Monday, April 20, 2009

CONFIDENCE IN ECONOMY BEING RESTORED (Spread) 18-04-09

Story: Kofi Yeboah
CONFIDENCE in the Ghanaian economy is being restored as the initial desire of many foreign investors to dispose of their investments in government’s short-term securities has been pulled off.
The Minister of Finance and Economic Planning, Dr Kwabena Duffuor, who made this known, said there was an increasing desire on the part of foreign investors to hold on to government securities.
“In my recent discussions with a number of offshore clients through some major banks in the UK, I am pleased to announce that confidence in the economy is being restored,” he said.
Dr Duffuor made the remark in Accra yesterday at a news conference organised by the Ministry of Information to highlight the achievements of the 100 days’ pledge made in the manifesto of the ruling National Democratic Congress (NDC).
The news conference, which served as an appendix to President Mills’s interaction with the media last Tuesday, featured six Ministers of State under whose portfolio the NDC’s 100 days’ pledge directly falls.
Apart from the Finance Minister, the others were the Attorney-General and Minister of Justice, Mrs Betty Mould-Iddrisu; the Minister of Trade and Industry, Ms Hannah Tetteh; the Minister of Energy, Dr Oteng Agyei; the Minister of Employment and Social Welfare, Mr Stephen Amoanor Kwao, and the Minister of Education, Mr Alex Tettey-Enyo.
As of December 2008, foreign investors were holding 46 per cent of the government’s three-year fixed bond and 87 per cent of its five-year fixed bond.
However, with the emergence of the global economic crisis in October 2008, many of them offloaded $145 million of their bonds to local investors, putting huge pressure on the value of the local currency. But the foreign investors are beginning to rescind their decision, thus injecting some hope into the economy.
Dr Duffuor said the Ghanaian economy had maintained strong growth in the last couple of years, although fiscal policy had been very expansionary in recent years, leading to strong excess domestic demand.
As a result of that, he said, the fiscal and external account deficits widened, while inflation rose significantly and the foreign reserve position weakened.
“Despite this, confidence in the country’s economy continues to be strong,” he maintained, pointing out that the confidence was rooted in the austerity budget being implemented by the NDC government.
Dr Duffuor said recognising that the risks associated with macroeconomic imbalances had the potential to undermine the country’s efforts at achieving a middle-income status by 2020, the government was giving top priority to the challenges getting out of the expansionary fiscal stance.
Commenting on the depreciation of the local currency, the Finance Minister attributed the situation to the introduction of the new Ghana cedi on July 1, 2007.
According to him, before the introduction of the new currency, the economic fundamentals that were necessary to support the value of the cedi at its appropriate level were all very weak.
“The broad money supply and total liquidity were all growing at very high levels, headline inflation was at two-digit level, the government’s finances were showing a negative balance, all the real sector indicators were showing a downward trend, the composite index of economic activities was showing significant negative growth, developments at the external front were equally very disturbing, the trade balance was in deficit and increasing, the overall balance of payments had deteriorated and gross foreign reserves had also declined to about two and half months,” he noted.
Dr Duffuor said between July 2007 and December 2008, the central bank spent more than $1.2 billion to prop up the Ghana cedi, yet the currency lost about 31 per cent of its value.
“Ghanaians should, therefore, know that the currency had depreciated significantly long before the advent of the NDC government,” he contended.
On the increasing rate of inflation, the Finance Minister again blamed the trend on the introduction of the new local currency without taking appropriate steps to deal with the situation.
“Since the re-denomination of the currency was done as a ploy to show false currency strength, without first successfully reducing inflation, it only added more fuel to inflationary pressures,” he said.
Taking her turn, Mrs Mould-Iddrisu announced plans by the government to establish an Economic Crime Centre to replace the Serious Fraud Office (SFO) to enable it to deal more effectively with economic crime which was gaining sophistication in recent times.
She said the 1960 Extradition Act was to be reviewed in view of the increasing rate of crime committed by foreign nationals, as well as financial and organised crime in the country.
Mrs Mould-Iddrisu said the government also intended to amend the Whistleblowers Act, in view of some inherent loopholes identified in the legislation, while the Right to Information Bill was to be subjected to further public discussion for fine-tuning.
On the separation of the Attorney-General’s office from that of the Ministry of Justice, as well as the need for some constitutional amendments, she said her office was conferring with some constitutional lawyers to address the issue.
For her part, Ms Tetteh said Cabinet was considering a proposal for the establishment of an institution known as the Ghana International Trade Commission to investigate allegations of trade distortions.
She said a Tariff Advisory Board was to be established under the ministry in line with the government’s commitment to reduce tariffs to facilitate local businesses.
Ms Tetteh said the Northern Star Tomato Factory would be re-capitalised, after which a strategic investor would be sought to manage it “because we believe that the business of government is not business”.
She said the government would consult Ghanaians on the Economic Partnership Agreements (EPAs) with the European Union before signing the final pact.
Dr Oteng Agyei said the government had fulfilled its promise of reducing taxes and levies on petroleum products but admitted that the impact had not been felt much in view of the recent upward adjustments in petroleum products.
He said compared to neighbouring countries, the current price of petroleum products was far cheaper, but he was quick to caution against smuggling of the commodity, warning that culprits would be dealt with according to law.
For his part, Mr Kwao mentioned the setting up of the National Council for the Disabled as a major achievement of the NDC’s 100-day pledge.
Beyond that, he said, the government had paid between GH¢8 and GH¢15 to about 15,000 households across the country under the Livelihood Empowerment Against Poverty (LEAP) programme.
On education, Mr Tettey-Enyo said the proposed forum to discuss a change in the duration of senior high school from four to three years would come on by June this year.
He reiterated the government’s desire to expand the School Feeding Programme and make it more transparent, efficient and beneficial.
A member of the Presidential and Waste Management Task Force, Mr A. B. Acheampong, said there had been an improvement as far as sanitation was concerned but pointed out that keeping the environment clean was a shared responsibility.

