The Market Place with Daryl Kwawu (23-11-23)
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NewsTranscript
00:00 Hi, good afternoon. Welcome to the Marketplace. Coming up this afternoon, banks fear election
00:04 related spending and budget overruns could result in interest rates surge next year and affect
00:10 deposit mobilization. Also coming up, Citi Stability, Inflation and Ghana's IMF program
00:15 dominates last round of Bank of Ghana's monetary policy committee meeting for the year. Plus,
00:21 all is set for the Ecobank Joiners Habitat Fair, which starts today at the Okwa International
00:27 Conference Center. My name is Darryl Kwau. Thanks for being with us. Details coming up.
00:54 My name is Darryl Kwau. Thanks for staying with us, everyone. First up, banks are worried that
00:58 interest rates could be going up further next year whilst deposit mobilization may be impacted
01:03 badly. These concerns were captured in an internal research document by the Ghana Association of
01:08 Banks. Here's more. The document highlights the impact of the various policy measures outlined
01:15 in the 2024 budget and how that could affect the banking sector and the operations. The commercial
01:23 banks were worried that if government goes into next year spending more than what it has budgeted,
01:28 as well as unplanned expenditure in the area of elections, that would not be good for the banking
01:34 sector. They were also worried about the actions of government and how that could impact on
01:39 investment and possibly deplete their deposits. On the possibility of government missing the 2024
01:47 revenue target, as well as the high budget deficit, the banks noted that that could result in government
01:53 borrowing more to finance deficit. The development could end up crowding out the private sector.
01:59 The banks in the report also fear that unemployment levels could be going up further if government is
02:06 not able to raise the required revenue to finance these operations. For some, maintaining strict
02:11 fiscal discipline going into next year will be needed badly to support the banking sector
02:18 and the entire economy. The Ghana City inflation-related pressures and Ghana's IMF program,
02:24 these are some of the issues dominating the last round of the Bank of Ghana's Monetary Policy
02:28 Committee meetings for this year. The engagement, which began on Wednesday, is aimed at reviewing
02:33 the economy and the policy rate, which will impact on cost of credit in the country. The policy rate
02:39 currently stands at 30 percent. The Monetary Policy Committee meeting is expected to end
02:44 tomorrow Friday with an announcement of a new rate on Monday, November 27. Some financial
02:50 analysts engaged by Joy Business have made a strong case for the policy rate to be maintained
02:55 at the current 30 percent. Director General of the Internal Audit Agency, Dr. Eric Oduo-Sai,
03:03 is urging internal auditors to take interest in the 2024 budget to provide support in sealing
03:09 leakages. According to him, this will help in economic recovery. Dr. Oduo-Sai was speaking
03:14 to Joy Business after addressing the 2023 Board and Chief Executive Governance Workshop of the
03:20 Institute of Internal Auditors in Okwa. Ghana has adopted international public sector accounting
03:26 standards. The Institute of Internal Auditors Global and Ghana are leading a change towards
03:30 ensuring that there is a new global internal audit standards. We are professionalizing the
03:35 internal audit practice in Ghana and IIA is leading the charge. I pray that they continue
03:42 along the tangent. But media, I invite you to also take an interest in internal auditing.
03:47 Build your capacities in internal auditing so you'll be able to tell the internal audit story
03:52 better. As a country, if we'll be able to reposition and capacitate internal auditors
03:57 so that they will be the gatekeepers and we'll rather use the preventive approach to corruption,
04:02 we'll be able to reduce corruption, channel resources into national level development.
04:07 As far as the 2024 budget is concerned, there is a lot of space in there for businesses and
04:13 internal auditors to be able to support Ghana to recover. At the moment, we have internal auditors
04:19 leading the charge as far as reporting on the implementation of the National Anti-Corruption
04:24 Action Plan is concerned. At the moment, government is introducing business regulatory bill.
04:29 All these things require internal auditors to be at the forefront. By the end of this forum,
04:35 board members will know that their role is to provide policy direction.
04:39 Chief executives will know their role is to implement approved decisions of the board.
04:45 Chief audit executives will also know that they are the eyes and ears of management on the ground.
04:50 The role of internal auditors is to make sure that we have professionally qualified chief
04:55 audit executives in all institutions across both the private and public sector so we'll be able to
05:00 support the state to develop. Meanwhile, President of the Institute of Internal Auditors Joseph
05:06 Dakwa Sumasegi highlighted the need to equip board members and top management of organizations
05:12 at a time the world is experiencing changes in governance and technology.
