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GCB Bank customer service to improve tremendously next year – MD

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The Managing Director of GCB Bank, Mr. Anselm Ray Sowah, said that the quality of Customer Service in the bank will see a major turnaround by the middle of next year.

“I want to see a new GCB delivering a totally different quality of service, a very efficient and exciting one right from when the customer enters GCB; and staff will be provided with the necessary tools to deliver,” he assured.

Mr. Sowah was commenting on three awards recently won by the bank for service quality. He commended staff for their contribution that has culminated in these awards, and for making stakeholders proud.

GCB within the past two months has been adjudged the Most Compliant Bank in Africa as well as the Safest Bank in Ghana for Investment by international agencies, and Best Money Transfer Bank in Ghana by RIA International Money Transfer. GCB is known for its high standard with rules and regulations that govern banking in this country.

Mr. Sowah, who is passionate about service quality and customer experience said, he wants to see a GCB that has been transformed into a brand synonymous with excellent customer service.

He further lauded introduction of the ‘Meeter-Greeter’ at various branches of the bank. The concept is all to do with a dedicated staff-member of the branch called the ‘Meeter-Greeter’, who receives customers at the point of entry and ensures they are directed to the right service point for attention.

GCB has a positioning statement of being the most welcoming bank, and has started putting in place the structures and procedures which give true meaning to this statement – of which the ‘Meeter-Greeter’ initiative is one.

He commended the first group of ‘Meeter-Greeters’ for their impressive input, which is already yielding results in terms of feedback that has reached management of the bank.

Customer Experience & HR: Let’s Link them!

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For years and years now, since inception of the Employee Engagement idea, a lot of companies have been struggling to maximise employee engagement – mainly for financial reasons, or for being hopefully perceived as an amazingly great place to work: this making it easier to attract high-calibre/top talent candidates.

FYI: There is no proof that Employee Engagement improves productivity – at least in 2017 we still have no strong case studies proving this to be true.

If you agree that your company, or even any other organisation, would not exist without customers (the customers of an NGO/Non-profit are its beneficiaries), then it is logical to expect that the best results in your Customers’ Experience can only be achieved if – and only if – Customer Experience (CX) becomes the context/the ‘meat & potatoes’ for every possible type of Employee Engagement.  It should not be strictly reserved for customer-facing employees! And obviously, here is where HR could help.

8 Ways HR can help with improving your Customer Experience (CX)

   #1. Cross-functional/cross-disciplinary collaboration

Your Customer/Beneficiary will always see your organisation as ‘one’ and not as a collection of business and functional units, or any other forms of Silos. Let me give you a few examples: you might have the best possible Customer Service and interaction in every channel and touchpoint with your Customers, but they will still be repelled/turned-off if you employ poor billing; or your distribution/shipment practices leave a huge space for improvement (does this sound familiar? Our personal experiences with online Ghanaian sellers are not positive yet); and the same if any of your physical Customer-visited areas reflect poor hygiene.

We always assume that cross-functional collaboration is a given reality, and that all teams talk to each other when needed and work happily together; nothing could be further for the truth. Here you need a good (if not excellent) HR team that has created an Organisation(al) Design on solid grounds, and is also continuously active in finding ways to champion and really promote in practice true cross-functional collaboration.

Tip #1: Stop assuming that teams know how to collaborate across departments, please!

FYI: Customer-pain usually results from communication gaps and/or weak handovers between functional areas.

   #2. Make your Employee Induction a Customer-centric process

All your new employees need to understand both your business(processes) and who your customers are; and how they can serve them better.

FYI / A simple example: At Disney Amusement Parks and other Hospitality services, the new employees are clearly told from Day-1 that they “need to treat a customer the same way they would treat a guest in their own home”.

   #3. Remove the ‘Thorn-Employee’

You can’t avoid the reality of unhappy and disgruntled employees. HR can help you reduce the risk by removing (not necessarily firing, unless there is a valid grave reason) the relevant employee from that particular contact touchpoint or channel with the Customers. If needed, perform active high-impact Damage Control.

   #4. Have Emotionally Intelligent (EI) Employees

FYI: L’Oréal has seen increased profitability as a direct result of EI training programmes delivered to its front-line customer-facing employees.

Do you even want to have employees with no customer-compassion?  Maybe you should consider training all your staff in Emotional Intelligence; yes, it is not the norm – but there is always a time when we need to employ new ideas. There are plenty of case studies on the Internet.

   #5 Imbed Customer Experience in your Organisation Design

Please omit that notion of “customer-facing” employees!  Customer Experience Service Standards are needed for all employees, regardless of their job-title or organisational/seniority level. 

   #6. Improve Employees’ Customer Experience Skills

Yes, this is obvious – but if everybody was doing this, Customers would not be running to their competitors.  Don’t blame untrained employees, and also do not send them to generic training courses and expect results specific to your organisation/environment.

Simply put, CX starts with every employee trained and engaged with it!

