Story: Boahene Asamoah, Dodowa
A FORMER Commissioner of the Internal Revenue Service (IRS), Mr David Adom, has called on the government to exempt all taxpayers and companies on self assessment from withholding tax at source on corporate income.
Mr Adom said companies on self assessment did not get automatic refund of overpaid taxes adding that by the provisions of the Internal Revenue Act. 2000 (Act 592), the Commissioner was deemed to have assessed a person who filed his self assessed tax.
He said such companies had over the years proven a high level of compliance by filing their taxes, promptly and accurately and that such companies should not be made to go through the process of tax refunds.
He said “self assessment system should be fully implemented so that a person who has self assessed and established over payments has the overpaid taxes automatically refunded or credited”.
Delivering a report on a research for advocacy on tax reduction and widening of the tax net at a workshop organised by the Ghana Chamber of Commerce and Industry (GNCCI), Mr Adom of AA&K Services, a tax consulting firm, said such a move could improve the business climate and could push other companies to comply by filing their taxes accurately.
The workshop supported by the Business Sector Advocacy Challenge Fund (BUSAC) and was aimed at lobbying government to further reduce corporate tax and widening of the tax net.
Participants from the Ministries of Finance, Trade, Industry, Private Sector development and President’s Special Initiative (PSI) Internal Revenue Service, Customs, Excise and Preventive Service (CEPS) and Value Added Tax (VAT) Secretariat.
Mr Adom also suggested that the system of withholding tax should be automated to ensure that the delays in the issuance of tax credit certificate was reduced.
“A comprehensive programme should be put in place to de-emphasise the dependence of the direct administration on withholding tax from corporate income as this often results in entities paying tax out of capital and therefore has adverse effect on business growth”, he stated.
Mr Adom said the research revealed that businesses were concerned about the high capital lock up in their bid to comply with provisions of the tax law.
Mr Adom said in the face of inadequate capacity the frequency of refund, audits of companies should be reduced by raising the threshold for automatic refunds to ¢20 million.
“It was proposed that the IRS should speed up audits for refunds and where overpayments have been established refunds should be done within three months”, he said.
The Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu said, while the association was advocating for a further reduction in the taxes, it must not lose sight of the government’s aim to raise additional taxes.
He said the workshop was relevant because it was through dialogue and brainstorm sessions that ideas could be generated to expand the tax net in the country.
Mr Baah-Wiredu said “ I wish to emphasis here that any advocacy to influence government policy formulation should be based on empiricism as opposed to just appealing to emotions”.
He said the decision by the chamber to undertake the study to carefully and critically look at the appropriateness of tax rates and to make recommendations to government was a step in the right direction.
The finance minister underscored the importance of widening the tax net to make everybody contribute his or her quota to the national coffers.
“ I take it that participants are fully aware of the benefits of a wider and efficient tax collection system without which no government can fully undertake its responsibilities of providing services, amenities and infrastructure to its people”, he emphasised.
The President of the GNNCI, Mr Wilson Atta Krofa, called for a legislation that would ensure that all businesses registered in the country belonged to one association in the country.
That, he said, would ensure the monitoring of such businesses and also ensure that such businesses pay their taxes.
Mr Akrofa stated that the chambers advocacy was in support of the government’s goal to reach out to informal sector.
The President called for a closer collaboration between the IRS, CEPS and other government agencies to educate professional bodies and the business community on the need for tax compliance.
Friday, January 26, 2007
Deepening activities on the stock market-Transol to rais ¢20 billion on GSE
Story: Boahene Asamoah
TRANSACTION Solutions TRANSACTION Solutions Ghana Limited (Transol), an information technology company is to raise ¢20 billion through an Initial Public Offer (IPO) on the Ghana Stock Exchange (GSE).
“These shops known as easy shops are 23 in number and have been deployed in Accra, Kumasi, Tema and Tamale”, Mr Jacquaye said, adding that plans were under way to open Ezi shops in Takoradi, Tarkwa and Koforidua.
EZI shops are points of sale centres for Areeba recharge vouchers and that of the other network. The locations could also be used for Ecobank Visa Gift card and payment of Multichoice bills.
The Chairman said the company was full of innovation that could help build shareholders funds, saying it was the first company to install stand alone Auto Teller Machines (ATMs) in the country using the Ecobank platform.
He said currently the company had installed 16 ATMs at strategic locations and was in the process of installing 25 additional ATMs throughout the country.
“This is why we are coming to the market to raise funds for the expansion of the business,” he said.
He said the prospects of the business was bright as the company had improved its financials tremendously over the past three years.
The company has witnessed very significant improvement in its financials registering rapid growth in its revenues since 2003.
It’s revenue went up by ¢8 billion in 2003 to ¢36.7 billion and ¢193 billion for 2004 and 2005 respectively.
Even though the company recorded a loss of ¢597.8 million in 2003, which was the first year of operations, it recovered in subsequent years, recording a net profit after tax of ¢556.8 million in 2004 and about ¢6 billion in 2005.
Fixed assets also improved from ¢1.1 billion in 2003 to ¢6.2 billion by the end of 2005, as against a total asset base of ¢2.5 billion in 2003 and ¢21.1 billion in 2005.
Shareholders funds also went up from about ¢2 billion in 2003 to ¢5.6 billion in 2005 due to improved profitability.
Mr Jacquaye said the company’s strategy was geared towards understanding key market conditions and customer needs in the medium to long term.
“The future prospects of the company are very positive as we continue to diversify our product portfolio,” he stated.
TRANSACTION Solutions TRANSACTION Solutions Ghana Limited (Transol), an information technology company is to raise ¢20 billion through an Initial Public Offer (IPO) on the Ghana Stock Exchange (GSE).
“These shops known as easy shops are 23 in number and have been deployed in Accra, Kumasi, Tema and Tamale”, Mr Jacquaye said, adding that plans were under way to open Ezi shops in Takoradi, Tarkwa and Koforidua.
EZI shops are points of sale centres for Areeba recharge vouchers and that of the other network. The locations could also be used for Ecobank Visa Gift card and payment of Multichoice bills.
The Chairman said the company was full of innovation that could help build shareholders funds, saying it was the first company to install stand alone Auto Teller Machines (ATMs) in the country using the Ecobank platform.
He said currently the company had installed 16 ATMs at strategic locations and was in the process of installing 25 additional ATMs throughout the country.
“This is why we are coming to the market to raise funds for the expansion of the business,” he said.
He said the prospects of the business was bright as the company had improved its financials tremendously over the past three years.
The company has witnessed very significant improvement in its financials registering rapid growth in its revenues since 2003.
It’s revenue went up by ¢8 billion in 2003 to ¢36.7 billion and ¢193 billion for 2004 and 2005 respectively.
Even though the company recorded a loss of ¢597.8 million in 2003, which was the first year of operations, it recovered in subsequent years, recording a net profit after tax of ¢556.8 million in 2004 and about ¢6 billion in 2005.
Fixed assets also improved from ¢1.1 billion in 2003 to ¢6.2 billion by the end of 2005, as against a total asset base of ¢2.5 billion in 2003 and ¢21.1 billion in 2005.
Shareholders funds also went up from about ¢2 billion in 2003 to ¢5.6 billion in 2005 due to improved profitability.
Mr Jacquaye said the company’s strategy was geared towards understanding key market conditions and customer needs in the medium to long term.
“The future prospects of the company are very positive as we continue to diversify our product portfolio,” he stated.
VAT flat rate aims at expanding tax net
Story: Boahene Asamoah
THE Commissioner of the Value Added Tax (VAT), Mr Anthony Ewereko Minlah, has said that the introduction of the VAT flat rate scheme, targeted at the informal sector is aimed at expanding the tax net in order to address some of the problems of the informal sector.
He said the high rate of non-filing of tax returns,the high incidence of non-issuance of invoices and bad record keeping were some of the problems of the informal sector.
Speaking at a one-day seminar for a cross-section of journalists on the VAT Flat Rate Scheme (VFRS), in Accra on Wednesday, Mr Minlah said the flat rate was not a new tax system but a modified tax on consumption to suit the informal sector.