05:16 Obvious to all of us that in Ghana we've witnessed a lot of changes in various spheres.
05:24 Within a few years and not just that looking into the future we still see a lot of changes that are
05:31 on the way. All of us are hearing about AI, artificial intelligence. We're all hearing
05:36 about ESG, that's environment, social and governance. The fact that there are environmental
05:42 concerns, there are governance concerns all around the world that are driving how and where people
05:48 invest their money. We sit in Ghana or in Africa for that matter, we don't have money of our own.
05:54 Whatever we use we borrow it from elsewhere and who decides the people that finance all these
06:00 things that we do here, they consider the things that people are interested in. What are the things
06:05 that the world is interested in and if we sit here and we are not looking out for the changes
06:08 that are coming and positioning ourselves to benefit from them or to at least continue to
06:13 survive then we would have done nothing and as an institute, Institute of Internal Auditors,
06:18 we're supposed to be helping the country. So we thought that our contribution in this area is to
06:23 have a forum themed as such and then guide discussions so that together we'll be able to
06:29 come out of here with some recommendations that organizations will be guided by.
06:32 Now head of department at GIMPA Faculty of Law, alum Nuku Ali Ja has called for a more competitive
06:40 process in the tendering and procurement of power solutions in the energy sector. According to him,
06:45 lack of a competitive process has the possibility of making energy transmission more expensive with
06:51 the consumer bearing the brunt. He spoke to Joy Business at the launch of his book Ghana Energy
06:56 Law and Policy Electricity where he explores the legal and regulatory framework governing
07:02 the energy sector with a focus on electricity. Spare capital consumption at peak demand for
07:08 electricity is currently less than 4000 megawatts. This is relatively low compared to other developing
07:15 countries. Increasing access to electricity especially for industry is a necessity to drive
07:22 economic growth. Also procurement processes have been surrounded with a lot of controversy. In his
07:29 book Ghana Energy Law and Policy Electricity, alum Nuku Ali Ja details a comprehensive and well
07:37 researched exploration of the legal and regulatory framework governing the energy sector with a focus
07:44 on electricity. He spoke to Joy Business. The book as I mentioned, the energy sector is one
07:50 of those sectors that is heavily regulated, very intricate, there are many dimensions of it
07:56 and so I think that putting together this book enables us to have clarity. So I've tried as
08:02 much as possible to write in very simple straightforward language, breaking down the
08:07 various components of the energy sector so anybody who picks up the book can read and understand
08:12 how the sector works and how it impacts our lives. He called for a competitive process in the
08:17 procurement system to enable varied solutions and competitive pricing in the energy sector. How we
08:24 procure power today, we don't have a competitive process actually for procuring power so essentially
08:30 what we've done over the years is for developers to approach with proposals and different offtakers,
08:37 mainly ECG, signs on to these agreements and based on whatever terms are agreed, eventually
08:43 the cost is passed on to consumers. But if we did have a more competitive process which enabled
08:49 different solutions to be provided to meet particular needs in the energy sector,
08:55 I believe we'll have more efficient power plants, we'll have more competitive pricing and many other
09:01 things and so when anybody picks up this book I believe they'll have all these things covered.
09:06 Former Chief Executive Officer of the Volta River Authority,
09:10 Engineer Kirk Kofi called for the utilisation of excess generation to drive industrial growth.
09:17 And as I said in my review, the per capita consumption of electricity in our part of
09:24 the world is still low. It has to go up with more industries, more utilisation of electricity and
09:30 that will help move us from the class we have as a developing country to a developed country.
09:37 Now close to 70% of Ghanaians are considered to be financially stressed while two out of three
09:44 Ghanaians have no retirement or contingency plans. This is according to the Old Mutual
09:49 Financial Services Monitor, an annual survey into the financial behaviours of Ghanaians.
09:54 Speaking at the launch of the survey, Group Chief Executive of Old Mutual Ghana,
09:58 Tavon Abiza, explained that tailored financial products coupled with
10:03 a deliberate plan will be needed to whip up interest in retirement.
10:07 According to the survey, 64% of the Ghanaian working population are considerably financially
10:15 stressed with 72% of this number found among the lower income group. Also, about 40% of
10:22 Ghanaians have the burden of supporting both children and adult dependents. The report
10:28 also stated that almost 50% of Ghanaians are engaged in auxiliary jobs to support upkeep
10:35 while one out of three respondents say they are saving towards retirement.
