Author: Administrator

Mrs Comfort Owusu, the Executive Director of the Association of Rural Banks Ghana, has called on government to support Rural and Commercial Banks (RCBs) to retrieve locked up funds with the defunct financial institutions whose licenses were revoked.

She appealed to government to consider a tax reduction from 25 per cent to 15 per cent and a tax holiday (2020-2021) to help strengthen the banks to mitigate the challenges they faced, especially during this COVID-19 pandemic.

Mrs Owusu made the appeal at the third edition of the webinar series of Krif Media Limited, publishers of Integrity Magazine, on the theme: “The Effects of Covid-19 on Corporate Ghana” with the focus on rural banks.

Dr Alex Asmah, the Chief Executive Officer of Amenfiman Rural Bank, said the time was ripe for government to consider a concessionary tax arrangement for the RCBs as part of the support.

He said such concession would strengthen them to better support the government’s financial inclusion agenda and the fight against extreme hunger and poverty post COVID-19.

Dr Asmah said at the initial stages of the restrictions, there were uncertainties about the future, so most rural and commercial banks switched to risk management mode mainly strategizing to survive the possible impact of the pandemic.

He said after building various risk scenarios the banks came out with strategies to support their customers whose businesses were impacted by the disease.

“It is worth noting that several rural banks have committed resources amounting to several thousand of Ghana cedis to support their communities and the Health Ministry in the form of cash and non-cash items such as PPE towards the fight against the pandemic,” he said.

Dr Asmah said interventions made to support clients in the farming and other sectors included moratoriums on loan repayments, deferment of monthly loan instalment and interest rate cuts from 150–200 basis points, far above the expectations of the Central Bank.

The Reverend Kennedy Okosun, Chief Executive Officer of Krif Ghana Limited and Krif Media, said the series focused on the impact of Covid-19 on rural banks and strategies adopted to mitigate them.

“Rural banks in Ghana have over the years played a very integral role in providing opportunities for microfinance clients, salaried workers, small and medium enterprises and the vast majority of Ghanaians who live outside of Accra,” he said.

He commended rural banks such as Fiaseman, Atwima Mponua, Amenfiman, Ahantaman, South Akyem, Juaben, Atwima Kwanwoma, Amansie West, Odotobri, Kintampo and Akuapem rural banks for consistently featuring in the Ghana Club 100 list for the last five years.

“These webinars create a platform for industry players, stakeholders and the public to redesign their corporate strategies, inform and educate businesses on the steps that will help them excel within this period,” Rev. Okosun said.

The next webinar was scheduled to take place on Tuesday, July 7, 2020 to focus on the “Effects of Covid-19 – The Insurance Industry.”

Rating agency S&P Global has affirmed its ‘AAA/A-1+’ long- and short-term issuer credit assessment of the African Development Bank (AfDB) with a stable outlook

The rating agency positively assessed the Bank’s very strong financial risk profile, very strong capital adequacy, strong funding and liquidity, extraordinary shareholder support, and adequacy of its governance and management.

“We are therefore affirming our ‘AAA’ long-term issuer credit rating on the AfDB,” S&P Global stated.

The rating agency noted the Bank’s $115 billion capital increase, approved by shareholders in October 2019, and the replenishment to the African Development Fund, the Bank’s concessional window, in December 2019.

“The stable outlook reflects our expectation that, over the next two years, AfDB will prudently manage its capital while maintaining solid levels of high-quality liquidity assets and robust funding,” S&P Global said in a statement.

S&P expects that “shareholders will remain supportive by providing timely capital payments”; the Bank “will continue benefiting from preferred creditor treatment (PCT); and “prudently manage growth in private-sector lending in a way that’s aligned with its mandate.”

The rating agency’s report further noted that the “AfDB will play a key role in supporting the region, particularly in the context of COVID-19. The institution approved an up to $10 billion relief package for 2020, of which $6.9 billion will be financed by AfDB and the remainder through its concessional lending window.”

The President of the Bank, Akinwumi A. Adesina, said: “We are delighted with and welcome S&P Global’s decision to affirm the Bank’s AAA/A-1+ rating. It reflects the Bank’s very strong financial position and risk management, as well as our sound governance.

We will continue to maintain these standards, with the strong support of all our shareholders, as we deliver much needed financial, knowledge and policy support to our regional member countries during and after this period of the COVID-19 pandemic.”

Oil prices were steady on Monday, supported by tighter supplies from major producers but held in check by concerns over a record rise in coronavirus infections worldwide that could stall a recovery in fuel demand.

Brent crude rose 10 cents, or 0.2 per cent, to $42.29 a barrel by 0826 GMT, while US crude for August delivery was at $39.87 a barrel, up 4 cents, or 0.1 per cent.