   #7. Is your Employee Social Media Policy CX-centric?

In 2017 you can’t afford to ignore Social Media; nor you can afford accidental damage to your Brand by your employees. You should have a clear and well-communicated Social Media Policy for all your employees – and you should also provide relevant training.

Empower all your CX-properly-trained employees to participate in Social Media with your customers.

FYI: Adobe, IBM, Intel, and several other companies have been doing this for years.

My advice on this – is to watch for all employees who do not participate in Social Media.  If they are so happy and excited to work in your company, why don’t they then share their enthusiasm with your clients? Please use ‘this’ as a diagnostic tool to spot unhappy employees and help resolve the issues, and not as a punishment mechanism for their lack of Social Media participation.

   #8. CXify your organisation

HR should make sure that the Customer Experience element becomes an integral part of every aspect of your organisation and its culture. From having the Customer Experience element in every job-description/every job advertisement, to having it in its planned training offerings for every employee – even to having it in every Employee-KPI Setup and Performance Evaluation.

Would you really want to promote people who do not make any contribution to your Customer Experience? Do you even want to pay bonuses to those employees?

Make sure that ‘everything’ (processes, procedures, methodologies, tools) and everyone in your Organisation Design, Structures and Frameworks ‘breathes’ CX in and out!

CX and HR: A 2-way Street
Think about it: Your best ideas for employee engagement and training originate with customer feedback.

Maybe it is time that your HR integrates with all possible Customer Service and Customer Operations teams (e.g. Customer Delivery – even if you make pizza; Customer Support Lines, etc). Have your HR walk and talk to the people on the floor doing the ‘work’, understand their challenges, make sure that their concerns are addressed, and their knowledge is communicated to the rest of the company (does your organisation need a Knowledge Base? Do you need to offer new trainings?).

HR should not be an isolated kingdom – go out there, talk to all employees and get to know their ‘pulse’; listen, observe, advise. Otherwise, how will you add value in creating CX policies and in disseminating knowledge/experiences from the customers back to the whole organisation?

Customer Service and Marketing Departments tend to do all sorts of Customer Satisfaction and Happiness Surveys. Unfortunately, survey insights do not permeate back inside the whole company; nor do they get captured in any sort of a knowledge base. Also, Customer Surveys are only valuable if your people act on them.

And for employee-rating surveys, focus your employee-performance metrics more on their CX-enabling behaviours and less on survey ratings…just a suggestion.

 

Btw, when is the last time that you or your Customer-Interfacing employees got engaged directly with a customer and ask that customer for their regular personalised feedback on the employee’s ability to satisfy that customer?

 

Conclusion

“Customer Experience is broadly affected by the entire company: its culture, internal handoffs, attitudes, decisions, processes, policies, and actions. Knowledge management, employee engagement, and cross-functional collaboration can be facilitated by HR to achieve greater connectedness, consistency and synergy both internally and externally.”

It is HR that creates the context and mindset within your organisation/business that will ultimately lead to a great Customer Experience. And, of course, it is your HR or your partner Recruitment Agency that recruits your employees who will contribute to and reinforce this mindset.

Finally, think of aligning your organisation to its customers instead of insisting that your customers align to your organisation. How does or can your organisational structure(s) best-serve your customers?

 

Thank you and Good Luck,

Irene

About the Author: Irene Gloria Addison is the owner of HIREghana [Human Intelligence Recruitment], a niche HRM & Organisational Development Consultancy and a Leader Ghanaian Recruitment Agency based in Accra.

 

Irene welcomes your feedback/ comments/ remarks/ suggestions via your email message to Press [at] HIREgh.com. HIREghana can be reached at +233 50 228 5155 or +233 266 555 907

Our website is http://www.hiregh.com

© 2017 Irene Gloria Addison and © 2017 Human Intelligence Recruitment

Customer Experience & HR: Let’s Link them!

0

For years and years now, since inception of the Employee Engagement idea, a lot of companies have been struggling to maximise employee engagement – mainly for financial reasons, or for being hopefully perceived as an amazingly great place to work: this making it easier to attract high-calibre/top talent candidates.

FYI: There is no proof that Employee Engagement improves productivity – at least in 2017 we still have no strong case studies proving this to be true.

If you agree that your company, or even any other organisation, would not exist without customers (the customers of an NGO/Non-profit are its beneficiaries), then it is logical to expect that the best results in your Customers’ Experience can only be achieved if – and only if – Customer Experience (CX) becomes the context/the ‘meat & potatoes’ for every possible type of Employee Engagement.  It should not be strictly reserved for customer-facing employees! And obviously, here is where HR could help.

8 Ways HR can help with improving your Customer Experience (CX)

   #1. Cross-functional/cross-disciplinary collaboration

Your Customer/Beneficiary will always see your organisation as ‘one’ and not as a collection of business and functional units, or any other forms of Silos. Let me give you a few examples: you might have the best possible Customer Service and interaction in every channel and touchpoint with your Customers, but they will still be repelled/turned-off if you employ poor billing; or your distribution/shipment practices leave a huge space for improvement (does this sound familiar? Our personal experiences with online Ghanaian sellers are not positive yet); and the same if any of your physical Customer-visited areas reflect poor hygiene.