10:40 Vuyokazi Madhube, Head of Knowledge and Insights at Old Mutual, has been speaking on the sidelines
10:46 of the launch of the Old Mutual Financial Services Monitor, which is an annual study
10:51 into the financial behaviours of Ghanaians. The first is that people are incredibly
10:56 financially stressed in Ghana. People's income has not changed or gotten less in the last year
11:03 and a bit. So 78% of people are saying that their income has stayed the same or actually reduced,
11:09 which means they have less money in real terms. And then finally, we see 61% of people in Ghana
11:16 dipping into their savings every single month to make ends meet, which tells you yet again that
11:21 there is a very real challenge from money and access to money and access to funds to be able
11:30 to make ends meet. Responding to the findings of the report, economist and lecturer at the
11:35 University of Ghana, Dr Patrick Esuming, called for deepening awareness in the formalisation of
11:41 the informal economy. People don't really understand the benefits of the formalisation.
11:47 So I think some education, general education for small businesses about the importance and
11:52 the benefits will help. But like I also spoke about, I think making the process simpler and
11:59 easier, easier to manage by small businesses because, you know, if a sole proprietor has to
12:09 leave their business behind for even an hour, just so that they can go and sort out the registration
12:14 process, that can be a huge incentive for registering. Chief Executive Officer of Old
12:18 Mutual Life Assurance, Tavon Biza, stated that Old Mutual is committed to providing
12:25 tailored retirement solutions for customers. So the products help because firstly, they help you
12:30 to plan adequately for that retirement so that when it gets there, you actually have enough money.
12:35 And then after you get to retirement, because you know, even when you look at our own Ghanaian
12:41 market, we have our tier threes, right? And our tier twos, what tends to happen is that people
12:47 take their lump sum, and they want to use all of it to start a business or to chop or do certain
12:52 things, right? But what we are saying is that if you give us a certain proportion of that money,
12:57 you can try a business with the rest. So you can give us 50%, 50% try a business. But with this 50%
13:04 that you've given us, you know that for the rest of your life, and even if you do pass on,
13:10 for the rest of your spouse's life, you know, they'll actually be adequately taken care of.
13:15 Old Mutual is one of Ghana's top 10 leading financial institutions with an innovative
13:20 record in offering the best in insurance services and has since produced the Old Mutual Financial
13:26 Services Monitor. The Monitor is an annual study into the financial behaviors of Africans
13:31 with a key focus on the economic outlook and its impact on society.
13:37 Now, Minister of Employment, Labor Relations and Pensions Ignatius Mbafwewa has asked SNIT to leave
13:42 its comfort zone and intensify public education to enroll more informal sector workers onto the
13:48 SNIT scheme. Now, speaking at the launch of the 2023 SNIT Mobile Service Week in Sunyane,
13:54 the Minister says such a drive would not only keep SNIT in business, but also allow the self-employed
14:00 to ensure their incomes in return for a decent pension. In retirement, Precious Semerville has
14:06 more. Ahead of the launch of the 2023 SNIT Mobile Service Week in Sunyane, some beneficiaries,
14:13 including a young man who has been receiving a monthly pension since age 29 after being declared
14:19 unfit to work, shared their experiences since they joined the pension scheme. Bono Regional
14:24 Minister Justina Osubanahene, at the awareness creation with the informal sector workers,
14:29 appealed to women who form the majority to take the lead and take advantage of the self-employed
14:34 enrollment drive from SNIT to reduce their children's burden in the future. Director-General
14:40 of SNIT Dr. John Oforitin-Krine called on the young ones to contribute to the scheme to benefit
14:45 beyond the contingent claims. "In addition to the old age pension that we pay you, we, unlike the
14:52 other pension schemes, we pay two contingent claims. The first one is that we give you life
14:58 insurance. The same thing with invalidity. You would agree with me that the older you get,
15:04 the higher the probability that you are going to claim on these contingent claims. If you go for
15:12 private life insurance, the premium for a 45 or 50 year old person is very high compared to the
15:19 premium for a 20 year old. So that is why there is an age limit where you can join SNIT because
15:25 when you come and join SNIT, we do not do any underwriting. We just take you as you are. We
15:30 don't ask you to go to the hospital to check your health and so on and so forth. So you can imagine
15:35 that if we were to take on 55 year olds and 57 year olds, their risk profile will increase
15:40 dramatically. That is why if you are young, between the ages of 15 and 45, you can join SNIT
15:48 today and start making your contributions." Minister for Employment, Labour Relations and
15:52 Pensions Ignatius Bafwewa urged SNIT to leave their comfort zones to ensure more self-employed
15:59 people ensure their incomes for a decent pension in retirement. "When we were putting the first
16:04 pension act, it was mandatory. They were the only pension institution in Ghana. But since the
16:10 passage of Act 766, there are multiple number of pension schemes. So if you do not go out there,
16:16 others will go out there and then you'll be played out of business. So I like the way that SNIT is
16:22 responding to the call. Otherwise, if they're not very careful, they'll be played out of business.