He said the scheme was a VAT collection accounting mechanism that applied a marginal tax percentage, representing net VAT payable on the value of taxable goods supplied and was an alternative to the invoice credit method of VAT accounting which was currently being used.
Making a presentation on the scheme, the Head of Training and Development Unit of the VAT Service, Mr Anthony Ackah-Mensah, said the challenges that faced the informal sector under the standard VAT system was the difficulty in claiming back tax, low record keeping and unfair competition.
Mr Ackah-Mensah said the proposed scheme had a marginal three per cent tax to be charged by traders on their taxable output, and explained that the scheme was an alternative to the invoice credit method of VAT accounting.
He said the scheme was restricted to all retailers of goods who made business turnover of ¢100 million per annum but whose annual turnover did not exceed ¢1.2 billion per annum.
“Retailers of goods who are currently registered to operate the standard or regular VAT scheme but whose business turnover does not exceed ¢1.2 billion over a 12 month period shall be converted to the scheme by the service”, Mr Ackah-Mensah stated.
He explained that the reason why the scheme was being piloted or restricted to the trade sector was because the sector operated largely as the informal sector.
He said some of the benefits of the scheme included, easy record keeping, was simple to operate, social acceptability of the rate and a simplified and easy to complete return form.
An Assistant Commissioner in charge of Research, Monitoring and Planning, Mr Nii Ayi Aryeetey, said appropriate training programmes had been organised for management staff and field operation officers to ensure timely and efficient delivery of service.
“Appropriate training programmes will also be delivered to leaders of identifiable distribution and retail trade associations,” he stated.
THE Commissioner of the Value Added Tax (VAT), Mr Anthony Ewereko Minlah, has said that the introduction of the VAT flat rate scheme, targeted at the informal sector is aimed at expanding the tax net in order to address some of the problems of the informal sector.
He said the high rate of non-filing of tax returns,the high incidence of non-issuance of invoices and bad record keeping were some of the problems of the informal sector.
Speaking at a one-day seminar for a cross-section of journalists on the VAT Flat Rate Scheme (VFRS), in Accra on Wednesday, Mr Minlah said the flat rate was not a new tax system but a modified tax on consumption to suit the informal sector.
He said the scheme was a VAT collection accounting mechanism that applied a marginal tax percentage, representing net VAT payable on the value of taxable goods supplied and was an alternative to the invoice credit method of VAT accounting which was currently being used.
Making a presentation on the scheme, the Head of Training and Development Unit of the VAT Service, Mr Anthony Ackah-Mensah, said the challenges that faced the informal sector under the standard VAT system was the difficulty in claiming back tax, low record keeping and unfair competition.
Mr Ackah-Mensah said the proposed scheme had a marginal three per cent tax to be charged by traders on their taxable output, and explained that the scheme was an alternative to the invoice credit method of VAT accounting.
He said the scheme was restricted to all retailers of goods who made business turnover of ¢100 million per annum but whose annual turnover did not exceed ¢1.2 billion per annum.
“Retailers of goods who are currently registered to operate the standard or regular VAT scheme but whose business turnover does not exceed ¢1.2 billion over a 12 month period shall be converted to the scheme by the service”, Mr Ackah-Mensah stated.
He explained that the reason why the scheme was being piloted or restricted to the trade sector was because the sector operated largely as the informal sector.
He said some of the benefits of the scheme included, easy record keeping, was simple to operate, social acceptability of the rate and a simplified and easy to complete return form.
An Assistant Commissioner in charge of Research, Monitoring and Planning, Mr Nii Ayi Aryeetey, said appropriate training programmes had been organised for management staff and field operation officers to ensure timely and efficient delivery of service.
“Appropriate training programmes will also be delivered to leaders of identifiable distribution and retail trade associations,” he stated.
Thursday, January 25, 2007
Integration of stock exchanges—Ghana, Nigeria take
Story: Boahene Asamoah
THE Ghana Stock Exchange (GSE) is exploring possible collaboration with neighbouring stock markets in a bid to create a platform of regional integration of stock markets, the General Manager of the GSE, Mr Ekwow Afedzi, has stated.
He said the “GSE has begun discussions on regional integration with the Nigerian Stock Exchange to harmonise the operations of the two bourses”.
Mr Afedzi made this known during an interaction with the visiting Lord Mayor of the City of London, Rt. Hon. Alderman John Stuttard, and his six-member delegation to the GSE as part of his four-day official visit to the country.
Mr Afedzi’s statement was in response to a suggestion by the Vice Chairperson of the Standard Chartered Bank in charge of Capital Markets, Ms Ann Grant, on the need for the GSE to merge with other neighbouring stock markets to create a regional bourse that could attract the needed investments.
Mr Afedzi said a committee had been set up between the two exchanges to facilitate the integration in the shortest possible time.
The General Manager said the listing of Ecobank Transnational on the three bourses in the West African sub-region — the GSE, the Nigerian Stock Exchange and the Ivorian bourses — was a good platform to integrate the regional markets.
He assured the delegation that the integration of the markets in the sub-region was high on the agenda of the GSE and its Nigerian counterparts.
In her submission, Ms Grant stated that irrespective of the good performance of the Ghana bourse, investors would be interested in bigger markets and called on the GSE to integrate with other regional bourses.
“The reality is that your market is too small in global terms”, she added.
She said “no foreign investor would develop your country for you unless there was equally vibrant domestic investment avenues”.
Ms Grant said Standard Chartered listed on the Ghanaian bourse because the bank wanted to be part of the Ghanaian success.
She said part of the reason for the bank’s growth was the decision to invest in emerging markets and said Ghana was one of the key pillars in the bank’s growth.
She urged the exchange to take advantage of Ghanaians living abroad to ensure a substantial investment back home.
“There must be a way of plugging into this group of people who are doing quite well in the United Kingdom to ensure substantial investments in the economy,” she said.
The Director-General of the Securities and Exchange Commission (SEC), Nii Noi Sowah, mentioned public education as one of the major challenges facing the market and said there was the need to intensify the education of all players on the market.
THE Ghana Stock Exchange (GSE) is exploring possible collaboration with neighbouring stock markets in a bid to create a platform of regional integration of stock markets, the General Manager of the GSE, Mr Ekwow Afedzi, has stated.
He said the “GSE has begun discussions on regional integration with the Nigerian Stock Exchange to harmonise the operations of the two bourses”.
Mr Afedzi made this known during an interaction with the visiting Lord Mayor of the City of London, Rt. Hon. Alderman John Stuttard, and his six-member delegation to the GSE as part of his four-day official visit to the country.
Mr Afedzi’s statement was in response to a suggestion by the Vice Chairperson of the Standard Chartered Bank in charge of Capital Markets, Ms Ann Grant, on the need for the GSE to merge with other neighbouring stock markets to create a regional bourse that could attract the needed investments.
Mr Afedzi said a committee had been set up between the two exchanges to facilitate the integration in the shortest possible time.
The General Manager said the listing of Ecobank Transnational on the three bourses in the West African sub-region — the GSE, the Nigerian Stock Exchange and the Ivorian bourses — was a good platform to integrate the regional markets.
He assured the delegation that the integration of the markets in the sub-region was high on the agenda of the GSE and its Nigerian counterparts.
In her submission, Ms Grant stated that irrespective of the good performance of the Ghana bourse, investors would be interested in bigger markets and called on the GSE to integrate with other regional bourses.
“The reality is that your market is too small in global terms”, she added.
She said “no foreign investor would develop your country for you unless there was equally vibrant domestic investment avenues”.
Ms Grant said Standard Chartered listed on the Ghanaian bourse because the bank wanted to be part of the Ghanaian success.
She said part of the reason for the bank’s growth was the decision to invest in emerging markets and said Ghana was one of the key pillars in the bank’s growth.
She urged the exchange to take advantage of Ghanaians living abroad to ensure a substantial investment back home.
“There must be a way of plugging into this group of people who are doing quite well in the United Kingdom to ensure substantial investments in the economy,” she said.
The Director-General of the Securities and Exchange Commission (SEC), Nii Noi Sowah, mentioned public education as one of the major challenges facing the market and said there was the need to intensify the education of all players on the market.
