GN Savings And Loans Collapse: Ex employees call on Finance Minister, BoG to reinstate the firm
The Market Place with Daryl Kwawu on JoyNews (16-8-23)
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NewsTranscript
00:00 Hello, welcome to the Marketplace.
00:01 Coming up, concerned ex-employees of JN Savings and Loans
00:04 appeal to Finance Minister and Bank of Ghana Governor
00:07 to reinstate the license of JN Savings and Loans
00:11 to restore lost jobs.
00:14 Life after the revocation of JN license
00:18 has been a terrible nightmare for the majority
00:21 of the employees.
00:23 Most ex-staff have remained jobless
00:27 as a result of the limited job opportunities in the country.
00:31 Also coming up, Ghana's savings from oil exports
00:37 since commercial production declines marginally
00:39 to $1 billion.
00:42 And fuel prices go up at the palms
00:45 as petrol is now selling at 13 cities 50 pesos
00:49 while diesel goes for 13 cities 90 pesos.
00:54 Thanks for joining us, everyone.
00:55 Details coming up.
00:58 [MUSIC PLAYING]
01:02 And first up, concerned ex-employees of JN Savings
01:18 and Loans have appealed to the president
01:19 to issue an executive order for the governor of the Bank
01:22 of Ghana to reinstate the bank.
01:24 Though the bank was reclassified from a commercial bank
01:27 to a savings and loans company with threats of insolvency,
01:30 this was not enough to save the institution, which
01:32 had close to 5,000 direct and indirect employees,
01:36 over 1.3 million customers, and 300 branches
01:39 across the country at the time.
01:41 Speaking at a press conference to commemorate
01:43 four years of the revocation of the license of the Ex-World
01:47 Bank, convener of the group, Kofi Fosu,
01:49 said the move will ensure or restore lost jobs
01:53 and strengthen the informal economy.
01:57 After the vocation of JN License has been terrible nightmare
02:02 for majority of the employees.
02:05 Most ex-staff have remained jobless
02:09 as a result of the limited job opportunities in the country,
02:14 as well as the stigmatization associated
02:21 with the vocation of license.
02:24 So that former or ex-employees apply for jobs,
02:29 and they will look at them with skepticism and say,
02:33 sorry, we can't employ you.
02:35 But you may know that at the onset and to the level
02:40 that we got to, these were the same staff that
02:43 prepared the bank to the level that the bank got to.
02:46 Now, they become outcasts.
02:50 One other important concern has to do with our pension
02:56 benefits.
02:58 The revocation of the license has had an adverse effect
03:03 on our pensions.
03:05 Majority of the ex-employees are unable to make contributions
03:08 toward their pensions for the last four years
03:11 since revocation.
03:14 We recognize that the bank was faced with some liquidity
03:18 challenges at certain points as a result of delays
03:23 on the part of borrowers to settle their loan
03:26 obligations on time.
03:29 But a substantial portion of this credit default
03:34 were due to the government's inability
03:37 to honor its obligation to most of our customers
03:41 who have executed jobs for some state institutions.
03:45 And I'm referring to contractors and suppliers of services
03:50 to state institutions.
03:52 We believe that the regulator, the Bank of Ghana,
03:58 could have resorted to a more progressive and human-centric
04:02 approach to remedy the situation and the difficulties at a time
04:08 rather than the iron-fisted method adopted to revoke
04:14 the license of the bank.
04:16 This is very sad.
04:19 We therefore passionately appeal to the President
04:24 of the Republic to intervene by using his executive powers
04:31 to urge the governor of Bank of Ghana
04:35 to restore the operating license of GN Savings.
04:43 And so those are some ex-employees
04:46 of GN Savings and Loans addressing the press
04:48 commemorate four years since the license of the savings and loans
04:53 company was revoked.
04:55 Now, Ghana's savings from crude oil exports
04:57 since it started producing oil in commercial quantities
05:00 has declined marginally.
05:02 The Ghana Petroleum Fund's report
05:04 showed that it dropped to $1 billion ending June this year.
05:07 Here's George Afeweth with more.
05:09 In June 2022, the balance in Ghana's accounts
05:14 in the Federal Reserve Bank in New York, USA,
05:17 stood at $1.2 billion.
05:21 However, fast forward to June 2023,
05:25 and this amount reduced to $1 billion.
05:29 A careful look at the account shows
05:31 that an amount of $83 million was withdrawn on this account
05:36 ending June this year.
05:38 However, we don't have fine details
05:40 of the accounts to establish the exact date their withdrawal was
05:44 done.