16:27 There are about over 10 million Ghanaians who are working. Only 2 million or slightly less
16:33 on one form of pension or the other. And most of these people are persons who are already
16:38 working within the formal economy. So if you want to grow and you do not penetrate into the
16:43 informal economy, how do you grow? Others will take advantage, expand their tentacles over there
16:48 and overtake you. So SNIT, whether they like it or not, they will have to move out of their
16:53 comfort zone and take charge of this huge market opportunity which exists." The mobile service week
16:59 is under the theme "Choose your tomorrow. Sign up for SEED from SNIT today. Precious Semevo,
17:05 joy business. Sunyai." And you're watching the Marketplace. I want to take you right now to
17:14 the Okwa International Conference Center where the much anticipated Echobank Join You Targeted Fair
17:19 has kick-started. The program will assemble players in the housing and mortgage sector to provide
17:25 solutions for patrons. Joining us is Jacqueline Sumeya-West. Therefore, as Jacqueline, what is
17:30 the bars there ahead of the official opening? "Okay, Daryl. So as I've been saying, that's
17:41 the 14th edition of the Echobank Join You Habitat Fair and patrons have been trooping in. I'm
17:49 currently here with the Lands Commission and they're the newbies on board this year. Most people
17:55 expect tons of the services that they will be providing this year. So I'm here with one of the
17:59 reps from there. Hello, can you tell me your name? "My name is Mariam from the Communications Unit
18:04 Head Office." Okay, all right. Now a lot of people are excited to have you on board this year
18:09 considering a lot of questions that they have. What are the services that you're providing this
18:13 year? "We provide a lot of services but we are here to give advices and then also introduce them
18:18 to our new online services. You can now do your searches online without even coming to the
18:22 commission. Just log on to online services.lc.gov.gh and then from the comfort of your homes, you can
18:29 submit a site plan and then your search will be done. You can track your process, your progress
18:33 of the search reports to online. We are also coming up with a new unit known as the Complaints
18:40 and Advisory Center where people can call and then make inquiries and then also walk into the
18:47 premises and then any questions they have, their questions will be solved." Okay, but what has been
18:52 the reception so far? You've been here since morning, it's noon now and what has been the
18:57 reception so far? "So far, so good. People were trooping in with their questions and then they
19:02 are getting a lot of answers. I would just encourage everybody here to also come and then
19:06 make inquiries on anything you want to know about your land issue. We'll be glad to help." If anyone
19:12 has any issue with regards to land litigation, can they also come because someone watching will be
19:16 like, okay, so there's this rampant issue of land litigation. I know lands commission is here.
19:21 Should I also walk in here and ask you questions about that? "You can walk in here and then we will answer your
19:24 questions. Sometimes the land discussion doesn't emerge from the lands commission. People don't do
19:28 their due diligence. But then as we are talking to them and then we are educating the public,
19:32 they are getting it that you have to do a search before even you buy a land. When you identify a
19:38 land, please come to the lands commission with a site plan and do a search before you pay for
19:43 the land and then you avoid these land litigations." Okay, before I leave you, your expectations for this
19:48 year's Ecobank Join News Habitat Fair? "Okay, I'm expecting a lot of things. I'm expecting that at
19:53 the end of this Ecobank Habitat Fair, people will get to know that the lands commission don't sell
19:58 lands. We don't sell lands. We help advise and then we manage the lands on behalf of government.
20:06 So we are just expecting that at the end of this habitat fair, people will walk to the
20:11 lands commission and do their due diligence before buying lands." Okay, all right. So that is the lands
20:16 commission and by the end of the day, you'd get to know a lot. Just as how I know that lands commission
20:21 doesn't sell land. Now, I am with Deng Limited. Hello madam, how are you? "Hello, I'm fine, thank you."
