The Ministry of Roads and Highways is holding discussions with the authorities of the University of Ghana on how best the Ministry can absorb the cost of recent rehabilitation on some university roads into the Ministry’s 2014 budget. The university authorities recently announced their intention to start levying tolls on all vehicles using the new roads which have been rehabilitated under an agreement with a private credit facility. A statement issued by the Ministry said: “It is hoped that a more conducive solution can be found to end the controversy generated by the announcement of the tolls”. The Minister for Roads and Highway, Alhaji Amin Aminu Sulemana, has already stated the government’s view that the rehabilitation of campus roads is a laudable initiative. However, there’s concern that the introduction of tolls could create a number of inconveniences for some road users. The Minister said the Ministry will ensure that roads on the campuses of major institutions are maintained at reasonable standards across the country. The Students’ Representative Council (SRC) has already kicked against the decision of the university authorities to introduce user charges for all vehicles entering the university from February 1, 2014. The university has announced that with effect from February 1, all vehicles entering the main campus and those using the road passing through the Staff Village will be required to pay a user charge. Private vehicles are to pay GH¢1 per entry while taxis and other small commercial passenger vehicles will be required to pay GH¢2 per entry. The university authorities indicated that large trucks delivering goods or passing through the campus will pay GH¢3 per entry. They also said arrangements were being made for private road users to make one-time payments of GH¢400 per year; GH¢250 for six months and GH¢150 for three months. For the first two months, a manual collection will be used at the toll booths while arrangements are being made for an electronic access control. The university authorities said only employees of the institutions and their dependants using vehicles registered with the university will be exempted from paying the charges.

  The Ministry of Water Resources, Works and Housing has expressed its support for the new policy of the Ghana Water Company Limited (GWCL) to introduce prepaid meters for water consumption by commercial and industrial customers. According to the Ministry, “GWCL does not intend, at this moment, to apply the same policy to residential and domestic consumers”. A statement issued by the Ministry and signed by Alhaji Collins Dauda said: “This policy has become necessary because of the willful non-payment of the necessary charges by a number of large-scale users of water, including some producers of sachet water”. The statement added that the efficient monitoring of water usage by commercial and industrial customers, followed by timely charging and payment, will enhance the capacity of GWCL to produce and supply safe potable water to the public in a more sustainable and affordable way. The prepaid water system is based on the principle that the water consumptions are calculated, and consumers are charged accordingly in advance. Consumers spend the amount of water loaded from credit sales offices by loading the credit to water meters via smart cards. The water meter cuts off the water by closing its valve when the credit ends, but when the consumer re-loads the spare credit in smart card to the water meter, the valve will re-open. The spare credits function allows consumers to use water until they re-load the smart card. FIN

  The International Labour Organisation (ILO) on Monday said that about 202 million people worldwide were unemployed in 2013, an increase of almost 5 million compared with the 2012 figure. It said the uneven economic recovery and successive downward revisions in economic growth projections had an impact on the global employment situation, adding that this reflects the fact that employment is not expanding sufficiently fast to keep up with the growing labour force. The ILO’s “Global Employment Trends 2014: The risk of a jobless recovery” report which was made available to the Ghana News Agency in Accra by the ILO said the bulk of the increase in global unemployment is in the East Asia and South Asia regions, which together represent more than 45 per cent of additional jobseekers, followed by Sub-Saharan Africa and Europe. It said by contrast, Latin America added fewer than 50,000 additional unemployed to the global number – or around 1 per cent of the total increase in unemployment in 2013.It said overall, the crisis-related global jobs gap that had opened up since the beginning of the financial crisis in 2008, over and above an already large number of jobseekers, continues to widen. According to the ILO report, in 2013 this gap reached 62 million jobs, including 32 million additional jobseekers, 23 million people that became discouraged and no longer look for jobs and 7 million economically inactive people that