Business

If the Coronavirus pandemic does not slow down any time soon, about 90 per cent of hotels surveyed will be fully or partially closed down by next week, the Chamber of Tourism has said.

This means the government will significantly lose earnings from a sector that is the fourth contributor of revenue to the country.

According to the Chamber of Tourism Ghana, the impact of the COVID-19 pandemic on the tourism sector is so dire that only pragmatic action will save the sector from total collapse.

Chief Executive Officer of the Chamber of Tourism, Odelia Ntiamoah, told Class Business: “We are currently doing a research, we are yet to complete the research but so far, the hotels we have dealt with, for example, by next week about 90% of them will have totally closed down. That means that all these hotels that are closing down, we are looking at job losses, we are looking at revenue losses.”

She said: “Apart from that, restaurants and other places connected to us including tourist sites have all been closed down, beaches have closed. So, these are some of the reasons we are asking for a stimulus package”.

“Remember that the tourism sector contributed significantly to our foreign exchange earnings; we are currently at number four in terms of contribution to the country’s revenue. This also directly means that the government is losing revenue; so, if this sector goes down, you definitely have to help this sector stand up so you get the needed revenue when corona ends”, Mrs Ntiamoah said.

She explained further that a decline in activities of the tourism sector will affect the local currency, the cedi.

“Remember also that this is directly connected to the performance of the cedi, and all of us are interested in the cedi staying stable, whether you are an importer or exporter, you want the cedi remaining stable”.

Source: clasfmonline

The African Development Bank (AfDB) has raised an exceptional US$3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.

The fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion.

This is the largest Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%.

The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.

“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.

The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.

“As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure,” said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.

Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems.

It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it.

Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.

Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).

Source: afdb.org

Ghana and six other West African countries have been allocated US$379 million by the Board of the World Bank Group in International Development Association (IDA) credits and grants to help harmonize and strengthen statistical systems.

The other six ECOWAS countries are Burkina Faso, Cabo Verde, Ivory Coast, Liberia, Sierra Leone and Togo.

According to the World Bank Group, the funds is to support the African Union (AU) and the Economic Community of West African States (ECOWAS) in their efforts to deepen regional integration in Africa.

The new project, Harmonizing and Improving Statistics in West Africa (HISWA), aims to strengthen the statistical systems of participating countries and regional and sub-regional bodies, in order to help them harmonize, produce, disseminate and enhance the use of core economic and social statistics.

Good data, the World Bank Group said are essential to address the socio-economic development challenges facing the West Africa region in general, and the seven beneficiary countries in particular.

HISWA is a regional project that will stimulate demand for data and increase the capacity of the National Statistics Offices in the beneficiary countries. Key activities include, inter alia: the harmonization of methodologies by the ECOWAS Commission; strengthened production of core economic and social statistics, including demographic and poverty statistics, national accounts and price statistics; the improvement of targeted administrative statistics; capacity-building, data dissemination; and institutional reforms.

The project will also help to improve and modernize physical and statistical infrastructure to help achieve its stated objectives.

Beyond the National Statistics Offices and the regional bodies, HISWA will provide reliable microdata, data platforms and statistics bulletins to a larger audience, including universities, researchers, students and the general public.

The project is also relevant to the Strategy for Harmonization of Statistics in Africa (SHaSA2), the continent-wide initiative aimed at addressing the constraints facing African statistical systems and promoting its regional integration agenda. It also supports the implementation of ECOWAS’s regional strategy 2019-2023 that aims to raise the living standards of its member country populations. By generating data critical to national and regional planning and monitoring, the project remains well aligned with the World Bank Group’s Regional Integration and Cooperation Assistance Strategy for Sub-Saharan Africa and will help strengthen the connection between regional policy commitments and national planning.

The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.

IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa.

Source: classfmonline

In the spirit of working together to support the welfare of its customers and clients, Fidelity Bank Ghana Limited has reduced interest rates on personal loans for qualifying customers to 17.5%.

This reduction will include a further relief option of a maximum three-month repayment holiday where required.

The bank in a statement said this is part of initial support measure designed to provide immediate relief and cushion their clients and by extension Ghanaians at large, with effect from Thursday, 26th March 2020.

The bank, in a statement, said, “we have aligned with Ghana’s Association of Bankers’ fee waiver announcements and as such have waived all interbank transfer fees on our digital platforms and mobile wallet transaction fees for transactions of ¢100 and below”

In addition, Fidelity Bank has also introduced an enhanced offering to customers on the Fidelity Mobile App, which now enables customers to apply for salary advances, overdraft limit increases and loan top-ups from the comfort of their homes.

According to the Managing Director of the Bank, Julian Opuni, “we have introduced a relief package for existing borrowers who are identified as being affected by the COVID-19 pandemic, thus impacting on the ability to meet repayments.

