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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

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

BoG announces policy rate today

The Governor of the Bank of Ghana, Dr. Ernest Addison is today [January 22, 2018] expected to announce the central bank’s policy rate for commercial banks for the next couple of months.

It follows the completion of the Monetary Policy Committee (MPC’s) annual meetings to review the Ghanaian economy.

Today’s announcement will be the first for this year and it is expected to affect interest rates charged by banks on their loans given to customers.

For last year alone, the central bank reduced the policy rate by 550 basis points.

The rate was reduced from 25.5 percent in January 2017 to 20 percent as at November the same year.

Checks by Citi Business News also indicate that between January and December 2017, the average interest on loans by commercial banks reduced by 7 percent.

It went down from 27.6 percent in January to 25.7 percent as at December 2017.

 

Source: GNA

BoG wants banks to improve risk management systems

The Bank of Ghana has called on banks to improve the quality of their risk management system, corporate governance and internal control practices.

Special Advisor to the Governor, Mrs Grace Akrofi, said with the implementation of sound risk management practices, banks would be able to access and set aside the appropriate capital needed for inherent operational risks as required under the capital requirement directives and the Basel ll and III frameworks.

Mrs Akrofi, who was speaking at the launch of the Royal Bank’s fifth Anniversary Celebration in Accra, said the BoG would also ensure that the banks comply with the international financial reporting standards.

“This is to guarantee uniformity in the presentation of financial accounts and accompanying notes to financial accounts,” she added.

She said the new minimum capital requirement offered valuable opportunities for consolidation within the Banking industry and encouraged small and under-capitalised banks with corporate governance challenges among others to merge and consolidate their operations.

She said the BoG is of the view that there were more benefits to be gained from consolidation, hence, their bias in encouraging mergers in the industry.

Mrs Akrofi said the consolidation process was expected to lead to the emergence of big Banks to help finance high-valued projects that would be transformative for the economy.

“Bank consolidation will pave way for bigger operations with relatively lower costs associated with the provision of banking services,” she said.

The Special Advisor said these would ensure stability and sustainability of the banking sector and contribute to the enhancement of the resilience of the financial system and contribute to the needs of the growing economy.

She said the new Bank’s and SDI Act has made provision for the establishment of criteria for mergers and acquisitions, which addresses in more details, what BoG must consider in determining whether or not to approve a merger or amalgamation under the Act.

Professor Bill Pupulampu, Chairman of the Board of Directors, the Royal Bank, said the Bank would continue to improve their operations and serve their clients better.

He said the future of the Bank was very promising and bright, having grown from a single branch in 2012 to 26 branches in five years, “we can only hope for greater things in the years ahead.”

He said the Bank’s assurance to their customers and other stakeholders was that; they would continue to improve their services and develop products to serve their changing needs and wants.

He said in 2014, through the vision and instrumentality of the Founder Alhaji Dr Adamu Iddrisu, The TRB Foundation now Alhaji Dr Adamu Iddrisu Foundation was inaugurated to provide relief in the area of Water and Sanitation, Health, Education, Culture and Sports to deprived communities.

He said since its establishment the Foundation had provided over 120 boreholes to 115 communities across the country under its flagship “water for life” project.

 

Source: GNA

GCB Bank goes international as it partners Morocco’s largest bank

GCB Bank Limited and Attijariwafa Bank Group (AWB), Morocco’s largest financial institution have signed a Memorandum of Understanding (MOU) to broaden and consolidate financial transactions in Ghana, ECOWAS and beyond.

Under the partnership, the two institutions will operate as correspondent banks, facilitate trade finance, deepen capital markets and jointly organise business missions designed to enhance trade and investment between Morocco and Ghana.

Other areas of interest being explored between the two reputable strong financial institutions with the financial muscles to carry out big deals include retail banking, insurance, consumer finance, corporate and investment banking.

The partnership will ensure that AWB customers mainly in Francophone countries engaged in businesses in Ghana will make use of GCB to transact banking businesses while GCB customers transacting businesses in Ghana will also use GCB platforms and channels.

This, according to the partnership agreement, would provide convenience for AWB and GCB customers in Francophone and Anglophone countries.

