Kempinski Hotel partners maiden “Hungarian Cultural Week”
The Hungarian Embassy in Ghana is organising its maiden “Hungarian Cultural Week” at the Kempinski Gold Coast City Hotel in Accra, as part of efforts to promote the country’s rich traditions and culture.
The week-long celebration will be marked along three key pillars of arts and cultural exhibition; a Ghana-Hungary musical concert to be headlined by Sena Dagadu, a renowned musician with both Ghanaian and Hungarian descent; and business-to-business engagement between Hungarians and their Ghanaian business counterparts.
Hungarian Ambassador to Ghana, András Szabós, told the B&FT in an interview that the event also seeks to announce the reopening of Hungarian diplomatic missions in Ghana, which has been closed for over 30 years.
He said: “Through this celebration, we want to show to the Ghanaian community that the Hungarian diplomatic mission is back with its accompanying foreign policies.
As part of the event, we will be hosting policymakers, the business community and friends of Hungary to Hungarian delicacies to be prepared by a top chef from Hungary. For a whole week, the public will have the chance to taste Hungarian cuisine, arts and culture.”
Mr. Szabos also indicated that fact sheets and short movies about Hungarian culture, tourism and business opportunities will be showcased during the week-long celebration to attract the segment of the public who are interested in exploring Hungary.
The Hungarian Cultural Week celebrations will include the Ghana-Hungary Business Forum that will pool dozens of Hungarians drawn from various business sectors of agriculture, health, creative industry and IT to interact with counterparts in Ghana.
“I hope this will boost the economic relations between the two countries, apart from those that we have already started working on in different sectors,” Mr. Szabos said of the business forum.
General Manager of Kempinski Gold Coast City Hotel, Manish Nambiar, told the B&FT in an interview on the partnership: “We always belief in adding value in one way or the other to our customers and loyal clients; and in achieving that, we are working together with various embassies to create a platform where people can come and appreciate the arts and culture of these countries.”
He added: “Hungary is a country that has tremendous culture which has not been well exposed and we anticipate that the one-week celebrations will provide an interesting avenue for people to come and experience.”
According to Mr. Nambiar, tourism goes beyond beaches and tourist sites and for that matter; the hotel, as an industry player, will leverage its up-class products and services to market Ghana as a preferred tourism destination.
“Ghana has tremendous potential as far as tourism is concerned; we are just at the tip of the iceberg considering the coastline and rich culture; there is however the need for destination marketing.
The domino effect of developing the hospitality sector can be felt at the grassroots level of the economy; as a sector, what we do reflects in different levels and penetrates all aspects of society,” he added.
Kempinski is one of the oldest hospitality brands in the world with a prestigious legacy that spans over 120 years. In Ghana, the five-star facility has been operating for less than two years and boasts a combined workforce of close to 800 directly and indirectly.
Mr. Nambiar indicated: “Kempinski Gold Coast Accra is a people-oriented company and this is what drives us towards excellence; currently, we are hiring directly over 400 employees and 350 indirect employees offering related services.
We are relatively new in Ghana, having been operating for a little over a year; but within this period, we have demonstrated the level of service and standards that we are bringing to the hospitality industry; our products are by far the most superior in this part of the world.”
Ghana Cedi: from volatility to resilience & convertibility:
Optimal Reserve Ratio (Gold Reserve / Foreign Reserve)-Targeting (30%) [+/-3%], in tandem with Inflation-Targeting
The present Government’s Cedi stability policies are recycled from 2000 – 2008 (Pre – Global Financial Crisis), and inappropriate for today’s global monetary environment (Quantitative Easing dilutes Ghana’s Cash Reserves), and some negative nominal interest rates by major Central Banks (Japan), and the ECB is at zero interest rate, limit the pool of investable assets.
The current Government is calling for a Cedi / Foreign Reserve (primarily Cash Reserve) equilibrium. The $2.25 Billion “Foreign” Cedi Bond, moved Ghana’s ORR from 7.7%, to below 5%. At this level, it is not robust, and is susceptible to volatility. Already, the Cedi has moved from 3.90 to 4.20 / $1.00, as the liquidity from the foreign cash injection dissipates.
