Today’s Business Headlines

Invest in local raw materials for manufacturing – Deputy agric minister urges

The Deputy Minister of Agriculture, Alhaji Yakubu Alhassan has called on industries to reduce their dependence on imported raw materials for manufacturing but rather invest in the local raw materials supply chain, by sourcing locally for their manufacturing.

He said this at the second Guinness Ghana Breweries Limited (GGBL) Domestic Value Creation workshop held in Accra. The workshop, aimed at continuously engaging key stakeholders to understand the effect of local sourcing in Ghana and explore opportunities throughout the value chain.

According to the Minister, GGBL has shown tremendous capability, transforming the agriculture sector through the use of raw material sourced locally from 12% usage in 2012 to 48% in 2015. By such initiatives, we move from our traditional subsistence farming to commercial farming, creating life changing opportunities for our local farmers and the entire value chain’.

A research report shared by Deloitte UK, an independent research and audit firm, highlighted in detail the economic impact of the local raw materials tax concession in the Ghanaian beverage market.

The report also emphasized the need for any amendments to policies affecting domestic value creation to consider the potential short term economic costs and benefits as well as the long term impact caused by disruptions to the investment environment.

Statistical Service to rebase three economic indices

The Ghana Statistical Service (GSS) is to conduct a number of surveys to enable it to collect data needed to rebase its three main economic indicators namely the Consumer Price Index (CPI), Producer Price Index and Gross Domestic Product (GDP).

As part of the process, the GSS would conduct the second phase of the Integrated Business Establishment Survey (IBES II) from November to December, and data from the survey would help in rebasing the PPI.

At a news conference to announce the Producer Price Index (PPI) for September in Accra, the Government Statistician, Dr Philomena Nyarko, said the rebasing of the indices would require a lot of data, which were expected to reflect changes that had taken place over time with respect to the baskets used to calculate each of the economic indicators.

Beware of charlatan microfinance companies

he National Chairman of Credit Unions Association (CUA) Ghana, Mr Charles Yaw Assua-Yeboah, has cautioned members of the association, and prospectives to beware of the proliferation of financial institutions in the country, espeically charlatan mircofinance companies.

He said those institutions were baiting unsuspecting customers with juicy interest rates only to escape after they had taken huge sums of money from their clients.

In the end, customers lost all that they have saved over the years, he observed, adding that, ‘‘People must be told in no uncertain terms that the credit union movement was tried and tested and had as well withstood the test of time.’’

Mr Assua-Yeboah, who was addressing the national celebration of the 2015 International Credit Union Day at Takoradi in the Western Region, said members should, therefore, be careful of those institutions in the financial market and be guided by the wise saying, ‘‘To be forewarned is to be forearmed.’’

FDIs soar in spite of economic crisis; Investors inject US$2.29bn in 9 months

Ghana’s economy is still the toast of investors worldwide despite an unenviable macroeconomic environment which have dampened growth and pushed consumer and business sentiments to record lows.

With a stable socio-political record, the country is still attractive to investors who appear to be testing the business axiom that investments are better made when markets are turbulent.

This has reflected in the flocking of investors into the country in recent times, leading to an 18 per cent growth in foreign direct investments (FDIs) in the first nine months of the year.

Between January and September this year, FDI inflows rose to US$2.29 billion, thanks to some 120 new projects registered within the nine-month period, according to the Ghana Investment Promotion Centre (GIPC).

Although the strong growth in FDIs contradicts the economy’s current grim position, Mr Emmanuel Alex Asiedu, the Managing Director of investment management and advisory firm, STANLIB Ghana Limited, said it confirmed analysts’ belief that the country’s challenges would ease in the medium to long term.

“We are going through a blip but the consensus among economists and people in the industry is that this blip is more of short to medium term than long term. So, if I were to invest, I would probably be looking at doing it now,” he told the GRAPHIC BUSINESS on October 30.

Gov’t ditches Printex: Imports fabric for free school uniforms

Documents available to The Finder indicate that the Min­istry of Education has flouted the directive of President John Mahama on government’s policy on made-in-Ghana products.

The ministry is importing fabrics being used for government’s free school uniform programme for de­prived pupils in basic schools from China, which has rendered a contractual agreement with Printex Ghana Limited, one of the local textile manufacturing companies, to supply the fabric useless.

Equipment worth millions of dollars which the company purchased to re­tool its equipment in anticipation of the continuous production of the uniforms now lie idle.The action of the Ministry of Educa­tion contradicts promises made by gov­ernment to revamp the local textile industry to make it competitive and a major driver for youth employment.

Government in 2009 made it a pol­icy to empower local textile manufac­turing companies by procuring all its fabric needs from local manufacturers.

A few years down the line, govern­ment seems to have abandoned the local textile manufacturing companies, who have sunk huge sums of monies into retooling and installing new ma­chines to meet the new demand, to pro­cure the uniforms from China.

Late last month, the Greater Accra Regional Directorate of the Ghana Ed­ucation Service released sets of uni­forms to schools in Metropolitan, Municipality and District Assemblies for onward distribution to pupils in the region.

African Sun Hotel folds up but workers insist on severance package

About 60 workers of the African Sun Hotel located at the Airport City in Accra are up in arms with former management of the hotel, demanding what they described as their un-paid severance package.