Wednesday, January 24, 2007
“Effective management of stock market is key”
Story: Boahene Asamoah
THE visiting Lord Mayor of the City of London, The Rt. Hon. Alderman John Stuttard, has said that the efficient management of the stock exchange is key to its development.
He said it while it was ideal to have high prices, it must not be done to create problems for the stock market.
Rt. Hon Stuttard made this known during a courtesy call on the Management and Council members of the Ghana Stock Exchange (GSE) as part of his official four-day visit to the country.
Rt. Hon Stuttard is leading a six member delegation to the country.
He said in some instances, prices of shares had been hiked only for such shares to fall , making investors much poorer than they had anticipated.
Rt Hon Stuttard said the London Stock Exchange had in recent times focused on domestic regulation to ensure the development of the capital market.
He said again there was also the need to ensure the quality of entrants, and that there was the need to observe good corporate governance to safeguard the integrity of the market.
The Managing Director of the GSE, Mr K.S. Yamoah, recounted the establishment of the market some 16 years ago, and mentioned some of the feats that the market had chalked up since it started operations in 1991.
He said the market was expecting to list some high profile companies on the market for this year, which he hoped would increase its capitalisation, which currently stood at over $10 million.
Again, he mentioned the automation, the migration to Central Depository System (CDS) and the implementation of the GSE rule book as some of the policies to be pursued this year.
The chairman of the GSE Council, Mr Frank Adu Jnr, urged the visiting delegation to advise some British firms operating in the country to list on the market.
Rt. Hon. Stuttard later rang the bell on the floor of the exchange to signal the beginning of trading activities for the day.
He was accompanied by the British High Commissioner to Ghana, Gordon Wetherell, The Chief Commoner, Mr Pulman, Mr Sinclair of the Daily Mail Group, Ms Ann Grant of Standard Chartered Bank, Mr Neil Chrimes, Ag. Private Secretary and Ms Sarah Stevenson, First Secretary of Trade and Investment of the British High Commission
THE visiting Lord Mayor of the City of London, The Rt. Hon. Alderman John Stuttard, has said that the efficient management of the stock exchange is key to its development.
He said it while it was ideal to have high prices, it must not be done to create problems for the stock market.
Rt. Hon Stuttard made this known during a courtesy call on the Management and Council members of the Ghana Stock Exchange (GSE) as part of his official four-day visit to the country.
Rt. Hon Stuttard is leading a six member delegation to the country.
He said in some instances, prices of shares had been hiked only for such shares to fall , making investors much poorer than they had anticipated.
Rt Hon Stuttard said the London Stock Exchange had in recent times focused on domestic regulation to ensure the development of the capital market.
He said again there was also the need to ensure the quality of entrants, and that there was the need to observe good corporate governance to safeguard the integrity of the market.
The Managing Director of the GSE, Mr K.S. Yamoah, recounted the establishment of the market some 16 years ago, and mentioned some of the feats that the market had chalked up since it started operations in 1991.
He said the market was expecting to list some high profile companies on the market for this year, which he hoped would increase its capitalisation, which currently stood at over $10 million.
Again, he mentioned the automation, the migration to Central Depository System (CDS) and the implementation of the GSE rule book as some of the policies to be pursued this year.
The chairman of the GSE Council, Mr Frank Adu Jnr, urged the visiting delegation to advise some British firms operating in the country to list on the market.
Rt. Hon. Stuttard later rang the bell on the floor of the exchange to signal the beginning of trading activities for the day.
He was accompanied by the British High Commissioner to Ghana, Gordon Wetherell, The Chief Commoner, Mr Pulman, Mr Sinclair of the Daily Mail Group, Ms Ann Grant of Standard Chartered Bank, Mr Neil Chrimes, Ag. Private Secretary and Ms Sarah Stevenson, First Secretary of Trade and Investment of the British High Commission
Structural reforms, stability will shape banking
Story: Boahene Asamoah
A Deputy Governor of the Bank of Ghana (BoG), Dr Mahamudu Bawumia, has said that structural reforms, coupled with macro-economic stability, will deliver the robust financial services which the country requires to achieve a middle- income status.
He said while the economy had witnessed macro-economic stability, the central bank would continue with structural reforms to further promote efficiency and competition in the banking system.
Speaking at the launch of the 6th Ghana Banking Awards organised by Corporate Initiative, Ghana (CIG) in Accra on Tuesday, the deputy governor said the central bank had initiated policy reforms aimed at enhancing the transparency and competitiveness of the inter-bank money market. They were also to enhance the development of the capital market and reduce asymmetric information.
He mentioned some of the reforms as the passage of the Credit Reporting Bill, the publication of bank charges, the proposed Borrowers and Lenders’ Bill, the review of the Know Your Customer (KYC) Bill and the Anti-money Laundering Bill.
Dr Bawumia stated that “macro-economic stability is not enough”, adding that there was the need to ensure structural reforms which would propel the financial sector much further.
He mentioned other reforms as the abolition of secondary reserve requirements, non-resident participation in domestic government securities, the Foreign Exchange Bill, the re-denomination exercise and the universal banking concept.
“These are all benefits of macro-economic stability,” he said, adding that the Ghana Banking Awards were, therefore, a measuring rod to see what banks were doing and also to stimulate debate over how banks could create social and environmental values without sacrificing profitability.
“The banking sector has become very competitive with increased intermediation but improved loan quality,” he said.
Bank credit to Gross Domestic Product (GDP) was 4.7 per cent in 1990, as against 18.4 per cent in 2005, he said, adding that loan deposits ratio was 50 to one per cent in 2002, as against 66 per cent in 2006.
Dr Bawumia stated that non-performing loans stood at 19.6 per cent in 2001, as against 11 per cent as of October 2006, while net foreign currency assets to shareholders’ funds was negative 9.4 per cent in 2000, as against 43.4 per cent in 2006.
The Executive Secretary of CIG, a non-governmental organisation made up of some of the country’s “blue chip” companies, Mr Afotey Odarteifio, said the aim of the organisation was to work towards the creation of an excellent corporate environment in the country by helping to address some of the issues which hindered the growth, efficiency and competitiveness of Ghanaian companies.
He said 22 out of the 24 banks in the country would be competing for awards in 14 categories this year.
“The two new banks, Fidelity Bank and Intercontinental Bank, do not qualify for awards, since they are yet to operate for a full year,” Mr Odarteifio stated.
He said CIG was happy with the increased activity on the banking scene, adding, “We have noticed the increased level of competitiveness, the improved variety of products and services on offer and the increased activity of banks in the areas of lending, electronic banking, money transfer, among others.”
The Chairman of Interplast Limited, Mr Saied Fakhry, who chaired the function, said the banking sector, according to statistics, held a lot of promise for the country and urged the banks to improve upon the innovative products being introduced into the country.
“The future of banking in Ghana, I believe, is very bright. If contemporary banking innovations are anything to go by, such as the networking of most branches, assorted automated teller machines (ATMs) dotted across the country and inter-bank ATM cards, then I believe Ghana will be positively positioned on the world map of banking,” he stated.
Tuesday, January 23, 2007
THE GHANA FREE ZONES BOARD:TEN YEARS OF IMPLEMENTING THE FREE ZONES PROGRAMME:
Story: Boahene Asamoah
In a bid to attract Foreign Direct Investment (FDI), governments throughout the world have adopted several strategies and policy directions which have contributed in enhancing the inflow of foreign direct investment.
One such policy is the Free Zone concept. About 10 years ago, Ghana adopted the Free Zone Concept, which was meant to encourage competitive enterprises to establish themselves within zoned boundaries, mainly to produce for export.
Free Zones (also referred to as Export Processing Zones (EPZs) or Special Economic Zones) have been effectively used, and are currently being applied, in a variety of settings to introduce market oriented economic and institutional policy reforms in several countries such as Ireland, Taiwan, South Korea, Mauritius, Nigeria, Togo, Namibia, and the Republic of China.
In some of these countries, the application of the Free Zones/EPZ Policy option has led to the attraction of competitive enterprises to establish zoned boundaries mainly to produce for export. Ghana's case is not an exception.