The package will include loan repayment postponement and loan restructuring where applicable,” adding that, “we have waived issuance fees on Fidelity Bank Visa cards for the next five weeks, with an additional option for a courier service to deliver cards directly to customers.”

On Fidelity Bank’s support to priority sectors of the economy, Julian Opuni stated, “with immediate effect, Fidelity Bank’s SME & Corporate Clients directly impacted by the prevailing pandemic will receive a relief package.

This package will include loan moratoriums and loan restructuring opportunities subject to approval.”

With our continued partnership with the Dutch Government/SNV to support the WASH sector, all borrowers across the Water, Sanitation and Hygiene (WASH) value-chain will enjoy a concessionary rate of 10% per annum for qualifying loans,” he disclosed.

He further indicated that Fidelity Bank will expand its partnership-funding progranme with the Medical Credit Fund designed to support the health care sector by offering a concessionary financing rate reduction of 2%.

Source: peacefmonline

The President for the Institute of Liberty and Policy Innovation (ILAPI), Mr Peter Bismark, has stated that Ghana requires GH¢15 billion for 28 days’ total lockdown to sustain the economy and protect the lives of its citizens.

He said those who are calling for a total lockdown should note that that was not the best option for Ghana because should that happen, a stimulus package of over GH¢15 billion would be needed for a 28-day lockdown.

“If it happens like that, it means that registered businesses and firms would have to shut down operations with employees going home, and go with salaries,” he said.

The president of ILAPI said the government would still have to ensure the continuation of salaries of public sector employment and provision of basic needs and other services, including electricity, essential services, water and food.

Mr Bismark said this in a release from the institute yesterday.

He said the informal economy would suffer from the lockdown because of loss of daily sales and income. The sector, he said, may not directly benefit from the emergency financial response but would reduce individual income and purchasing power.

According to him, since Ghana’s economy thrives on small and medium-scale enterprises, the government must spend more to support local businesses with some tax rebates, financial reliefs, refunds and social assistance.

Total lockdown

“As the market activities continue to drop and many Ghanaians are calling for a total lockdown, foward-looking fiscal and monetary measures are necessary to save the economy from impacts of the Coronavirus pandemic,” he stated

Mr Bismark said the exponential growth of the number of cases is already causing a progressive lockdown.

“With this development, businesses would close and physical activities would cease. Because of inexplicable barriers that the coronavirus crisis brings, people may be prevented from doing useful things for income and wealth creation.”

He stated that in the process, businesses must be compensated and this would call for both critical fiscal and monetary measures.

“With a total lockdown, certain goods and services that people would otherwise buy and enjoy will be off-limit. It does not mean, however, that one would have stopped eating; instead, you make your food at home and due to this Ghanaians may now spend more money on other things,” the ILAPI boss stated.

He said switching from consumption to saving might be impossible at this time because the situation would encourage people to spend rather than save.

Mr Bismark said making readily available the package was important for private sector planning of business sustainability and job security in this COVID-19 pandemic.

He added that the critical areas to consider include businesses, jobs, internet connectivity, transport, fuel, tax compliance, raw materials, manufacturing, rent, health care, agriculture, security, utilities and occupational licenses.

Measures

The Vice-President of ILAPI, Mr Evans Badu Boampong, said the government must meet all the relevant business associations, including the manufacturing firms, to deliberate consciously on production capacity and job loss.

He said insurance companies could not remain the same with our insurance premiums during lockdowns so the government again must meet the Insurance Commission as early as possible to make a readily available partial payment to their clients to support them in times of the panic.

“They should also provide exclusive premiums to their clients to support government health interventions,” Mr. Boampong said.

He said salaries of workers should not be subjected to full tax deductions, suggesting that at least 50% tax refund should be given workers while Ghana Water Company should consider opening taps for those who are even owing bills to ensure there is a free flow of water to aid hand washing.

The Ministry of Food and Agriculture, through the Buffer Food Stock, Mr. Boampong said, should develop an outline system to supply food to underprivileged homes and also support companies in Ghana (both local and foreign) to change their structure of production to produce some essential goods to avoid shortages during the lockdown,” he stated.

Mr Boampong said Ghana Grid Company Limited, Volta River Authority and Electricity Company of Ghana must ensure there was continuous supply of power since most institutions would be working from home and that tariffs should be reduced.

He said there are people who don’t even have a place to get locked inside, adding Ghana has a housing deficit of over 1.5 million. Therefore, the government must advance plans to shelter some millions of Ghanaians in hotels, motels, and guest houses among others.

“As a policy analysis organisation, we make these proposals based on a careful study of other nations which have implemented lockdowns due to COVID19. And we believe that these measures should suffice, though not completely, in helping manage the situation of a lockdown,” Mr Boampong said.