GCB is currently Ghana’s largest Bank with over 200 networked branches, 20 Agencies and 280 ATMs.

AWB like GCB is the largest financial institution in the Kingdom of Morocco by assets and ranks the sixth largest bank in Africa by asset size.

While GCB is listed on the Ghana Stock Exchange and a higher performer and stock, AWB is listed on the Casablanca Stock Exchange with a market capitalization of $7.2 billion.

AWB operates in 14 countries in the North, West and Central Africa with a representative office in Paris, France.

It has 3,122 branches across Morocco and 3,844 branches across the globe.

 

Source: Ghana| Myjoyonline.com |Abubakar Ibrahim

2nd Deputy Governor of BoG officially steps down

The Second Deputy Governor of the Bank of Ghana, Dr Johnson Asiama, has finally tendered in his resignation letter.

This should mean that he has officially vacated the position he has held at the central bank over the past year.

In December of 2017, Joy Business broke the news about his resignation with follow-up indications by his lawyers on moves being made by Government to push him out of office.

Joy Business understands that the delay to exit has been driven more by behind-the-scenes negotiations between Dr Asiama, Bank of Ghana and the government.

When was this decision taken?

According to a letter intercepted by Joy Business, the decision to disengage from the Bank of Ghana happened some two weeks ago and a letter was finally tendered in last week Wednesday, December 27, 2017.

According to this letter, the President Akufo-Addo has been formally informed about this decision to resign with copies served to the Vice-President, the Governor of the Bank of Ghana, Dr Ernest Addison and Finance Minister Ken Ofori Atta.

The letter also indicates that Dr Johnson Asiama’s resignation is effective January 1, 2018.

Bank of Ghana 2016

How did we get here?

Sources say the decision to move on was influenced by the progress made on his entitlements as Second deputy governor of the Bank of Ghana, which had delayed the submission of a letter confirming his resignation.  His resignation paves the way for President AddoAkuffo to propose a new person to fill the position.

It would be recalled that Joy Business in December 2017 reported that Dr Johnson Asiama had taken his accumulated leave leading to his resignation by the end December 2017.

Joy Business at that time also reported there has been an oral communication about his resignation, subject to meeting some conditions before that formal resignation letter is submitted.

Cost of Dr Asima  exit  on the  public purse 

Dr Johnson Asiama was left with two more years to the expiration of this contract at the Bank of Ghana. So this action would come at a cost to the state in terms of putting together a better package for him.

For some, this is worrying because he may be sitting at home doing nothing, whiles he continuous to take his salary, just like what was done in the case of Dr Nashiru Issahaku.  Those who are raising this argument are worried because, if a new second deputy governor is appointed today, that person would be taken her/his entitlements, whiles, Dr Asiama would still be paid.

Would this action have any impact on Bank of Ghana’s independence and market confidence?

Banking sector analysts and in particular a lot of the banking executives that we have sampled lately are of the deep view that the central bank is  “politicized”. At a time when the central bank is struggling to assert its independence, with the various banking laws and reforms, this action will once again be seen as an attempt by the politicians to interrupt the inbuilt institutional process. Let us examine how institutional changes have evolved over the past 10 years:

1. The current vice president was a Deputy Governor at the Central Bank. He stood on the ticket of the NPP as a vice presidential candidate and lost the election in 2008. He went back to post after losing the election. The NDC government upon assuming office paid him off and ‘kicked’ him out.

2. NDC appointed three Governors in the period 2009-2016; Amissah-Arthur, Wampah and Nashiru.

Amissah-Arthur was co-opted into the vice presidency, Wampah was kicked out for being firm on some critical issues including standing firm on limiting central bank financing of the budget and Nashiru also was kicked out after many issues.

3. Then comes Governor Addison who “pulls” along Deputy Governor Afari to work with him after serving together at the Research Department and working for Governor Paul Acquah. Now Johnson is being forced out and his replacement is highly likely to be politically tainted and with some strong political linkages, given the early indications of new that is emerging of who is likely to be named as the second deputy Governor.

