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What the banks’ balance sheets do not reveal!

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One of the key attributes of money is that it is used as a unit of measurement. Thus, where Francis and Alberta earn GH₵10,000 each per month it is convenient to say that they both earn the same salary, perhaps perform similar functions in the same organisation or are at a parallel level in terms of the firm’s prevailing organogram. Similarly, prices quoted for similar items enable us to determine the values (even if superficially) of the items.

When it comes to analysing the balance sheets of two banks, however, the various line items in quantitative terms can give a fallacious view of the strengths or risk exposures inherent in the individual banks under consideration.

The usually half-hearted one-paragraph notes to the accounts do little to illuminate the true state of risk or value of the bank. This is where assets valued GH₵400million in bank A can differ significantly from the same line item valued GH₵400million in bank B. This situation is more evident when considering, particularly, the aggregated assets and liabilities of figures presented in the individual bank’s balance sheets.

Without access to the qualitative dimensions regarding the composition of these assets and liabilities’ figures, one may be tempted to jump into making dangerous conclusions. Of particular interest in judging the relative financial strengths or positions of different banks are vital issues which are not disclosed in the financials, in spite of the current global push for more disclosures and transparency in financial statements.

The exclusion of the under-mentioned critical issues has the tendency to obscure the real worth of inter-bank comparison, unless one has insider knowledge or access to other qualitative factors of the banks under consideration:

(a) the concentration mixes of the individual assets and liabilities portfolio

(b) the maturity profiles of the assets and liabilities

(c) the aging analysis or the quality of the loan portfolio

(d) the sectoral distribution of the assets (loans and advances)

(e) the specific risk factors associated with different sectors of the economy and degree of the individual bank’s exposure to these sectors.

(f) the relative cost of funds in the liabilities portfolio, and

(g) the product mix of the deposit liabilities – i.e. how much is held in, say, demand deposits, savings deposits and time deposits?

Admittedly, too much detail in the financials would make it cluttered and put off the average reader. For the critical analyst, however, merely churning out ratios for comparison purposes can be quite an unworthy exercise – unless these can be supplemented by trend analysis and assurance of consistency in the application of accounting principles and other extra financial information.

Each of these factors that illuminate the respective strengths of the various balance sheets will be explained in further detail shortly.

Depending on whether a bank has traditionally been a merchant, or development-oriented bank, its cost of funds tends to be relatively higher than a retail/commercial bank. The latter tends to benefit from low-cost retail deposits which also are usually comparably more cheap and stable than the high cost and volatile corporate funds. The Net Interest Income margin thus reflects these cost dynamics.

It follows therefore that the income generation capacity of two banks with say GH¢500,000,000 each in liabilities cannot necessarily be said to be on the same level. This is because their liquidity and income generation capacities can differ significantly. This is even more accentuated when one gets to know the concentration dynamics of these deposits; that is, “what proportion of these deposits are held by say the Top-20 Depositors?”

Similarly, maturity profiles of the various liability items (the quantum of deposits in the respective demand, savings and time deposits buckets) will determine the level of mismatches that can be tolerated by the individual bank. For instance, it would be imprudent for a bank with short-term maturities in its liability mix to engage in long-term loans and advances.

To manage its risk, the resultant advances would have to be short-term in nature offered to top corporates at relatively slim interest margins, while emphasis is placed on fees and commission income from other transactions. This does not, however, suggest that loans and advances are financed by deposits alone. Accumulated reserves that increase shareholders’ funds and other tier-two capital items complement the quantum of loans and advances that may be granted. Analysts should therefore be interested in these cushions.

The figures presented for net loans and advances also obscure the relative quality of such loans. The consolidation does not help one to determine the aging analyses of the different borrowing clients.

Whereas one bank’s figure may represent fairly current exposures, another’s figure may be made up predominantly of hard core irrecoverable loans, in spite of the subjective provision for bad debts that may have been made in the income statement.

In terms of income generation, therefore, one bank may be stronger or weaker than another, even if they both depict the same quantum of loans and advances in their respective balance sheets.