To enable Ghana provide the necessary environment for the attraction of investments therefore, the Free Zone Act 1995 (Act 504) was enacted by Parliament to, among other things, facilitate the establishment of free zones in Ghana for the promotion of economic development and also to provide for the regulation of activities in free zones and for related purposes.
In 1996, the Ghana Free Zones Secretariat was established, paving the way for the Implementation of the Programme.
By the enactment of the Free Zone Act, the country opted to further enhance its economic liberalisation programme by offering elaborate fiscal, trade and investment incentives to encourage the production of goods and services primarily destined for export markets through the attraction and utilisation of Foreign Direct Investment and increasing the role of the local private sector.
This was to kick start Ghana's economy with the objective of creating employment opportunities; attracting foreign direct investment/capital and encouraging local processing of (and value-addition to) manufactured products and increasing foreign exchange earnings with the aim of arresting the decline in the value of the cedi.
The free zones concept was also meant to promote transfer of technology; enhance technical and managerial skills/expertise of Ghanaians; and, ensure diversification of exports.
These innovative sets of objectives are expected to be achieved through the enhancement of industrial production and service by giving prominence to the private sector.
The country's programme is designed to promote the processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and encouraging the development of commercial and service activities at sea and in the air.
In essence therefore, the whole of Ghana is accessible to potential investors who have the opportunity to use the free zones as focal points to produce goods and services for foreign markets.
The country's programme is also linked to the “Gateway” objective of developing sustainable growth in the private sector through major economic and social improvements in the physical infrastructure and also creating a shift in attitude and institutional arrangements.
It also seeks to promote the country as the trade and investment gateway to West Africa.
The programme is completely private sector driven, limiting the government's role to that of facilitating, regulating and monitoring activities of free zone developers/operators and enterprises in the country.
The mission of the Ghana Free Zones Board therefore, is to help transform the country and position it as the gateway to the West Africa sub-region by creating an attractive and conducive business environment through the provision of competitive free zone incentives and the operation of an efficient “one-stop-shop” for the promotion and enhancement of domestic and foreign investment.
The Ghana Free Zones Board was therefore mandated by the Free Zone Act to:
a. Grant licences to applicants under the Free Zone Act;
b. assist applicants for licences under the Free Zone Act by providing services for obtaining other relevant licences, permits and facilities;
c. examine and recommend for approval agreements and treaties relating to the development and activities of the free zones;
d. monitor the activities, performance and development of free zone developers and enterprises;
e. ensure compliance by free zone developers and enterprises of the Free Zone Act and any other laws relevant to free zone activities.
f. register and keep records and data on the programmes of developers, operators and enterprises in free zones;
g. perform such other functions as are incidental to the foregoing.
By this mandate, the GFZB is responsible for all activities relating to the implementation of the Free Zones Programme. However, the GFZB collaborates with all front-line and revenue agencies having any bearing on the operations of licensed Free Zone Enterprises.
Ten years down the line, the Free Zones Concept has provided some tremendous opportunities for the country. These achievements could be seen in the areas of employment creation, technology transfer, diversification of the country's exports and higher exports earnings to the country.
Picture: the CEO of
In a bid to attract Foreign Direct Investment (FDI), governments throughout the world have adopted several strategies and policy directions which have contributed in enhancing the inflow of foreign direct investment.
One such policy is the Free Zone concept. About 10 years ago, Ghana adopted the Free Zone Concept, which was meant to encourage competitive enterprises to establish themselves within zoned boundaries, mainly to produce for export.
Free Zones (also referred to as Export Processing Zones (EPZs) or Special Economic Zones) have been effectively used, and are currently being applied, in a variety of settings to introduce market oriented economic and institutional policy reforms in several countries such as Ireland, Taiwan, South Korea, Mauritius, Nigeria, Togo, Namibia, and the Republic of China.
In some of these countries, the application of the Free Zones/EPZ Policy option has led to the attraction of competitive enterprises to establish zoned boundaries mainly to produce for export. Ghana's case is not an exception.
To enable Ghana provide the necessary environment for the attraction of investments therefore, the Free Zone Act 1995 (Act 504) was enacted by Parliament to, among other things, facilitate the establishment of free zones in Ghana for the promotion of economic development and also to provide for the regulation of activities in free zones and for related purposes.
In 1996, the Ghana Free Zones Secretariat was established, paving the way for the Implementation of the Programme.
By the enactment of the Free Zone Act, the country opted to further enhance its economic liberalisation programme by offering elaborate fiscal, trade and investment incentives to encourage the production of goods and services primarily destined for export markets through the attraction and utilisation of Foreign Direct Investment and increasing the role of the local private sector.
This was to kick start Ghana's economy with the objective of creating employment opportunities; attracting foreign direct investment/capital and encouraging local processing of (and value-addition to) manufactured products and increasing foreign exchange earnings with the aim of arresting the decline in the value of the cedi.
The free zones concept was also meant to promote transfer of technology; enhance technical and managerial skills/expertise of Ghanaians; and, ensure diversification of exports.
These innovative sets of objectives are expected to be achieved through the enhancement of industrial production and service by giving prominence to the private sector.
The country's programme is designed to promote the processing and manufacturing of goods through the establishment of Export Processing Zones (EPZs), and encouraging the development of commercial and service activities at sea and in the air.
In essence therefore, the whole of Ghana is accessible to potential investors who have the opportunity to use the free zones as focal points to produce goods and services for foreign markets.
The country's programme is also linked to the “Gateway” objective of developing sustainable growth in the private sector through major economic and social improvements in the physical infrastructure and also creating a shift in attitude and institutional arrangements.
It also seeks to promote the country as the trade and investment gateway to West Africa.
The programme is completely private sector driven, limiting the government's role to that of facilitating, regulating and monitoring activities of free zone developers/operators and enterprises in the country.
The mission of the Ghana Free Zones Board therefore, is to help transform the country and position it as the gateway to the West Africa sub-region by creating an attractive and conducive business environment through the provision of competitive free zone incentives and the operation of an efficient “one-stop-shop” for the promotion and enhancement of domestic and foreign investment.
The Ghana Free Zones Board was therefore mandated by the Free Zone Act to:
a. Grant licences to applicants under the Free Zone Act;
b. assist applicants for licences under the Free Zone Act by providing services for obtaining other relevant licences, permits and facilities;
c. examine and recommend for approval agreements and treaties relating to the development and activities of the free zones;
d. monitor the activities, performance and development of free zone developers and enterprises;
e. ensure compliance by free zone developers and enterprises of the Free Zone Act and any other laws relevant to free zone activities.
f. register and keep records and data on the programmes of developers, operators and enterprises in free zones;
g. perform such other functions as are incidental to the foregoing.
By this mandate, the GFZB is responsible for all activities relating to the implementation of the Free Zones Programme. However, the GFZB collaborates with all front-line and revenue agencies having any bearing on the operations of licensed Free Zone Enterprises.
Ten years down the line, the Free Zones Concept has provided some tremendous opportunities for the country. These achievements could be seen in the areas of employment creation, technology transfer, diversification of the country's exports and higher exports earnings to the country.
Picture: the CEO of
Two experts to help in Kimberly process
TWO experts from South Africa are in the country to help the country to purge itself of the illegal trade in diamonds through the implementation of the Kimberly Process (KP).
The KP is an innovative instrument of international co-operation involving multi-lateral organisations, governments, non-government organisations (NGOs) and the diamond industry to take a plan of action to curb the illegal trade in conflict diamonds on the international market.
Late last year, Ghana was enlisted as a country which carried out possible illegal trade in diamonds as a result of the conflict in neighbouring Cote d’Ivoire. The country risked being banned from the international diamond trade as a result of the reports.
In an interview, Mr Paulus Geraedts, the acting Head of Delegation of the European Commission to Ghana, sponsors of the programme, said the European Union (EU) was committed to ensuring that Ghana expunged itself from the illegal diamond trade.
That, he said, was because of the high level of co-operation between the EU and Ghana this year, as a result of the Golden Jubilee celebrations of both Ghana and the EU.
Again, since the EU took the chairmanship of the KP in January this year, it was committed to ensuring that the country was probably certified after the review periods, which ended in March, he said,.
Mr Geraedts said the agenda of the EU chairmanship would be to promote “continuity through consolidation” by strengthening the KP.
