cuba speaking at post-budget forum organized by KPMG in Accra said government deserves commendation for the way it has steered the affairs of the economy allowing industry to focus on their mandate rather than worrying about the health of the economy and what impact it would have on their businesses.

According to her, what this government has succeeded in doing is creating a predictable environment that allows businesses like Vodafone to focus on delivering on their mandate.

“There’s pretty much a predictable environment. The depreciation in the currency has been manageable, we have not had any kind of shock, to be honest with you, in the last eight months. To me, that’s a stable macroeconomic environment. Everything that I have put into my budget is coming to pass just as I have expected,” she stated.

She however stated that government must work further to enhance its efforts at creating a predictable policy environment among others if she is to give the government a perfect score.

“What I mean is that there is a difference between what is stated as the intention of the country and how I experience such intention. When I actually go from department to department in order to facilitate my business, then I don’t feel the ease of doing business is a reality.

When I look at all the competitive indexes and I see us a country we are dropping down a couple of notches, it doesn’t feel like it is that easy to do business in our country,” she stated.

The theme of the Forum was, “Government’s Fiscal Policies: Achieving Sustainable Growth in a Digital Age,” and was attended by a cross section of industry players who wanted to know what impact the budget would have on their respective industries.

Accra Psychiatric Hospital female ward gets facelift

November 20, 2017

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The Minister for Local Government and Rural Development, Hajia Alima Mahama has renovated the Female Infirmary Ward of the Accra Psychiatric Hospital.

With close to GH¢20,000 from the Minister’s personal savings, she fixed broken and hanging ceilings at the ward, corrected some plumbing works and renovated the washrooms, replaced old louvres with new ones, and changed window frames and nets.

She also replaced rusty and difunctional fans with new ones, and also facilitated the interior and exterior painting of the entire ward.

Speaking at a brief ceremony at the hospital to hand over the finished work to management, Hajia Alima disclosed that, she was saddened at what she saw in a report aired by an Accra-based television station, on the deplorable state of the facility, hence her decision to refurbish the unit to commemorate her 60^th birthday which fell on the 17^th of November.

The minister, who was joined by some staff from her ministry, nurses, and female inmates to make merry to mark her birthday, emphasised that she felt fulfilled for rendering support to the hospital.

She also appealed to other people and corporate bodies to take up such initiatives.

In an interview with the hospital’s Deputy Director of Nursing Services, Beatrice Nyarko, she recounted the depressing state of the ward which is supposed to cater for the physical well-being of mental health patients.

She thanked the minister for her kind gesture, adding: “This will bring a lot of comfort for us nurses and the patients, and it will motivate us to deliver effectively, as the environment has become a lot more conducive.”

What is a corporate social responsibility strategy?

A corporate social responsibility strategy takes into account customer, employee, shareholder, community, and environmental issues in their business operations. The most effective initiatives lie at the intersection of key societal matters and financial growth.

Why is it important to be socially responsible?

It’s important for corporations to act in socially responsible ways not only for societal value but also because it can drive enhanced employee morale, investor confidence, sales, and brand value. It can also decrease a company’s cost of capital.

Executive Summary

Sceptics of the Value of Corporate Responsibility

As the argument goes, doing what’s best for society is usually at odds with increasing short-term profits. If that weren’t the case, then issues of pollution and poverty would have been solved long ago by corporations seeking to maximise profits.

“Often, cutting corners, ignoring standards, trampling on communities, polluting, screwing the consumer and working staff into the ground can be profitable.”

Berkeley professor Robert Reich asserts that we are living in the age of super-competitive capitalism, or “supercapitalism”. For the modern firm, Reich argues, long-term earnings are irrelevant, and companies under supercapitalism do not have the discretion to be virtuous.

Business Case for Corporate Responsibility

Cost of capital reduction.CR has the potential to reduce the cost of equity by 1% and reduce the cost of debt by 40% or more.

Potential value for marketing, sales, and branding.CR has the potential to increase revenue up to 20%, increase the product price premium by up to 20%, increase commitment by 60%, and avoid revenue losses of up to 7% of the firm’s market value

Potential value for human resources.CR has the potential to reduce staff turnover by up to 50%, increase productivity by 13%, and increase employee engagement up to 7.5%.

Implementation Recommendations

Don’t dabble; make a genuine commitment to address CR issues.For a specific CR activity, investors and customers prefer not to have too little or too much; a sweet spot of investment exists. Each company must find the right fit on their own.

Measure and quantify.Develop and manage your portfolio of CR practices as if it were an intangible asset. A part of proper management is continuous measurement of quantitative metrics. Multiple frameworks have emerged, including reporting standards bodies such as GRI, IIRC, SASB, and CDP.

Introduction

For years, a debate has raged: Do corporate environmental and social initiatives drive or distract from financial performance? Can companies really do well by doing good?

How Does Corporate Responsibility Affect the Bottom Line?

There are two major schools of thought on the issue: those who don’t believe in CR’s tangible value, and those who insist that it’s possible for CR to yield tangible benefits. Below, we explore both.

Sceptics of Corporate Responsibility’s Value

As the argument goes, doing what’s best for society is usually at odds with increasing short-term profits. If that weren’t the case, then issues of pollution and poverty would have been solved long ago by corporations seeking to maximise profits.

The Business Case for Doing Good

CR’s Potential Value for Market Value, Share Price, and Risk Reduction

CR’s Potential Value for Cost of Capital

CR’s Potential Value for Marketing, Sales, and Branding

CR’s Potential Value for Human Resources:

Research finds that strong CR performance increases the motivation, fulfilment and morale of employees. This increased engagement and CR continually reinforce one another to enhance productivity, financial performance, brand value, and innovation.

Case Studies in Profitable Corporate Responsibility

TOMS

GlaxoSmithKline (GSK)

IBM

Implementation Recommendations

Parting Thoughts

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