Tuesday, November 4, 2025
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ECG to construct more customer service centres

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The acting Managing Director (MD) of the Electricity Company of Ghana (ECG), Ing Samuel Boakye Appiah, has said the company will construct more customer service centres in the near future to improve its service delivery.

The Company has commissioned a total of 11 customer service centres in some selected districts of the country.

The service centres were established at Osu, Perki, Sogakope, Wassa Akropong, North Ridge, Mathieko and Cape Coast at the cost of GH¢6.4 million.

In a statement read on behalf of Ing. Boakye at the inauguration of the Osu customer service centre, which is to serve the Makola District within the Accra East Area, said that ECG has taken steps to modernise its services in order to give customers reliable power supply.

He said the ultramodern centres shall be used for general faults and illegal connection reporting, prepayment and cash office, tips on efficient energy usage, among others, adding that the business centres are very important to ECG’s operational value chain.

Ing. Boakye explained that, ECG was investing heavily to improve its services, adding the company must always provide reliable electricity supply to its customers.

He urged customers to pay their bills on time to enable the company mobilize the needed funds for its operations, adding that soon ECG will start naming and shaming recalcitrant individuals and organisations that have refused to pay its bills over the years.

He said the company shall publish the names of such organisations and individuals in the national dailies.

He indicated that the company will launch an online payment application system by end of 2017 to facilitate post payment of electricity bills.

“I wish to announce that various applications have been successfully rolled out while others are still at pilot phases prominent among them is ECGs online payment platform for easy payment of postpaid electricity bills and purchase of prepaid electricity bills, this application will be launched before the end of this year,” he said.

He explained that the system would work via a short code that is in the process of being developed.

“To facilitate the online payment system a short code will soon be introduced to enable customers to receive their bills and vital maintenance information directly by SMS or through their emails”.

He stated that customers who do not pay their bills will be severely sanctioned.

“Our next course of action is to publish the names of customers in the national newspapers and make announcement on radio stations. I am therefore appealing to all defaulting customers of ECG to go and pay their electricity bills promptly to avoid such embarrassment, we mean business”.

thebftonline.com l Ghana

SHS solar power project to cost US$420m

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It would cost government more than US$420 million to roll out solar power generation in all second cycle schools across the country.

This amount, however, would not include subsequent maintenance of the equipment.

The Deputy Director of Renewable Energy at the Ministry of Energy, Seth Mahu who disclosed this indicated that government is looking for “a more sustainable funding mechanism” to be able to roll out this programme.

“We have counted more than 500 secondary schools already in Ghana from the Ministry of Education’s database. On the average if we are to give each of these secondary schools 100 KW of solar, we’ll need approximately US$420 million. This will be the initial investment, however, you’ll have to change certain components over time,” he said.

Mr. Mahu said running such a programme involves a lot of cost which government or the institutions will not be able to bear without a sustainable funding source.  “We have done some pilot project at the University of Ghana where we have close to one megawatt of solar system there. But I must be honest with you; it’s quite expensive managing that infrastructure.

The university itself does not have enough liquidity to manage it effectively, neither does government. So we need to make sure that we don’t find ourselves in that problem,” he added.

Government has a target to have renewable energy constituting 10 percent of the country’s generation mix by 2020. There’s also a plan to have government institutions supplementing their energy source with solar generated power.

Presently, less than 1% of electricity consumed locally is from renewable energy sources, a statistic players in the industry find worrying.

Parliament last month ratified the framework Agreement on the Establishment of the International Solar Alliance (ISA).

This means Ghana will be joining some 121 countries to access US$2 billion from the Indian government towards making renewable energy a reliable alternative to the more expensive sources of energy on the continent.