05:45 Ghana's savings from oil exports and production
05:48 has been put into the Ghana Stabilization Fund
05:51 and the Ghana Heritage Fund.
05:53 The country's laws requires that part of these earnings
05:56 should be put in the Ghana Stabilization Fund
05:59 so that governments can follow in times of crisis
06:02 to finance the budget.
06:04 On the other hand, the Ghana Heritage Fund
06:07 is meant for future generations so they can benefit
06:11 from Ghana's oil fund.
06:12 The Ghana Stabilization Fund currently
06:14 has $134 million in it, while the Ghana Heritage Fund
06:20 has $962 million.
06:24 This brings the total amount in these two accounts
06:27 to $1 billion.
06:29 Again, a careful look at the accounts
06:31 have raised questions about their returns on them.
06:34 This is because the laws that guide the petroleum funds
06:38 actually restricts areas that it can be invested.
06:41 Kodwo Yau, Chair, Policy Lead Petroleum and Conventional
06:49 Energy at the Africa Center for Energy Policy, ACIP,
06:52 joins me on Zoom with a reaction to this story.
06:54 Good afternoon to you.
06:55 Thanks for agreeing to speak with us.
06:56 So how worried should we be that the revenue we save from crude
06:59 oil exports seems to be declining, albeit marginally?
07:04 [AUDIO OUT]
07:06 Good afternoon.
07:07 Thanks for having me.
07:08 So let's break this down a bit.
07:12 The withdrawals which you've seen that your report says
07:18 accounts for the reduction in how much we have in savings
07:22 is actually allowed by the law.
07:26 The law that sets up the stabilization fund
07:29 allows the finance minister to place a cap
07:33 and then take part of that to support the budget in periods
07:38 where petroleum revenue is low to be
07:42 able to prop up the budget.
07:44 But the catch here is that it provides guidelines
07:48 for such capping to be done.
07:52 And the regulations for the petroleum revenue management,
07:58 if we were to follow it consistently as it provides
08:02 for, we should be having today around $600 million
08:08 in the stabilization fund, not the $143 that you see there.
08:13 That is because the finance minister has consistently
08:17 capped the stabilization fund at $100 million
08:22 to be able to cream off the excess for supporting
08:28 the budget and also into the sinking fund for debt service.
08:33 OK.
08:34 And considering the economic challenges
08:37 that we experienced the previous year,
08:39 can government be excused because in their money
08:42 to finance a budget amid the economic challenges?
08:47 No, no, no.
08:47 I mean, it can be excused.
08:48 Because if you look at the criteria for taking the money,
08:53 you should take it when there are
08:56 shortfalls in petroleum revenue.
08:59 That goes into the budget.
09:00 So if you have shortfalls and the ADFE cannot support
09:05 the budget like it used to the previous year,
09:07 then you have to now take that money.
09:09 That is why it was justified during 2020
09:12 when governments had to dip their house to take $200 million
09:16 to support the budget because of COVID.
09:18 Now we have increased revenue.
09:21 Last year, revenue increased by a billion.
09:25 We are expecting that same trend this year,
09:29 which means that there will be enough to support the budget.
09:32 So you shouldn't have the situation
09:34 where the finance minister will consistently
09:37 tap because the ADFE will be sufficient to support
09:42 the budget.
09:43 If those withdrawals were not have been made,
09:47 we would have accumulated about $3 billion
09:51 in the Ghana petroleum funds.
09:55 Still did.
09:56 But we have only $1 billion because over the years,
09:59 every year, the finance minister will withdraw.
10:02 Last year, it was around $500 million
10:05 that was withdrawn over the top.
10:07 And we are expecting more.
10:09 So this 83, just for the first half of the year.
10:11 By the end of the year, we should expect that amount
10:14 of withdrawal to go up.
10:17 - Earlier, you talked about guidelines.
10:19 So it's not the case that there are no guidelines
10:23 or appropriate measures in place to check this.
10:25 So is that issue of following this guideline?
10:29 So how do we tackle that?
10:30 - No, it's just a symptom of the finance ministry,
10:38 the finance minister and their total disregard
10:43 for the rules that govern how petroleum revenues
10:48 are to be managed in the country.
10:49 We've not had these blatant breaches of the law
10:53 like we are having now.
10:55 So it's just a matter of the finance ministry decided
10:59 to respect the law that we have all set to ensure
11:05 that our petroleum resources are managed efficiently.
11:08 - So how do we hold them to task
11:11 if they breach these guidelines?