We always assume that cross-functional collaboration is a given reality, and that all teams talk to each other when needed and work happily together; nothing could be further for the truth. Here you need a good (if not excellent) HR team that has created an Organisation(al) Design on solid grounds, and is also continuously active in finding ways to champion and really promote in practice true cross-functional collaboration.

Tip #1: Stop assuming that teams know how to collaborate across departments, please!

FYI: Customer-pain usually results from communication gaps and/or weak handovers between functional areas.

   #2. Make your Employee Induction a Customer-centric process

All your new employees need to understand both your business(processes) and who your customers are; and how they can serve them better.

FYI / A simple example: At Disney Amusement Parks and other Hospitality services, the new employees are clearly told from Day-1 that they “need to treat a customer the same way they would treat a guest in their own home”.

   #3. Remove the ‘Thorn-Employee’

You can’t avoid the reality of unhappy and disgruntled employees. HR can help you reduce the risk by removing (not necessarily firing, unless there is a valid grave reason) the relevant employee from that particular contact touchpoint or channel with the Customers. If needed, perform active high-impact Damage Control.

   #4. Have Emotionally Intelligent (EI) Employees

FYI: L’Oréal has seen increased profitability as a direct result of EI training programmes delivered to its front-line customer-facing employees.

Do you even want to have employees with no customer-compassion?  Maybe you should consider training all your staff in Emotional Intelligence; yes, it is not the norm – but there is always a time when we need to employ new ideas. There are plenty of case studies on the Internet.

   #5 Imbed Customer Experience in your Organisation Design

Please omit that notion of “customer-facing” employees!  Customer Experience Service Standards are needed for all employees, regardless of their job-title or organisational/seniority level. 

   #6. Improve Employees’ Customer Experience Skills

Yes, this is obvious – but if everybody was doing this, Customers would not be running to their competitors.  Don’t blame untrained employees, and also do not send them to generic training courses and expect results specific to your organisation/environment.

Simply put, CX starts with every employee trained and engaged with it!

   #7. Is your Employee Social Media Policy CX-centric?

In 2017 you can’t afford to ignore Social Media; nor you can afford accidental damage to your Brand by your employees. You should have a clear and well-communicated Social Media Policy for all your employees – and you should also provide relevant training.

Empower all your CX-properly-trained employees to participate in Social Media with your customers.

FYI: Adobe, IBM, Intel, and several other companies have been doing this for years.

My advice on this – is to watch for all employees who do not participate in Social Media.  If they are so happy and excited to work in your company, why don’t they then share their enthusiasm with your clients? Please use ‘this’ as a diagnostic tool to spot unhappy employees and help resolve the issues, and not as a punishment mechanism for their lack of Social Media participation.

   #8. CXify your organisation

HR should make sure that the Customer Experience element becomes an integral part of every aspect of your organisation and its culture. From having the Customer Experience element in every job-description/every job advertisement, to having it in its planned training offerings for every employee – even to having it in every Employee-KPI Setup and Performance Evaluation.

Would you really want to promote people who do not make any contribution to your Customer Experience? Do you even want to pay bonuses to those employees?

Make sure that ‘everything’ (processes, procedures, methodologies, tools) and everyone in your Organisation Design, Structures and Frameworks ‘breathes’ CX in and out!

CX and HR: A 2-way Street
Think about it: Your best ideas for employee engagement and training originate with customer feedback.

Maybe it is time that your HR integrates with all possible Customer Service and Customer Operations teams (e.g. Customer Delivery – even if you make pizza; Customer Support Lines, etc). Have your HR walk and talk to the people on the floor doing the ‘work’, understand their challenges, make sure that their concerns are addressed, and their knowledge is communicated to the rest of the company (does your organisation need a Knowledge Base? Do you need to offer new trainings?).

HR should not be an isolated kingdom – go out there, talk to all employees and get to know their ‘pulse’; listen, observe, advise. Otherwise, how will you add value in creating CX policies and in disseminating knowledge/experiences from the customers back to the whole organisation?

Customer Service and Marketing Departments tend to do all sorts of Customer Satisfaction and Happiness Surveys. Unfortunately, survey insights do not permeate back inside the whole company; nor do they get captured in any sort of a knowledge base. Also, Customer Surveys are only valuable if your people act on them.

And for employee-rating surveys, focus your employee-performance metrics more on their CX-enabling behaviours and less on survey ratings…just a suggestion.

 

Btw, when is the last time that you or your Customer-Interfacing employees got engaged directly with a customer and ask that customer for their regular personalised feedback on the employee’s ability to satisfy that customer?

