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NPA directs OMCs to begin charging reduced prices for petroleum products today

The National Petroleum Authority (NPA) has directed Oil Marketing Companies (OMCs) to implement the amended Special Petroleum Tax (SPT) Act which reduces the tax by 2%.

The amendment also converted the SPT from a 15% ad valorem to a 13% specific tax, which means a specific amount will now be charged for a litre of petroleum product.

Per the new pricing regime, the SPT on petroleum products effective from Friday, February 16, 2018, will be as stated below.

New-SPT

Parliament on Thursday passed the bill following agitations by Labour and the Chamber of Petroleum Consumers (COPEC) against rising fuel prices.

COPEC says the reduction is welcome news but it had hoped for a total scrapping of the controversial tax.

The SPT was introduced in 2014 in reaction to the falling price of crude oil on the international market, but it still remains in the books despite a stable price for the commodity.

Inflation drops to 10.3% from 11.8%

Latest data from the Ghana statistical Service has revealed that inflation has dropped from 11.8 percent to 10.3 percent for the month of January.

This represents a significant drop considering the fact that inflation increased to 11.8 percent in December.

The monthly change rate in January 2018 was 1.4 percent compared with the 1.0 recorded in December 2017.

Inflation is the rate at which the general level of prices for goods and services rise and, consequently, the purchasing power of a currency is falling.

The Upper West region recorded the highest year on year inflation rate of 12.1 percent followed by Brong Ahafo with 11.2 percent while Upper East region recorded the lowest year on year inflation of 7.8 percent in January.

 

Source: adomonline

Importers resist Customs’ Cargo Tracking Notes policy

Businesses at the ports are opposing customs new policy, the Cargo Tracking Notes (CTN), saying it will add unto their cost of production.

The CTN is expected to track all imports to Ghana to reduce revenue losses with under declaration.

Even before its implementation in March 2018, the businesses say they will be disadvantaged.

The freight forwarders argue that the Cargo Tracking Notes (CTN) is a duplication of efforts to slow down their activities.

They explain that the customs already has access to shipment information hence no need for any new documentation.

The President of the Ghana Institute of Freight Forwarders, Kwabena Ofosu Appiah explained the group’s position as;

“We believe this is just allowing someone to set up just a system to provide information on imports such as vehicles and make up to about 100 dollars on every bill of laden,” he stated.

The CTN primarily allows freight forwarders from the country of origin to upload information on a particular consignment unto the platform.

This is subsequently relayed unto the Ghana customs platform in real time.

The charges range between 100 and 200 dollars per consignment of goods.

This is however dependent on the number of consignments.

The CEO of CTN Ghana, Geoffrey Cole disputes the arguments of the freight forwarders of additional costs.

“We are dealing with the freight forwarder at the port of origin who is engaged by the shipper or supplier or manufacturer to process documents out of that country to Ghana. So we have no business with the freight forwarder whose mandate resides in Ghana,” he explained.

Due to the timely provision of information, any consignment which is suspected of under declaration or under valuation, could be surcharged to avert any possible revenue loss due to tax evasion.

Geoffrey Cole tells Citi Business News the program should also protect the economy from dumping of unapproved goods.

“The benefits do not only accrue to customs but also to the Ministry of Health as it can use the CTN to control the importation of some prohibited pharmaceutical products. Likewise the Ministry of Interior could use the CTN to determine any threat of importation of unwanted weapons, etc. Also, the Ministry of Trade in making economic decisions for Ghana could also use the CTN to track imports,” he added.

A Tax advisor at the Commissioner of Customs, Christian Sottie admits to the outstanding issues raised by the businesses.

He however explains that all such issues should be resolved for the roll out in March.

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

GRIDCo to export electricity to Burkina Faso

The Ghana Grid Company (GRIDCo) says it will soon start the export of some 50 megawatts of electricity to Burkina Faso once work on the interconnection lines has been completed.