That, he said, would be done by putting emphasis on pursuing and strengthening the implementation of the peer review system, research the traceability of diamonds, increase transparency and accuracy of statistics, promote inclusiveness and participation and improve information capacity in KP participants.
He said the EU would also seek to enhance the capacity to react to emerging crises with a view to ensuring that the KP would increasingly be a “process from conflict diamonds to property diamonds”.
He said during the KP Plenary meeting in Gaborone in Bowtswana in November last year, the plenary agreed on an action plan with Ghana, with a view to ensuring that it could fulfil its obligations under the KP and subject itself to a review mission after three months.
Mr Geraedts said “given the importance of the matter, the EC has agreed to assist the government of Ghana in complying with the Gaborone Action Plan for Ghana”.
The acting Head of Delegation said he was confident that the country would show its usual strong leadership and firm action commitment so that the review mission would prove the country’s full compliance with minimum KP requirements.
Two reviews on the country’s compliance with the Action Plan are expected to be held this month and February, while a final review is expected to be held in March which will either clear the country’s name in the illegal trade of diamonds or affirm its status as supporting the illegal trade.
The KP is an innovative instrument of international co-operation involving multi-lateral organisations, governments, non-government organisations (NGOs) and the diamond industry to take a plan of action to curb the illegal trade in conflict diamonds on the international market.
Late last year, Ghana was enlisted as a country which carried out possible illegal trade in diamonds as a result of the conflict in neighbouring Cote d’Ivoire. The country risked being banned from the international diamond trade as a result of the reports.
In an interview, Mr Paulus Geraedts, the acting Head of Delegation of the European Commission to Ghana, sponsors of the programme, said the European Union (EU) was committed to ensuring that Ghana expunged itself from the illegal diamond trade.
That, he said, was because of the high level of co-operation between the EU and Ghana this year, as a result of the Golden Jubilee celebrations of both Ghana and the EU.
Again, since the EU took the chairmanship of the KP in January this year, it was committed to ensuring that the country was probably certified after the review periods, which ended in March, he said,.
Mr Geraedts said the agenda of the EU chairmanship would be to promote “continuity through consolidation” by strengthening the KP.
That, he said, would be done by putting emphasis on pursuing and strengthening the implementation of the peer review system, research the traceability of diamonds, increase transparency and accuracy of statistics, promote inclusiveness and participation and improve information capacity in KP participants.
He said the EU would also seek to enhance the capacity to react to emerging crises with a view to ensuring that the KP would increasingly be a “process from conflict diamonds to property diamonds”.
He said during the KP Plenary meeting in Gaborone in Bowtswana in November last year, the plenary agreed on an action plan with Ghana, with a view to ensuring that it could fulfil its obligations under the KP and subject itself to a review mission after three months.
Mr Geraedts said “given the importance of the matter, the EC has agreed to assist the government of Ghana in complying with the Gaborone Action Plan for Ghana”.
The acting Head of Delegation said he was confident that the country would show its usual strong leadership and firm action commitment so that the review mission would prove the country’s full compliance with minimum KP requirements.
Two reviews on the country’s compliance with the Action Plan are expected to be held this month and February, while a final review is expected to be held in March which will either clear the country’s name in the illegal trade of diamonds or affirm its status as supporting the illegal trade.
Stand up to the challenges- GSE boss tells stock brokering firms
GSE (fin) Edited by LHA
Story: Boahene Asamoah
THE Managing Director of the Ghana Stock Exchange (GSE), Mr K.S. Yamoah, has urged brokers on the market to brace themselves up for the challenges that confront the capital market.
He said the implementation of the new rule book of the exchange, the expected passage of the Central Depository System (CDS) Bill by Parliament, the automation of the trading as well as the re-denomination of the cedi would pose serious challenges to the market.
In an interview shortly after the listing of Transaction Solutions on the market, Mr Yamoah said “ the challenge for us is to brace ourselves up for these challenges that lie ahead”.
Mr Yamoah said these policies would have a positive impact on the operations of the Ghana bourse, acknowledging that one of the major challenges would be an enhanced public education.
He said the GSE rule book had been reviewed and was expected to be implemented during the course of this year.
He further stated that the passage of the CDS Bill by Parliament would facilitate the easy trading and transfer of share ownership without the use of paper, adding that the purchase and trading of shares would be done through electronic transfer.
Mr Yamoah said the redomination of the cedi would also impact positively on stock market trading as a result of the knocking off of four zeros from the currency.
The managing director said the market was also expected to see some listings on the market to boost the capitalisation of the market as a result of the government’s policy to use the market to divest itself of State Owned Enterprises (SOE).
Companies such as State Insurance Company (SIC) and the Ghana Oil Company Limited (GOIL), Ghana Oil Palm Plantation, Western Telecom (WESTEL) and Ghana Telecom are expected to be divested through initial public offering.
Corporate bodies such as the Trust Bank Limited of The Gambia, British American Tobacco, Camelot as well as HFC are expected to issue right issues during the course of the year.
“These are all expected to make the market vibrant during the course of the year”, a stock market analyst said.
Mr Iddrisu Mahama, Head of EDC Stockbrokers Limited, said with the expected listing of these companies the market capitalisation was expected to increase by about five per cent.
Mr Mahama said although the market was not expected to be as bullish as experienced in 2003 and 2004, it was however, expected to do much better than the five per cent yield recorded last year and predicted a 30 per cent return on investments as a result of the positive outlook.
Story: Boahene Asamoah
THE Managing Director of the Ghana Stock Exchange (GSE), Mr K.S. Yamoah, has urged brokers on the market to brace themselves up for the challenges that confront the capital market.
He said the implementation of the new rule book of the exchange, the expected passage of the Central Depository System (CDS) Bill by Parliament, the automation of the trading as well as the re-denomination of the cedi would pose serious challenges to the market.
In an interview shortly after the listing of Transaction Solutions on the market, Mr Yamoah said “ the challenge for us is to brace ourselves up for these challenges that lie ahead”.
Mr Yamoah said these policies would have a positive impact on the operations of the Ghana bourse, acknowledging that one of the major challenges would be an enhanced public education.
He said the GSE rule book had been reviewed and was expected to be implemented during the course of this year.
He further stated that the passage of the CDS Bill by Parliament would facilitate the easy trading and transfer of share ownership without the use of paper, adding that the purchase and trading of shares would be done through electronic transfer.
Mr Yamoah said the redomination of the cedi would also impact positively on stock market trading as a result of the knocking off of four zeros from the currency.
The managing director said the market was also expected to see some listings on the market to boost the capitalisation of the market as a result of the government’s policy to use the market to divest itself of State Owned Enterprises (SOE).
Companies such as State Insurance Company (SIC) and the Ghana Oil Company Limited (GOIL), Ghana Oil Palm Plantation, Western Telecom (WESTEL) and Ghana Telecom are expected to be divested through initial public offering.
Corporate bodies such as the Trust Bank Limited of The Gambia, British American Tobacco, Camelot as well as HFC are expected to issue right issues during the course of the year.
“These are all expected to make the market vibrant during the course of the year”, a stock market analyst said.
Mr Iddrisu Mahama, Head of EDC Stockbrokers Limited, said with the expected listing of these companies the market capitalisation was expected to increase by about five per cent.
Mr Mahama said although the market was not expected to be as bullish as experienced in 2003 and 2004, it was however, expected to do much better than the five per cent yield recorded last year and predicted a 30 per cent return on investments as a result of the positive outlook.
Decentralise the Registrar General Department-GNCCI
Story: Boahene Asamoah
THE Ghana National Chamber of Commerce and Industry (GNCCI) has called for the decentralisation of the services of the Registrar General’s Department throughout the country in a bid to track companies and ensure that they honour their tax obligations.
The chamber said if that was done, it could be a central base for revenue agencies as well as help widen the tax net.
This was contained in a communiqué issued by the chamber at the end of a workshop for advocacy on tax reduction and widening of the tax net in the country.
The workshop, which was supported by the Business Sector Advocacy Challenge Fund (BUSAC), was aimed at lobbying government to further reduce corporate taxes in the country, while widening the tax net to rope in the informal sector of the economy.