Of equal importance to the analyst is the concentration of the loans and proportion of this that is held by, say, the bank’s top-twenty clients, and the specific industries or sectors in which these clients operate. Any specific risk in the sector in which they operate can have dire consequences on the respective banks’ fortunes. The banks’ exposure to VRA, ECG and the BDCs clearly exemplify this point, but which fact may not be revealed in the individual balance sheets to aid fair comparisons of different banks. The Finatrade exposure that hit some six key banks some months ago is another classic pointer.

Concentration dynamics also prevail in terms of the total deposit liabilities. The raw figures in balance sheets do not show the deposit mix’s volatility, especially which clients hold what proportion of the deposit figure. Are these individual or corporate clients, and what is the likelihood of major withdrawals?

Obviously, the degree of volatility has implications on how the bank plays on the money market or engages in long-term advances. At some point in time, a telcom company was said to be commanding close to 20% of total deposits across the banking industry. A strategy to become a net borrower in the economy as part of the company’s internal risk management initiatives could have serious implications for the banks holding these deposits.

Other key areas of risk that are not apparent from figures in the balance sheets are interest rate and foreign exchange risks, depending on the sensitivity of the individual bank’s assets and liability structures and offshore exposures to rates variability.

This brief insight plays into the argument (which has now been laid to rest somewhat) of whether all the universal banks should have the same minimum capital of GH¢400,000,000 irrespective of their different stages of growth, the specific risk exposures faced by each bank and their risk absorption or tolerance levels. Clearly, GH¢400,000,000 is not equal to GH¢400,000,000 in different banks, given the above exposition.

Dubai must connect African entrepreneurs with growth opportunities – Experts

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Dubai has been urged to make itself available to support development of Africa’s entrepreneurial eco-system by connecting the continent’s business leaders and entrepreneurs with new growth opportunities.

This was the view of a panel of entrepreneurs who spoke at the 4th Global Business Forum on Africa, which is taking place at Dubai’s Madinat Jumeirah.

The panel session was on the theme ‘Innovative​ ​Solutions​ ​-​ ​Is​ ​Leapfrogging​ ​a​ ​Reality​ ​or​ ​a​ ​Myth?’, with the following as panellists: Jeremy​ ​Hodara, ​ ​Co-Founder and Co-Chief Executive Officer of Jumia Group, UAE; Vahid​ ​Monadjem​, ​ Chief Executive Officer of Nomanini, South Africa; and Ada​ ​Osakwe, ​ Founder and Chief Executive Officer of Agrolay Ventures, Nigeria.

According to the panel members, Dubai can leverage its strategic geographic location and capital to connect African entrepreneurs with new growth opportunities and fill market gaps across the continent.

The high-profile forum, which is happening for the fourth time, is held under the patronage of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and is being organised by the Dubai Chamber of Commerce and Industry.

There is a need to create the right environment and policies to ensure the success of Africa’s entrepreneurs and SMEs, said Osakwe, adding that governments must take action to implement policies that support business growth.

She pointed out that the emergence of young entrepreneurs across Africa is not limited to technology, and noted that new solutions are being adopted by the continent’s agro-business sector.

On his part, Monadjem ​revealed that African enterprises are creating new business models that factor-in existing challenges, and added that Africa has a strong narrative pushing people toward entrepreneurship across the continent.

“Entrepreneurship is not the cure for infrastructure. Government is responsible for ensuring that the horizon of growth is there, and entrepreneurs are responsible for realising that potential,” Monadjem said.

Africa is witnessing growing demand for products and services, despite the lack of a strong distribution infrastructure, Hodara explained, noting that this trend is creating plenty of opportunities within the continent’s fast-growing e-commerce sector.

“If you wait for countries in Africa to have as many malls as Dubai, it might never happen. Yet, African consumers will find a way to access these products, and that is why e-commerce is a great opportunity,” said Hodara.

Sangu​ ​Delle​, Chief Executive Officer of Golden Palm Investments, Ghana, introduced the theme of the forum ‘Next Generation Africa’, and revealed that young entrepreneurs accounted for a third of the participants at the event. He described the forum as an important platform for African and UAE entrepreneurs, and business and government leaders, to explore new opportunities that can potentially drive entrepreneurial growth in Africa.

The Global Business Forum series – launched by Dubai Chamber in 2013 – focuses on Africa, the Commonwealth of Independent States (CIS) and Latin America. To date, the series has hosted 10 heads of state, 74 ministers and dignitaries, and 5,400 executives as well as a host of influential decision-makers from 65 countries around the world.