Mr Frank Okyere, the Systems Control Manager at GRIDCo, who announced this, said the supply arrangement with Burkina Faso could reach some 100 Megawatts of power by the middle of 2018.

“There is potential for the exports to go as high as 400 megawatts,” Mr Okeyere said at a stakeholders’ forum on power outlook for 2018, organised by the Association of Ghana Industries (AGI).

The forum, which was on the theme: “Diversifying Our Generation Sources, Strengthening the Base Load Sources to Support Industrial Growth,” seeks to get a holistic picture of the power situation from the three main actors, the Volta River Authority, GRIDCo and the Electricity Company of Ghana.

Mr Okyere said GRIDCo had forecast peak demand to be at 2,523 MW for 2018 based on factors such as VALCO’s operation of two potlines, the power supply to Burkina Faso and network expansion and rural electrification programmes for Electricity Company of Ghana and the Northern Electricity Company.

He said peak demand to date is at 2229 MW vis-a-vis current total installed capacity of 4,966.5 MW.

Mr Kwaku Wiafe, Manager Volta River Authority, said installed generation capacity had increased significantly in recent years in response to the energy crisis, resulting in a reserve margin of about 95 percent by year-end 2017.

“The increased installed capacity and greater fuel diversity mean generation system is now more robust and resilient to ensure reliability in power supply in 2018,” he said.

Mr Wiafe said thermal generation had exceeded hydro as the main source of supply, adding that, the hydro-thermal ratio is expected to be 28 percent to 72 percent.

There are currently 10 Independent Power Producers in operation, making up 46 percent of the generation mix.

Mr Wiafe said the diversity of fuel for the operation of power plants had reduced over-reliance on any one source, making the system more resilient.

“Increased dependence on gas means less volatility in electricity prices as compared to when crude oil was the main fuel,” he said.

However, he said, the increasing generation from thermal and the high reserve margin could put pressure on the cost to recover the massive investment in new generation and cost of increased thermal generation at a time the general expectation was for a reduction in electricity tariffs.

In this direction, Mr Wiafe suggested a careful management of electricity pricing to avoid the perpetuation of financial difficulties of the recent past and an improved governance of the power sector to cope with the increasing number of IPPs.

Mr Kivlyn Asante, General Manager Corporate, Electricity Company of Ghana, said the company had to contend with high cases of energy theft despite prosecutions to serve as a deterrent and unrealistic tariffs, which were not cost-reflective.

He said the ECG was working to reduce its non-technical losses.

 

Source: BFT

Ghana sells 1.99 bn cedis worth of 5-year local bonds at 16.5%

Ghana sold 1.99 billion cedis ($448 million) worth of a fresh five-year domestic bond on Thursday and the major commodity exporter will pay a yield of 16.5 percent, joint transaction arrangers said.

Initial guidance for the bond, open to non-resident Ghanaians, was in the range of 15 percent to 16.5 percent. Total bids tendered for the paper were 2.01 billion cedis.

The government plans to issue a total of 11.13 billion cedis in the first three months of this year of which 8.96 million cedis are rollovers to restructure maturing debt.

Ghana, which exports cocoa, gold and oil, is in its final year of a $918 million credit deal with the International Monetary Fund to reduce deficits, inflation and public debt which hit 70 percent of GDP last year.

Settlement of Thursday’s bond which matures in 2023, is on Monday, said co-bookrunners Barclays Bank Ghana. The others are Stanbic Ghana, Fidelity Bank, Databank and brokerage firm ICsecurities.

 

Source: Reuters

BEIGE begins nationwide campaign to reverse poor pension planning culture

Finance powerhouse, BEIGE, has launched a tier-3 personal pension scheme aimed at securing financial independence for subscribers during retirement.

The ‘EveryDayPension’ retirement plan allows subscribers to save at least GHȻ50 a month to enable them to secure comfortable financial future.