11:16 - No.
11:17 - Okay, we're trying to reconnect with Kodriyaoche,
11:32 Policy Lead Petroleum at ASEP.
11:36 Having a little challenge with his connection there.
11:38 But while we do that, some news from the fuel price hikes
11:43 that we have been reporting over the past couple of days.
11:47 Some oil marketing companies have started increasing prices
11:50 of petroleum products at the pumps.
11:52 Total Energy has increased the price of petrol
11:54 to 13 cities 50 pesos from 12 cities 45 pesos
11:58 at the beginning of this month.
12:00 Diesel is also going for 13 cities 90 pesos
12:03 from the previous price of 12 cities 45 pesos.
12:05 The rest of the major oil marketing companies
12:08 are expected to also adjust prices today.
12:11 Earlier, the Chamber of Petroleum Consumers
12:13 announced that fuel prices will see an increase
12:16 of about 5.7% in the second pricing window of August.
12:21 So that's the latest concerning fuel price hikes.
12:24 I don't know if we still have Kodriyaoche on.
12:28 Do we?
12:29 We've lost him.
12:31 Well, let's turn to tourism now.
12:32 The Minister of Tourism, Arts and Culture,
12:35 Mohamed Awal, has announced that government
12:36 will be launching a project to solicit
12:39 novel tourism ideas from young people.
12:41 During his address at an editors' forum held in Accra,
12:45 he said the initiative is aimed at getting the youth
12:48 more interested in tourism and engaging them
12:50 to come up with innovative business models for the sector.
12:54 He said the government was going to launch
12:55 a 100 million city tourism enterprise project next year.
12:59 Let's discuss this further with Emmanuel Fimpong,
13:02 who is president of the Africa Tourism Research Network.
13:05 Good afternoon to you.
13:06 So what do you make of this 100 million city tourism
13:09 enterprise targeted at the youth?
13:12 Well, good afternoon, Darrell,
13:16 and good afternoon to our cherished viewers.
13:19 I think it's a welcoming news for the industry,
13:23 because if you look at young people in the sector,
13:28 gradually a lot of them are getting interested
13:31 in the tourism and hospitality sector.
13:34 Actually, even yesterday, I was having a conversation
13:38 with the Ghana Association of Tourism and Hospitality
13:41 Students, their president, and for the past few weeks,
13:45 we've been looking at tourism, entrepreneurship,
13:48 and digital hub on the various campuses.
13:52 So it's a welcoming idea.
13:55 We welcome it.
13:57 I think there are equally more questions
14:00 that we also need to ask,
14:01 because we've heard some of these promises before.
14:06 So we are just looking forward to getting more detailed
14:09 information about how and when and where.
14:13 So, yeah.
14:14 Yeah, the concern with such initiatives is if the money
14:17 to reach the right people, as you've written us in the past,
14:20 what due diligence must go into it?
14:22 I think what the ministry needs to do is to work
14:28 with industry players, the private sector,
14:31 because some of them have structures that can help
14:36 these tourism entrepreneurs, because tourism is such
14:39 that you need to have some level of experience.
14:42 You don't just get up and set up a tourism enterprise.
14:46 So they need to work closely with private sector,
14:50 and for those who are in schools,
14:52 they need to also take certain group of them
14:56 and then nurture them, have entrepreneurship hubs,
14:59 so that they are trained and they are given resources
15:02 to actually have their businesses run very well.
15:05 So it's not a matter of just having money, 100 million,
15:09 and then we call for people to bring ideas.
15:12 There is a lot more to it than just that.
15:14 So the ministry needs to actually sit down
15:17 with the private sector and design a program
15:21 and a process for this to be done well.
15:24 Well, also at that forum was talk about
15:27 the Destination Ghana project, the four-year project
15:30 aimed at attracting two million international arrivals
15:33 into the country and two million domestic tourists as well.
15:37 Are you satisfied with how this project is going so far?
15:40 Not at all, not at all, because there's a lot more.
15:46 You see, you can't just say you want to attract people
15:51 and then the people will come.
15:53 Of course, naturally, Ghana is a place
15:55 that people have interest in coming,
15:58 but unfortunately, most of them, when they come,
16:01 they get dissatisfied with a lot of things,
16:04 and it has to do with service.
16:06 The service quality has been poor,
16:09 and we keep talking about it, and nothing is being done.
16:13 So if we don't do something about the service quality,
16:17 yes, the two million is not much.