 

Conclusion

“Customer Experience is broadly affected by the entire company: its culture, internal handoffs, attitudes, decisions, processes, policies, and actions. Knowledge management, employee engagement, and cross-functional collaboration can be facilitated by HR to achieve greater connectedness, consistency and synergy both internally and externally.”

It is HR that creates the context and mindset within your organisation/business that will ultimately lead to a great Customer Experience. And, of course, it is your HR or your partner Recruitment Agency that recruits your employees who will contribute to and reinforce this mindset.

Finally, think of aligning your organisation to its customers instead of insisting that your customers align to your organisation. How does or can your organisational structure(s) best-serve your customers?

 

Thank you and Good Luck,

Irene

About the Author: Irene Gloria Addison is the owner of HIREghana [Human Intelligence Recruitment], a niche HRM & Organisational Development Consultancy and a Leader Ghanaian Recruitment Agency based in Accra.

 

Irene welcomes your feedback/ comments/ remarks/ suggestions via your email message to Press [at] HIREgh.com. HIREghana can be reached at +233 50 228 5155 or +233 266 555 907

Our website is http://www.hiregh.com

© 2017 Irene Gloria Addison and © 2017 Human Intelligence Recruitment

US$8.5m Rigworld training centre opens today

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With increased mining activity in West Africa, especially Ghana, it has become essential to have adequate and necessary training facilities to train and empower its workforce so as to ensure that safety practices meet international standards.

It is on this premise that Ghanaian-owned service provider Rigworld International Services has led the way in establishing a safety training school to address this need.

The Rigworld Training Centre, which will be officially inaugurated tomorrow at Kejebril, Takoradi, in the Western Region, and serve as a catalyst to enabling better safety in oil and gas exploratory ventures.

The centre, valued at US$8.5 million, is fully-equipped with advanced simulators, helipad, water survival training pool, medical center, prime on-site accommodation, restaurant and fitness centre. The highly equipped oil and gas training facility, which is the first of its kind in the West African sub-region, has advanced simulators for real-time training and development.

The training centre will offer a variety of safety and survival courses, including Basic Offshore Safety Induction and Emergency Training, Further Offshore Emergency Training, Helicopter Underwater Escape Training, and the Compressed Air Emergency Breathing System.

Other courses to be offered are Well Control and Intervention Training, Banksman and Slinger, Forklift Training, Crane Operations, Rope Access Training, Health, Hose Assembly Training, as well as provision of offshore medicals, among others.

Speaking in an interview with the General Manager of Rigworld Training Centre, Carlos Akyeampong, explained that the idea of building the center was conceived in 2016, following the desire to find suitable and lasting solution to the problem of lack of relevant training and expertise within the oil and gas industry.

“The need to carry out jobs safely and competently within the oil and gas industry propelled the idea for an offshore training centre. This is also in line with the regulator of the oil and gas sector’s – the Petroleum Commission – commitment to as much as possible ensure local content and participation within the industry.

“The establishment of Rigworld Training Centre is therefore part of the forward-looking and giant steps to boost local content and participation in the oil and gas sector,” Mr. Akyeampong added in a recent interview with the media.

The Local Content and Participation Policy was formulated to champion the cause of ensuring that Ghanaians constitute 90% of the workforce in the oil and gas sector by 2020. Shortly afterward, the local content and local participation law was passed to enforce that vision.

However, over seven years of oil production down the line, not much has been achieved in building local competence to fill this budding industry.

According to Kofi Abban, Managing Director of Rigworld International Services, the training centre is a move geared toward supporting government’s effort to ensure that enough locals are trained and well-equipped to facilitate and execute the oil sector’s needs within the confines of internationally accepted practices and operations.

“It was against this background that our company decided to complement government’s effort with the establishment of an international-standard oil and gas training centre to train locals for this industry.”

Some have described the training centre a haven of comfort, but in essence it is a one of a kind well-equipped oil and gas training centre that is the first to be witnessed in Ghana – and indeed the West African sub-region.

The launch of the Rigworld Training Centre hopes to attract more than 500 distinguished government officials and industry experts as well as well-wishers of Ghana’s booming oil and gas sector.

GLICO honoured with four awards at the 2017 CFO awards

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GLICO, a leading insurance service provider, won four awards at the recently-held CFO awards.  The categories won were: Chief Finance Officer of the Year (Insurance); Chief Finance Officer of the Year (Pensions); Innovation in Insurance and a Special Recognition Award for the Executive Chairman of GLICO GROUP – Dr. Kwame Achampong-Kyei, for his outstanding contribution toward the development of insurance in Ghana.

Mr. Victor Owusu-Boakye received the Chief Finance Officer Insurance Category award; Mrs. Belinda Dede Tandoh received the Chief Finance Officer Pensions award; and the Group Head Corporate Affairs & Marketing, Nana Efua Rockson, received the Insurance innovation and special recognition award for GLICO GROUP.