With this ratification, government hopes to expedite the integration of renewable energy in the sources for electricity among its institutions and agencies, including Junior and Senior High Schools.

thebftonline.com l Ghana

‘Vodafone Vim’ promoting entrepreneurship growth among the youth -Rewards over 50 Vodafone Vim customers

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Some Vodafone VIM winners in a group picture with the Marketing Manager, Segment, Vodafone Ghana, Regina Ofori and television show host, Deloris Frimpong Manso

Vodafone Ghana’s latest enterprising package is leading a change among the youth to become entrepreneurial, as it gave away some exciting consolation prices, educational support packages and working tools to first of its beneficiary customers.

The pioneering initiative, dubbed Vodafone VIM, launched early this year, seeks to equip customers with knowledge, shape their skills, connect them to the things that matters most to them while also rewarding their loyalty.

The initiative has three focus areas; education, product and loyalty programme. It equips customers with knowledge and motivation to enhance their skills through a series of educational and self-development videos and voice clips on seven main courses including shirt printing, soap making, beauty and baking.

It also offers subscribers minutes for calls to Vodafone and other networks, in addition to data for browsing the internet, and a unique loyalty programme that delivers to customers training in various vocational courses, award certificates to participants and provide essential working tools to enable them to succeed.

The first batch of over 100 loyal customers were rewarded with certificates and working tools having successfully finished viewing all tutorial videos for a continuous period of 12 weeks.

Seven ultimate winners are expected to be enrolled in partner institutions for proper certification, while 20 others received various working tools including gas cookers, soap cutters, shooting boxes, sewing machine, cocktail set among others to enable them setup and start a business.

“The young men and women who are filled with entrepreneurial spirit to succeed. The youth, who mostly involved in small scale trading, buying and selling and sometimes are looking for opportunities to put their energies to good use,” an official communication said.

It also said “Vodafone VIM has been designed to meet the specific needs of these youth and satisfy their passion. These groups need VIM to become what they want to be – and we want to be the platform that gives them this VIM to go all out and succeed.”

The Marketing Manager, Segment, Vodafone Ghana, Regina Ofori, explained that inspired by the commitment to help improve the lives of its cherished customers, Vodafone discovered that many people desirous of doing something for themselves but lack help.

She said this among others informed Vodafone to step in to be the help for these willing customers and individuals to come out with a product that can drive entrepreneurship development, in the country.

“This is an innovation yet to be seen in this country, where we are not just being a technological company or selling airtime but through the power of technology we are helping our customers to learn a trade and skill so that they can also be their own bosses and earn some living.”

According to the Marketing Manager, the Vodafone VIM is a proposition that has come to stay in as long as customers continue to show their willingness to learn, and added that the platform has been subscribed by over 100,000 Ghanaians who are learning from the tutorial videos sent to them weekly.

She said the entry opens in the next three months where other customers who are successful with their videos will be selected and also attractively rewarded and seven of them selected to be enrolled in school for proper certification.

An award winner from Accra, Grace Doku, shared her excitement and hoped that the opportunity will put her on the path to fulfil her dream of become a business owner.

As she envisages to become a professional food processor, in the production of juice, Grace counts on the opportunity to be able to teach others to also succeed in this endeavor.

By Kizito Cudjoe l thebftonline.com l Ghana

YEA goes GIFMIS

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Justin Kodua Frimpong

Justin Kodua Frimpong, Chief Executive Officer of the Youth Employment Agency (YEA), has directed that henceforth, all financial transactions of the agency shall be processed through the Ghana Integrated Financial Management Information System (GIFMIS) in line with the Public Financial Management Act 2016, Act 921.

He has further cautioned that any staff of the agency who would process any financial transaction without passing it through the GIFMIS platform would be appropriately sanctioned. He said, this measure is to ensure financial discipline at the YEA and also create the fiscal space for new beneficiaries.

Mr. Frimpong made this known when he addressed officers of the agency at a three day training workshop organised by the YEA in conjunction with the GIFMIS Office of the Controller and Accountant General’s Department  (CAGD) for some key officers of the YEA in Accra.

The training is aimed at bringing the officers up to speed on how to process transactions on the GIFMIS platform and make payments using the same system.