The chamber expressed concern about the lack of decentralisation of the services of the Registrar General's Department.
The chamber also noted that the National Identification System could be adopted and used as an effective tracking system for business operations and tax payments.
The 12-point communiqué stressed the need to encourage voluntary compliance with tax obligations by improving customer care such as making payment systems easier through the use of electronic data to ensure that tax payers would not have to spend a lot of time at the Internal Revenue Office trying to pay their taxes.
The communiqué also called for system networking and integration, adding that “if this is done, the tax payer can pay his /her tax from any point such as the banks or utility agencies. With the tax identification number, money paid will automatically be updated at the internal severs of the revenue agencies,” the chamber said.
The GNCCI suggested to the authorities to create incentives for voluntary tax compliance for both the formal and informal sectors.
“In the formal sector tax compliance should be a condition for achieving Club 100 status, self-assessment status, automatic refund of excess payment of taxes, exemption from withholding tax and easy issuance of tax credit certificates,” the communiqué suggested.
In the informal sector, tax compliance should be a condition for access to loans, grants and aid for business support from the government, the communiqué suggested.
It added that the informal sector taxpayers who belonged to business or trade associations should be targeted for support schemes that would help them to grow their businesses to enable them to pay more taxes in future.
The communiqué urged officers of the Internal Revenue Service (IRS), the Value Added Tax Service (VAT), the Customs, Excise and Preventive Service (CEPS) and the Registrar General’s Department to develop and organise free seminars on relevant topics for members of identifiable groups such as hairdressers and beauticians, the Association of Traditional Caterers, the Ghana Private Road Transport Union (GPRTU) and others who operate in clusters such as exist in Odawna, Suame Magazine, Abossey Okai and Makola areas.
The communiqué said banks and other credit agencies could also use tax compliance as a measure of credit rating and good business practices for advancing loans to such informal sector operators.
It said the chamber was ready to collaborate with the revenue agencies to identify their members for the purposes of tax payment and compliance, but would not be collection agents for the tax authorities.
THE Ghana National Chamber of Commerce and Industry (GNCCI) has called for the decentralisation of the services of the Registrar General’s Department throughout the country in a bid to track companies and ensure that they honour their tax obligations.
The chamber said if that was done, it could be a central base for revenue agencies as well as help widen the tax net.
This was contained in a communiqué issued by the chamber at the end of a workshop for advocacy on tax reduction and widening of the tax net in the country.
The workshop, which was supported by the Business Sector Advocacy Challenge Fund (BUSAC), was aimed at lobbying government to further reduce corporate taxes in the country, while widening the tax net to rope in the informal sector of the economy.
The chamber expressed concern about the lack of decentralisation of the services of the Registrar General's Department.
The chamber also noted that the National Identification System could be adopted and used as an effective tracking system for business operations and tax payments.
The 12-point communiqué stressed the need to encourage voluntary compliance with tax obligations by improving customer care such as making payment systems easier through the use of electronic data to ensure that tax payers would not have to spend a lot of time at the Internal Revenue Office trying to pay their taxes.
The communiqué also called for system networking and integration, adding that “if this is done, the tax payer can pay his /her tax from any point such as the banks or utility agencies. With the tax identification number, money paid will automatically be updated at the internal severs of the revenue agencies,” the chamber said.
The GNCCI suggested to the authorities to create incentives for voluntary tax compliance for both the formal and informal sectors.
“In the formal sector tax compliance should be a condition for achieving Club 100 status, self-assessment status, automatic refund of excess payment of taxes, exemption from withholding tax and easy issuance of tax credit certificates,” the communiqué suggested.
In the informal sector, tax compliance should be a condition for access to loans, grants and aid for business support from the government, the communiqué suggested.
It added that the informal sector taxpayers who belonged to business or trade associations should be targeted for support schemes that would help them to grow their businesses to enable them to pay more taxes in future.
The communiqué urged officers of the Internal Revenue Service (IRS), the Value Added Tax Service (VAT), the Customs, Excise and Preventive Service (CEPS) and the Registrar General’s Department to develop and organise free seminars on relevant topics for members of identifiable groups such as hairdressers and beauticians, the Association of Traditional Caterers, the Ghana Private Road Transport Union (GPRTU) and others who operate in clusters such as exist in Odawna, Suame Magazine, Abossey Okai and Makola areas.
The communiqué said banks and other credit agencies could also use tax compliance as a measure of credit rating and good business practices for advancing loans to such informal sector operators.
It said the chamber was ready to collaborate with the revenue agencies to identify their members for the purposes of tax payment and compliance, but would not be collection agents for the tax authorities.
Transol lists on GSE
Story: Boahene Asamoah
TRANSACTION Solutions Limited (Transol), an information technology company, was formally listed on the Ghana Stock Exchange yesterday, incidentally the last trading session on the exchange for the year.
A total of 22, 662,442 shares valued at ¢1,000 per share was quoted.
Transol thus becomes the 32nd member on the Ghana bourse and also the fourth company to be listed on the market for the year, following on the heels of Aryton Drugs, Ecobank Ghana Limited and Ecobank Transnational Limited.
Transol offers transaction switching and processing systems, electronic funds transfer support services, electronic bill payment services, prepaid utility and telecommunications services, information technology consulting services as well as customer payment services.
The listing of the shares followed a successful initial public offer which was over-subscribed by over 12 per cent.
Speaking at the ceremony, the Managing Director of the Ghana Stock Exchange, Mr S.K. Yamoah, said the successful listing of the shares of Transol conformed to the GSE’s focus to attract more small and medium enterprises (SMEs) to the Ghanaian bourse.
He said “our focus is to attract SMEs to raise capital on the capital market”, adding that “we also welcome big companies to raise funds on the market”.
The Chairman of Transol, Mr Paul Tse Jacquaye, called on local brokerage firms to seek in-depth information from issuers of shares to enable them to advise their clients appropriately.
He commended the board, management and all who helped to ensure the successful listing of the company.
The Chairman of World-wide Investment Limited, one of the sponsoring brokers, Mr Rexford Adomako-Bonsu, said there was the need to encourage SMEs to take advantage of the capital market.
He urged the GSE to strengthen its promotional activities to attract more listings on the market.
The Managing Director of the State Insurance Company, Mr Peter Osei Duah, said the prospects of the information technology business was bright as the government had made it a policy to support that sector to drive growth and development in the country.
He said he was hopeful that transol would use the funds judiciously in order to expand its business and create shareholder value for its shareholders.
Transol operates the EZI shops which are points of sale centres for Areeba recharge vouchers and that of the other networks. The locations could also be used for Ecobank Visa Gift card and payment of Multichoice bills.
It was the first company to install stand alone Auto Teller Machines (ATMs) in the country using the Ecobank platform and has currently installed 16 ATMs at strategic locations.
The company is also in the process of installing 25 additional ATMs throughout the country.
The company has witnessed very significant improvement in its financials, registering rapid growth in its revenues since 2003.
It’s revenue went up by ¢8 billion in 2003 to ¢36.7 billion and ¢193 billion for 2004 and 2005 respectively.
Even though the company recorded a loss of ¢597.8 million in 2003, which was the first year of operations, it recovered in subsequent years, recording a net profit after tax of ¢556.8 million in 2004 and about ¢6 billion in 2005.
Fixed assets also improved from ¢1.1 billion in 2003 to ¢6.2 billion by the end of 2005, as against a total asset base of ¢2.5 billion in 2003 and ¢21.1 billion in 2005.
Shareholders funds also went up from about ¢2 billion in 2003 to ¢5.6 billion in 2005 due to improved profitability.
TRANSACTION Solutions Limited (Transol), an information technology company, was formally listed on the Ghana Stock Exchange yesterday, incidentally the last trading session on the exchange for the year.
A total of 22, 662,442 shares valued at ¢1,000 per share was quoted.
Transol thus becomes the 32nd member on the Ghana bourse and also the fourth company to be listed on the market for the year, following on the heels of Aryton Drugs, Ecobank Ghana Limited and Ecobank Transnational Limited.
Transol offers transaction switching and processing systems, electronic funds transfer support services, electronic bill payment services, prepaid utility and telecommunications services, information technology consulting services as well as customer payment services.