prefer not to participate in the labour market. “If current trends continue, global unemployment is set to worsen further, albeit gradually, reaching more than 215 million jobseekers by 2018. “During this period, around 40 million net new jobs would be created every year, which is less than the 42.6 million people that are expected to enter the labour market every year. “The global unemployment rate would remain broadly constant during the next five years, at half a percentage point higher than before the crisis,” the reporter said. The report said young people continued to be particularly affected by the weak and uneven recovery.It said: “It is estimated that some 74.5 million young people – aged 15–24 – were unemployed in 2013; that is almost one million more than in the year before. “The global youth unemployment rate has reached 13.1 per cent, which is almost three times as high as the adult unemployment rate. Indeed, the youth-to-adult unemployment ratio has reached a historical peak. It is particularly high in the Middle East and North Africa, as well as in parts of Latin America and the Caribbean and Southern Europe”. The report said importantly, in the countries for which information exists, the proportion of young people neither in employment, nor in education or training (NEET) had continued the steep upward trend recorded since the start of the crisis. It said in certain countries, almost one-quarter of young people aged 15 to 29 are now NEET.It said in 2013, 375 million workers (or 11.9 per cent of total employment) are estimated to live on less than $ 1.25 per day and 839 million workers (or 26.7 per cent of total employment) had to cope with $ 2 a day or less. The report explained that this was a substantial reduction in comparison with the early 2000s when the corresponding numbers of working poor below .25 and were more than 600 million and more than 1.1 billion, respectively. It said in 2013, the number of workers in extreme poverty declined by only 2.7 per cent globally, one of the lowest rates of reduction over the past decade, with the exception of the immediate crisis year. The report said informal employment remains widespread in most developing countries, although regional variations are sizeable. It also shows that a rebalancing of macroeconomic policies and increased labour incomes would significantly improve the employment outlook. It said with 23 million people estimated to have dropped out of the labour market due to discouragement and rising long-term unemployment, active labour market policies need to be implemented more forcefully to address inactivity and skills mismatch. The study offers the latest global and regional information and projections on several indicators of the labour market, including employment, unemployment, working poverty and vulnerable employment. GNA

  President John Mahama has announced the appointment of Ben Dotse Malor as Senior Communications Adviser and Head of Communications at the Presidency. Mr. Malor joins the Presidency with a wealth of experience having worked with BBC and the United Nations, where he served as the Chief Executive Producer of UN Radio. Among other duties at the UN, he served for two years from September 2006 with the UN Mission in Liberia as Spokesperson and Deputy Chief of Public Information. He also served as an Associate Spokesperson for UN Secretary-General Ban Ki-moon. Before joining the UN in January 2003, Mr. Dotse Malor distinguished himself as a vibrant and popular voice across many programmes at the BBC World Service where he rose to the position of Deputy Editor of Focus on Africa.

By Elliot Williams & Evans Boah-Mensah     Insurance companies are howling about the inclusion of their products in the new VAT-net, which they fear could further inflate premiums paid on insurance policies.   The insurance industry has over the years been exempted from VAT. However, the coming into force of the new VAT law last week, which has seen the VAT rate raised from 15% to 17.5%, requires insurance companies to charge the new rate on non-life insurance products.   Kwame Gazo Agbenyadzie, President of the Ghana Insurers Association (GIA) - the trade association of insurance and reinsurance companies, has warned that the new VAT rate will end up hitting consumers in the form of higher premiums. Kwame Gazo Agbenyadzie   Mr. Agbenyadzie told the B&FT during an interview in Accra that such hikes will only increase the strain on individuals and businesses trying to comply with the laws that mandate them to buy or provide insurance.   “The likely effect we will see is that if the VAT is implemented and charged on the premium, we’ll pass it on to the final consumer. Motor insurance, for instance, is compulsory and that is where a lot of people will be affected; because if motor insurance goes up it is likely that the transport unions will adjust transport fares accordingly to reflect the increment, and that will impact on the cost of transportation and food as well as other fast-moving goods.   “Two years ago, we tried to increase motor premiums moderately and the government intervened,” he said.   The new VAT law puts Ghana among only a few countries in the world that charge a consumption tax on insurance at a time the industry is struggling to expand. Currently, insurance penetration in the country is less than two percent in a market operated by 43 firms in both the life and non-life insurance sectors.   The Ghana Reinsurance Company says never in its work as the country’s foremost reinsurer has it come across VAT on insurance, saying: “In our dealings with the outside world, we have never come across VAT on premium. What we know is tax on premium leaving the country. For instance in Zambia it is 0.18%, Egypt is 5.8%. VAT on premium will make people pay more”.   Mr. Agbenyadzie said the introduction of the new VAT rate to insurance will most likely push premiums up and make insurance costlier, which will impact negatively on the demand for insurance and insurers’ business.   “Insurance has an elastic demand and we have very low insurance penetration rate in this country. We are now trying to get people to buy non-life insurance products because we believe that if people insure their own assets, in the event of any misfortune they can be compensated adequately instead of them appealing to government for help -- which would create a social burden for the state.   “So the application of VAT on insurance in the form now, which will be charged on premiums, will affect the demand and the purchase of insurance products. If that happens, companies will not be able to generate enough business to be able to make profit and pay corporate tax and the revenue from the VAT that government is expecting will not come.   “We also think that this can also be politically sensitive, especially on motor insurance, because premiums will have to go up immediately by 17.5% -- which will be a very difficult thing to sell at this time,” he said.   He said the insurance players have been shocked by the VAT introduction and will seek an audience with tax authorities on the best way forward for its implementation.   “Of course, insurers have not been prepared for this because we need to do a lot of education and reconfigure our computer systems -- so we need to actually engage the tax authorities to seek clarification and also find the best way that it can be implemented without creating any upheavals in the system.   “We were in fact surprised and shocked to read that VAT will now apply to insurance...This will make insurance cost in Ghana uncompetitive and more expensive than it is in other countries in the West African region.   “We have many companies from other jurisdictions who are doing business in Ghana, and if insurance premiums become more expensive they will advise themselves as to whether to even insure or buy the insurance here in Ghana. Even though the law requires assets in Ghana to be insured locally, it is not compulsory that businesses insure their assets. So they will have options,” he said.   A financial consultant, Dr. Daniel Seddoh, also expressed his disappointment with the introduction of VAT on insurance, describing it as “ill-conceived” and a desperate move to raise revenue.   He said the tax will weaken the financial standing of both the insured and the insurer to do business at a time that insurance penetration is low.   “This is the first time we are seeing VAT on insurance in this country, which means the tax on insurance products is moving from zero to 17.5% -- unlike the others that we are only adding 2.5% to.   “So the effect of the VAT will be significant for people buying insurance. We are in essence taking away people’s capital in that insurance is a mechanism for protecting capital, which is an asset people use to work, so that in the event something happens to that capital, one can get insurance or have the asset replaced for work to go on.   “As we have introduced VAT on insurance, businesses that want to buy a machine to expand are being asked to donate 17.5% to government. What if they don’t have the 17.5%, what happens? They will not buy the machine.   “In this country, insurance penetration is low and people do not have appetite for it. So as people are being encouraged to buy insurance and the industry itself is struggling to expand, slapping on a tax like this is a disincentive.   “The likely effect of this VAT on insurance is that people will not take or buy insurance. When they are in distress, they will run to government -- and we have seen that with the fire outbreaks in recent times.   “We are encouraging people to buy and use this same insurance as an avenue to raise tax, and I think present developments show that there is a problem with the thinking process.   “VAT on insurance is a desperate measure and I am disappointed. There are better ways of doing things than introducing 17.5% VAT on insurance. Perhaps it was a mistake and somebody overlooked it, and so we need to correct it. For me, it’s a bad policy and the idea of VAT on insurance is ill-conceived,” he said.