The workers have accused the management of hiding behind the sale of the hotel to a new owner to deny pay them their due.

According to the workers, all attempt to get the management to settle its indebtedness had proved futile as management insisted  the hotel had new owners.

This is brewing anger and dissatisfaction among the workers who felt cheated by the original owners of the hotel, deciding to sell off the company without paying what they owe their workers.

The local union Chairman of the hotel, Mr Jairus Abormegah, who confirmed this to the Graphic Business in Accra, indicated that the workers were informed through an emergency meeting held on the third week of August that African Sun was folding up operations out of Ghana at the end of the month.

He said the workers were made to believe that the original owner of the building, Trassaco Ghana Limited, was taking over the day to day running of the hotel since management of the Africa Sun Hotel rented the building from Trassaco.
“Hence, Trassaco Ghana, which is the owner, will continue to run the facility and staff were assured they were not going to suffer in anyway because African Sun will see to it that employees were well taken care of and handed over to the new management before they leave,” he said.

BoG must consider reducing policy rate – Ebo Turckson

Some economists are predicting the Monetory Policy Committee (MPC) of the Bank of Ghana (BOG) may maintain the monetary policy rate.

According to Dr. Ebo Turckson, the current inflationary trends, high interest and cost of government borrowing will make it difficult for the MPC to reduce policy rate.

The last meeting of the MPC increased the policy rate by 100 basis point to 25 percent from 24 percent.

Speaking to Citi Business News ahead of this month’s MPC meeting Economist and Senior Lecturer at the University of Ghana Dr. Ebo Turckson said the Bank of Ghana must consider reducing the rate to reduce high interest rate.

“The role of the monitoring committee meeting will be more concerned about the interest rate hikes and therefore their target would be beyond inflation. If in their estimation and as the figures would show inflation is toned down then I believe that if it is possible for them they should reduce the rate so that it would have an impact on interest rate so that the private sector can borrow but then perhaps if they would have to balance the rate of inflation. But given the way the government is behaving am not too sure if the central bank would want to reduce the rate of interest.”

Industry kicks against utility price increase

Industry players say it will be untimely for the Public Utilities Regulatory Commission (PURC) to increase utility prices without an improvement in the quality of service to customers.
The concerns by the industrialists follow proposals by PURC to consumers to pay more for utility.

The Commission believes that an increase in prices will enable the utility providers operate at optimum levels to satisfy the needs of their customers.

The call by the industry players also corroborate similar concerns raised by consumers at almost all the regional consultative fora.

Some have been accusing the PURC of exploitation as they complain bitterly about the quality of service delivery.

Speaking to Citi Business News, the President of the Ghana Chamber of Commerce and Industry, Seth Adjei Baah, who admits that prices have to be increased, however advocated a proper timing for the move.

Cashew processors face bleak future

About 10 out of the 13 cashew processing companies in the country have collapsed or halted operations over the past five years.

The companies that are still in business are also struggling to cope with various challenges in the industry, which led to the collapse of their counterparts.

The challenges ranged from lack of raw materials to rising costs of production, which have, over the years, combined to take the shine off an otherwise profitable business.

Although the cashew industry has been a major revenue contributor to non-traditional export (NTE) earnings, accounting for 5.35 per cent (GH¢134.61 million) of last year’s earnings, a lobbyist for the Cashew Industry Association of Ghana, Dr Gideon Kofi Agbley, said it had virtually been left to fend for itself.

From the availability of cashew nuts to access to credit and inputs for farmers, Dr Agbley said at the national cashew development advocacy forum in Accra that appeals for government-sponsored interventions to help revive the industry were yet to be heeded to, thereby making it difficult for companies and farmers to operate profitably.

“What most of the farmers did was that they remained with the old methods of farming because of lack of resources to buy inputs. The processing companies are also collapsing. In fact, so far, only three out of the 13 companies are still operating and that is not good for us,” he said at the event.

Dumpong Rural Bank named most profitable bank

The Dumpong Rural Bank Limited at Asakraka Kwahu in the Kwahu South district of the Eastern Region has been named the most profitable company in Ghana at the 2013/2014 Ghana Club 100 awards.

Dumpong Rural Bank was among the top-ten new entrants and awarded for being the 2014 Club 100 leader in the rural banking sector; and it came 4th out of the 100 companies that were acknowledged by the Ghana Investment Promotion Centre, GIPC, with Tullow Oil emerging as the No-1 company. In all twenty-four rural banks made their way to this year’s event.

The annual event, which is organised by the Ghana Investment Promotion Centre (GIPC), is to exclusively celebrate and motivate Ghana’s leading 100 companies for their initiative, innovation and leadership. This year’s event was on the theme ‘Impact Investments and Sustainable Economic Development’.

Making its maiden appearance at the Club 100 and sweeping three awards simultaneously has been the greatest achievement in the bank’s operations; the board of directors and management have promised to leave no stone unturned to maintain or improve upon this enviable achievement.

Credit: Graphic, Joy Online, Citi Online, Finder, BFT

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Henry Cobblah

Henry Cobblah is a Tech Developer, Entrepreneur, and a Journalist. With over 15 Years of experience in the digital media industry, he writes for over 7 media agencies and shows up for TV and Radio discussions on Technology, Sports and Startup Discussions.

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