LAST MINUTE AGREEMENT STALLS CEPS' DESTINATION INSPECTION DUTIES (Pg 55) 20-04-09

Story: Kofi Yeboah
AN initiative to enable the Customs, Excise and Preventive Service (CEPS) to rake in huge revenue for the state has been stalled by the stroke of the pen of a former Minister of Trade, Industry, Private Sector Development and President’s Special Initiatives.
The initiative was to make CEPS take over its core function of classification and valuation from Destination Inspection Companies (DICs) with effect from January 1, 2009, and the essence was to inject efficiency into its operations and huge revenue into the national kitty.
However, under inexplicable circumstances and at the eleventh hour of takeover, the contract of the DICs to perform that function on behalf of CEPS was extended by one year under the signature of the Minister, Mr Joe Badoe-Ansah, on Sunday, December 28, 2008.
Snippet of information gathered by the Daily Graphic at the CEPS Headquarters in Accra indicates that some members of management were not privy to the extension of the contract, which was reached just four days before the widely publicised decision for CEPS to take over its statutory function from the DICs.
Stakeholders like importers and clearing agents who had anticipated enormous savings on cost and time of doing that business directly with CEPS have been left in big disappointment.
The project involves the installation of IT equipment to enable CEPS to manage electronic information, including the production of Classification and Valuation Report to be transmitted electronically, thereby injecting efficiency into its operations.
The project also involves the integration of the Ghana Customs Secure Document Management System (GCSDMS) into the existing GCNet/GCMS to add value to the current system.
“The aim of the integration is to offer importers/declarants an enhanced single window for clearing their goods from the ports in Ghana. The result will be one seamless CEPS system that will better serve the general public,” an article in the January – March 2009 issue of the CEPS Newsletter stated.
In that regard, CEPS has made huge investments in acquisition of logistics and building of requisite human resource capacity to enable it to perform its core function of valuation and classification.
In October, last year, CEPS inaugurated an ultra-modern ICT office complex at North Ridge in Accra, for its newly established Classification and Valuation Unit as part of plans to take over destination inspection duties from the DICs.
About 70 CEPS officials drawn from its stations across the country were mobilised for the project and equipped with the ability to electronically verify HS Codes, FOB values, freight and insurance values.
At the inauguration ceremony of the IT office complex, the management of CEPS made it clear that adequate preparation in terms of logistics and developing the capacity of CEPS officials had been made, to enable the service to execute its statutory function of destination inspection.
However, three months after the planned takeover had failed to materialise, the officers are said to have been sent back to their original stations, while the ultra-modern IT office complex now stands as a white elephant.
Some CEPS officers, importers, clearing agents and members of the public have expressed surprise at the extension of contract for the DICs, expressing fear that the decision might undermine efforts at modernising the service and particularly achieving its revenue target for this year.
CEPS is the largest revenue collector for the state, banking about 70 per cent of total national revenue collection every year.
The stakeholders are, therefore, demanding answers to the rationale for renewing the contract of the DICs and what the future holds for CEPS as far as performing its core function of valuation and classification is concerned.
Responding to the issue at a new conference in Accra last Friday, the Minister of Trade and Industry, Ms Hanna Tetteh, said after taking office, the government had to assess the issue critically before taking any action.
She explained that there were legal implications regarding the contract and so there was the need to exercise caution to ensure that any action taken was within the ambit of the law.