20:28 Okay, you are a first-time exhibitor. "Exactly so." What are your expectations? "We are expecting that we'll
20:34 have more people at the fairgrounds to our booth so that we'll be able to interact with them and
20:38 tell them what we have in store for them when it comes to renewable energy." Okay, but what informed
20:44 your decision to be part of the Join News Habitat Fair? "I would say it's basically the feedback we
20:50 heard on radio. People who had already been here for the fair, the feedback they gave and how
20:56 successful it was informed our decision to be part of the fair this time. So as first-timers, we are
21:02 already excited. We've had people visit our stands already and yes, we are happy and expecting more
21:06 people." Okay, what services are you providing for patrons today? "Today, we have our renewable energy
21:12 products, solar to be precise. We have solar lighting for homes and for commercial purposes.
21:19 We have irrigation pumps. We have solar water pumps as well for large farms and small farms
21:27 and for homes. Portable drinking water, boreholes, we have pumps for all that. And then we also have
21:33 discounts, our products for home systems. And then we have a solar training school. We are also
21:40 offering discounts on the fees for the solar training center as well." Okay, all right. I wish you all the
21:46 best. "Thank you." Okay, so I have another exhibitor here, Agassi Homes. I hope I got the pronunciation
21:51 correct. "Yes, that's right. Agassi Homes." Okay, tell me more about Agassi Homes. "So, we are a
21:58 development company with properties located in Thema and airports. We have two, three, four, five
22:05 bedroom houses. And I would say the unique thing about us is the fact that we have very, very
22:11 competitive prices, affordable prices, but the luxury is that of a highly priced property." Okay, so for the normal person...
22:19 All right, and that's what's happening right now at the Acquire International Conference Center.
22:34 We will be there at two o'clock for the official opening of the Acrobank Joiners' Habitat Fair.
22:40 Let's bring you some more stories. The Minister of Environment, Science, Technology and Innovation,
22:44 Dr. Kwekwe Fie, is calling for a collective effort from government institutions and countries and that
22:50 the economic community of West African states combat climate change. According to him, it is
22:55 important for farmers to adapt to the challenges brought about by climate change as government
23:01 takes steps to mitigate its impact. He was speaking at the fifth Waskow Ministerial Council meeting.
23:08 The fifth Waskow Ministerial Council meeting is geared towards deepening the relationships
23:13 among the country members at policy-making levels. It is being held under the theme,
23:19 "Journey towards Climate Resilience to Improve Livelihoods in West Africa and Building Sustainable
23:24 Partnerships and Policies." Minister of Environment, Science, Technology and Innovation, Dr. Kwekwe Fie,
23:31 who addressed the meeting called for collective efforts to combat and reduce the effect of climate
23:36 change on the environment and farmers. We should be reminded as Africa plays both state and non-state
23:48 actors that our continent has been and is still being hit hard by climate change. Our collective
23:58 efforts, therefore, to fight the common security threat will go a long way to win the battle against
24:08 climate change. I've always advocated that since we are small, when your municipal emitter is less
24:15 than four percent, maybe we should, the conventional wisdom out there is that we should not waste the
24:21 executive time discussing that and we should leave these issues to the global north and the many big
24:27 economies like India and China to deal with. But we have an enlightened self-interest. We suffer most,
24:36 but we even have something to show to the rest of the world, even how to adapt. The other time,
24:43 I just came from Abu Dhabi and I told them that poor farmers in Africa are still investing in
24:50 adaptation. I'm a Poko farmer and I know that even the habitats of poor farmers, they have adapted by
25:00 using materials who can withstand the ravages of the climate. Head of Division of Climate Change
25:06 at the German Federal Ministry of Education and Research, Dr. Carsten Hess urged other institutions
25:12 to support WASCA financially to reduce its reliance on the BMBF. WASCA's scientific and
25:18 climate services should benefit all of its member countries. There's still great potential to
25:25 develop such climate services. Second, WASCA is in urgent need of a solid financial basis that goes
25:34 beyond the support from BMBF. All member countries must be aware that membership fees are paid.
25:46 Additionally, third-party funds must be increased to reduce WASCA's dependence on
25:53 BMBF funding. This challenge must be addressed by the coming new Executive Director. WASCA is a
26:00 body that aims to provide information and shared knowledge at the local, national and regional
26:05 levels to West African member countries to cope with the adverse impact of climate change.
26:14 And that's our program tonight. Thanks for watching everyone. But there is more news on
26:18 our website, myjoyonline.com/business. Our top stories there, government must walk the talk and
26:24 not merely engage in rhetoric. Does the PwC also produce a price inflation falls to 9.6%? There
26:33 you go. Those stories on myjoyonline.com/business. My name is Daryl Kwah. Thanks for watching our
26:39 program. We will be back same time tomorrow.
26:53 [Music]