Speaking at a forum Thursday before the launch of the scheme at the Holiday Inn in Accra, Director of Planning, Research, Monitoring and Evaluation at the National Pensions Regulatory Authority (NPRA), Ernest Amartey-Vondee, said due to a lack of proper pensions planning, many Ghanaians receive very meagre pensions during retirement.

Quoting recent figures from the Social Security and National Insurant Trust (SSNIT), Mr Amartey-Vondee revealed that more than half of the total number of people on pensions receive less than GHȻ500 a month from SSNIT because of poor planning.

He revealed further that as at December 2017, some 189, 549 people are on pensions and out of this number 110, 292 (58.2%) receive less than GHȻ500.

Also, only 17,365 people on pension currently receive GHȻ1,000 a month, meaning that 86.25% of Ghanaians receive pensions less than GHȻ 1,000.

Beige pensions forum

He said the figures show a poor pensions planning culture among Ghanaians.

According to him, because during retirement the expenses of retirees are likely to be higher, there was a need to reverse the trend and ensure that workers in both the formal and informal and informal sector actively work towards a comfortable retirement.

In response to the poor retirement planning among the majority of Ghanaians, BEIGE has begun a nationwide campaign to highlight the need for financial independence during retirement.

The campaign, according to Managing Director of Beige Pensions Trust, Richard Kwame Frimpong, will target Ghanaians in both the formal and informal sectors.

The BEIGE Group, firmed up its pensions arsenal when it acquired Universal Pensions Master Trust (UPMT), a licensed corporate trustee in 2017 – bringing to two the number of corporate trustees it acquired.

BEIGE’s first acquisition of a corporate trustee firm was in 2014 and the acquired firm was Legacy Pension Trust (LPT).

The transactions are key steps in BEIGE’s strategy to affirm its status and capacity to serve as a provider of a broad range of financial services.

Board Chair of The Beige Bank, Kofi Otutu Adu Larbi, also called for consistency in the payment towards pensions plans by persons already subscribed to a scheme.

“The money that you earn today, however little, is a seed for tomorrow’s harvest,” he advised the delegates at the well-attended forum.

The delegates, drawn from both the formal and informal sectors, are partners of The Beige Group.

Prof Stephen Adei, Board Chair of The Beige Group, lauded the launch of the EveryDay Pensions scheme and the nationwide campaign.

As part of the campaign, Beige Pensions will visit target locations to offer free advice on pension planning, banking, insurance and investment.

“The pension scheme is also very good for our country. All the countries that have made it have had a source of stable long-term capital and the pensions funds are the drivers of successful economies,” Prof Adei said.

 

Source: myjoyonline

ExxonMobil yet to reach Parliament for approval

Citi Business News is learning that government is yet to submit the ExxonMobil agreement to Parliament for ratification, three weeks after the resumption of the House.

This is however expected to be carried out before the operators could commence exploration activities at the oilfields.

The submission of the agreement to Parliament is in fulfillment of Article 268 subsection 1 of the constitution which makes it mandatory for any agreement on the exploitation of Ghana’s mineral resources, to be approved by Parliament.

“Any transaction, contract or undertaking involving the grant of a right or concession by or on behalf of any person including the Government of Ghana, to any other person or body of persons howsoever described, for the exploitation of any mineral, water or other natural resource of Ghana made or entered into after the coming into force of this Constitution shall be subject to ratification by Parliament,” the constitution reads.

Earlier indication from persons close to the agreement suggested that the agreement will be laid within the first few weeks upon resumption of activities in the Legislature.

But Citi Business News understands that is yet to happen since a local partner is yet to sign to complete the whole process.

The said local partner is expected to control some 5 percent stake in the entity.

It is unclear what the actual investment figures are but the deal is estimated at some 200 million dollars.

If that is the case, then the local partner to be picked would be expected to cough up at least 10,000,000 dollars as equity.

Citi Business News is however learning that the conditions put forward by the ExxonMobil group in terms of capital requirement, the balance sheet of the preferred company as well as human capital strength may have contributed to the delays.

The total Ghanaian ownership in the ExxonMobil operation is estimated at thirty percent.

