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Commercial gold production at the Prestea Underground Mine (PUM) is set to resume in October, this year, bringing into reality a revival process that started in 2002 by the Ghana subsidiary of Canada-based miner, Golden Star Resources Limited.

Twenty-three young men and women grouped into six start-ups are gearing up to convince an expert panel of judges in a final showdown on July 28, 2017 to grab the $100,000 grant on offer from oil producer, Kosmos Energy Ghana.

Mr Sumaila Abdul-Rahman

Business News

Actionaid Ghana has asked the government to revise the tax treaties granted to multinational corporations operating in the country.

This is to halt the harmful and generous tax breaks granted foreign business entities in the country.

President Nana Addo Dankwa Akufo-Addo has expressed his government’s resolve to promote the availability of data and information to enhance opportunity for economic development and creation of jobs in the area of digital technology for the youth.

In line with that objective, he said the nation has committed a budget to revamp the Ghana Open Data Initiative.

A section of participants in the workshop

Business News

Team leads from Tigo Cash have engaged with their partner agents to educate them on regulations and agent guidelines by the Bank of Ghana BoG, as well as mobile money safety.

This was part of a nationwide retailer convention organised by Tigo Cash to, among others, explain some new initiatives to be rolled out by the service.

Dr Ernest Addison

Business News

The Bank of Ghana (BoG) has cut its policy rate by 150 basis points from 22.5 per cent to 21 per cent due to the downward trend in consumer inflation.

Before Monday’s cut, the central bank had cut the rate by 300 basis points this year, trailing the 420 basis-point decline in the 91-day treasury bill rate.

Professor Pikay Richardson

Business News

Leaders of Ghanaian businesses must learn from companies of the past, Senior Visiting Fellow on Leadership and Management at the Manchester Business School, Professor Pikay Richardson, has advised.

He was speaking in reference to when in the late 1970s, two individuals by name Tom Peters and Robert Waterman decided to do a piece of research on successful American companies.

Ms Victoria Adongo

Business News

The Peasant Farmers Association of Ghana (PFAG), wants government to as a matter of urgency collaborate with agric research institutions in the country to be able to develop effective pesticides that would combat the Fall Army Worm (FAW).

The PFAG said although government had put in its own arrangements to combat the situation, it had proved to be futile and the FAW was fast spreading across many farms in the country, hence the need for the collaboration.

Prof. Mthuli Ncube — Head of Quantum Global Research Lab

Business News

The economy is likely to return to a single digit inflation by next year, the Head of Quantum Global Research Lab, the research arm of Quantum Global, Professor Mthuli Ncube, has predicted.

He said the key macroeconomic indicators coupled with a relative stable exchange rate regime would push the rate further down as the economy continues to sustain its growth.

Funds required for efficient and effective operations in corporations are obtained from two main sources; internal and external.

Internal sources

These include funds generated through retained earnings or profits and sales of company assets. Retained earnings refer to part of the company’s profit that is not distributed to shareholders in a form of dividend, but withheld for present and future expansion projects. In some cases, management may deem it necessary to dispose of or sell some of the company’s assets due to wear and tear; the introduction of more sophisticated machinery than previous or existing ones; or the need to pay off debts. Proceeds from the sales serve as source of internal funds to the organisation.

 External sources

These comprise funds raised through borrowing and sale of shares in the primary markets. Borrowing includes contracting of loans from financial institutions and sale of financial securities on short-term and long-term basis.

 Common forms of corporate financing

The instruments used to finance the activities of an organisation can be broadly categorised into short-term borrowing instruments and long-term borrowing instruments.

Short-term borrowing instruments include commercial paper, trade credit, overdraft facility, acceptance credit, short-term bank credit, among other instruments.

Commercial paper is a short-term marketable, unsecured promissory note often issued by credible organisations, including finance companies, bank holding companies and others purchased directly by companies. The involvement of secondary markets in this transaction is relatively low.

Trade credit explains a mutually arranged commodity credit between manufacturing companies and wholesale firms; and sellers and buyers outside the initial control of the banking system. Trade credit serves as a source of short-term working capital to buyers who obtain goods and services on account from suppliers. It is drawn by the seller and accepted by the buyer. Trade credit transactions are manifested in commercial bills of exchange. The buyer agrees to pay the amount incurred at a specified future date. Through the arrangement, the buyer holds on to an “IOU” during the term of contract. Where the seller is in dire need of funds and cannot wait till the maturity date, he or she can discount the bill of exchange and sell to raise funds.

 Merits of trade credit

To begin with, loan repayments and trade turnover tend to increase when trade credit is used. Also, it is convenient since it provides suppliers the needed security to contract bank loans prior to the maturity of trade bills. Finally, trade credit helps firms to increase their working capital in times of credit restrictions.