Mr. Frimpong made it clear to the trainees of YEA that the President Nana Akufo-Addo led government is not bereft of ideas as to how to deal with the issue of corruption in state institutions.  He said as a result, all efforts are being made by the board and management of YEA to ensure that the public purse is adequately protected.

The CEO said he is much aware that globally the GIFMIS is accepted as a major tool for fighting against corruption and abuse of office.

He said he is happy that with the GIFMIS in place, the agency would not be able to spend on financial obligations that have not been approved in the budget. He pointed out that the YEA, under the GIFMIS system, would not be able to exceed its budgetary allocation as the system would not allow for budget overrun.

The CEO explained further that payments on the platform would also leave an audit trail for future verification and therefore financial malfeasance on the platform would easily be detected by auditors.

The CEO reiterated that this new measure would create the much needed fiscal space for the Agency to add more beneficiaries to the modules. He therefore tasked the officers of YEA in accounts, procurement and stores to ensure that all transactions are processed through the GIFMIS system.

Finance Director of YEA, Rev. Solomon Otoo, in throwing more light on the use of the GIFMIS, said that the platform provides for segregation of duties and functions of officers which acts   as a check on financial malpractices.

He said that the Public Financial Management Act 2016, Act 921 section 25 (6) provides that ” Where a covered entity enters into a contract or any other arrangement that commits or purports to commit Government to make a payment, the contract or arrangement shall be approved by the Principal Spending Officer of that covered entity and the Principal Spending Officer shall enter the contract or arrangement into the Ghana Integrated Financial Management Information System.

He said that the use of the GIFMIS is not an option but rather mandatory on the part of MDAs as clearly stipulated by the law on Public Financial Management. He explained further that section 98 (b) of the PFM provides for punishment of not less than six months imprisonment if an officer issues a local purchasing order outside the GIFMIS.

He said the GIFMIS has come to stay in YEA and assured the CEO that all effort would be made to ensure the successful implementation of the system. Resource persons from the GIFMIS Secretariat of the Controller and Accountant General’s Department facilitated the training.

It is expected that about a hundred staff of YEA would be trained and activated on the platform by the close of the year 2017.

thebftonline.com l Ghana

Unilever launches Omo; ‘the power of 10 hands’

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Mr. Yeo Ziobeieton speaking at the launch

Unilever Ghana Limited has launched its newly improved Omo ‘power of 10 hands’ to commensurate with the global handwashing day.

Speaking at the launch, the Managing Director of Unilever, Mr. Yeo Ziobeieton, said unilever wants to bring comfort to every mother’s washing experience through its newly formulated Omo.

“At Unilever we know that every mum’s aspiration is to see her children grow up into responsible adults and will give all they have to make that dream come true.

To our caring mothers out there, we have news for you; dirt is a mark of adventure, it is crucial for a child’s well-being.

In fact, research shows that children tend to be more creative when their parents are involved in the play, let us get involved in the play and not be afraid to get dirty as well, Omo will take care of our washing with the power of 10 hands,” he said.

He added that the new Omo, which comes with the power of 10 hands’ enhanced packaging features, will not be the last of the company’s innovation.

“We are committed to doing more to help raise children with superior creative imaginations, developed through play and we are matching our commitment with investments that would ensure constant and reliable supply of the product to the market,” he said.

He said the company has commenced packaging Omo locally, creating both direct and indirect job openings for many Ghanaians and helping to transfer skills and technology in the process.

By Dziedzom Atoklo l thebftonline.com l Ghana

Nyonkopa launches ‘Nyonkodo Farmer Life Plan’

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The MD of Nyonkopa, Mr. Joshy Varkey, assisted by the Chairman of Vanguard Group to present the first policy certificate to the Regional Chief Cocoa Farmer

Nyonkopa Cocoa Buying Limited continues to make giant strides in Ghana’s cocoa industry. The latest of its many innovative interventions is the launch of Nyonkodo Farmer Life Plan, a bundled insurance, pension and scholarship plan for its farmers at Sefwi Wiawso in the Western Region of Ghana.