Draft report on 70% contracts for locals ready

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Trade and Industry Minister, Alan Kyerematen

A draft report that will see 70 percent of government of Ghana-funded projects go to local contractors has been completed, and is expected to be submitted to Cabinet and Parliament for approval soon.

The new policy, government believes, will help grow local businesses.

It is aimed at empowering indigenous contractors, and will also reserve a 30% quota of all contracts for women.

Trade and Industry Minister Alan Kyerematen – who appeared before Parliament to answer questions – said the draft report has been finalised, and outlined a number of steps government is taking to push through local consumption of goods and services.

“The ministry has completed a draft report to support a new policy on Ghanaian participation in the award of contracts by national and local governments. The objective, among other things, is to ensure that 70 percent of all procurement to be financed from public funds should be sourced from locally produced goods and services.

“The ministry will be submitting the relevant legislation to Cabinet and Parliament for approval, which will significantly enhance the effective promotion and consumption of locally produced goods and services,” he said.

He also indicated that the ministry is taking decisive steps to enhance the country’s capacity to deal with dumping as a means of ensuring fair competition for locally produced goods.

In pursuit of this, five people have been appointed by the President to serve as Commissioners for the Ghana International Trade Commission, which will soon be formally inaugurated.

“All these measures have been put in place to ensure that locally produced goods are able to compete in our markets, and that government procurement is used strategically to promote private sector development in Ghana.”

BOOK REVIEW: Ogyakrom: The Missing Pages of June 4th

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Author:  Prof. Kwesi Yankah

Publisher: Standard Newspapers & Magazines  (SNAM), Ltd.

This book, written by Prof. Kwesi Yankah, is a part-compilation of his Abonsam Fireman column in the Standard, the national Catholic Weekly. The volume covers the political periods of two military regimes and one civilian government in Ghana, namely

  1. the Supreme Military Council II (SMC II): July 5, 1978-June 4, 1979
  2. the Armed Forces Revolutionary Council (AFRC): June 4, 1979 – October 1, 1979
  • the People’s National Party (PNP): October 1, 1979 – December 31, 1981.

The 55 Chapters of the Book treat evergreen politically sensitive topics only an “abonsam” (dare-devil) would venture to tread. The volume spans the repressive “culture of silence” period, when free expression was a taboo. Indeed, the major media outlets in Ghana, both private and state-owned, had resorted to “Afghanistanism (the journalistic practice of conveniently focusing on outside news, as against domestic issues, for fear of political reprisal). The new column changed it all. It immediately threw the modest Standard into stardom.

Prof. Yankah is an accomplished academic linguist. He has written several books and received academic awards, too numerous to recall: W.E.B Du Bois (GAW); the Gold Book Award (Ghana Academy of Arts and Sciences). In 1986, he began writing another column “The Woes of a Kwatriot” in the Mirror.

The present volume: Ogyakrom: The Missing Pages of June 4th is a sequel to an earlier volume, published by the same author in 1979. The 1979 Book, entitled: The Last Days of Alhaji Blanket was a compilation of “Abonsam Fireman’s” column, written between 1977 and 1978.

The Abonsam Fireman column came as a welcome relief to discerning Ghanaians. The provocative issues, the scathing but veiled language and the satiric format all combined to draw readers to the column. With every publication in the Standard, the column grew bolder and bolder. For the ordinary person, Abonsam Fireman had become a messianic spokesperson, exposing matters, which otherwise might be buried; for the discerning reader, the column’s intellectual gratification offered much needed comic relief; for the few political leadership, the torturous writing nevertheless served a political agenda regarding what bothered Ghanaians most.

Ogyakrom: The Missing Pages of June 4th– re-lives most of the turbulent political times. The first 20 episodes were written during the rule of Gen. Akuffo, otherwise known as ‘Alhaji Kung Fu’. The next 15 episodes deal with the intervention of Flt. Lt. J.J. Rawlings. The last 18 episodes were about the rule of Dr. Hilla Limann.