Thursday, April 16, 2009

BREAK WITH PAST NEGATIVE TENDENCIES (Pg 20/45), 16-04-09

Story: Kofi Yeboah

THE Chief Executive Officer of Yamson and Associates, Mr Ishmael Yamson, has noted that after experimenting with many development strategies over the past 20 years, Ghana is still struggling to achieve its development objectives.
He has therefore challenged President Mills and his government to break away with past negative tendencies and take bold actions to accelerate national development and make the country become competitive within the global community.
“We need a different mindset, attitude and perspective to be part of the new world. The new government and leadership has an opportunity to break with the past,” he said.
Mr Yamson made the observations in Accra yesterday at a forum dubbed, “Ghana Development Dialogue”, jointly organised by the World Bank and the Council for Scientific and Industrial Research (CSIR), in collaboration with the Ministries of Trade and Industry, and Environment, Science and Technology.
It was on the theme, “Building private sector competitiveness for growth, jobs and poverty reduction”.
The dialogue is intended to stimulate discussion between the government and the private sector on how best to improve the competitiveness of the private sector towards accelerated economic growth and the achievement of a middle-income status by 2015.
According to Mr Yamson, Ghana had remained poor because of the negative mindset of the nation, pointing out that it was time to break with the past.
“If we continue to live with the past, we will continue to lag behind. It’s long time for us to begin to re-discover ourselves,” he said.
Mr Yamson said there was no reason why registration of a business, for instance, could not be done in one day and had to take about 14 days.
Mr Yamson said there were opportunities within the current global economic crisis, but the country required different mindset to take advantage of those opportunities.
He expressed worry that, “We’ve locked ourselves in the mindset of mediocrity.”
The Minister of Trade and Industry, Ms Hanna Tetteh, stressed the need for the nation to move beyond dialogues, seminars and workshops, to action in order to achieve its development goals.
“We do not have the luxury of time to dance around the issues any longer. We need to move from discussions and concepts to action,” he noted.
Ms Tetteh announced the government’s intention to restructure the National Board for Small-Scale Industries (NBSSI) and also introduce a consumer protection policy in line with efforts to promote private sector growth.
She expressed the hope that the dialogue would help deepen mutual understanding between the government and the private sector.
The Minister of Environment, Science and Technology, Ms Sherry Ayitey, underlined the importance of the private sector to the country’s quest to attain a middle-income status by 2015.
She, however, noted that in order for the private sector to become competitive, there was the need for players to be innovative.
Ms Ayitey pledged the government’s commitment to protect research findings through the introduction of patenting and also support research institutions to come up with innovations for the production of more made-in-Ghana goods.
“We have to shift from our dependence on imported items so that we can protect our local industries,” she said.
The Country Director of the World Bank, Mr Ishac Diwan, said cheap imports had destroyed much of Ghana’s industries built in the 1970s, adding that the country was not doing well as compared to its competitors.
He said years of stability and liberalisation policies and consolidation of democracy and private sector growth, had all delivered impressive opportunities for Ghana, but the challenge ahead was to make huge investment in education and science and technology so as to take advantage of those opportunities.
The Director-General of CSIR, Dr S. A. Salifu, said there was the need for increased co-operation between the government, academia and research institutions to ensure the competitiveness of the country.

GOOD SHOW (Front page), 16-04-09

Story: Graphic Reporters
ON the occasion of his 100th day in office today, President John Atta Mills has earned high marks from a number of governance experts and industry players who have hailed his stewardship in governance, the economy and security but raised issues with sanitation and the case of suspects being held without remand.
The experts include the Head of the Conflict Prevention Management and Resolution Department of the Kofi Annan International Peacekeeping Training Centre, Dr Emmanuel Kwesi Aning; a senior lecturer at the Faculty of Law of the University of Ghana, Dr Kwadwo Appiagyei-Atuah, and a waste management consultant, Captain F. B. Amoh-Twum (retd).