  A 155MW peak solar PV plant is to be constructed in the Western Region this year to complement the nation’s energy needs for national development.  When constructed, the solar project could be one of the largest solar power generating facilities in Africa and a reflection of private sector response to government’s priority agenda to provide energy for all in the not-too-distant future. Captain Paul Forjoe, a Director of Mere Power Nzema Ltd., an independent power generating company, said this in an interview with the media in Accra on the outlook for the energy sector this year. He applauded government’s recent passage of the renewable energy law as well as its programme to achieve a total installed generation capacity of 5,000MW within the next few years, and said the provision of reliable, sustainable and accessible energy is a critical condition for industrial take-off and growth. “Ensuring available clean energy that is responsive to our environment must be our national priority,” he said Captain Forjoe, who is also the Managing Director of Mere Plantations Limited, said the past year was one of opportunities and challenges for the country.  He said the difficult global economic situation coupled with investor caution also slowed down investment into international trusts funding Ghana’s unique and ground breaking reforestation project in the middle belt of Ghana which involves reforestation of over four thousand (4,000) hectares of degraded land in the Afram Headwaters forest reserve in the Ashanti Region. Mere Plantations limited, he said, has to date planted over two (2) million teak trees to reclaim the degraded land since the project started in 2011. He however said the emerging signs of global recovery should impact positively on fund flows and the pace of our work on the reforestation project. He cautioned against over-dependence on the Oil and Gas sector, which he said would be a horrible mistake if that happens. He said the Oil and Gas revenues from Jubilee give Ghana’s economy a temporary leverage by providing needed resources that will allow the country to achieve real and accelerated growth in agriculture and light industry. “Growth in these key sectors, agriculture and light industry, will have a positive impact on employment creation and household income -- leading to a corresponding decline in poverty in our society,” he said, and encouraged government to pursue growth in these critical sectors. Captain Forjoe said over-dependence on oil and gas in some of our neighboring countries and the negative impact on their economies are examples of the pitfalls of such dependence. Ghana, as a country, must come up with policy choices to avoid this by all means he said.

  The socio-economic livelihood of the people of Nassana, a farming community in the Tain District of the Brong Ahafo Region is severely distressed as they do not get value for money from their farm produce, which is their only source of livelihood. Residents of Nassana are predominantly smallholder cassava and groundnut farmers and noted for ‘gari’ processing. Mini-gari roasting centres are visible in virtually every household, a situation that is also inimical to their environmental health -- especially with smoke pollution and open disposal of by-products in the town. Upon realising the situation there, Action Aid Ghana has establish a gari-processing factory, located on the outskirts of the town at a cost of GH¢20,456 to regularise the business and also spare the community from further pollution. But the factory is gradually becoming a “white-elephant” as the community members rarely patronise the centre. They have cited means of transportation to convey the raw material to the factory site as a challenge preventing the people from realising the full benefit of the factory. Speaking to the B&FT, they lamented that access to market is the major challenge thwarting the gari business at Nassana. The deplorable state of the roads leading to the community, they said, makes it extremely difficult for buyers to reach them. The only means left them is to stock the gari till Fridays, which are traditional market days at Seikwa where commercial vehicles ply their road. A woman, Solemay Fekaa said: “We have to kow-tow to the exorbitant fares charged by the few drivers who work on the 10km road during Fridays”. The situation is not peculiar to Nassana; many communities in Tain, one of the deprived Districts in Brong Ahafo, face similar problems. The helpless farmers and gari processors say the worst of the matter is the “insensitivity” of traders at the Seikwa market, who take undue advantage of their plight and short-change them. “The traders have the sole control over pricing of the commodity as there are always heaps of gari at the market, giving them the bargaining-power to cheat us,” they explained and further appealed to the powers that be to intervene. In another development, there is no health facility at Nassana and residents have to travel to Seikwa to access the nearest healthcare facility. Pregnant women in labour, for instance, have to be carried on bicycles and motorbikes due to the non-motorable state to their road network. The chiefs and people of the community have taken their destiny into their own hands by constructing a clinic to help salvage the situation. The project, which is at roofing stage, has come to a halt due to financial constraint. They have therefore sent an SOS message to government, benevolent organisations and individuals to help them complete it.  By Edward Adjei Frimpong, Nassana