The Book’s critical posture was both admired and feared. For those too young to know about the immediate past, the Book serves as a fresh political history textbook. For the elderly, too old to remember due to memory failure, the Book vividly recapitulates Ghana’s economic woes, military adventurism, greed, political ambition, authorized hooliganism, ‘kalabluleism’ (excessive profiteerism), empty party promises, military brutalities, political execution, Makola demolition, ostentatious lifestyles by politicians, inflation and labour unrest.

In the Book, Abonsam Fireman dares to describe Gen. Akuffo’s military as: “soldiers whom courage and spiritual discipline had deserted and whose ability and stamina are suspect; whose voluminous bellies can be mistaken for pregnancies”.

And this is how Abonsam Fireman described Dr. Limann’s demeanor a few days to Rawlings’ handing over to him in October 1979: “As Obiba Lee stood under the shea-butter tree waiting, and watching the foot-works of ‘Red herrings’ as well as his pronouncements about him (Dr. Limann), Lee’s thumping heartbeat was overhead in all the nearby houses, pam-pam-pam-pam, as if a fufu-pounding contest was on. An ‘Ogyakrom’ doctor on applying his stethoscope to Lee’s head recommended for him a salt-free omo-tuo diet to decelerate his heart beat and lower his blood-pressure”.

About Rawlings and his colleagues, Abonsam Fireman had this to say: “For it did come to light that not only were some of the ‘bow and arrow men’ (soldiers) extorting cowries from ‘Ogyakromians’ and duping others in various ways, some of the very arrow men in whom ‘Red Herrings’ (Rawlings) had enough confidence as to appoint as his auxiliaries, were caught in the ‘noble’ act of collecting ‘cola’ from potential culprits;…and if that was true, was the ‘Herrings Monarchy’ (AFRC) not as corruptible as those of ‘Alhaji Blanket’ and Kung Fu? ”

The present volume displays Prof. Yankah’s linguistic masterly: “land of long noses” (overseas);  “Nairaville” (Nigeria); Hinduville” (India); “Cocoyam suburb” (Brong Ahafo Region); “Okro-soup suburb” (Volta Region); “Kenkey suburb” (Central Region); Glasscutter suburb” (Northern Region); “Batakari suburb” (Upper Region); “Copra oil suburb” (Western Region).

The Book also preserves some of our precious, local vocabulary or literal expressions: “nika-boka”; twakoto”; “plain face” trousers (clothing designs known to villagers); “oyiwa”; (typical Akan exclamation for “so you heard it”); “wato nkyene” (a large popular, mummy truck in the 1970s); “going to small” (attending nature’s call); “animal tree”, literally ‘aboa dua’ (insult for a fool); “wa som mu ye den”, literally ‘your ears are too hard’ (headstrong person); “your hands are worrying you” (euphemism for thief); “do them, before they do you” (pre-emptive strike); “tomorrow too… looking at something, you will you go near it” (… serves you right; next time, you will exercise caution!); “the doctor should feel you” (medical examination).

Contemporary titles have been appended to all of the Book’s 55 Chapters or episodes to unmask the issues Abonsam Fireman makes fun of, while provoking thinking. What is more, a glossary is attached to breakdown Prof. Yankah’s ‘ogyalinguistics’, which richly flavours every page of the book.

Prof. Yankah invites the reader into how the present reflects the past. It is both an aide memoire and a heritage. It is a compelling reader, difficult to put aside, once you start reading it. The younger generation especially will treasure this rich source of Ghana’s immediate political history.

Dispute over Achimota School land heads for Supreme Court

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The Achimota School is lacing-up its boots to file an application at the Supreme Court to overturn an Appeals Court ruling that nullified an earlier decision by a High Court which sought to give possession of 172.68 acres of land to the school.

In ruling against the Achimota School, the Court of Appeal raised an issue of capacity. It referred to the action in the 2011 judgement of a lower court where the case started, and stated that the school was aware of that action and should have applied to state its case in that suit.

The Court of Appeal relied on previous judicial pronouncements which state that a party affected by a judgment can seek permission of the defendants in that action to join and assert the party’s case.

It however concluded that by not following that procedure, the current action is an abuse of the court’s process – and then proceeded to nullify the current action.

In this regard, the Achimota School with support of the Old Achimotan Association has decided to refer the case to the Supreme Court, and has directed its solicitors accordingly.