Receiving the award on behalf of GLICO, Nana Efua Rockson expressed: “We are delighted that our efforts as an organisation in bringing insurance to the doorsteps of Ghanaians is being honoured. This is a feather in our cap and a challenge to continue churn out quality and innovative products for our customers”.

She also thanked the organisers of the awards, Instinctwave for recognising the contributions of Dr. Kwame Achampong-Kyei toward the development of insurance in Ghana. She further relayed the excitement felt by the Executive Chairman of GLICO GROUP when he received notification of his special award – that “It feels humbling to be awarded for something one has dedicated his entire life to. It is indeed a spur to do more as long as God gives me strength”.

The annual CFO awards recognize the accomplishments of senior finance executives and their contribution toward the growth and success of their organisations in the financial industry.

It is worthy of note that GLICO started operations as a life insurance company.  Significantly, it has grown into a Group status with six subsidiaries: namely GLICO LIFE, GLICO HEALTHCARE, GLICO PROPERTIES, GLICO CAPITAL, GLICO GENERAL and GLICO PENSIONS – all together providing innovative and quality insurance/ financial products and services for the Ghanaian people.

 The Attitude Lounge: Workplace Conversations

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“‘Come what may’ is unpatriotic.” – Akan proverb

We all chatter – and we do this everywhere, especially in the workplace where we spend an estimated third of our days. Interestingly, with all the talk about harnessing talents and potential within the business environment, conversations are missing from that list. Maybe it is not strange, because conversations come so easily to us. Conversations take more of our time than any other activity. We make them while working and we use them to idle the time away.  Conversation is perceived more as a social experience than an energy that can be harnessed for productivity. But what if we started thinking out of the box, and turned all the conversations we have at the workplace into productive energy? Can you imagine the result?

Conversations are the medium by which we share our perceptions on everything about life. In the workplace, they bring out the thoughts of employees – from the moral state of the organisation’s value system, to the essence of working within that particular environment, to the sterility of harassment and discrimination. When we converse, we pour out our understanding of life.

Conversations can be likened to preparing dinner with a recipe; we get to appreciate the ingredients that have cooked the opinion of others. And so, the more we converse the more we get to appreciate their strengths and understand why they are weak in other areas. It is the means through which we can influence individuals, attitudes and cultures; be it organisational or societal. Conversations, when steered strategically, are cultural provocateurs.

Whether we know it or not, and whether we appreciate it or not, the number-one requirement for generating ideas is conversations. The same is required for inspiring change in attitudes and everything else. In an era when life is characterised by ambivalence, we need conversations to help us distinguish facts from beliefs and opinions.

We need conversations grounded in facts while abounding in disagreements, so that we can understand where we stand individually and build bridges to the points where facts reside – and, ultimately, to truth. But for that to happen, we need leaders who understand that their role ought not to be to push their views down their followers’ throats, but to rather engage them in conversations so they can answer their nagging questions.

It is no secret that many leaders view conversationalists as wastrels. This is so because they assume talking business is what efficiency is all about. What they miss is that without real and true engagement – that which conversations provide – it is almost impossible to take advantage of synergies, economies of scale and the shared risk that brings about efficiency. Conversations are what connect us to people. They are the soul of all relationships, whether at the workplace or at home. Sadly, what pertains in many work environments is the art and act of giving and receiving orders. The greater number among us are in so much of a hurry to give an order or receive one, we never really take the time to create a connection with our subordinates and bosses. Such an attitude misses the point of engaging people to inspire them and bring out their best.

Steered conversations take everyday business issues that we consider boring and mundane and make them fun and exciting, presenting them as inspiring so employees see them as something they are proud to be part of – and not only that, but to also show they can actually do them and do them very well.

When we get people to act out of their own accord, their actions are so free, so easy, and so natural that it almost seems as if they are not working at all. The efforts that flow from them do so without sapping their energies, and this allows them to output more with less.

Instead of promoting idleness, conversations promote the highest activity by engaging people to find their aspirations in the organisation’s existence. This dependence is indispensably necessary to energise the individual into becoming an intrapreneur, helping thereby to attain the purpose of its creation.

Life communicates, but it is conversations that have allowed humans to dominate life. It is our greatest gift, outside of salvation. We should never forget that God had to be conversing with us to save us. Christ did not talk down to people. He encouraged them to share their innermost fears, so He could allay those fears with conversations about love. Such is the importance of conversations. They ennoble us to define what the world needs, rather than what it wants.

But we need to understand that the line between talking and conversing has never been blurrier. Which is why how we converse with each other always leaves a lasting impression. We are therefore obliged to ensure we converse properly, at least, if not strategically. And so, as we strive to push the economic-profit agenda in our workplaces, let us use conversations to galvanise the creativity and commitment that allows for those profits to be possible.

 

Comments, suggestions and requests should be sent to the author at [email protected]

The role of government in an economy

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President Akufo-Addo

It is far better to be free to govern or misgovern yourself than to be governed by anybody else: Kwame Nkrumah – in the Autobiography of Kwame Nkrumah, 1957.