 Demerits of trade credit

First, trade credit minimises the effectiveness of credit control and sanctions imposed by the Bank of Ghana (BoG). Second, lack of settlement discounter or payment delay may render trade credit transactions costly. Finally, trade credit may contribute to inflation by increasing total credit in the economy beyond the expected limit.

The foregoing demerits notwithstanding, banking experts stress the need for trade credit to be encouraged during periods of recession to ensure faster economic recovery.

Overdraft facility is where a bank allows its corporate customers to withdraw in excess of the total balances in their respective accounts, preferably current deposit accounts. An overdraft fee is usually charged by the bank when an overdrawn amount is not repaid within 24 hours. A bank may provide protection for its customers for a year; the overdraft agreement may be renewed after one year. It is arguably the most common form of borrowing initiated by organisations.

 Advantages of an overdraft facility

An overdraft is usually not tied to a specific transaction. This makes it flexible and suitable for financing daily working capital requirements of businesses. Interest charges on overdrafts may be lower compared with interest charges on other loan facilities.The documentation process for the award of overdraft to bank customers is simple and fast. Risks associated with secured overdrafts are usually low. This enables banks to charge lower interest rates on secured overdrafts.

 Disadvantages of an overdraft facility

The borrower may be exposed to interest rate fluctuations, especially when the rate is tied to the base rate. Fluctuations in this case may not be as volatile as the inter-bank rates. An overdraft is usually repayable on demand. This makes it an unsafe form of borrowing; even in difficult economic times, the borrower is compelled to repay the overdraft. Sometimes, base rates are higher than inter-bank rates. In such a situation, overdrafts attract higher charges than loan facilities.

Acceptance credit

This is a bill of exchange guaranteed by a credit insurance company or bank for a commission. Under the acceptance credit, a bank is approached by a corporate customer and the former permits the latter to draw a bill of exchange after an agreement has been reached. A credit limit is placed on the bill of exchange by the bank. It may be easy for the customer to find a third party in the financial market to discount the bill after its acceptance by the bank.

Discounted bill of exchange means the buyer purchases it at a price below its face value.

Acceptance commission refers to the difference between the price paid by the discounting bank and the face value of the bill; it represents the interest rate. A commercial bill is termed as a bank bill if it is accepted by the bank. An eligible commercial bill accepted by an eligible bank is called an eligible bank bill. An eligible bank meets the minimum requirements of the central bank, namely reciprocal treatment of local and foreign banks, quality of acceptance business and market standing.

 Merits of acceptance credit

The discount rate of an acceptable credit is often below the inter-bank rate. The discount rate associated with an acceptance credit is an eligible bill rate, meaning the discount rate is a fine rate. Cost of borrowing is not affected by subsequent changes in interest rate since the effective interest rate or discount rate is determined at the beginning of operations. Acceptance credit is considered flexible because it can be drawn for various amounts of different maturities up to 187 days. When the borrowing company pays the credit and the main transaction is carried out successfully, the acceptance credit is said to be self-liquidating.

The acceptance credit policy is in tandem with the real bill doctrine; an acceptance credit is often guaranteed. This facilitates removal of the commitment fee charged on short-term bank credit. Corporate customers sometimes arrange for acceptance credits in bulk. The issuing company is not obliged to be tied only to the accepting bank. This makes it possible for the issuing firm to discount its credit bill with another discounter with better terms and conditions. Removal of the commitment fee allows for individual bills to be drawn without negotiation after an agreement has been reached on bulk credits.

 Demerits of acceptance credit

The issuing firm may discount the credit acceptance bill. The discounting firm or bank may, again, rediscount or

COCOBOD is negotiating with some traditional rulers to release lands for the youth to go into cocoa farming

Business News

 

The Ghana Cocoa Board (COCOBOD) has observed that the success of its Youth-in-Cocoa Farming Programme will depend on the availability of land to young persons in cocoa-growing communities.

As a result, it has called on traditional authorities and land owners to make lands available for the youth to help motivate them to venture into cocoa farming as a business and not just for survival.

The general not-too-favourable perception about insurance seems to be taking longer to be minimised than expected. Many persons still feel aggrieved by the way motor insurance claims especially are handled by insurance companies especially where the insurance companies, through due diligence, also become a bit suspicious of some claimants.

The upward adjustment in motor insurance tariffs over a year ago indeed triggered a lot of discussions, especially around persons who felt aggrieved in the past due to a few previous experiences.

Telecoms - Oil and Gas

Grid List

Communications Minister Ursula Owusu-Ekuful pays working visit to NCA

Telecom

The Minister for Communications, Mrs Ursula Owusu-Ekuful, on Monday paid a working visit to the National Communications Authority (NCA).

