LeapFrog Investments, the specialist investor in financial services in Africa and Asia, has taken a stake in one of Ghana’s largest pension trustee companies, Petra Trust. The landmark investment seeks to take advantage of the expected 400% growth in Ghana’s retirement industry funds over the next four years, and marks LeapFrog’s entry into the African pensions sector. Doug Lacey, who leads LeapFrog’s Ghanaian investments, said: “We are very excited about the investment possibilities that Ghana presents and the enormous growth potential of the country, in particular the pensions and insurance sectors. Petra Trust is a dynamic and fast-growing company with a uniquely experienced leadership team. “They have a strong set of existing clients, with plans to serve a local market of 20 million consumers in the informal and semi-formal sectors, which account for some 90 percent of Ghanaian employees. We look forward to providing support both on the board and operationally to enable Petra’s growth, profitability and impact in Ghana.” Kofi Fynn, Petra’s Managing Director, said: “We are delighted to have LeapFrog as an investor. Their team offers strong pensions experience, decades of knowledge of our market and others in Africa, and a global perspective. With this injection of capital and expertise, Petra will be able to invest in expanding infrastructure to better serve existing clients and grow our market reach, while boosting Ghana’s pension industry. Pension reform was introduced to ensure that the previously unserved will also have a chance to invest for their future, and that is exactly the service we have been called to provide. We see the pensions industry growing fast in Africa, and are very excited about growth of the micro-pension sector.” Doug Lacey added: “LeapFrog’s focus is on the emerging consumer -- investing in companies that profitably provide financial safety nets and springboards to people who until now have had no or little access to these products. Petra’s pension offerings will bring peace of mind and financial security to many people in Ghana, and serve as an inspiration to leaders in other swiftly-growing markets in Africa.” LeapFrog Investments is a specialist investor in emerging markets’ financial services, seizing the growth opportunity presented by two billion emerging consumers in Africa and Asia. Its portfolio companies currently provide insurance, savings and pension products to over 18 million people in countries such as India, Indonesia, Sri Lanka, Ghana, Nigeria, Kenya and South Africa. Petra Trust is one of the top-three trustees in the pensions industry by assets in trust, and the most recognised independent trustee company in Ghana. The company is led by investment practitioners with decades of asset management and finance experience in the US and West Africa. Its co-founders, Kofi Fynn and Chris Hammond, as well as Head of Operations Helena Poku returned to Ghana from the United States to participate in the country’s dramatic growth opportunities. Following the introduction of new pension regulations in 2008, the team has rapidly built one of Ghana’s largest pension trustees.

Ghana Water Company (GWC) can also consider using a Direct Debit payment system as the company considers options of significantly reducing revenue losses through non-payment of water tariffs. This suggestion was made by the Chief Executive of Ghana Interbank Payment and Settlement Systems, operator of the national electronic payment system. The National Water Company has indicated its decision to pilot a pre-paid metering system for water as it battles commercial losses due to the refusal of some consumers to pay their water bills. Besides the challenge that pre-paid metering for water is not well-developed, some civil society groups have also criticised the idea, saying it could deprive the poor of a basic necessity for life. Granting an interview in Accra, the CEO of GhIPSS Archie Hesse said the Direct Debit, which is an electronic payment system that enables a bank customer to instruct his/her bankers to make payments to a third party, provides an  option for the Water Company to reduce its losses.  Mr. Hesse explains that since the Direct Debit is electronic, once the customer issues the instruction the deductions and subsequent transfers will be made automatically. He added that customers who pay by Direct Debit would not need to visit the banking halls to issue such instructions “and that convenience should encourage many more to pay” Mr. Hesse stated. GhIPSS has different electronic payment systems which various institutions are applying for easy collection of monies due them as well as making payments, and Ghana Water Company can explore some of these options. Mr. Hesse also intimated that GhIPSS can support Ghana Water Company in case it decides to introduce the pre-paid meters -- by enabling customers to pay their bills with their ATM cards on the hybrid Point of Sales terminals which are being deployed. He said his outfit will not hesitate to have discussions with Ghana Water Company and other utility companies on how they can deploy various electronic payment systems to make it easier for them to collect monies due with an audit trail that will also prevent the revenue collectors from diverting the monies collected for personal uses. The GhIPSS Boss was optimistic that with various services being rolled-out, there should be a lot of flexibility and convenience in payments of any form in the “very near future” -- such that only the very recalcitrant ones will continue to default in payments. He said electronic payments provide variety of options that should be well exploited.