The listing of the shares followed a successful initial public offer which was over-subscribed by over 12 per cent.
Speaking at the ceremony, the Managing Director of the Ghana Stock Exchange, Mr S.K. Yamoah, said the successful listing of the shares of Transol conformed to the GSE’s focus to attract more small and medium enterprises (SMEs) to the Ghanaian bourse.
He said “our focus is to attract SMEs to raise capital on the capital market”, adding that “we also welcome big companies to raise funds on the market”.
The Chairman of Transol, Mr Paul Tse Jacquaye, called on local brokerage firms to seek in-depth information from issuers of shares to enable them to advise their clients appropriately.
He commended the board, management and all who helped to ensure the successful listing of the company.
The Chairman of World-wide Investment Limited, one of the sponsoring brokers, Mr Rexford Adomako-Bonsu, said there was the need to encourage SMEs to take advantage of the capital market.
He urged the GSE to strengthen its promotional activities to attract more listings on the market.
The Managing Director of the State Insurance Company, Mr Peter Osei Duah, said the prospects of the information technology business was bright as the government had made it a policy to support that sector to drive growth and development in the country.
He said he was hopeful that transol would use the funds judiciously in order to expand its business and create shareholder value for its shareholders.
Transol operates the EZI shops which are points of sale centres for Areeba recharge vouchers and that of the other networks. The locations could also be used for Ecobank Visa Gift card and payment of Multichoice bills.
It was the first company to install stand alone Auto Teller Machines (ATMs) in the country using the Ecobank platform and has currently installed 16 ATMs at strategic locations.
The company is also in the process of installing 25 additional ATMs throughout the country.
The company has witnessed very significant improvement in its financials, registering rapid growth in its revenues since 2003.
It’s revenue went up by ¢8 billion in 2003 to ¢36.7 billion and ¢193 billion for 2004 and 2005 respectively.
Even though the company recorded a loss of ¢597.8 million in 2003, which was the first year of operations, it recovered in subsequent years, recording a net profit after tax of ¢556.8 million in 2004 and about ¢6 billion in 2005.
Fixed assets also improved from ¢1.1 billion in 2003 to ¢6.2 billion by the end of 2005, as against a total asset base of ¢2.5 billion in 2003 and ¢21.1 billion in 2005.
Shareholders funds also went up from about ¢2 billion in 2003 to ¢5.6 billion in 2005 due to improved profitability.
Exports of MD2 pineapple rake in $20 m
Story: Boahene Asamoah
THE country has successfully completed her first commercial export of MD2 pineapple variety of 42,000 tonnes at the close of last year.
The exports of the new variety earned the country $20 million in foreign currency. That feat also helped the country to maintain her position as the third exporter of pineapples to the European markets.
Additionally, the MD2 variety currently accounts for about 85 per cent of all pineapple exports to the European market.
Ghana’s pineapple exports of smooth cayenne in 2003 took a severe hit as a result of the introduction of the MD2 variety by Costa Rica, which is the leading exporter of pineapples to the European market.
It plunged the industry so badly that exports of pineapples plummeted from 71,000 peak of 2004 tonnes to about 40,000 tonnes in 2005.
According to figures from the Ghana Export Promotion Council (GEPC), in the year 2000, Ghana exported a total of over 28,000 tonnes of pineapples valued at $11.85 million, and in 2001, the figure increased to over 35,000 tonnes at a $13 million value. In 2002, the country exported over 46,000 tonnes valued at $15.52 million.
A year later, the country exported 45,000 tonnes valued at about ¢14 million. This was the time Costa Rica introduced the MD2 variety, which forced the price per tonne downwards.
In 2004, export peaked at approximately 72,000 and was valued at $22,068,649, while in 2005, the volumes dropped to about 47,000 tonnes at a value of $12,784,322, making the country feel the full impact of the MD2 variety.
The MD2 variety, according to experts, are yellowish in colour, have longer shelf-life and was sweeter than the smooth cayenne.
Speaking in an interview, the General Manager of the Sea-Freight Pineapple Exporters of Ghana (SPEG), Mr Stephen Mintah, said with the successful implementation of the MD2 variety programme, it would help the country to regain its market share on the European market.
He said “ government’s intervention was timely”, adding that with the successful progress of the MD2 variety, the country expected a 15 per cent increase in pineapple exports for the year.
The government intervened in the pineapple sector with a $2 million facility after the country had suffered a decline in pineapple exports to the European markets.
Part of the government’s support was used to establish the Bioplantlet Ghana Limited for the multiplication of the MD2 variety, through the tissue culture technique as well as the nursery methods.
Bioplantlet was established as a joint venture between the Ministry of Agriculture, the Sea-Freight Pineapple Exporters of Ghana (SPEG), the Ghana Export Promotion Council (GEPC), the Biotechnology and Nuclear Agriculture Research Institute (BNARI) and the Ghana Atomic Energy Commission, with support from the United States Agency for International Development (USAID).
According to the Project Manager of the Biolplantlet Ghana Limited, Mr Harry Mensah Amoatey, the company was the first laboratory in the country to use the tissue culture technology for the duplication of the MD2 variety in 2003.
He said the process ensured a quick duplication of the MD2 suckers at a relatively shorter periods. Biolplantlet has successfully used the tissue culture technique to multiply the planting materials.
The centre currently produces two million plantlets, although it has the capacity to do more.
The project manager, in another interview, said production started in 2004, and the company had since been producing suckers for farmers and employed 51 people, 10 of whom were permanent staff and 41 casual labour.
He said another effective method was the gauging or the castration methods .
Mr Amoatey said one of the major challenges facing the company was the ability of the farmers to pay back planting materials sold on credit.
He said as at December last year, farmers owed the company $88,000, as result of non-payment of credit extended to them.
He said that was because an arrangement between farmers and the company was to ensure that the suckers were given out on credit to farmers to undertake their planting activities.
Costa Rica is the leading exporter of pineapple to the European markets with an annual export of about 300,000 tonnes followed by Cote de’Ivoire, with an export of 150,000 tonnes, while Ghana just reached the third position with 71,000 tonnes.
According to sources at the GEPC, indications were that with the introduction of the MD2 variety demand for Ghana’s pineapples had picked up.
There is a global pineapple market growth of about six per cent. While Cote d’Ivoire experienced a two per cent growth over the past five years as a result of the conflict situation in that country, Ghana had experienced a 45 per cent growth over the same period and reached the third position.
Costa Rica, around the same period, doubled her exports from 280,000 tonnes in 1996 to 360,000 tonnes by the end of 2001.
Mr Mintah said while Costa Rica had good infrastructure facilities which ensured good refrigeration from the farm gates to the destination, the country lacked such infrastructure.
That, coupled with lower cost of freight and haulage, made the country’s products uncompetitive on the international market.
He was, however, optimistic that the proposed building of storage facilities at the country’s main port would ensure that the country’s products were competitive
THE country has successfully completed her first commercial export of MD2 pineapple variety of 42,000 tonnes at the close of last year.
The exports of the new variety earned the country $20 million in foreign currency. That feat also helped the country to maintain her position as the third exporter of pineapples to the European markets.
Additionally, the MD2 variety currently accounts for about 85 per cent of all pineapple exports to the European market.
Ghana’s pineapple exports of smooth cayenne in 2003 took a severe hit as a result of the introduction of the MD2 variety by Costa Rica, which is the leading exporter of pineapples to the European market.
It plunged the industry so badly that exports of pineapples plummeted from 71,000 peak of 2004 tonnes to about 40,000 tonnes in 2005.
According to figures from the Ghana Export Promotion Council (GEPC), in the year 2000, Ghana exported a total of over 28,000 tonnes of pineapples valued at $11.85 million, and in 2001, the figure increased to over 35,000 tonnes at a $13 million value. In 2002, the country exported over 46,000 tonnes valued at $15.52 million.
A year later, the country exported 45,000 tonnes valued at about ¢14 million. This was the time Costa Rica introduced the MD2 variety, which forced the price per tonne downwards.
In 2004, export peaked at approximately 72,000 and was valued at $22,068,649, while in 2005, the volumes dropped to about 47,000 tonnes at a value of $12,784,322, making the country feel the full impact of the MD2 variety.