Speaking at the launch Mr. Emmanuel Kobby Yawson, Sustainability Analyst of Nyonkopa, indicated that the Farmer Life Plan is the brainchild of Managing Director Mr. Joshy Varkey and was designed by the Nyonkopa Team with support from its partners – Takaful Ghana and Vanguard Life. He explained that Nyonkodo Farmer Life Plan is the first of its kind in yhe Cocoa, Insurance and Pension industries.

The plan is designed to provide life insurance cover for farmers and spouses, scholarships for the farmers’ children, and pension benefits for any farmer who sells their produce to the company consistently for a minimum period of five years and attain the age of 60.

The life insurance cover takes effect immediately the farmer supplies a minimum of 10 bags of 64kg cocoa beans to the company in a year.  At the beginning of each school-year, the company will make cash donations for deserving farmers to cater for their children’s back-to-school expenses.

The plan’s cost is borne by the company and farmers are not expected to pay any premium as normal insurance would require; it is 100% free for the farmer. Additionally, the farmer does not need to travel to any insurance office to access the product, all the cost and accessibility burdens are borne by Nyonkopa. He said: “Nyonkodo Life Insurance Plan has come at the right time as the solution to the age-old problems of insurance and pension which have eluded cocoa farmers since the beginning of cocoa-buying business in Ghana”.

At the launch, Managing Director of Nyonkopa Cocoa Buying Limited, Mr. Joshy Varkey said: “The Nyonkodo Farmer Life Plan marks another evident value of the company’s hand of true friendship extended to its cocoa farmers in Ghana”. He explained that the programme is part of Nyonkopa’s mission to support farmers sustain cocoa production and build resilient social capital for them. “This gesture of Nyonkopa is a seed of lasting gratitude expressed to its farmers for their contributions, commitment and loyalty.”

Speaking at the launch, a representative of Cocobod – Chief Executive Mr. Samuel Amponsah, Regional Manager of CHED – commended the initiative taken by Nyonkopa to assist farmers not only in their old age but also while they continue to farm. He said the liberalisation of cocoa-buying business has brought competition and afforded farmers a better option to choose from among the lot the best company to trade with, and also advised LBCs to emulate best practices in the industry like Nyonkopa is doing.

The Sustainability Manager of Nyonkopa, Mr. Robert Asugre, said the company adopts a ‘bottom-up approach’ in dealing with farmers given the crucial role they play in their operations. He noted that since the entry of Barry Callebaut through Nyonkopa into the cocoa supply chain in 2015, they have delivered cutting-edge innovative approaches to promote the wellbeing of farmers. “We registered, trained and certified farmers in record time, resulting in payment of premium after just under eight months of operations. Since then, we have continued to be the only LBC to pay premium twice in a year,” he added.

Mr. Osei Akoto, Director of Crop Services who represented the Minister for Food and Agriculture, stated that government alone cannot transform the cocoa industry, and therefore appealed to the private sector for support in this regard. He reckoned that farmers are challenged in many ways, particularly when it comes to money – a development that he said has been a key concern for government. He therefore lauded the initiative taken by Nyonkopa, and said it will go a long way to assist government realise its objectives for the cocoa industry.

The Managing Director of Vanguard Life, Mr. Isaac Damptey, said the company is happy to be associated with this programme and will ensure that all claims are paid promptly to farmers as and when required.

The Chairman of Vanguard Group, Mr. Daniel Awauh-Darko – together with Mr. Joshy Varkey, presented the first policy certificate to the Western North Regional Chief Cocoa Farmer Nana Nicholas Cobbina. Nana Augustine Kwarteng, Sefwi Wiawso Municipal Chief Cocoa Farmer who received the certificate on behalf of the Regional Chief Cocoa Farmer, was full of gratitude to Nyonkopa. He indicated that the cocoa farmer has long yearned for pension benefits, but Nyonkopa has gone ahead to provide insurance and scholarships – which has come to the surprise of all. He thanked the MD and staff of Nyonkopa, and entreated all cocoa farmers to sell their produce to the company.