This comprises 10 percent royalty to the government of Ghana while the GNPC owns 15 percent stake as Carried and Participation Interest.

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

Large organisations can now receive instant electronic payments

Large corporate organisations and public-sector institutions can receive instant payment electronically if they sign onto the e-bills pay system introduced by the Ghana Interbank Payment and Settlement System (GhIPSS).

This should address payment challenges and improve efficiency at these organisations.

The e-bills pay system is targetted at large organisations such as manufacturers which deal with wholesalers and retailers. It can also be used by airlines and big hotels to receive payments from customers. It is also suitable for public sector institutions which receive taxes, levies and fees.

The e-bills pay is the latest initiative by the national payment infrastructure provider as it seeks to modernise payments in Ghana in line with best practices globally.

The e-bills pay runs on the back of the Instant Pay system and will enable customers of large corporate organisations to pay for goods and services electronically so the money will be received by the companies instantly. It eliminates the issuance of cheques and delay associated with the days that cheques take to clear. It also eliminates the cumbersome processes involved in sorting out cheques from thousands of customers.

Speaking in an interview, Mr. Archie Hesse, the Chief Executive Officer of GhIPSS, said the e-bills pay will introduce efficiency in how large corporate organisations handle their payments while making business expedient for the customer as well. He explained that since the e-bills pay is instant, the situation wherein customers or wholesalers and retailers have to wait for their cheques to clear or payments to go through before receiving their consignment of goods no longer exists because the payment is immediate.

e-bills payment is electronic and can be accessed via mobile applications or Internet banking, which means customers will not need to be physically present to make payments but can do so from the comfort of their offices, homes or wherever they find themselves.

Mr. Hesse is hopeful that e-bills pay will address a lot of payment anomalies and reconciliation challenges that large organisations face in dealing with a large number of customers.

The initiative is one of the key projects that GhIPSS has set out to drive this year. Mr. Hesse said GhIPSS has already signed on some airlines and public-sector institutions and is in talks with some others to also get on board. He said GhIPSS will embark on extensive engagements with corporate institutions with good information technology set-ups, to encourage them to also use e-bills pay. As with other initiatives by GhIPSS, e-bills pay is being offered through the banks.

 

Source: BFT

Ex-pump prices ‘not abnormal’– Hosi downplays COPEC, ICU protest

he CEO of Ghana Chamber of Bulk Oil Distributors says prices of petroleum products have not gone up inconsistently with global figures to warrant concern or criticisms against the government.

Reiterating the position of the National Petroleum Authority (NPA), Senyo Hosi said the current ex-pump price of petroleum products appropriately fits into the dictates of external factors that determine the pricing of the commodity.

“Crude prices are about 24% above what it was one year ago. Diesel international prices are about 27% up, pump prices are 13% up…it is not abnormal. It’s actually a function of the entire international situation,” he said Tuesday evening on PM Express, a current affairs programme on the Joy News channel on Multi TV.

His comments follow a planned protest march on Wednesday, February 7, 2018 by the Chamber of Petroleum Consumers (COPEC) and Industrial and Commercial Workers Union (ICU).

Senyo Hosi

– Senyo Hosi

Executive Director of COPEC, Duncan Amoah, who was also on the current affairs programme, said the current administration must move to mitigate the burden of the increasing prices of fuel.

COPEC and the ICU have said the last five months have seen a persistent increase in the prices of petroleum products with corresponding hardships.

“The increases always take us by surprise. By the time we realise the prices are already up but we cannot increase our fares. When we complain, the government will say we should hold on,” a member of the ICU told Joy News.

Meanwhile, the National Petroleum Authority, the sector regulator, has urged the two organisations to seek clarity about the situation to “ensure that the public is not misled by those who are motivated by reasons other than those of national interest.”

NPA said in a release Tuesday evening that since February 1, 2018, the Price Stability and Recovery Levy (PSRL) on petrol (GHp12/Lt) and diesel (GHp10/Lt) have been completely neutralised to reduce the impact of rising prices on the international market on Ghanaian consumers.