By Konrad Kodjo Djaisi The Ghana Tourism Authority (GTA) has begun an enforcement exercise to clamp down on private hostels that are operating illegallyThe exercise, which is carried out every year throughout the country, is meant to enforce standards in the tourism sector. It began about a week ago, and so far 44 units of hostels have been affected. Speaking to B&FT, the Chief Quality Assurance Officer of the GTA, George Nkrumah Ansere, explained that before a facility is closed a letter is served reminding or cautioning operators to regularise their operations -- paying their registration and licence fees as the case may be -- before a stated deadline. The registration fee is a one-time payment that is paid after the necessary documentation has been certified and approved by the GTA, while the licence fees are annual payments made to renew the operational licence. Giving a breakdown, Mr. Nkrumah Ansere said the project registration cost is GH¢800 for a hostel facility with 1-20 beds, while hostels with 21-50 beds pay GH¢1,500, and those with 500 beds and above pay GH¢5,000. Operational licences are GH¢100 for the basic category, GH¢500 for standard, and GH¢3,000 for executive facilities. According to Mr. Ansere, some of the affected hostels in this year’s exercise had been notified as far back as 2008; and while some complied, others just gave a verbal indication to comply. Hence, after a period of dialogue without any effort to pay, the Authority believes the law must be enforced.When the facilities are closed down, operators then have to pay a penalty of 100 percent of the licence fee in addition to the amount owed. New unregistered facilities pay a penalty in addition to a registration fee. Mr. Ansere said in registering hostels certain requirements are to be met, including producing a business operational licence, a fire certificate to ensure that fire safety precautions are taken, and a police report indicating the operator has no criminal record. In addition, an environmental health report must be produced to ensure proper sanitary requirements are upheld. He explained that after the clampdown on hostels, the GTA will proceed to the informal sector, where drinking bars and “chop bars” (local restaurants) operate, to check their particulars. Private movie operators will similarly be inspected to ensure compliance with tourism regulations.

Mr Kofi Yamoah, Managing Director of the Ghana Stock Exchange has said the performance of the bourse in 2013 was as a result of the 2nd-tier Private Pension Fund Managers participation in the market. He said another factor that accounted for the outstanding performance was the excellent results of listed companies for full year 2012 and first to third quarters of 2013. Mr Yamoah was speaking at a press conference on the GSE market performance for the year ended December 31, 2013 in Accra on Wednesday. He said trading was very likely to be active on the back of continued participation in the market by the 2nd tier Private Pension Fund Managers if listed companies continue to post extremely good results in 2014. Mr Yamoah said during the year, the new market dedicated for small-and medium-scale enterprises and start-ups dubbed: “Ghana Alternative Market” took off with two companies accessing the listing support fund. The Managing Director indicated that the exchange has made efforts at integrating of West African capital markets and that enough progress has been made in that direction. He announced that three companies would be listed on the Ghana Alternative Market and three on the main bourse.

The banking sector needs efficient regulation and supervision in order to win customer trust and ensure financial stability, Finance Minister Seth Terkper has said.   Government, he added, would implement policies that would enable financial service providers come out with an efficient credit delivery system.   The Finance Minister said this in a speech read for him by his Deputy Mr. Kweku Ricketts-Hagan at the official launch of the Agriculture Development Bank’s (ADB) new logo in Accra on Tuesday.   Mr. Terkper urged the banking sector to use its leadership role to help deepen and diversify the financial market.   “Ghana’s medium-term objective and strategic direction is to expand opportunities for all and reinforce the foundation for socio-economic transformation in partnership with the private sector.”

By Ekow Essabra-Mensah         Government’s end-of-year inflation target has been missed as headline inflation for December 2013 surged to 13.5 percent, against a target of 9 percent.The December inflation rate, which is the highest since March 2010, represents a 0.3-percentage-point increase compared to the November rate of 13.2 percent. The jump was mainly attributed to price changes in housing, water, electricity, gas and other fuels as well as clothing and footwear during the last quarter of 2013, which kept non-food inflation – that constitutes 55.09 percent of the consumer price index (CPI) basket – rising. “We’ve seen some price changes in the food component and increases in the non-food, especially changes in petroleum prices and utility prices,” acting Government Statistician Dr. Philomena Nyarko told journalists at news conference in Accra. The increase has given impetus for interest rates to be pegged higher by the Bank of Ghana at its next monetary policy meeting. Analysts are of the view that on the average the economy has faced massive challenges with lots of external shocks, and some have predicted a further surge in inflation this year based on government’s fiscal and monetary policy framework, expectations for key commodity prices and instability of the cedi against major currencies like the US dollar. The country’s economy, which depends largely on the export of commodities like oil, gold and cocoa, was hard hit by the persistent fall in commodity prices on the global market last year. The Public Utilities Regulatory Commission (PURC) increased power tariffs again this month, maintaining that the adjustment will allow utility companies to cut down on their losses. The weak cedi also contributed to the high rate of inflation last year, with the currency losing 17 percent to the dollar. Over the coming months, the hike in the value added tax from 15 percent to 17.5 percent is likely to fuel inflation, threatening the Central Bank’s end-2014 target of 9.5 percent.Inflation dynamicsThe monthly change rate for December 2013 was 1.0 percent, against the 0.8 percent recorded in November 2013. The food and non-alcoholic beverages group recorded an average year-on-year inflation rate of 7.2 percent, 0.1 percentage points lower than the 7.3 percent recorded in November 2013. Three subgroups of the food and non-alcoholic beverages group recorded inflation rates above the group’s average of 7.2 percent. The non-food group recorded an average year-on-year rate of 18.1 percent in December 2013, compared to a rate of 17.6 percent in November. Two subgroups recorded year-on-year inflation rates above the group’s average rate. Housing, water, electricity, gas and other fuels recorded the highest rate of 35 percent, followed by transport, which recorded 25.6 percent. Inflation was lowest in the communications subgroup, which recorded 4.4 percent. At the regional level, the inflation rate ranged from 6.2 percent in the Upper West Region to 14.8 percent in the Central Region. Five regions, namely Central, Greater Accra, Eastern, Western and Ashanti, recorded inflation rates above the national average of 13.5 percent.