William Hutton-Mensah--ECG MD The Electricity Company of Ghana (ECG) on Friday launched an initiative that will see new service connections completed within 24 hours if prospective customers are able to meet the necessary requirements. The initiative, which was conceived and piloted by the company’s Achimota District Office, also applies to customers who apply for a second connection but does not include new service connections that require utility (electricity) poles. ECG’s Managing Director William Hutton-Mensah said the initiative “is a demonstration of our preparedness as a company to totally confront and surmount the most daunting challenges which are characteristic of the electricity distribution business.” The initiative, which will be implemented in all ECG operational areas, seems rather ambitious considering the fact that the Public Utilities Regulatory Commission (PURC) has set a benchmark of five working days for the connection of a new service. According to Mr. Hutton-Mensah, “this achievement shows our commitment to exceed the expectations of our customers, regulators and stakeholders. “A major positive effect of this innovation is that it will eliminate customer apprehensions and frustration in getting electricity service connection. This will in turn lead to a reduction in illegal connections. We trust that this innovation will ultimately give ECG a positive public image.” He added that the utility company is determined to improve the reliability of its systems through other innovative initiatives. “It is a fact that our performance as a company is measured by the duration and frequency of power outages. This year, we are tackling this challenge head-on in the spirit of our success in the one-day service-connection.” ECG’s acting Regional General Manager, Accra West Region, Delali Oklu, said the initiative has been long in coming. “In fact, completing a new service for a prospective customer within one day is not rocket science, but it takes leadership and innovation to shorten the long-established procedures to exceed customers’ expectations and at the same time ensure accountability and prevent abuse or misuse,” he added. To benefit from the service, prospective customers, according to Mr. Oklu, are required to complete an application form and attach to it a site-plan of the house requiring the service, as well as supply a photocopy of a national ID of the property owner. He stressed that the onus lies on property owners to ensure that their property is properly wired to qualify for the one-day service-connection. By Richard Annerquaye ABBEY      

By Basiru ADAM The Public Utilities Regulatory Commission (PURC) has hinted at adopting new measures to deal more decisively with complaints by consumers of poor quality service from the power utilities. At a meeting with organised labour last week, PURC’s Executive Director Samuel Sarpong said his outfit is in the process of acquiring Power Quality Analysers to monitor the quality of service provided by the Electricity Company of Ghana (ECG). The commission, he added, is also setting up a Metering and Power Quality Testing Laboratory to investigate complaints related to all types of meters. “In some of the complaints we receive, people say their meters are not reading right; sometimes, people say they bought so much worth of electricity and in two days it is gone. So we have put in place a lab,” Mr. Sarpong said. “We are using the same reference meters as the ECG, so that they won’t tell us we are getting a different result because we are using a different machine. So we expect that consumers who have problems will come for us to check and be able to solve their problems,” he added. He also advised the ECG and the Northern Electricity Distribution Company (NEDCo), which distributes electricity in the northern belt, to do a regular recalibration of their meters to forestall challenges associated with their reading. The PURC is an independent body set up to regulate and oversee provision of the highest quality of electricity and water services to consumers. Its key tasks include providing guidelines for rates to be charged for the provision of utility services, examining and approving water and electricity rates, and promoting fair competition among public utilities. It is also to monitor and enforce standards of performance for provision of utility services, and to receive and investigate complaints and settle disputes between consumers and public utilities.