 

One of the longest running debates in economics is the role of government. And like every debate, there are sides to it. The two sides to the role of government debate are largely what has given rise to the left and right side of politics in the world.  In all countries across the globe, outcomes of national elections are strictly influenced by this debate – i.e., what should the role of government be in an economy?

In its basic form, the two sides are whether government should be small or large – with the former implying a small government expenditure and the latter a large government expenditure. The academic literature on fiscal policy – i.e. government expenditure and taxation – is largely dependent on these two sides of the debate.

And when an economy is in a recession, there are economists who believe that government expenditure should either remain the same or be reduced and those who believe government should increase expenditure to ameliorate the effects of economic recession. It is important to note that these debates are often not half-hearted. In fact, they are carried out with such zeal they are sometimes to the detriment of economic data, evidence and economic reality.

A few days ago, it was widely reported that the International Monetary Fund (IMF) had expressed concern about high expenditure projects being carried out by the government of Ghana. This was supposedly contained in the most recent Article IV (article 4) consultation, which is an annual consultation with countries all over the world.

Article 4 consultations are carried out to ensure a country is complying with the articles under which the International Monetary Fund was established, and that it is ensuring exchange rate convertibility for international trade purposes and maintaining global aggregate demand – with the IMF seemingly reneging on the latter in most developing economies. The International Monetary Fund was founded primarily as a public institution – financed by taxpayers in member-countries – that would put international pressure on countries to maintain global aggregate demand through expansionary fiscal policies, reducing taxes and the reduction of interest rates to stimulate the economy.

It is important to note that not all countries adhere to the provisions which stem from these consultations. Advanced and powerful economies such as the United States do not abide by them. And while the IMF has largely been a force for good, there is overwhelming evidence that developing countries such as Ghana have not always benefited from directives of the IMF article 4 consultations.

An interesting fact one learns from studying economics is that there are no hard and fast rules – which is why economic policies and social interventions that are data-dependent and tuned to the needs and wants of local inhabitants tend to produce the right outcomes. This is a point the IMF seems not to factor into the advice given to developing countries.

There are several stages of economic development, and in many ways Ghana is still classed as a developing country. The role of the central government in a developing economy is crucial. This is due to the fact in a country like Ghana there might be an absence of the right market institutions, competitive markets, safety nets, laws that deal with bankruptcies and incentives which would cause private individuals to engage in some of the economic activities the President Nana Addo Dankwa Akuffo-Addo-led government is embarking upon, or has promised to provide.

For example, economic research shows that individuals exhibit a lack of foresight and careful planning; therefore, government has to provide pension services as opposed to individuals being asked to save for retirement. The governments of advanced economies played this crucial role before markets were created for annuities.

For example, when European economies created social welfare programmes such as unemployment and disability insurance, there were no private markets for annuities – and this example applies to several sectors of their economies which space will not permit me to list all. The government held the fort and in many instances, for example, provided the market before allowing or encouraging private participation.

Market liberalisation – the most-often prescribed economic policy by the IMF – began as recently as the 1970s in the United States, while that of the United Kingdom began in the 1980s. Prior to that, governments of the said countries were deeply involved in every aspect of their country’s economy; and available data shows that inequality was greatly reduced at the time, while the citizens of those countries enjoyed better economic outcomes and welfare.

Ghana’s economy is one in transition as the country moves forward with its industrialisation agenda. Even though this requires a lot of money for investment, it is an economic policy that will provide jobs and economic welfare for the people of Ghana. It is also the one economic policy that has the potential to ensure Ghana’s economic development is geographically broad-based, reducing the ever-increasing rural to urban migration in the process.

Government expenditure of any sort, be it high or low, is a problem only when this expenditure is not used for utility-generating economic activities such as investments in education, social security and job-creation programmes. In such an instance, it is unlikely that this government expenditure will get onto the economic production function leading to economic expansion. When this happens, then money spent or ‘invested’ will not generate any revenue – leading a widening deficit.

As an economist, I wrote about deficits run by the previous government because even though government can run a temporary deficit, this temporary deficit must lead to an economic expansion. It is a problem if persistent deficits do not lead to an economic expansion, as was the case in the previous administration. But the data shows an improvement in Ghana’s financial variables for 2017, and therefore I believe as long as government expenditure is judiciously used toward the One District, One Factory policy, free Senior High School intervention, National Health Insurance Scheme and other utility generating economic activities, then Ghana should opt to be free to govern itself in a manner that benefits Ghanaians.

21st Century Etiquette School for girls opens in Accra

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At a time when there seems to be a complete societal breakdown in politeness, courtesy, manners and etiquette, the GIRL (Growing Into Respectable Ladies) programme has been launched in Accra to help bridge this gap and train a new crop of young ones who are mindful and conscious of what society expects of them.