By Ekow Essabra-Mensah Government’s end-of-year inflation target has been missed as headline inflation for December 2013 surged to 13.5 percent, against a target of 11 percent. The December inflation rate which is the highest since March 2010, represents 0.3 percentage points compared to the November rate of 13.2 percent. The jump was mainly attributed to the price changes of housing, water, electricity, gas and other fuels as well as clothing and footwear during the last quarter of 2013, which kept non-food inflation – that constitutes 55.09 percent of the consumer price index (CPI) basket to rise. “We’ve seen some price changes in the food component and increase in the non-food, especially changes in petroleum prices and utility prices,” acting Government Statistician Dr. Philomena Nyarko told journalists at news conference in Accra.

By Dominick Andoh American oil and gas exploration and production company, Kosmos Energy, which had initially indicated its interest to list on the Ghana Stock Exchange, has shelved the idea due largely to the changes in the top hierarchy of the company. Kosmos’ listing on the exchange, “for some of us, is on the back bench,” said Managing Director of the exchange Kofi Yamoah. Reviewing activities on the bourse last year, Mr. Yamoah said 2013 was generally a good year for the exchange, with a total of 313 million shares traded—an improvement over the 218 million traded in 2012. The value traded amounted to GH¢465 million. Total market capitalisation for last year was GH¢61 billion, with domestic market capitalisation accounting for GH¢12 billion. “Trading activity on the exchange was buoyant and is the highest since the inception of the exchange in spite of the challenging macro conditions,” Mr. Yamoah said.

  By Dominick Andoh The Ghana Stock Exchange (GSE), one of the best performing bourses on the continent, says it is targeting six listings this year. Mega African Capital, an investment fund; Processed Food and Spices Limited; Meridian Marshalls Limited, an educational institution; Juaben Oil Mills Limited; Intravenous Infusions Limited; DanAdams Pharmaceuticals; Vanguad Assurance Limited; and Agricultural Development Bank are some of the targeted companies. Three are expected to list on the main bourse, with the rest expected to list on the Ghana Alternative Exchange (GAX). “We are targeting three for the main market and, of course, three for the GAX,” Mr. Ekow Afedzie, Deputy Managing Director of the GSE, said at a forum to discuss the performance of the exchange last year.  

Farmers at Johnsonkrom and Donkorkrom in the Sunyani Municipality have petitioned the Brong Ahafo Regional Minister to intervene in the proposed surface gold mining in the two communities. They said the project was a health hazard and was economically disadvantageous to the people. The would-be affected farmers took the decision at an emergency meeting on Tuesday at Jonsonkrom to deliberate on a letter from Sunyani Municipal Assembly dated December 27, 2013 signed by Mr. Kwasi Oppong Ababio, the Municipal Chief Executive. Headed “Notice of Publication Application”, the letter informed the chiefs of the two communities located on Dormaa Stool Lands that the Ministry of Lands and Natural Resources had given license to 40 companies for Mineral prospecting /Reconnaissance in these areas. Twenty-nine out of the companies are billed to operate at Johnsonkrom while 11 are for Donkorkrom. “We vehemently reject and oppose any plans now and in the future to grant mining concessions to any company to engage in surface mining within our communities”, the resolution stated. The resolution said the people “vehemently reject and oppose the proposal’’ because of the hardships that had been unleashed on many communities by the activities of surface miners. It said surface mining had led to extreme poverty, disease, deaths, disintegration of communities, destruction of arable land, cash and food crops, contamination of water bodies and destruction of the eco-system.