Security
On security, Dr Aning commended the Mills administration for taking positive steps to address the narcotics menace and lauded the appointment of ACP Robert Ayalingo as the Head of the Narcotics Control Board (NACOB) as most appropriate.
He said public pronouncements made by the President, the Vice-President, as well as the Minister of the Interior, on government’s abhorrence of the narcotics problem were good assurances in dealing with the situation.
Dr Aning, however, urged the government to move beyond rhetoric and provide adequate operational support for NACOB, particularly by upgrading it into an independent body with investigative and prosecutorial powers in order to make it more efficient.
He also stressed the need for the government to increase budgetary allocation for NACOB and review the country’s anti-drug legal regime.
On the Ghana Police Service, Dr Aning reiterated the need for the President to appoint a civilian as the IGP to “clean the dirt within the service”.
He said although the President promised to re-open investigations into the murder of the Ya-Na in 2002, it should not be done out of context, in view of the sensitive nature of the issue.
He said critical to the Ya-Na case were other unresolved chieftaincy disputes and the increasing spate of human trafficking that needed to be addressed, pointing out that “all these and the drug menace are underpinned by the fact that we still lack a financial intelligence unit to give teeth to our anti-money laundering law”.
Dr Aning said the greatest challenge confronting the Mills administration was how to deal with small arms and light weapons, since their circulation fuelled conflicts.
“All Ghana's conflicts are fuelled by these guns. More worrying is the provision of licences for companies to import these weapons into Ghana,” he stated.

Rule of law and human rights
On the rule of law and human rights, Dr Appiagyei-Atuah rated Prof Mills’s performance as “generally positive”.
According to him, there had not been any serious violation of the rule of law and human rights during his 100 days in office, adding that media freedom was still being accorded high respect.
He said President Mills’s commitment to expand the beneficiaries of the Livelihood Empowerment Against Poverty (LEAP) programme and the establishment of the National Council on Disability, for instance, lent credence to his commitment to address human rights issues.
He, however, expressed concern over suspects who were remanded in prison for long periods without trial, describing the situation as a serious abuse of the rights of those concerned.
Dr Appiagyei-Atuah, therefore, suggested that judges be made to visit the prisons to appreciate the problem better and find a more appropriate way of dealing with the situation.
On the international front, he stressed the need for Ghana to endeavour to sign all international treaties it was yet to sign and also ratify those it had already signed to underline its commitment and responsibility to address human rights issues.

Transitional management
President Mills scored very high marks on management issues, particularly the transition process, from the script of the Rector of the Ghana Institute of Management and Public Administration (GIMPA), Prof Yaw Agyeman Badu, who gave the President a score of A-.
He said the score was based on the short period of transition within which the new administration had had to assume office.
He said despite the short transition period, the government assumed office with minimum disruptions and had, within its first 100 days, been able to nominate ministers of state, metropolitan, municipal and district chief executives and also constituted the Council of State and boards of state-owned institutions.
For Prof Badu, the most important point in the first 100 days was the tone set by President Mills in his public utterances.
He said once the President, in his public utterances, set the tone for a lean, frugal and efficient government, the right tone had been set for ministers and other appointees to follow.
The second most important thing that characterised the new government’s first 100 days, he said, was its indication to continue building on the democratic governance institutions and process of the past.
He said that was indicative of Ghana having reached a stage in its history where governance institutions and processes would not be destroyed but built on by successive governments.
“We will no longer reinvent the wheel but build on our existing structures to make them work,” he said.
Prof Badu also pointed at some lapses in the first 100 days of the President’s administration, such as the reported seizure of some vehicles from former government appointees and the agitation over the use of a government building by the immediate past President and described them as teething pains of a transition process which did not have the benefit of laid down structures, processes and institutions that had been tested and tried with time.
He said with time, such lapses would not be experienced when Ghanaians perfected the art of transiting from one democratically elected government to another.

Sanitation
That was an issue that had also played out significantly in the run up to the elections, with the NDC declaring that in its first 100 days in office it would take bold and comprehensive measures to deal with the appalling filth in our communities.
However, a waste management expert with Waste Recycling Ghana Limited, Capt F. B. Amoh-Twum (retd), believes that that has simply not been achieved.
He remarked that although the government might be demonstrating the political will to get rid of filth in the country, the strategy had not been effective and no new strategies or measures had been introduced to deal with the appalling filth.
Captain Amoh-Twum acknowledged, though, that the new administration had embarked on broad-based consultations to find a way out and said that was commendable.
“However, things have not been concretised and that is worrying. We need to redefine our waste management philosophy,” he emphasised.
He said the country needed to maximise economic benefits from waste, stressing that “that is key to addressing the waste management woes confronting the country”.