Source: starrfmonline

International ratings agency, Moody has projected a dire consequence for African economies amid the COVID-19 pandemic.

It says the global shock is having a severe macroeconomic and financial impact on African countries.

In a new report which did not constitute a ratings action, Moody’s said the global shock will significantly constrain regional growth despite the numerous fiscal and monetary stimulus measures announced by a number of African governments and central banks.

David Rogovic, a Moody’s senior Analyst and co-author, said while the number of Coronavirus infections in Africa is considerably lower than elsewhere, it is increasing.

“To avoid a widespread pandemic that would overwhelm Africa’s generally less-developed healthcare sectors and add to the fiscal cost through higher health spending, several governments have closed borders and instituted lockdowns to prevent the virus’ spread,” he emphasised.

The report foresees that the combined effect of border closures, global trade disruption, commodity price declines and financial market volatility related to the coronavirus pandemic will weaken credit conditions for many African sovereigns.
Already, most African countries fiscal position have weakened.

At the same time, declining export revenue is expected to increase pressure on the balance of payments and aggravate external vulnerability of countries.

Government liquidity risk will also be exacerbated given financial market dislocation and investor aversion towards weaker debt issuers.

In January, 2020, Moody’s affirmed the Government of Ghana’s long-term issuer and senior unsecured bond ratings at B3 and changed the outlook to positive from stable.

It also concurrently affirmed the rating of the bond enhanced by a partial guarantee from the International Development Association (IDA, Aaa stable) at B1.

The decision to assign a positive outlook Moody’s said reflected rising confidence that the country’s institutions and policy settings will foster improved macroeconomic and fiscal stability over the medium term.

Source: classfmonline

Residents in the Eastern Regional capital, Koforidua have been gripped with fear as the deadly coronavirus disease is gradually taking over the country by storm.

This fright which has engulfed the residents has lead to panic buying as they believe the country will soon face a total lockdown due to the increasing number of cases recorded.

Speaking to some of these purchasers, even though they are going by the directives given by health practitioners and the government there is a need for them to get some more groceries to stock their home.

“I have a strong feeling the government will soon come out and declare a total lock down of the country because the coronavirus disease is widely spreading across the country and who knows what will happen next? If the lockdown comes and there is no food at home, I will face a lot of challenges, so I’m doing all my necessary shopping now before the ‘dark’ days come,” a buyer revealed.

Touching on the prices of goods in the market, the purchasers disclosed that, prices of foodstuffs which has tremendously shot up amazes them.

According to them, a half sack of onion which was sold at GH? 150 is now being sold at GH? 200, a 5kg bag of rice which was sold at GH? 30 is now being sold at GH? 40 which wows them as purchasers but since there isn’t any option for them, they end up patronizing the product without any hesitation.

“The traders are using this avenue to make abnormal profits for themselves which is not fair to us. We understand they want profit, as they sell but gaining huge profit in this way, is total absurd. The funny thing is it’s as though they’ve held a meeting because the prices on goods are hiked and are the same, which is really bad, ”another purchaser cried.

“Not all of us can patronize goods at such prices which isn’t reasonable to me. This is because a trader shouldn’t just wake up one day and decide to sell their product at a certain price which other traders astonishingly follow the trend which to me as a purchaser is criminal. The amount I always use for foodstuffs can’t get me what I used to get from the market anymore due to this overpricing,” another said.

Talking to some of these traders in the Koforidua central market, they unveiled that, the relatively high prices labelled on their items aren’t their fault, but rather do so depending on the prices at which they get their goods.
“Prices on goods keep increasing as the day goes by and it isn’t our fault the prices keep going up. We sell based on the price we get our products and we cannot sell products without getting a dime as profit. We do this business to make profit not to run at a lost. They (purchasers) make it seem we are duping them of their money which isn’t so.” A trader said.

Other traders who were interviewed added that, there is no way they as traders will add unimaginable profit to their goods as they believe it isn’t religious for one to do that.

“Most of us here are Christians and just like the way we preach against corruption in our churches there isn’t any way we would go contrary to what we preach against by cheating our customers which we indeed know it isn’t right in the sight of God. We believe every trader here in the market will get their share at the end of the day. There is no point in overpricing your products and later reduce it drastically when we are done with coronavirus”. Some traders averred.

However, the Ghana Medical Association has recently called on the government to lockdown the country as the association believes, a total lockdown will go a long way to help the country as the country battles with the coronavirus pandemic.

Source: ghanaweb

The mining industry in Ghana and the West African Sub-region will soon receive a major boost following the establishment of a world-class Geochemical Laboratory at Tarkwa in the Western region of Ghana by SGS Ghana Limited.