16:19 To be honest with you, we can do far more than two million,
16:23 but if we don't do something about the service quality
16:26 in the tourism and hospitality industry,
16:28 we will keep talking about the numbers,
16:31 and we will not achieve it.
16:33 Also, we're hearing that for the first half of this year,
16:37 Ghana has attained the number of 500,000 tourist arrivals
16:40 as 41% of the 1.2 million target we expect this year.
16:45 Well, Darrell, when it comes to numbers, tourism arrivals,
16:54 I personally have a challenge with the data,
16:59 because the source is really from the Ghana Immigration
17:03 Service, and basically from the airport.
17:06 So when they get the figures, it's usually people
17:10 that arrive into the country, so we have no idea
17:13 whether they are actually tourists,
17:15 or they are here to do something else.
17:17 So we put everything together, and we say we have
17:19 this number, but the numbers are not really tourists
17:22 arriving, they are just people who come in.
17:25 And until we begin to set out and know the numbers
17:28 that are coming in because of tourism,
17:30 or coming in for the purposes of tourism,
17:33 we will continue to chart the numbers out,
17:36 but in real terms, they may not be tourists.
17:40 - Well, great to speak with you, it's been a while.
17:44 Emmanuel Fempom, President of the ATRN,
17:48 appreciate your time with us,
17:49 hopefully we'll speak another time.
17:51 You're watching The Marketplace, Let's Talk Tech.
17:53 A new study by Home Security Heroes has revealed
17:55 that threats, Instagram, and other meta platforms
17:58 are the worst social media platforms
18:01 for protecting user privacy.
18:03 The study also showed that meta platforms,
18:05 particularly threat, Instagram, Facebook, and Messenger,
18:08 collect 86% user data for advertising
18:12 and marketing purposes, which is way more
18:14 than any other social media platform does.
18:17 Henry Cobbler is lead for Eyes of Africa,
18:19 and joins us for Let's Talk Tech.
18:21 Good afternoon to you, great to have you.
18:24 Henry, how concerned should we be about this study?
18:26 - Thank you very much, Darryl.
18:30 So I think that when threat are coming to force,
18:33 and that basically have the interest of a lot of users,
18:37 we are actually speaking about it,
18:38 and I have indicated that when a product comes in,
18:41 usually the most important thing you should do
18:44 is to understand the mother company of the product.
18:49 Really, everyone looked at Facebook and what they've been,
18:53 if you understand Facebook advertisement models,
18:57 the strategies in marketing, and all of those things.
19:00 It was one of the things that you would definitely envision.
19:02 They were only playing on the complaints,
19:04 and then the new enforcement in terms of the manipulation,
19:08 which were coming in from Twitter,
19:10 and then certain implementations,
19:12 which users which were accustomed to the old Twitter
19:15 were used to, and so they just thought
19:16 that it was just one of those things
19:18 where they could definitely get users
19:20 to jump onto a new platform.
19:22 But even looking at the mother company itself,
19:24 you're going to sort of understand
19:25 that they were coming in in a different force.
19:28 I mean, if you look at one of the terms and conditions
19:31 where they have placed it, to delete thread
19:33 meant that you would have to delete your Instagram,
19:35 and they knew that people had their Instagram,
19:38 what do you call it, account gone to the extent
19:39 that they wouldn't want to delete their Instagram account.
19:42 And so it was sort of a mind game that we were playing
19:45 to sort of fit into the market
19:46 and make sure that they sort of have a competitive product,
19:48 which was going to be there.
19:50 Now, to what we should be concerned about,
19:52 we should be majorly concerned about,
19:54 because I mean, on now on your phones,
19:56 definitely every application
19:58 is not even doing a standalone monitoring.
20:00 And there are quite a number of monitoring purposes,
20:02 which is going on, on even different applications,
20:05 which is sort of informing the main application
20:07 that is monitoring you on the kind of information
20:10 you're putting out there, the kind of interest you have,
20:12 the kind of site you're visiting, and all of those things.
20:17 So we should sort of be very much concerned.
20:20 And I'm looking at how our data protection laws
20:23 definitely could also now look into
20:24 some of these applications directly
20:27 and be pushing up laws.
20:28 I have seen the GRA basically putting
20:31 taggations on some of these platforms,
20:33 and they're working.
20:34 And so I see that there's some level of influence,
20:36 especially from African countries,
20:37 that can be on some of these applications.
20:39 And I feel that it should be the same thing
20:41 when it comes out to data protection.
20:43 - Well, so this week, the Data Protection Commission
20:45 has been carrying out an exercise to clamp down
20:48 on institutions not complying with the country's data laws.