South Korea said on Monday for the first time it is in the midst of a ‘second wave’ of the coronavirus. The World Health Organization reported a record increase in global coronavirus cases on Sunday, with the biggest increase from North and South America.

“Infections are rising in key markets around the world and there are valid concerns that the world is in for a prolonged period of dealing with its consequences,” said Rystad Energy’s head of oil markets Bjornar Tonhaugen. Oil prices have been supported by a recovery in fuel demand globally following a collapse in April-May during virus shutdowns, as nations worldwide resume economic activity. Signalling a recovery in global markets and tighter supplies, Brent has moved into backwardation, where oil for immediate delivery costs more than supply later.

Both contracts rose about 9 per cent last week. However, after weeks of rising, prices of physical oil have begun to ease, traders and analysts say, as the rally succumbs to the reality of poor refinery margins and brimming storage tanks.

“I find it more difficult for oil to move higher at this point, especially with the growing concern about second-wave contagion,” said Howie Lee, an economist at Singapore’s OCBC Bank.

In Canada and the United States, the number of operating oil and natural gas rigs fell to a record low last week, even as higher oil prices prompt some producers to start drilling again.

The OPEC+ group, consisting of the Organization of the Petroleum Exporting Countries and its allies, including Russia, has yet to decide whether to extend a record supply cut of 9.7 million barrels per day (bpd) for a fourth month in August.

However, Iraq and Kazakhstan pledged to comply better with oil production cuts during an OPEC+ panel on Thursday.

A former Deputy Minister of Communications, Mr Ato Sarpong, has noted that policies and regulatory practices in the telecommunication sector of the Ghanaian economy have consistently, over the years, favoured foreign multinationals against locals.

In an article, he explained that the then Ghana Telecom which was sold to Vodafone by the Kufuor administration, with incumbent authorisation for mobile services, launched its mobile service branded Onetouch in late 2000.

Glo, was the last GSM service to be launched in Ghana, he said.

“Today, Ghana boasts of a thriving mobile industry with over 41 million mobile telephony subscriptions and penetration in excess of 138%. Fixed telephony subscriptions have been at almost same level for over a decade at less than 300,000 lines.

“Mobile data continues to dominate in the data space with over 28 million subscriptions to mobile data service on the second and third generation platforms and a further 1.4 million on the fourth generation platform.

“ Sadly, the fourth generation broadband wireless space, originally awarded to indigenous operators like Surfline and Blu Telecom, is now dominated by global multinationals bringing to the fore policies and regulatory practices that have consistently, over the years, favoured foreign multinationals,” he noted.

Mr Ato Sarpong further stated that former President John Dramani Mahama introduced several reforms in the telecommunication sector of the Ghanaian economy when he was the Minister of Communications under the Rawlings administration.

These reforms, he said, propelled Ghana’s telecom industry to glory days which Ghanaians are enjoying currently.

Mr Saprong said : “A little over two decades ago, making an international call in the comfort of one’s room was just a dream. To speak to someone overseas, you had to go and book the call at Ghana Telecom, Accra Central, and be given a date to come make the call. On that day, you would join a queue and when it came to your turn, you would enter one of the booths where everyone within the hall would be privy to your conversation. Telecommunications in Ghana was in the hands of only one entity – the Ghana Post and Telecommunications Company – a giant, very deeply asleep, under utilising its resource base and feeding off the little revenue generated by the state.

“Under His Excellency President John Mahama, former President of the Republic of Ghana, but then as Deputy Communication Minister and later as Minister for Communications, major reforms were carried out in the telecommunications sector leading to the decoupling of post and courier services from telecommunications services and resulting in the Incorporation of Ghana Telecom and the promulgation of Act 505 to create the Ghana Postal Services Corporation in 1995.

“Around the same time, Ghana had fallen in love with the Malaysians and saw two major Malaysian investments in telecommunications and media coming into Ghana. One was Telecom Malaysia taking up a 30% stake in Ghana Telecom including management of the entity. The other was the use of the huge assets and resources of the Ghana Film Industry Corporation to enter into an arrangement with Media Prima of Malaysia to create TV3 with the Malaysians taking up a 90% stake in the newly created entity.

“To get the sleeping giant – Ghana Telecom – to wake up, an attempt was made to deregulate the fixed telephony sector with the award of a second national license to another sleeping giant, Western Telesystems Ghana Limited (Westel) creating a duopoly and offering other service providers some options to opt for services from two competing sleeping giants. Westel metamorphosed into Zain when it was acquired by Celltel International which later sold it to Bharti Airtel and rebranded Airtel until its recent merger with Millicom leading to the creation of Airtel-Tigo.”