The big question now is what would happen if there is a change of government in the next 4 or 8 years and what may happen to the current team. Will they also be forced out in a subtle manner and will the same pattern emerge and be followed through once again?

Who is Dr Johnson Asiama?

Dr Johnson Asiama was in April 2016 appointed Second Deputy Governor to replace, Dr Adul-NashiruIssahaku who was promoted to the position of Governor of Bank of Ghana. Until his appointment, Dr Asiamah was the Assistant Director at the Economics Department of the central bank, where he coordinated the work of the Monetary Policy Committee and supported the work of the Governors directly.

Dr. Asiama is an economist with an extensive working experience at the Bank of Ghana over the past twenty (20) years.

He was born on May 5, 1968, and joined the Bank of Ghana in 1996, where he rose through the ranks. He has served in various departments such as the Banking Supervision Department, the Financial Markets Department, the Research Department and the Governors Department.

He served as Director of the Macroeconomic Management Department at the West African Institute for Financial and Economic Management (WAIFEM) in Lagos, Nigeria between 2010 and 2013 where he designed and managed the capacity building programs for staff of central banks, Ministries of Finance, and other public sector institutions across the West African sub-region.

Dr Asiama holds a PhD (Economics) from the University of Southampton, UK and an MPhil (Economics) from the University of Ghana, Legon.

He has published widely in journals in the area of monetary economics and economic growth and has a strong research interest in monetary policy modelling, economic stabilisation and long-term growth in developing countries.

He is also interested in issues about risk management in banks.

He was born on May 5, 1968, and joined the Bank of Ghana in 1996, where he rose through the ranks. He has served in various departments such as the Banking Supervision Department, the Financial Markets Department, the Research Department and the Governors Department.

He served as Director of the Macroeconomic Management Department at the West African Institute for Financial and Economic Management (WAIFEM) in Lagos, Nigeria between 2010 and 2013 where he designed and managed the capacity building programs for staff of central banks, Ministries of Finance, and other public sector institutions across the West African sub-region.

Dr Asiama holds a PhD (Economics) from the University of Southampton, UK and an MPhil (Economics) from the University of Ghana, Legon.

He has published widely in journals in the area of monetary economics and economic growth and has a strong research interest in monetary policy modelling, economic stabilization and long-term growth in developing countries

Mixed reactions meet GH¢6 to $ 1 prediction

There are mixed reactions to the prediction that the cedi will depreciate to 6 cedis to a dollar by 2022.

The Economist Intelligence Unit (EIU) based in the UK, has predicted that the local currency will perform poorly against the dollar within the next four years due to some external pressures and political uncertainties.

But some currency analysts have expressed diverse opinions with strong arguments for their stance.

The Economist Intelligence Unit (EIU)’s claims are based on the fact that the US Federal Reserve will likely increase its rate which will affect developing economies like Ghana.

Also, that the political uncertainty associated with Ghana’s general elections in 2020, might trigger speculation among investors which will reduce the supply of the dollar in the system.

For Economic Analyst with GN Research, Emmanuel Zewu, this prediction is possible.

His basis are that the relative stability of the cedi have least been backed by strong sustainable policies.

“We need to ask ourselves what has accounted for this improvement, is it because the economic fundamentals are improving or we are managing the situation temporarily. We should look at the bonds that have been issued as well as the Bank of Ghana’s decision to release some dollars into the system especially in the early stages of the year. All these things should have accounted for the marginal improvement that we have seen last year,” he argued.

For 2017, the cedi ended at 4 cedis 41 pesewas to a dollar.

As at Thursday January 3 2018, the cedi has depreciated marginally and it is selling at 4 cedis 42 pesewas.

Treasury manager disagrees

But the General Manager for Treasury at HFC Bank, Joseph Nketsia disagrees with the projection by the EIU.

Though he admits to the cedi’s seasonal depreciation, he believes the move may least hit the 6 cedis mark.

“We know with the oil exploration, our foreign exchange resources are likely to increase considerably. It is true that on a year on year basis the cedi depreciates but I don’t think that the cedi will depreciate to 6 cedis to a dollar by 2020.”

Mr. Nketsia also argues that the reasons cited by the EIU may just be too early and highly speculative.