The School Board is asking the Supreme Court to overturn the Appeals Court ruling, and to also reinstate the interlocutory injunction placed on Osu Stool by the High Court in 2016.

 Background

It all started in 2010, when the Osu Stool sued and obtained judgement against the Lands Commission in 2011 to remain in possession of 172.68 acres of Achimota School’s land.

Osu alleged in that action that government acquired the land in the 1920s but had not used it for the purpose of the acquisition; and that subjects of the Osu Stool have remained in occupation of the 172.68 acres since it was acquired in the 1920s.

The Lands Commission did not challenge these allegations, although it is aware government vested the land acquired in Achimota School and the school occupies the land.

After the 2011 judgment to remain in possession, Osu returned to the same court in 2012 and obtained an order to recover possession of the 172.68 acres. Osu then applied for the court to compel the Lands Commission to register the 172.68 in its name and for the benefit of Osu Stool. In 2013, the Land Commission informed the school about the case.

According to management of the school, they made two attempts to assert its tittle in that case but it failed.

The management said Osu and a company called Platinum Equities Limited later approached the school and proposed settlement of the 2011 judgement, which the School rejected.

Subsequently, the school sued Osu, Platinum Equities and the Lands Commission to assert the school’s right to the 172.68 acres. The school asked the High Court to set aside the 2011 judgement and the 2012 order which the court granted them.

Proceedings in current action

The school started the current action in the High Court on two grounds.

First, that it owned the 172.68 acres and was unaware of the 2010 suit by Osu against the Lands Commission – and so the 2011 judgment and 2012 order cannot be enforced against the school’s interest in the land.

Second, the school alleged that Osu perpetrated fraud to obtain the 2011 judgement and the 2012 order against the Lands Commission. This, the school argued, is because the land has been vested in the school by government, and that no subject of Osu Stool has ever been in occupation of the 172.68 acres. The High Court therefore agreed with the school’s argument.

Osu appealed against the 2016 ruling to the Court of Appeal, where the court overturned the ruling of the High Court.

The School’s opinion on the Court of Appeal’s decision

According to the school, the Court of Appeal did not specifically determine the key issue of capacity and the process for challenging same, although extensive arguments have been submitted by both sides – saying the court only quoted the law regarding the challenge to capacity and its effect on an action. It also referred to CAP 114 and the fact that it has been repealed.

“Significantly, the court was silent on our arguments that a repeal does not invalidate a concluded and closed matter, such as establishment of the Board.

“The law that repealed CAP 114 (the Education Act, 1961, Act 87) continued the existence of the Board and provided for the establishment of new boards for other public schools. The law that repealed Act 87 did not dissolve the Board, and the current Education Bill, 2015, provides for establishment of even more boards to manage public schools that do not have such boards,” the school said.

Stanchart records 25% growth in profits in quarter three of 2017

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Standard Chartered Bank Ghana Limited has recorded a profit before tax of GH₵331million in the third quarter of 2017.

The figure represents a 25% growth in profits, compared to the same period in 2016 which the company recorded GH₵264million.

The bank in its third quarter 2017 financial results released Tuesday said, they posted a loan impairment recovery of GH₵18.1million as of 30th September 2017 compared to an impairment charge of GH₵61.5million same period 2016.

During the period under review, Operating expenses was up by only 28% to GH₵177.6million as a result of continued focus on the cost management strategy and gains from operational efficiency compared to the third quarter of 2016 which recorded GH₵138.5 million.

Meanwhile the underlying operating income increased by 6% to GH₵490 million from GH₵464million recorded in September 2016, as a result of stable business performance for the bank.

“The effects of the above drivers resulted in increase of pre-tax profit by 25% to GH₵331million from GH₵264million recorded in same period of 2016,” the bank said in a statement on Tuesday.

Earnings per share for the period increased by 24% from GH₵1.61 to GH₵2.00 while the average return on equity was 29.67% compared to prior year 29.75%.

The statement further explained that, the growth was possible due to the macro-economic environment having seen relative stability coupled with robust GDP growth during the period under review.

“Capital adequacy ratio for the period is 28.27 per cent compared to 21.59 per cent in prior year,” the statement added.