 

 

 

 

 

 

 

 

 

 

 

Pass law to halt energy-sector SOE guarantees– credit consultant

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Parliament must consider legislation that would prevent guarantees of loans advanced to state-owned enterprises in the energy sector by government, Emmanuel Akrong – a credit consultant, has advocated.

The proposal, Mr. Akrong argues, will ensure the banking sector lends to only creditworthy institutions.

According to Emmanuel Akrong, over the years, banks in the country have taken “irresponsible” credit decisions, which saw several lending to SOEs that clearly had no means of paying back the contracted amount.

His comments come after government announced it will be raising GH¢10billion from the issuance of energy sector bonds to retire outstanding debts owed banks by various energy sector SOEs and Bulk Oil Distribution Companies (BDCs).

The indebtedness of the SOEs and BDCs to banks is largely blamed for prevailing high non-performing loans in the banking sector, which is currently is about 21 percent – meaning that for every one cedi given out as a loan, banks are unable to recover 21 pesewas.

But Mr. Akrong argued that energy-related SOEs and BDCs are not the problem or cause of default, and they are not cause of high non-performing loans (NPL) ratios among banks and the industry.

“In my view, many people point to symptoms of the problem and not the problem itself. It is true that the key risk to the banking industry is the high stock of impaired assets to total loans as measured by NPL ratio, of which energy-related SOEs and BDCs contribute to that number,” he said.

While there are several triggers of credit risks, Mr. Akrong said with the case of the SOEs and BDCs, in his view, the primary cause of default is the irresponsible credit decisions taken by some banks – although he acknowledges other possible triggers relating to economic conditions such as oil prices; government action to subsidise oil prices; and the inability of Tema Oil Refinery to raise sufficient working capital/letters of credit facilities to import oil, which in certain periods leads to almost-halted operating activities of TOR and others.

He stated all the energy-sector SOEs are in a precarious financial state, as banks advanced as much as US$2.4billion to them.

“Given their poor financial positions, why did some banks continue lending to energy-related SOE like TOR, Bulk Oil Storage and Transportation Co. Ltd. (BOST), Volta River Authority (VRA), Electricity Corporation of Ghana (ECG) and BDCs?

“Simply because they [banks] thought government would pay them if TOR, BOST, VRA and ECG did not pay. So, the normal factors that should be considered in approving credits were either not properly vetted or thrown out the window,” Mr. Akrong said in a paper analysing the IFRS 9 implications of the assumption made by Banks in Ghana regarding implied government guarantee of energy-related SOE and BDC debts.

“Some of these SOE were visibly bankrupt but banks kept lending to them, why? Because Father Christmas government of Ghana (GoG) would pay if those SOEs defaulted. Why would the Banks think that way? It is because the GoG in the past has done that,” he said citing the TOR Recovery Levy slapped on petroleum products to pay loans acquired by TOR from some banks.

Mr. Akrong stated that the one of the ways government can get out of this situation is to pass a law to explicitly say there is no implicit guarantee of SOE debts – especially the energy-related ones – and that banks are on their own when they lend to those SOEs.

“This has been done before in other countries. In 2001, government guarantees for savings banks in Germany were removed following a law-suit. What happened to that? It was found out that the removal of government guarantees resulted in a significant reduction of banks’ exposure to credit risk.

Exposure to credit risk decreased significantly more in banks for which the value of guarantees was higher ex ante. Savings banks shifted their portfolios toward safer borrowers by dropping existing borrowers with higher credit risk, and by tightening their lending standards for new borrowers. Loan sizes were reduced,” he argued.

More women needed to rebrand Ghana — First Lady

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The First Lady, Mrs. Rebecca Akufo-Addo, has urged women leaders to continue the drive for greater inclusion of women in all facets of our national development.