“This means that government has forfeited the revenue it would have collected on these products for the period 1st – 15th February 2018 in order to cushion consumers,” the NPA said.

But when the protest begins on Wednesday, COPEC and ICU will be hoping to get the government to do even more about fuel price hikes.

President-listen-copec

– Duncan Amoah raises one of the signs that will be paraded during the protest march today during

Bigger picture

Senyo Hosi has urged the government to look at the bigger picture and fashion out a more sustainable solution to the perennial agitations against fuel price increases.

He suggests investments in mass public transport system to cushion Ghanaians from the economic hardships that come with ex-pump price increases of petroleum products.

“We are here primarily because we allowed politicians to deceive us. We also acted in ways that encouraged them to do so. We have subsidised this economy and this sector by 2.5 to 3 billion dollars since 2011 and for me as an economic policy analyst, it’s ridiculous. That was money we should have spent transforming our mass transportation sector,” he said.

He envisages that the dynamics will change once government invests significantly in mass transportation infrastructure.

Watch more from the discussion in the video below.

Use Lithium to develop Volta Region – PIAC urges gov’t

Vice Chairman of the Public Interest and Accountability Committee (PIAC), Mr Kwame Jantuah, has urged the government to use the newly discovered mineral, Lithium, to develop the Volta Region.

Speaking to journalists on the sidelines of a training workshop organised by the Institute of Financial and Economic Journalists (IFEJ) and GIZ in Koforidua recently, he called on the government to ensure the new mineral was not exported in its raw state so the country could derive the maximum benefit from the resource.

“We shouldn’t take out and export. Any company that wants to come and mine, [the company should] open a small processing company in the area so that we create more jobs, build capacity and we make sure that the people in the community would benefit” he suggested.

According to Mr Jantuah, many areas in the Volta Region are covered by water, rendering the region relatively poor in terms of economic viability and high in unemployment.

Kwame Jantuah

– Kwame Jantuah

He said the discovery of Lithium should be actively channelled into creating jobs and making the economy of the area better.

The PIAC Vice Chair further urged the government to put in place a comprehensive plan to extract the resource and not to repeat the mistakes made in the extraction of gold, bauxite, diamond and oil.

“With the discovery of lithium, we shouldn’t do it the way we have done our gold, our diamond and other minerals. If it has to stay in the ground till we develop the capacity of the people in the area so that they too can get jobs out of it, it would be best,” Mr Jantuah said.

Ghana announced the discovery of Lithium in commercial quantities in the Volta Region in January this year.

Chief Executive Officer of the Minerals Commission, Mr Kwaku Addai Antwi-Boasiako, disclosed the mineral was identified during a nationwide exploration exercise.

“The mining activities will start but we want to attract investments into the Volta Region. That is where we have the Lithium and all these rare minerals. These are the minerals of the future. Lithium is about green energy and renewable energy.

“So if you have Lithium and all these rare minerals in the Volta Region, you will want to expand the base of mineral production. The presence of these minerals is as important as having the money to mine them… for now, we know we have it,” he had said.

Mr Antwi-Boasiako assured Ghanaians the Minerals Commission will follow due process in issuing licenses to companies to mine the mineral, emphasizing it will consider electronic applications from interested investors to avoid issues of corruption.

Lithium, among the top 10 most expensive minerals in the world can be used for the manufacture of batteries, heat-resistant glass, and ceramics while Lithium stearate is mixed with oils to make all-purpose and high-temperature lubricants.

Lithium hydroxide is used to absorb carbon dioxide in space vehicles and it is alloyed with aluminium, copper, manganese, and cadmium to make high-performance alloys for aircraft.

Lithium metal has the highest specific heat of any solid element and it is sometimes used as battery anode material electrochemical potential).

Lithium-based compounds such as lithium carbonate are used as drugs to treat manic-depressive disorders.

 

Source: myjoyonline

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