  Lekan Sanusi The Managing Director of Guaranty Trust Bank (GT Bank), Mr. Lekan Sanusi, says banks must strive hard to be innovative as without this they risk going out of business. “Without innovation you can’t continue to remain as a business in the minds of the customers. Customers must be able to know that there’s always something new that will come out of their banks,” Mr. Sanusi said. Mr. Sanusi, whose GT Bank won the Best Bank-IT and Electronic Banking and Best Bank-Product Innovation at the 2012 Ghana Banking Awards, said this when a team from the Business and Financial Times (B&FT) called on him. He said the year 2014 will be very instrumental for the bank, having lined-up at least four key innovative banking products which, he added, will be groundbreaking in the banking industry. Mr. Sanusi added that apart from GT Bank’s continuous innovative drive, the bank is also rejuvenating its human resources to continue being at the forefront of delivering convenience to the doorstep of its customers. The visit by the B&FT team, which was led by its CEO Mrs. Edith Dankwa, was to afford the two entities a platform to discuss ways they can enhance their strong business relationship. Mrs. Dankwa said the relationship enjoyed by the two outfits is one that’s mutually beneficial to the parties involved. She lauded the operations of the bank, which she said has also been a key partner in the paper’s sustained growth. Other members who joined the CEO on her visit were William Selassy Adjadogo, Editor, and Raymond Ahiadorme, Business Development Manager. GT Bank (Ghana), which commenced its operations in 2006, won the Bank of the Year for two consecutive years in 2009 and 2010. The bank is a subsidiary of Guaranty Trust Bank Plc, one of the foremost banks in Nigeria with a Triple “A” rating -- the first indigenously owned sub-Saharan bank to be quoted on the London Stock Exchange. By Richard Annerquaye Abbey

By Ekow Essabra-Mensah   The Agricultural Development Bank (adb) says it is on course to list on the Ghana Stock Exchange (GSE) this year to enable it raise additional equity to deepen its operations. The move, though yet to be endorsed by government which is the majority shareholder, will enable the bank to finance capital-intensive businesses in all sectors of the economy -- including the oil and gas sector. “Our plans of going to the stock market for recapitalisation and expansion programmes this year is very much on course,” said Adam Sulley, Head of Marketing & Client Service of the bank told B&FT at an interview in Accra. “There has been discussion for some time now, and there are still a lot of discussions with the Finance Minister in terms of reporting, structure, among others. A lot depends on the Minister now, but there is goodwill -- even from the Bank of Ghana which is very much willing,” he added. adb prides itself on being a bank dedicated to financing agriculture, but concerns have been raised about whether its current structure and operations give the needed thrust to the agricultural sector, with many commentators asking for the bank to be repositioned to upscale its agriculture business. Ghana’s agricultural sector employs approximately 42 percent of the working population, according to census data. The sector is often said to be growing below potential with farmers facing perennial problems such as the unavailability of modern equipment, erratic rainfall, and expensive credit. Nana Soglo Alloh IV, chairman of the bank’s board of directors, stated that adb’s key plan is the injection of additional capital into its business through the planned public floatation. The additional capital, he said, will be used to expand the bank’s business frontiers, open more branch locations, venture into new channels and make its banking products accessible to more Ghanaians. Currently, the bank is in the initial stage of its follow-up strategic plan for the 2014-2016 period -- designed to ensure sustainable growth and profitability and build on the key successes achieved in the previous strategic plan that was completed in 2012. “We are committed to leveraging our skills, resources and risk expertise to build an efficient policy-led agricultural-financing institution of choice and contribute to the building of a strong national economy,” the board chairman said. Minister of Finance and Economic Planning, Seth Terkper, whose address was read on his behalf by his Deputy, Kweku Ricketts-Hagan, said: “The country’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”. He said the strategy of agricultural modernisation is pivotal, and government is working to harness all resources toward achievement of this objective. “For this reason, an efficient credit delivery system to the sector remains one of the high points of government’s economic policy. Government will therefore implement measures that will enhance the role and efficiency of financial service providers in the agriculture sector. “adb as an indigenous banking institution has contributed immensely to the government’s development agenda, especially its role as one of the closest partners of government in prosecution of the country’s agricultural development,” he said. He commended the bank for its involvement in all national agricultural development programmes, projects and schemes undertaken by the government and various local and international donor organisations over the years. “Since 2009, the bank has undertaken transformational restructuring with a view to repositioning itself in the face of the challenges of operating as a universal bank,” he said. adb, which was set up in 1965 by Act 286, is wholly public-owned -- with government holding 52% of the shareholding while the remaining 48% is held by the Financial Investment Trust on behalf of the Bank of Ghana. It provides a full range of banking products and services in retail, commercial, corporate and investment banking. Despite its limited support, the bank continues to remain the number-one financier in the agricultural sector. In 2011, the bank’s total lending to the agricultural sector amounted to GH¢142million. It also made some new interventions in the agro-processing sub-sector and invested a total of GH¢84.5million. In the same year, the bank transferred GH¢25million to its stated capital account, which increased its stated capital from GH¢50million to GH¢75million. This enabled it to fully comply with the regulatory minimum capital requirement of GH¢60million ahead of the 31st December 2012 deadline given by the Bank of Ghana for full compliance by indigenous Ghanaian banks.