Opened at the Kempinski Hotel on Saturday October 21, the maiden workshop brought together young girls from various schools across the country. Key among the array of topics covered during the session were social etiquette, the art of conversation, Image, Presence as well as the world of E- communication (Cellphone and social media) etiquette that could keep them safe in today’s world.

The GIRL, which is expected to be organised monthly, is run by professional facilitators through carefully crafted and extremely interactive sessions. Currently, the workshop admits girls between the ages of 8 to 13, but will have younger and older age group sessions from February 2018.

Speaking very passionately about the programme, Ms. Michelle Kwame – Founder of G.I.R.L., noted that she started this programme in Accra to bring back emphasis on instilling good manners from a young age – which is mainly a way of being sensitive to other people’s feelings.

She said: “It is time to take back our society. People do not respect each other anymore. Therefore, they do not feel that they need to show courtesy to others or make them feel comfortable. They do not care how others feel”.

Commenting on the workshop’s uniqueness, Ms. Kwame concluded by saying: “Our GIRL programme is not just about crossing your legs or teaching girls how to sit. It’s about shaping behaviour and social interactions – which is a great foundation for now and into the future. I encourage parents and especially mothers to enrol their daughters in this programme, and they will be glad they did”.

The young participants at the maiden workshop had lots to say about the programme’s content, and were fulsomely praiseful and excited about the many things they learned.

The next GIRL programme is expected to take place this weekend at the Kempinksi Hotel. Interested persons can register via, email: [email protected] or call 055 2000010.

Fiscal Policy, Fiscal Multipliers, Debts, Deficits and Economic Development

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There is disquiet by some persons about Ghana’s debts, deficits and by extension fiscal policy. Some have even gone a step further to suggest that Ghana will soon become Highly Indebted Poor Country (HIPC) again. This article will attempt to explain the dynamics of Ghana’s fiscal policy, debt, deficits and how this links to Ghana’s economic development.

Fiscal policy refers to government expenditure and taxation policies. When a government wants to carry out fiscal policy, the options available to the government is either to increase/decrease expenditure or increase/decrease taxes or a combination of expenditure and tax increment and decrement. Government debt refers to the historical sum of amounts owed to both domestic and international lenders while the deficit refers to the difference between revenue and expenditure. If government revenue is higher than expenditure then the government will run a surplus. If, however revenue is less than expenditure then government will run a deficit.

Debt is not bad in principle. What makes debt bad is what it is used for. For example, if a government borrows $600,000 to spend on a fence wall for a government building, then this debt is most likely not going to be repaid as it is not going to generate any revenue. Similarly, if a government borrows $72 million to spend on software then by all means this debt is not going to be repaid as it will generate no revenue for government kitty. I have used the software and fence wall examples because in all probability, a fence wall does not cost $600,000 dollars to build and a software (enterprise) does not cost $72 million. Thus, these expenditures will not generate $600,000 and $72 million worth of economic activity.

When government spends a certain amount of money let’s say, GH₵ 1 billion and assuming that demand equals supply such that this extra expenditure does not lead to an increase in the price level, this leads to the production of an extra GH₵ 1 billion worth of goods and services. This implies that changes in aggregate demand leads to a corresponding change in aggregate output as measured by real gross domestic product.

Assuming the government of Ghana decides to spend GH₵ 135 billion on affordable home construction over the next 8 years, aggregate income and aggregate output will increase by the same value (bearing in mind the assumption of demand equaling supply) as every cedi spent translates to a cedi of income for construction workers, electricians, surveyor’s suppliers of building materials etc. If the process stopped at this stage, it will mean that the GH₵ 135 billion investment leads to exactly GH₵ 135 billion increases in income. But the process does not stop there as the increase in income flows to households in the form of profits and wages. The increase in wages leads to higher consumer spending which in turn leads to an increase in aggregate demand causing firms to produce more thereby generating another round of additions to aggregate income.

Marginal propensity to consume (MPC) will enable us to determine the overall effect of a GH₵ 135 billion investments. Specifically, the MPC refers to the percentage of an individual or national income that is consumed thus if aggregate income increases by GH₵ 10 billion and consumer spending increases by GH₵ 6 billion then marginal propensity to consume is 0.6 (MPC is always between 0 and 1).

From 1992 to 2016, Ghana’s MPC is 0.9 (from savings rate – Ghana Statistical Service data) therefore, after a hypothetical GH₵ 135 billion investment the total effect on Ghana’s economy is given as

  • Increase in investment spending = GH₵ 135 billion
  • 2nd round of investment spending = MPC x GH₵ 135 billion
  • 3rd round of investment spending = MPC2 x GH₵ 135 billion
  • 4th round of investment spending = MPC3 x GH₵ 135 billion

total increase is then given as (1 + MPC + MPC2 + MPC3 + ….. ) + GH₵ 135 billion

We know from mathematics that when we have an infinite series of the form (1 + x + x2 + x3 …) where x is between 0 and 1 as pertains above, it can be rewritten as 1/(1-x). This means that with an MPC of 0.9 and an estimated government expenditure between 2009 and 2016 of GH₵ 135 billion (i.e. $30 billion) total increase in Ghana’s gross domestic product between this period should be 1/(1-0.9) x GH₵ 135 billion = GH₵1.35 trillion.