If Ghana experiences any shocks now — like the budgeted 30% increase in Revenues don’t materialize, and we’re still paying for the 110 Ministers et al, the Cedi will face material headwinds. Also, for the unprecedented Single Financier Risk with 95% of the bond held by 1 foreign private investor — a bond that was well received and lots of interested investors.
Ghana should aim to achieve Cedi Resilience (essential for Clean Industrialized Growth) — Lower Inflation, Interest Rates and Unemployment Rate; Exchange Rate Stability and Convertibility by:
- using the ECB Optimal Reserve Ratio (“ORR”) (we should take an average of the past 3 years)
(+/- 3%) as a de facto peg ORR (This follows the role of “permanent capital” in optimal capital structure theory, and usually practice. Further, gold is similar to debt (short-term) in its risk / return profile. Most importantly, gold is a traditional hedge against inflation, therefore Ghana’s ORR needs to be higher than the ECB’s to dampen Inflation further from the current 12.8% to below the current target — (8%) [+/-2%]. The additional 300 basis points spread to the ECB average, is due to the Inflation differential between Ghana and the ECB — 1.73%. The ECB aims at Inflation rates of below, but close to, 2% over the medium term. For Ghana, this will lead to significantly Lower Inflation and Interest Rates; a material increase in both private sector and public sector investments; double-digit GDP growth rates; and
- An optimal Gold Reserve storage architecture proposal could be 76% is stored in Ghana – similar to “permanent capital;” with the remainder 24% split among WAEMU (CFA), United States, United Kingdom, China, Switzerland and Mauritius, for Safety, Liquidity and Convertibility purposes.
WAEMU (CFA) — [5%]. 50% of the Foreign Reserves of WAEMU (CFA) are deposited with the French Treasury (indirectly the ECB), in return for the guarantee of the CFA Convertibility. The Cedi’s Convertibility will be materially enhanced by this storage arrangement, as well as the Safety of the Gold Reserve. Further, through March, year on year Inflation in the CFA zone was 0.8%.
[16%] of Ghana’s gold will be split proportionally between the foreign currency markets in New York, London, HK, Zurich, where gold is traded — enhancing the Cedi’s Liquidity.
Mauritius — [3%] is considered because: (i) with the recent signing of a double taxation treaty with Ghana, greater investment flows are expected through Mauritius; (ii) traditionally, Mauritius has played a role as the offshore financial center for Africa; and (iii) security and logistical advantages — boosting Ghana’s Trade capabilities.
Effectively, we have created the same Monetary Policy conditions (Lower Inflation and Interest Rates; Currency Stability, Resilience and Convertibility) that have generated enhanced macroeconomic stability in WAEMU (CFA) — (Narrower Fiscal Deficits and Current Account Balances), in tandem with optimizing Ghana’s competitiveness through utilizing a best practice storage architecture.
By implementing an ORR-Targeting framework in tandem with Inflation-Targeting, the Cedi’s Resilience, and Exchange Rate Stability and Convertibility will be optimized.
Coupled with a Clean Industrialized Growth fiscal policy, Ghana can achieve and sustain GDP growth rates of 10%+.
Countries/Central Banks that have successfully implemented or are implementing this ORRTargeting strategy include:
- ECB + Eurozone Central Banks (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia, Spain, Bulgaria, Croatia, Denmark, Poland and Romania).
- WAEMU (Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal & Togo); and
- Turkey, Sri Lanka and Lebanon; (iv) China and Russia.
Sources: Bank of Ghana, Government of Ghana, ECB, WAEMU, World Bank, IMF, World Gold Council/
The writer is a financial strategist with 25 years of global finance experience, has worked with Ark Partners, IFC/World Bank and Norwest Bank. A previous article from the writer can be found in the Tuesday, April 18, 2017 edition of this publication:
http://thebftonline.com/features/opinions/24040/a–best–practice–gold–reserve–proposal–forghana.html
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