Chief Financial Officer, Kweku Nimfah – Essuman, commenting on the results said, “We have a strong underlying business and we will continue to stick to our strategy of sustaining a diversified balance sheet which remains, structurally liquid and conservatively positioned”.

Meanwhile the Chief Executive Officer, Mansa Nettey who maintains that the bank can meet the set targets for 2017, all things being equal said, “Our results continue to trend upwards as we create shareholder value. Our focus for the rest of the year is to deliver on our strategic priorities whiles investing in the right systems and platforms to drive growth”.

The collective scheme

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Mutual Funds fall under the group called collective investment schemes.  They are mutual because you team up with others who share similar investment objectives. They are collective because your Fund Manager will invest your pooled funds together in a collection (carefully selected mix) of investment vehicles (fixed income, shares, commercial paper, certificates of deposits etc.) with the view to maximizing and “gaining positive returns” on your investment.

Generally, interest rates on savings accounts, averaged at about 10.4% at end September, 2017 by the Bank of Ghana (BoG), are unable to beat inflation at a current rate of about 12.2%. So right from the onset, the purchasing power (value) of your funds hidden in a saving account is eroded by inflation.

Mutual Funds which invest in the money market, for instance, seek to beat this risk for you by benchmarking the 91-day Treasury Bill (T-Bill) rate currently at about 13.3%. And because your funds are also invested in a collection of carefully selected investment vehicles with different, and higher return profiles than the T-Bill benchmark rate, the fund manager will do well to beat the benchmark rate, plus a descent margin, all other things being equal.

Mutual Funds are either closed or open ended. Classifying them into either money market (short term or within one year) or capital market (long term or over one year) informs the decision as to which vehicles they will be invested in, either fixed income, equities or a combination of both, and what to benchmark them at, either the 91-day Treasury Bill, the stock exchange or a particular well known market index, like the Ghana Stock Exchange Composite Index (GSE-CI).

In this presentation, we provide a case study, using IDEAL SIKA FUND, a money market mutual fund which was launched in March, 2017.

KEY FACTS: IDEAL SIKA FUND
B.        FUND PERFORMANCE

 

§  Fund Manager                              Ideal Capital Partners

§  Fund Name                                    Ideal Sika Fund

§  Inception Date                              9th March 2017

§  Base Currency                              Ghana Cedis

§  Bid Offer                                        GHS 0.2000

§  Offer Price                                    GHS 0.2252  (as at 31 Oct ,17)

§  Current Value                               GHS 1,080,175.84

§  YTD                                                 12.60%

§  Annualized Yield                          19.22%

§  Minimum Initial Investment      GHS 50.00

§  Regulator                      SEC, Ghana

§  Custodian                      CAL Bank Ltd

§  Management Fee        2.5% per annum
  • FUND SUMMARY

 

  1. THE FUND’S INVESTMENT OBJECTIVE

Ideal Sika Fund is a money market fund with the objective of preserving capital, offering competitive returns and providing liquidity to meet short-to medium term financial needs. The Fund will invest in a diversified portfolio of fixed income securities and other high quality money market instruments with maturity period of not more than 1 year.

 

  1. THE FUND’S STRATEGY

The Fund seeks to achieve its investment objective by investing primarily in a portfolio of high quality money market securities in order to reduce investment risk through diversification.

 

  1. ASSET ALLOCATION & YEAR TO DATE (YTD) PERFORMANCE
§  KEY FACTS: From its inception in March, 2017, Ideal Sika Fund has recorded an annualize yield of 19.22%. This compares favourably with the benchmark 91-Day T-Bill of 13.32% and the 182-Day T-Bill rate of 13.82%. It is also above the 1 year Government of Ghana Treasury bill rate of 15% and inflation which currently stands at 12.2% as at September, 2017.

§  Ideal Sika Fund has also recorded a year-to-date (YTD) of 12.60% since its inception or IPO in March, 2017.

§  PORTFOLIO DIVERSIFICATION: There is power in diversification. It is the fund manager’s duty to allocate the funds into the right investment vehicles, pooled mostly in small amounts, from various sources to achieve this desired outcome.