The facility will complement the existing facilities available in the country by ensuring that clients receive full scale geochemical analytical services at the highest quality and promptness that is required.

The Client Liaison Manager of SGS Ghana at Tarkwa, Wilfred Appiah, who made the announcement at the just ended maiden edition of the Ghana Gold Expo held in Takoradi, said the facility is one of SGS Ghana’s top-notch laboratories in the sub-region.

With a network of what some have described as super labs, clients in the mining industry can enjoy various standardized, validated methods and techniques using state of the art equipment that spurs growth and reaches desired targets timeously.

Players in the mining industry can also get enhanced services offered by sister labs for MMI (Mobile Metal Ion) analysis, multi-element analyses by ICP-AES, ICP-MS and XRF. SGS also invested in FAST technology (Field Analytical Services & Testing) using the pXRF, FTIR and ED-XRF scanning instruments for mineralogical sample analyses. Carbon and Sulphur analyses are offered from SGS Maslab in Tema, which is also fed from the new SGS environmental feeder, lab recently opened in the Cyanide area in Tarkwa.

Mr. Appiah noted that SGS Ghana is part of the global entity SGS, which is recognised as a global benchmark for quality and integrity and the world’s leading inspections, verification, testing and certification company with offices worldwide including Accra, Tema, Tarkwa, Takoradi, Damang, Ahafo, Akyem and Obuasi.

SGS, which was established in 1878 in Europe, opened its Ghana operations in 1960 in Ghana and provide services in the following sectors; Oil, Gas and Chemicals, Agriculture, Food and Life, Certification and Business Enhancement, Environment, Health and Safety, Government and Institutions, Industrial and Minerals. The company has a network of 2,600 offices and laboratories and more than 94,000 employees around the world.

The Convenor of the Ghana Gold Expo, Dr. Steven Blessing Ackrah expressed excitement about the new facility, adding that, it was a good effort at ensuring responsible mining as the theme of the Expo indicates; “Promoting Responsible Gold Mining and Zero Mercury.”

“Contributions to the facilities in Ghana, such as the Geochemical Laboratory in Tarkwa by SGS continue to place Ghana favourably for responsible gold mining in the region,” he added.

He observed that the enthusiasm and overwhelming representation by stakeholders in the mining industry was a testament to the “strength of gold in the current market and the high level of interest in doing business in Ghana”.

Gold price has hit $1667 as of March 11 and have shown strong recent gains amid stock market crises worldwide.

Henry Treku who is in charge of Strategy and Partnerships for Ghana Gold Expo also noted that the high level investors who attended the expo are in the right place at the right time if they were interested in producing gold responsibly and sustainably. “Ghana is good for such opportunities,” he stressed.

He thanked SGS for sharing the news about the new laboratory and extending an invitation to key stakeholders to witness the world-class facility.

However, we have been informed that due to the COVID-19 outbreak, and the recent press release of 2 cases in Ghana, SGS was compelled to postpone the opening function, which was scheduled to be held on the 18th of March in Tarkwa.

Source: GNA

A mass spraying exercise is to be undertaken in all local markets in the Ashanti Region on Friday, March 27, to disinfect them for public safety.

The exercise, under the auspices of the Ministry of Local Government and Rural Development (MLGRD), is in line with proactive measures instituted by the government to manage the spread of the COVID-19 (coronavirus) disease.

A statement signed by Mr. Simon Osei-Mensah, the Regional Minister, copied to the Ghana News Agency (GNA), Kumasi, said consequently, a temporary ban on all market-related activities would be enforced on the day of the exercise.

“I wish to take this opportunity to passionately appeal to all traders to cooperate and comply with the ban on activities in the markets on Friday,” it said.

The statement gave the assurance that chemicals to be used for the spraying exercise were not harmful. Therefore, there is no fear of negative effects.

Ghana has recorded 68 confirmed cases and two deaths since the COVID-19 (coronavirus) outbreak about three months ago.

Source: GNA

With immediate effect and consistent with national laws of the creditor countries, the World Bank Group (WBG) and the International Monetary Fund (IMF) are calling on all official bilateral creditors to suspend debt payments from International Development Association (IDA) countries that request forbearance.

This follows a joint statement to the G20 concerning debt relief for the poorest countries in the world in the wake of the Coronavirus outbreak.

Ghana is a member of IDA and will, therefore, benefit from the directive from the two Bretton Wood institutions.

The statement added that the coronavirus outbreak is likely to have severe economic and social consequences for IDA countries with about a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.

“We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries.

“We will seek endorsement for the proposal at the Development Committee during the Spring Meetings (April 16/17),” the statement said.

The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets.

The international community would welcome G20 support for this Call to Action.

Source: classfmonline