“If we are say in January 2019, we could perhaps predict the performance of the government at the elections and the uncertainties surrounding the elections. But as it is now, it is highly speculative to say that in 2020 people will be hoarding currency because of the uncertainty surrounding the elections,” he added.

Government could reverse trend

Meanwhile it may seem government could work to avert the occurrence altogether.

Emmanuel Zewu suggests that could be achieved with a more robust strategy t grow the tourism and non-traditional export sectors to attract more foreign exchange and deal with the perennial causes of the massive depreciation of the cedi.

“We look at the tourism industry which gives inflows of foreign direct investments. Also with the exports, if you look at the non-traditional products that we are trying to explore the African markets, we should be able to create the necessary environment for these farmers to produce more and to be at a competitive price so that when they go to the international market, our commodities could be very competitive,” Emmanuel Zewu advised.

Source: citibusinessnews.com

The BEIGE Bank officially launched

After almost a decade of being a leading Savings and Loans company in Ghana, the financial institution has progressed to become The BEIGE Bank.

At a brief ceremony to outdoor the bank on Thursday, December 15, 2017, CEO of BEIGE, Mike Nyinaku, said the progression from a savings and loans company to a bank will sustain the wind of change that his blowing in the entrepreneurship space.

“There’s a wind blowing. It’s a wind of change. It’s very contagious and stimulating. This wind is carrying with it a feeling of hope, self-belief and somehow an aura of patriotism. Suddenly people of Ghanaian descent are thinking big and global in spite of the obvious lack of resources.

“Let’s take advantage of this wind and galvanise Ghanaians into action and endeavour. Keeping in mind, however, that many of these entrepreneurial adventures may fail but I believe that if one out of every 10 succeeds, the wheels of prosperity would gradually be turning in our favour, one business at a time,” he said.

Nyinaku-BoG

He lauded the central bank for facilitating the process to become a bank; customers for their unwavering support and everyone who “in diverse ways supported us – materially, physically, emotionally.”

Mike Nyinaku reiterated BEIGE’s commitment to delivering tailor-made services that best satisfy the needs of the consumer.

He noted that The BEIGE Bank will focus primarily on the over 80% economically active people in the country.

He revealed that these people fall within the SME industry and indicated The BEIGE Bank’s preparedness to deliver quality products and services as they have done since its inception.

“We are a traditional SME financing institution. That’s where we have built out capacity and that’s where can play with our competitive strengths. We do not see ourselves veering into corporate banking at least for the first 5 years of our existence. We will play where we are good at. More than 80% of the economically active population of this country are in the SME space. That is big business” he disclosed.

BEIGE is a financial services firm with business operations in Banking, Pension, Insurance and Investments.

It began operations with one branch in 2008 and now boasts of over 70 branches across the country.

It is also considered to be the largest Savings and Loans company to be given the Universal Banking Licence to operate as a bank in Ghana.

 

Source: myjoyonline

UK tribunal backs Ghana International Bank dismissal of Mark Arthur

A tribunal in London has upheld a decision by Ghana International Bank to sack one of its employees, Mark Arthur, for breaching the Bank’s internal policies and procedures.

Mr. Arthur was dismissed by the bank for failing to follow anti-money laundering rule after he deposited £350,000 in cash handed to him by Asantehene, Otumfuo Osei Tutu II.

Mr Arthur kick-started the legal battle to challenge his dismissal in court, a move that saw the revered Ashanti King embroiled in allegations of money laundering.

The Otumfuo has since been cleared of any money laundering violations.

The London-based Employment Tribunal unanimously upheld the Bank’s actions and ruled that the Bank was right to dismiss the employee.

“The Tribunal was satisfied that in doing what he did, Mark Arthur had committed misconduct of sufficient seriousness that amounted to a fundamental breach of his employment contract entitling the Bank to terminate that contract without notice,” said a statement released by Ghana International Bank.

The Tribunal, according to the statement found for the Bank on all counts and dismissed the claim for automatically unfair dismissal; held that the claim for unfair dismissal failed and dismissed the claim for wrongful dismissal.

Source: Ghana | Myjoyonline.com
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