§  FUND ADMINISTRATION: Mutual Fund is a company. The other parties involved the organization and smooth running of this company, or investment vehicle, are the Fund Manager, who must be licensed by the Regulator, and whose duty it is to apply their skills and expertise to achieve suitable diversification and competitive returns for shareholders; and a Custodian (which could be a bank or insurance company) who has oversight over the prudent use of your funds and also ensure that the benefits of diversification are achieved in accordance with the Funds objectives.

§  Both the custodian and the Regulator remain firmly positioned in the picture to help you to mitigate your risks through the performance of their various functions, not least ensuring that funds are invested according to plan!

§  THE MARKET: At end June, 2017 there were 34 Mutual Funds registered with the Securities and Exchange Commission (SEC) of Ghana. Also, total Funds Under Management (FUM) for Collective Investment Schemes stood at GHS 1.3 billion as at end March, 2017.

 

 
  • Call our customer care for assistance.

·         Download application forms from our website (www.idealcapitalpartnersgh.com) and fill it.

 

 
Address: No 2 Flower Road, Opposite East-Legon Police Station, Accra.

Customer Care:  0302 541197 / 0302 543436

Email: [email protected]

 
The writer, Peter Nii Odoi Charway, is the Head of Research & Strategy at Ideal Capital Partners Limited, a SEC regulated Investment and Asset Management firm engaged in asset/ fund management, corporate finance & advisory services, investments and research.

Location: East Legon, Accra, Ghana.

 

 

Lands Commission planned digitalisation almost ready …corruption, delays to be dealt with

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Dr. Wilfred K. Anim Odame

Executive Secretary of the Lands Commission, Dr. Wilfred K. Anim Odame, has said that its upcoming digital system, dubbed the Ghana Enterprise Land Information System (GELIS), is one of the key interventions designed to reduce the turnaround time, bureaucracies and corruption in the system.

According to him, the GELIS innovation will transform land administration processes in the country, making the Commission one of the best in the sub-region.

Dr. Wilfred K. Anim Odame made this assertion after a day’s familiarization visit of the Lands Commission by an eleven-member Ugandan government delegation to learn from the digitalized systems at the commission.

The delegation had the opportunity to learn from the commission’s best practices, including the streamlined land acquisition and registration processes, as well as the effectiveness of laws and policies for land administration and land management.

Executive Secretary of the Commission, Dr. Wilfred K. Anim Odame, took the delegation through the core operations of the Lands Commission, and highlighted the vision of the commission to become a center of excellence for land service delivery.

He said GELIS is a platform that will digitize the operations of the commission and cut delays significantly, adding that “for example, land title registration will be reduced to a turnaround time of thirty (30) days under the GELIS.”

Odame said despite the many challenges, the Lands Commission has been able to chalk some successes by way of internal funds generation.

​Meanwhile, Deputy Executive Secretary, Corporate Services, Jones Ofori Boadu noted that the Clients Service Access Units of the Commission has effectively reduced the inefficiencies involved in land document processing and consequently prevented illicit extortion of money from customers.

He said that has contributed to the upsurge in the Commission’s internally generated funds (IGF).

The heads of the various divisions also highlighted the key operational responsibilities of their divisions and the best practices that have positively affected the progress of the commission.

The leadership of the commission also discussed issues of government acquisitions (small and large scale compulsory acquisitions), land valuation, corruption, unlicensed operators and others things with the Ugandan delegation, led by Honorable Lady Justice Catherine Bamugemereire.

Chairman of the Lands Commission, Stephen Ayensu Ntim commended the Ugandan government for choosing Ghana as a model nation and assured them of quality information that will boost the effectiveness and efficiency of land administration and management in Uganda.

​Hon. Lady Justice Catherine Bamugemereire expressed the appreciation of the government of Uganda for the opportunity to partner with Ghana in developing their land management systems.

She was particularly impressed with the fact that, despite the challenges faced, the lands commission had still chalked some successes worthy of emulation.

Lady Justice Bamugemereire was optimistic that, their visit will positively impact the development of their land management systems.

​As part of their tour, the delegation will also be visiting other agencies under the Lands Ministry.

Energy bond fails to meet GH¢6bn target

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E.S.L.A PLC, on Monday, November 6, 2017, said it successfully closed its books for the issue of the ESLA bonds on Friday, November 3, 2017, after extending the timeline for the issue of the 10-year bond by one week.