Accompanying her were the Minister for Information, Mr Mustapha Abdul-Hamid and Deputy Minister for Communications, Mr Vincent Sowah Odotei.

Mr Emmanuel Hudson-Odoi (right) receiving the award on behalf of Subah Infosolutions

Telecom

IT and Telecommunications solution provider, Subah Infosolutions Ghana Limited, has been adjudged the “Best Revenue Assurance, Fraud & Traffic Monitoring Solution” provider at the just-ended 4th Annual Africa Telecoms Fraud, Revenue Assurance and Risk Management Forum in Kenya. 

The Director of Subah Infosolutions, Mr Redeemer Kwame, accompanied by the Business Development and Marketing Manager, Mr Emmanuel Hudson-Odoi, and the Revenue Assurance Manager Mr Felix Steve Quaicoe, received the award on behalf of the company.

New smartphone, Fero L100 introduced in Ghana

Telecom

A new smartphone, Fero L100 has been introduced in Ghana by MTN in partnership with Dubai-based mobile company Fero.

The Fero L100 has a 5-inch HD IPS display with a dragontrail glass protection and a long battery lifespan.

Ghanaian-owned technology company, Rlg in partnership with Adulawo Technology Company, has secured a multi-million dollar contract for the production of terrestrial broadcast set top boxes for Nigeria.

A three-day International Workshop on Criminal Justice Statistics on Cybercrime and Electronic Evidence on Wednesday, 29th March, 2017 has opened in Ghana’s capital, Accra at the Movenpick Ambassador Hotel.

NCA Director General Joe Anokye tells Telcos to improve service to consumers

Telecom

The Acting Director General of the National Communications Authority (NCA), Mr. Joe Anokye, has charged Mobile Network Operators to work on improving Quality of Service (QoS) and ensure that consumers are satisfied.

He said this at a meeting with Chief Technical Officers of the various Mobile Network Operators (MNOs) on Friday, 17th March, 2017 at the NCA Tower.

Present at the meeting were representatives from MTN, Tigo, Vodafone, Airtel, Glo, and Expresso. The purpose of the meeting was to discuss poor Quality of Service (QoS) being experienced by consumers.

The managers after one of the training sessions

Oil & Gas

Seventeen selected mid-career managers at Tullow Oil Ghana Limited are building their leadership skills in the China Europe International Business School (CEIBS) Advanced Management Programme (AMP). The 18-month programme has been tailor-made to fit the needs of Tullow Ghana limited, one of the leading oil and gas production companies in Ghana. The CEIBS (AMP) provides the Tullow employees a chance to step back from their daily professional demands while reflecting on the challenges facing the organisation.

The Ghanaian delegation at the Jereh LNG/CNG Fuelling Station Workshop

Oil & Gas

Chinese multinational firm Yantai Jereh has expressed interest in supporting key infrastructural development in the oil and gas industry in Ghana.

The company believes there are opportunities to explore in pipelines, refineries, petroleum storage, LNG/CNG systems, LPG distribution and natural gas compression.

Mr Bonarh Sarpong (left), General Manager of M&K Gh Ltd, welcoming Mr Boakye Agarko, the Minister of Energy, to the International Paint, stand during the Oil and Gas exhibition at the AICC in Accra

Oil & Gas

The 8th Annual Ghana Summit Exhibition, a platform for companies to showcase their latest products, services and innovative solutions in the oil and gas industry, took place in Accra last Thursday.

Some members of the Scottish delegation at the reception

Oil & Gas

A high-powered team of Scottish business people are in the country to explore investment opportunities in the oil and gas sector.

Representatives of 19 oil companies, whose visit was facilitated by the Scottish Development International (SDI), will in the next four days interact with key players in the oil and gas sector to assess the industry and find potential local partners.

Players in the country’s oil and gas industry have expressed shock at reports making the rounds that the current Chief Executive Officer of the Petroleum Commission is to be axed and the post handed to a “politically aligned” person.

The industry upstream sector players kicking against any such move suggest the best way forward would be to establish a board whose members have proven expertise in the industry who will focus on supporting the commission and allied bodies – the National Oil Company (NOC), the Ghana National Petroleum Corporation (GNPC), and the Ghana National Gas Company (Ghana Gas), and the Environmental Protection Agency to protect the interest of the country.

Mr Patrick Akorli (left), the MD of GOIL, addressing shareholders at the AGM

Oil & Gas

The new board of the Ghana Oil Company (GOIL) intends to increase the company’s market share from 18 per cent to about 30 per cent by 2020.

This forms part of its plans of making GOIL the major driver and the market leader in the oil marketing business in the country.