20:52 Just wondering, though, how compliant
20:53 are tech firms here in Ghana, do you think?
20:56 - So I think that we could have a lot of improvement.
21:01 Data protection has sort of been in the place
21:03 where they're sort of looking at how
21:07 they can get people to be compliant.
21:08 But I've not seen a real underground implementation.
21:13 I've seen trainings and all of those things happening.
21:15 But as to tapping into systems to relatively see
21:17 that, I mean, clients or companies or startups
21:20 are actually compliant, I have not really seen that.
21:23 It's sort of just renewal of licenses and all of those.
21:26 And this is looking at how can we get into making sure
21:29 that these companies are being compliant.
21:32 We have test systems that can understand
21:35 the models of how they're using some of the information
21:37 and all of that.
21:38 I think that for now, they're sort of majorly relying
21:40 on information or complaints from users
21:44 and from clients of people, which is now giving them
21:48 some level of information to process.
21:50 And I think that even the processing of some of these issues
21:53 basically is gonna take a bit of time
21:54 because they have to report it to the police,
21:56 the police has to comment.
21:58 How many people are just gonna, I mean,
21:59 go through that whole process just because
22:02 they've just had a text message because they gave a data
22:04 to a particular client and a particular client
22:06 keeps sending them the data?
22:08 Or they've actually had to give them the address
22:10 and then the address is being used to harass them
22:13 physically.
22:14 Some of those things are the things we have to start
22:15 looking at.
22:16 How can we have a major implementation and structure
22:20 which can actually make sure that the people
22:22 that are taking information using any application
22:25 basically adhere to data protection laws in Ghana.
22:28 - 30 seconds if you can, Henry.
22:30 How can social media users protect themselves
22:33 from data breaches?
22:34 - Majorly, I mean, very first of all,
22:37 when you're basically jumping on any social media
22:39 application, first thing, read the terms and conditions.
22:42 It's a thing that a lot of people don't do,
22:43 but these are inherent points where you're having
22:47 a lot of information coming in.
22:48 The second thing is that you should yourself be very sure
22:51 that the information you're giving to any application
22:53 is not too detailed.
22:55 I mean, some information that we give out,
22:57 some applications are not really needed.
22:59 It's not that important, but we sort of put in a lot.
23:02 And again, you should also remember that now that AI,
23:04 there's machine learning and all of those things,
23:07 quite a lot of people like to post unnecessary stuff
23:10 on their social media platforms and all of those things.
23:12 And I think that that becomes a big open issue for us
23:15 because we realize that when we are in that regard,
23:18 you actually giving yourself the data to, I mean,
23:22 artificial intelligence, machine learning applications,
23:26 which they are not manned by humans,
23:27 but they do sort of understand how the emotions
23:30 towards the information that you're giving them.
23:31 So we should just generally be careful.
23:33 - All right, thank you so much for joining us,
23:36 Henry Kobla, lead for Eyes of Africa.
23:38 You're watching The Marketplace.
23:39 Next, our MoneyLab episode for today.
23:42 - Hello, welcome to MoneyLab.
23:49 My name is Kofi Poli,
23:50 Chief Operations Officer of People's Pension Trusts.
23:54 We are continuing our 10 days of pension on MoneyLab.
23:57 In our last episode, we looked at how pension works.
24:01 Today, we are going to look at
24:03 the two basic types of pensions.
24:05 One is what we call the defined benefit scheme,
24:09 with the defined benefit scheme,
24:11 there is a formula to calculate pension for members.
24:15 The key parameters in the formula
24:17 are the frequency of your contribution,
24:20 that is, if it's monthly,
24:21 how many months are you contributing per month?
24:24 Then we also look at your salary,
24:26 the salary that's contributed.
24:27 These are the two parameters we use
24:29 in calculating your pension
24:31 in terms of old age retirement.
24:34 The other one is what we call
24:35 the defined contribution scheme.
24:37 With the defined contribution scheme,
24:39 we are not interested in your frequency
24:41 of payment of contributions.
24:43 What we are interested is how much have you contributed
24:46 and interest that has accrued on it.
24:50 And at the end of the day,
24:51 when you're going on retirement,
24:53 it is paid out to you.
24:55 Thank you once again for being with us on MoneyLab.
24:57 Hope to see you in our next episode.
24:59 - And that's the Marketplace.
25:01 Thanks for watching.
25:01 There is more news on our website,
25:03 nigerialine.com/business.
25:05 We are back same time tomorrow.
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