Despite investors making bids in excess of GH¢2.79 billion for the 10-year bonds with interest rates ranging between 19% and 20%, ESLA plc said about GH¢2.29 billion was accepted at an interest rate of 19.5%.

Total bids submitted by investors for both auctions, the 7 and 10-year bonds amounted to GH¢5.32 billion, GH¢4.70 billion was accepted  in the first phase of the planned GH¢10 billion ESLA Bond programme.

The bonds which were issued as the first tranche under the bond programme comprised of 7-year (GH¢2.4 billion) and 10-year (GH¢2.29 billion) bonds carrying coupons of 19.5% respectively.

Though the ESLA bond is a new asset class, the pricing was very tight and compares favourably with local currency Government issues.

Whereas E.S.L.A PLC went to market with an initial target amount of up to GH¢6 billion out of the GHc10 billion Programme for the first tranche, the issuer in consultation with the Transaction Advisors made a decision to decline offers in excess of its price target.

Given that this is a Programme, future issues will be undertaken subject to favourable market conditions and adequate levels of Energy Debt Recovery (EDR) Levy flows.

Subsequent issuances will continue until the total outstanding legacy debts and other obligations due suppliers and other creditors within the energy sector have all been settled.

E.S.L.A PLC, the issuer, shall ensure that EDR Levies are monitored and collected in a timely manner to ensure that all bond covenants are met in accordance with the prospectus. Bond holders will be paid from EDR Levy receipts assigned to E.S.L.A PLC.

All financial flows will be published in addition to financial statements, that will be audited by independent auditors’, on the E.S.L.A PLC website at www.eslaplc.com.

Rice imports hit US$1.2bn …800% increase since 2007

0

The nation’s value of rice imports reached US$1.2billion in 2015, an 800 percent increase from US$152million in 2007, the Minister of Agriculture Dr. Owusu Afriyie Akoto has said.

“I have been able to assemble data which clearly confirm that over the past ten years the volume and value of food imports have gone beyond alarming proportions.

“An examination of the individual items reveals even more disturbing trends. The value of rice imports has escalated eight-fold – from US$152million in 2007 to a peak of US$1.2billion in both 2014 and 2015.

“In the same period, the volume of rice imports climbed from 441,000 metric tonnes to 630,000 metric tonnes,” he said at the 4th National Rice Festival held in Accra.

Dr. Owusu Afriyie described the development as worrying, saying it not only puts pressure on the nation’s trade balance but has also made the economy vulnerable to global price increases and supply shortages in the rice market.

A report by the Oxford Business group indicates, though, that domestic rice production has increased by 12 percent over the 2010-15 period – although consumption has increased by double that rate over the same timeframe.

The report adds that Ghana imports between US$300million and US$500million of rice annually.

This, Dr. Owusu Afriyie said, is not good for the country; and said further that plans are currently being rolled out by government to address the situation.

Some of the programmes, he said, include provision of imported seeds, supply of fertilisers, provision of dedicated extension services, marketing strategy and the infusion of electronic platforms in the undertaking of all activities involving food and agriculture.

He also added that the Korean government, after conducting a study on rice production in Ghana, has offered the nation US$9million to begin extensive rice production in the Central Region.

Again, he said, the ministry is facilitating revision of the National Rice Development Strategy (NRDS) to reflect government’s vision for the rice sector and serve as a guide for all projects and interventions in the rice sector.  

The rice festival

Speaking on the theme ‘Ghana rice for food, Ghana rice for jobs’, President of the Ghana Rice Inter-Professional Body (GRIB) Mr. Imoro Amoro urged consumers to patronise locally produced rice as it has advanced from its once-poor state to match international standards.

He also urged government to lead the consumption of local rice by ensuring that all public institutions such as government institutions and agencies, schools, hospitals, among others, patronise it.

“We are appealing for government to use its purchasing power to procure Ghana rice for all schools, and other government agencies should ensure that Ghana rice is the first choice for all rice procurement for the country. This will pave the way for other private companies and individuals to follow the steps of government,” he said.

The two-day festival brought together stakeholders of the rice sector: including rice farmers, processors, sack-designers, tools and equipment manufacturers, among others.

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