Speaking at the maiden edition of the Executive Women Network (EWN) Annual Conference held in Accra, she said: “Excluding women, who make up more than 50 percent of our population, is not the way to go if we want to develop Ghana. We need more female voices engaged in our national discourse, and to engage them actively in our national development”.

She added that Ghana will be the biggest beneficiary, because the participation of women leaders in the national development agenda is critical to achieving many successes as a country.

The event, which was held under the theme ‘Rebranding Ghana to Drive Business Growth: The perspective of women leaders’, brought together leading businesswomen in the country to deliberate on business-related issues, including tourism, to reposition Ghana’s economy for national development.

She noted that: “Women bring fresh perspectives to the table; they excel at developing ideas, inspiring and motivating others, building consensus, and engendering collaboration and teamwork.

“These are critical success factors for organisations and the wider society. When women are not at the table, our nation is worse off for it. As we drive for greater inclusion of women in national development, our country and continent will be the biggest beneficiary.”

After commending participants and organisers of the conference, the First Lady expressed her gratitude to them for collectively coming together to deliberate on what women leaders can do to rebrand Ghana to drive business growth, and not solely talk about what government can do.

As part of the conference, various panel discussions were held to deliberate on issues ranging from personal branding for business development to making Ghana the most-preferred tourism hub in West Africa.

The panellists included Co-founder of Executive Women Network, Lucy Quist; CEO of African Brand Warrior, Fatima Ali Mohammed; Professor Robert Hinson, University of Ghana Business School; Patience Akyianu, CEO Barclays Bank Ghana; Theresa Ayoade, CEO of Charterhouse Ltd.; and Patrick Awuah, President and Founder, Ashesi University.

Other panellists were Yvette Atekpe, Regional Managing Director, Internet Solutions Ghana Ltd.; Adelaide Ahwireng, CEO of Fio Enterprises; and Ivy Apea Owusu, CEO of Cirrus Oil.

Speaking on the issue of discrimination against female bosses, Ms. Fatima Ali Mohammed noted that people – especially employees – need to change their mindset about how female bosses are expected to behave. She said most employees assume female bosses are either too bossy or must be able to empathise.

“We tend to complain when we know we have female bosses. But we want women to be able to empathise, they need to be in our shoes because they are going through the same thing.

“It’s not what comes into an office, it’s not what business is made of – and this is why we really need to change our attitude and our mindset. Why is it that we are okay to take that from a male boss; why is it we aren’t okay to take that from a female boss?” she quizzed.

Speaking on the same issues, Ms. Lucy Quist blamed the situation on the social orientation of people.

“In the context of a female business leader, you have to understand that for many people what they know it is not the norm for them; the things they say about you, the toughness, half of them are not true. Half of them are women equally as tough as a man, not even more; but society says women shouldn’t be that way. So the moment she is that way a little bit, she is this woman that stands out,” she said.

She advised women bosses to be firm and insist on getting the work done, and ensuring that workers achieve their performance expectations.

The Executive Women Network (EWN) is a non-profit organisation of women in senior management and executive positions in private organisations, and women entrepreneurs of well-established businesses in Ghana.

 

Diasporan Pension Scheme gathers steam…two trustees secure licence to operate

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The National Pensions Regulatory Authority (NPRA) has certified two trustees who are ready to roll out the newly-launched Diasporan Pension Scheme, targeted at Ghanaians living abroad who hope to return home on a good pension.

Falling short of mentioning the two trustees, the Chief Executive Officer of the NPRA, Hayford Attah Krufi, noted that it is encouraging to see some trustees signing up to roll out the scheme, and called for more participation.

“So far, we have given licence to two and there is room for many more; and what is much more important is the quality of those getting involved,” he told the B&FT in an interview.

Launched in July this year, the Diasporan Pension Scheme is targetting the millions of Ghanaians living abroad from North to South America, Europe, Asia, Australia and other parts of the African continent.

Mr. Krufi said the Diasporan Pension scheme will be a win-win situation for the country, as it provides a huge capital pool for investment and pension savings for the contributors when they return home.