That said, it will interest the reader that the sum of Ghana’s real gross domestic product for 2009-2016 was GH₵ 240 billion instead. This implies that an estimated GH₵ 1 trillion worth of ‘potential’ income was lost between 2008 and 2016 for various reasons. It is not surprising that our public-sector debt shot up by almost 900% in this period. Looking at investment alone Ghana’s fiscal multiplier between 2009-2016 is 10 which is very high meaning that fiscal policy if well implemented will produce the desired economic outcome and improvement in the economic welfare of Ghanaians.

We have seen from the analyses that when government expenditure increases the economy grows but this economic growth happens only when it is used for value for money investments and utility generating economic activities. Despite the astronomical growth in government expenditure between 2009 and 2016 there was sharp decline in gross domestic product. The peak seen in 2010 is due to the production of crude oil in commercial quantities so controlling for that paints an even bleak picture of economic activity between 2009 and 2016.

It is good economics for Ghana to aim to reduce its debt to GDP ratio and this is important when one considers the fact that we do not borrow in Ghana Cedis on international markets. However, the current government met what can best be described as empty coffers therefore as long as government is determined to carry out the one district, one factory, free SHS and other economic policies and social interventions then debt to GDP ratio will rise marginally before it falls. Ghana will only return to HIPC – that is if Ghana is allowed to assess the debt relief program twice –  if government expenditure and the economy is managed like it was managed between 2009 and 2016. So far, the evidence suggests otherwise.

Notes: The assumption of aggregate demand equaling aggregate supply is realistic in the short run but in the long-run aggregate increment in expenditure is likely to have an impact on the price level.

 

2018 Budget Watch:Highlights and final document

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Ken Ofori-Atta, Minister of Finance

Today the Nana Addo Dankwa Akufo-Addo led government presented its second budget which contains revenue and estimates for 2018 to parliament.

The 2018 budget according to the Minister of Finance, Ken Ofori Atta, seeks to create jobs, cuts tariffs in electricity, support SME’s and investments in the key sectors of the economy.

Presenting the budget the Finance Minister said, “the 2018-2021 Budget is informed by the President’s Coordinated Programme for Economic and Social Development Policies which aims at creating a conducive environment for the private sector to thrive, propel growth and create employment opportunies, especially for the youth. In this regard, Government’s policy objectives for the medium term will aim at:

  • Stabilizing the economy and setting it on a path of sustained, diversified and resilient growth;
  • Optimizing the key sources of growth in the economy on sustainable basis;
  • Enhancing a competitive and enabling business environment for private sector-led growth;
  • Formalizing the informal sector;
  • Building a strong and resilient economy able to withstand internal and external shocks;
  • Promoting agro-industrial enterprises as the basis for the “One District, One Factory” initiative; and
  • Creating entrepreneurial and employment opportunities, especially for the youth.”

The Finance Minister said, “this will be underpinned by a stable macro-economic regime. The strategies for achieving these broad macroeconomic objectives include the following:

  • Promoting inclusive growth without compromising fiscal consolidation;
  • Anchoring fiscal policy on reducing the fiscal deficit to low and sustainable levels, sufficient to reduce the overall public debt burden;
  • Strengthening the inflation targeting regime and pursuing complementary monetary policy to promote monetary discipline; and
  • Pursuing complementary external sector policies to ensure exchange rate stability and favourable current account balance.”

He added that, consistent with our medium-term development policy framework, we have set the following macroeconomic targets for the medium term (2018-2021):

  • Real GDP to grow at an average rate of 6.2 percent between 2018 and 2020;
  • Inflation to stay within the target band of 8±2%;
  • Overall fiscal deficit to remain within the fiscal rule of 3-5 percent;
  • Primary balance expected to improve from a surplus of 0.2 percent of GDP in 2017 and remain around 2.0 percent in the medium term; and
  • Gross International Reserves to cover at least 4 months of imports.

Mr. Ofori-Atta pointed out that, based on our policy objective of ensuring macroeconomic stability, and growing the economy for job creation, whilst protecting social spending, the following macroeconomic targets are set for the 2018 fiscal year:

  • Overall GDP growth rate of 6.8 percent;
  • Non-oil GDP growth rate of 5.4 percent;
  • End period inflation rate of 8.9 percent;
  • Average inflation rate of 9.8 percent;
  • Fiscal deficit of 4.5% percent GDP;
  • Primary balance (surplus) of 1.6 percent of GDP; and
  • Gross Foreign Assets to cover at least 3.5 months of imports of goods and service.

Below is the final budget speech as delivered by the Minister of Finance, Ken Ofori Atta.

Final 2018 Budget

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