“The homecoming for Diasporans will not be complete without building up some investment at home in the form of pensions that they can retire to.

“The Diaspora is worth its gold, and if this missing jigsaw piece is not added in Ghana’s transformation we will always fall short of capital infusions,” he said.

Already, Ghanaians living abroad remit a lot of money – estimated at US$4billion per annum – for various purposes including taking care of family-members, real estate projects, and other forms of investment.

“They are the richest constituency and yet the most deprived when it comes to pension provision. As a nation, our quest for investment will be skewed if we do not provide for their pension or retirement income security,” Mr. Krufi said.

Set up as a voluntary contribution, the Diasporan Pension Scheme has levels set up by contributor’s ability to pay – and it is tax free. “It is savings which translates itself in compounded capital and investment – and being a contributor, you will also be assisting significantly in economic development of the country.”

Mr. Krufi explained further that the scheme will be a provision for old-age poverty alleviation; contributors can join from any part of the world and the scheme can be accessed for draw-down from the age of 55 upward.

“As regulators of the pension industry, we have robust compliance procedures to ensure that the investment is looked after safely. As part of our regulatory functions, we visit the premises of licenced corporate trustees and other pensions service providers to ensure scheme account statements, receipts for collections, investment portfolio reports, custodian reports on assets, minutes of trustees meetings, investment committee reportsm, and all IT infrastructure are up to speed to ensure the scheme’s safety and sustainability.”

A number of vehicles are available for interested contributors, including the Master Trust Provident Fund Scheme, Group Personal Pension Scheme or Personal Pension Scheme. The scheme, he said, is designed to have a representative of the Diasporan Relations Office at the Office of the President sit on its board of trustees.

Energy bonds roadshow excites bankers

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Ken Ofori-Atta, Minister of Finance
  • NPL ratio to reduce
  • Interest rates to drop
  • Private sector to be biggest beneficiary 

The government’s roadshow to raise a bond to clear the much talked about energy sector debt, which is in excess of US$2.5billion, has excited bankers.

The roadshow for the long-awaited bond issuance saw some delays due to bureaucratic procedures and blockages from international partners.

According B&FT sources, one of the blockages came from the International Monetary Fund (IMF) on how the debt should be raised.

While the Bretton Wood institution wanted the bond to be issued as a sovereign debt, which would reflect directly on government’s account, government wanted to put the debt on the books of energy companies – which would then be pegged to the Energy Sector Levy Account (ESLA).

But the recent announcement and subsequent roadshow indicates that the money is closer to home than ever.  Banks and energy sector players such as the Volta River Authority (VRA), Electricity Company of Ghana (ECG), Ghana Grid Company (GRIDCo), the Bulk Oil Distribution Companies (BDCs) and several thermal plants are heaving big sighs of relief in their respective corporate boardrooms.

“We think that any effort by government to reduce the debt overhang, which currently sits on the books of banks and corporations, is brilliant,” Alhassan Andani, President of the Ghana Association of Bankers (GAB), told the B&FT in an interview.

The banking industry’s Non-Performing Loans (NPLs) has been high for the past three years, and without issuance of the deb, it could stay high for quite some time.

According to the Bank of Ghana’s latest Monetary Policy Summary report, the banking industry’s asset quality measure – the NPL ratio – increased from 17.3 percent in December 2016 to 20.9 percent in July 2017 due to the downgrade of some loan facilities after the asset quality review exercise.

The adjusted NPL ratio, which excludes the fully provisioned loss category, also rose to 11.1 percent from 9.8 percent over the same period.

The industry’s Return on Equity (ROE) and Return on Assets (ROA) declined in July 2017 compared with July 2016, an indication of declining profitability within the industry.

Should the government successfully raise the expected US$2.5billion in either one, two or three tranches, at least half of that will go straight to banks to fill up holes in their books: and for those who have already taken a hit, they will declare bumper profits in their next financial statements.

A successful issuance of the bond and payment of debts owed banks will mean more money to move around in the system, sound and stronger banks, and a revival of debt-stricken energy companies and BDCs.

With more liquidity comes the urge to provide more products and services to customers, and bankers prefer excess liquidity to tightening their systems.

“The debt of about GH¢4billion to be taken off will be significant, because it will introduce liquidity into those banks and get the companies, private sector companies including BDCs, back on track.

“These companies were providing fuel to grow this economy and others and were on a growth trajectory with building storage tanks and developing infrastructure, but all of these have come to a halt.

“Once we get the monies to them and get them into business, all of these will expand and continue their development –  and Ghana will become the focal point for energy infrastructure to service the West African market, which will generate jobs and increase economic activity,” added Mr. Andani, who is also the CEO of Stanbic Bank.

High lending rates

But the biggest challenge facing bankers and financial sector regulators is the high rates on lending to individuals and businesses.

Since turn of the year, several indicators that are factored into the cost of lending to clients have seen significant declines and improvements in some cases.

Already, the average interest offered by banks on customer deposits dropped between August and September. According to the latest Annual Percentage Rates (APR) and Average Interest (AI) report by the Bank of Ghana, the figure declined from 10.8 percent to 10.4 percent within the one-month period.

The local currency has been fairly stable after coming under marginal demand pressures from the corporate and energy sectors, as well as offshore investors seeking to repatriate their profits. The BoG’s Monetary Policy Summary report noted that in the year to August 2017 the cedi cumulatively depreciated by 4.5 percent, compared to a depreciation of 4.4 percent during the same period in 2016.

Inflation, which was as high as 19.2 percent as at March 2016, significantly dropped to 11.9 percent in July before inching up marginally to 12.2 percent as at September 2017.

The BoG benchmark lending rate, otherwise called Policy Rate, has also seen significant drops.  At the four meetings held so far in 2017, the Monetary Policy Committee (MPC) cumulatively lowered the Monetary Policy Rate (MPR) by 450 basis points to 21 percent in July 2017.

In line with the declining MPR, money market interest rates also broadly declined. In the year to August, interest equivalent on the 91-day T-bill rate steadily declined to 12.8 percent from 16.8 percent in December 2016. Similarly, the rate on the 182-day bill declined to 13.5 percent from 18.5 percent, while the 1-year note also fell to 15 percent from 21 percent over the same comparative period.

On the interbank market, the weighted average interest rate declined to 20.99 percent in August 2017 from 25.26 percent in December 2016.

Despite the significant declines in all indicators, average lending rates of banks could only manage a marginal decline to 29.75 percent in August from 31.68 percent in December 2016.

The Association of Ghana Industries (AGI) – the umbrella-body of businesses in the country – has for the past decade called on the government and banks to find a common ground to tackling the stubbornly high lending rates.

Even though some bankers agree that the energy bond could trigger a drop in lending rates, because it would significantly drop the NPL ratio, the general assumption is that it is much easier said than done.

Edward Botchway, Chief Financial Officer of Ecobank, told the B&FT in an interview, earlier this year that since the energy sector and BDCs related debt contribute significantly to high NPLs, banks have taken these risks factors which have led to high lending rates.

“In an economy where the industry’s NPL is 20.9 percent, it basically means that for every GH¢100 loan a bank gives GH¢20.9 is not paid back. In pricing these loans, one has to find a way to deal with this and all that feeds into it.

“There is also a part of this that is linked to debts which need to be paid by the BDCs and energy firms. Once all of these are resolved, it will go into reducing NPLs and subsequently cost of credit. Given more time and space, we will see reductions in lending rates,” he noted.

Frank Adu Jnr., Managing Director of CalBank, asserted that what it [energy bonds] will do to banks is clean up their books and provide enough liquidity for them to continue lending.

He added that the reason banks are not able to react immediately when the policy rate drops is because there is a process that must be followed. “The thing is you cannot operate out of the market, but as interest [policy] rates trend down we are going to trend down; so far, the rates at which banks lend are falling – albeit, marginally,” he said.

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