The MD2 variety, according to experts, are yellowish in colour, have longer shelf-life and was sweeter than the smooth cayenne.
Speaking in an interview, the General Manager of the Sea-Freight Pineapple Exporters of Ghana (SPEG), Mr Stephen Mintah, said with the successful implementation of the MD2 variety programme, it would help the country to regain its market share on the European market.
He said “ government’s intervention was timely”, adding that with the successful progress of the MD2 variety, the country expected a 15 per cent increase in pineapple exports for the year.
The government intervened in the pineapple sector with a $2 million facility after the country had suffered a decline in pineapple exports to the European markets.
Part of the government’s support was used to establish the Bioplantlet Ghana Limited for the multiplication of the MD2 variety, through the tissue culture technique as well as the nursery methods.
Bioplantlet was established as a joint venture between the Ministry of Agriculture, the Sea-Freight Pineapple Exporters of Ghana (SPEG), the Ghana Export Promotion Council (GEPC), the Biotechnology and Nuclear Agriculture Research Institute (BNARI) and the Ghana Atomic Energy Commission, with support from the United States Agency for International Development (USAID).
According to the Project Manager of the Biolplantlet Ghana Limited, Mr Harry Mensah Amoatey, the company was the first laboratory in the country to use the tissue culture technology for the duplication of the MD2 variety in 2003.
He said the process ensured a quick duplication of the MD2 suckers at a relatively shorter periods. Biolplantlet has successfully used the tissue culture technique to multiply the planting materials.
The centre currently produces two million plantlets, although it has the capacity to do more.
The project manager, in another interview, said production started in 2004, and the company had since been producing suckers for farmers and employed 51 people, 10 of whom were permanent staff and 41 casual labour.
He said another effective method was the gauging or the castration methods .
Mr Amoatey said one of the major challenges facing the company was the ability of the farmers to pay back planting materials sold on credit.
He said as at December last year, farmers owed the company $88,000, as result of non-payment of credit extended to them.
He said that was because an arrangement between farmers and the company was to ensure that the suckers were given out on credit to farmers to undertake their planting activities.
Costa Rica is the leading exporter of pineapple to the European markets with an annual export of about 300,000 tonnes followed by Cote de’Ivoire, with an export of 150,000 tonnes, while Ghana just reached the third position with 71,000 tonnes.
According to sources at the GEPC, indications were that with the introduction of the MD2 variety demand for Ghana’s pineapples had picked up.
There is a global pineapple market growth of about six per cent. While Cote d’Ivoire experienced a two per cent growth over the past five years as a result of the conflict situation in that country, Ghana had experienced a 45 per cent growth over the same period and reached the third position.
Costa Rica, around the same period, doubled her exports from 280,000 tonnes in 1996 to 360,000 tonnes by the end of 2001.
Mr Mintah said while Costa Rica had good infrastructure facilities which ensured good refrigeration from the farm gates to the destination, the country lacked such infrastructure.
That, coupled with lower cost of freight and haulage, made the country’s products uncompetitive on the international market.
He was, however, optimistic that the proposed building of storage facilities at the country’s main port would ensure that the country’s products were competitive
Let’s now focus on real sector
Let’s now focus on real sector
•Although lower inflation is desirable
Story: Boahene Asamoah
A Senior Research Fellow at the Institute of Economic Affairs, Dr John Asafu-Adjaye, has said that while achieving a single digit inflation was desirable, there was the need to also focus on other real sector variables such as employment and investment.
He said “although low inflation is desirable for an economy, an overly aggressive anti-inflationary stance has the potential to dampen aggregate demand, causing firms to reduce production, which could then stagnate economic growth”.
Delivering a paper on “Dynamic Analysis of Ghana’s Inflationary Process” at a round-table discussion organised by the Institute of Economic Affairs (IEA) in Accra on Thursday, Dr Asafu-Adjaye asked “what should be an optimal inflation target for Ghana”.
He said at a lower inflation target about three per cent it could be a costly opportunity as it could have adverse effects on the economic development as the output gap could be widened.
“The danger in a single-minded attempt to keep inflation low is that it could compromise economic growth,” he said, adding that other economic variables such as employment general and investments which could help in enhancing economic growth while reducing poverty.
Dr Asafu-Adjaye recounted the inflationary trend in the country since independence to 2004 and said over the past years, money supply had been a determinant in the money supply in the short term.
He said according to his module, in the long run however, money supply and currency depreciation and the out put gap had been the main drivers of inflation in the country.
He said since 1983, when the country experienced its highest inflation of about 123 per cent as a result of the draught the country faced and the return of Ghanaian migrants from neighbouring Nigeria to Ghana, inflation had been on the decline.
Dr Asafu-Adjaye said “inflation reduction to be successful, it has to go hand-in-hand with acceleration of structural reforms, in particular deregulation of the economy and institutional reforms.
Again, he said there was the urgent need to remove the lack of credit, which was one of the major barriers preventing both consumers and producers from reaping the benefits of low inflation.
“Why are market interest rates high (currently about 18- 20 per cent) when inflation is hovering around 10.5 per cent,” he questioned.
Dr Asafu-Adjaye said over the past five years, the country had seen some considerable stability in economic fundamentals which had moved the country from high inflation to disinflation and macro-economic stability.
On the re-denomination of the cedi, he said there was a possibility of the policy leading to higher prices and hence inflation.
He explained that for some commodities the possibility of rounding up prices to arrive at a even figure could lead to high prices and called for public education.
The research fellow said while the central bank’s inflation targeting had been largely successful, with a single digit inflation within reach, the Bank of Ghana “should consider targeting real sector variables such as employment and investment, which do not only enhance economic growth but also have the potential to reduce poverty.
•Although lower inflation is desirable
Story: Boahene Asamoah
A Senior Research Fellow at the Institute of Economic Affairs, Dr John Asafu-Adjaye, has said that while achieving a single digit inflation was desirable, there was the need to also focus on other real sector variables such as employment and investment.
He said “although low inflation is desirable for an economy, an overly aggressive anti-inflationary stance has the potential to dampen aggregate demand, causing firms to reduce production, which could then stagnate economic growth”.
Delivering a paper on “Dynamic Analysis of Ghana’s Inflationary Process” at a round-table discussion organised by the Institute of Economic Affairs (IEA) in Accra on Thursday, Dr Asafu-Adjaye asked “what should be an optimal inflation target for Ghana”.
He said at a lower inflation target about three per cent it could be a costly opportunity as it could have adverse effects on the economic development as the output gap could be widened.
“The danger in a single-minded attempt to keep inflation low is that it could compromise economic growth,” he said, adding that other economic variables such as employment general and investments which could help in enhancing economic growth while reducing poverty.
Dr Asafu-Adjaye recounted the inflationary trend in the country since independence to 2004 and said over the past years, money supply had been a determinant in the money supply in the short term.
He said according to his module, in the long run however, money supply and currency depreciation and the out put gap had been the main drivers of inflation in the country.
He said since 1983, when the country experienced its highest inflation of about 123 per cent as a result of the draught the country faced and the return of Ghanaian migrants from neighbouring Nigeria to Ghana, inflation had been on the decline.
Dr Asafu-Adjaye said “inflation reduction to be successful, it has to go hand-in-hand with acceleration of structural reforms, in particular deregulation of the economy and institutional reforms.
Again, he said there was the urgent need to remove the lack of credit, which was one of the major barriers preventing both consumers and producers from reaping the benefits of low inflation.
“Why are market interest rates high (currently about 18- 20 per cent) when inflation is hovering around 10.5 per cent,” he questioned.
Dr Asafu-Adjaye said over the past five years, the country had seen some considerable stability in economic fundamentals which had moved the country from high inflation to disinflation and macro-economic stability.
On the re-denomination of the cedi, he said there was a possibility of the policy leading to higher prices and hence inflation.
He explained that for some commodities the possibility of rounding up prices to arrive at a even figure could lead to high prices and called for public education.
The research fellow said while the central bank’s inflation targeting had been largely successful, with a single digit inflation within reach, the Bank of Ghana “should consider targeting real sector variables such as employment and investment, which do not only enhance economic growth but also have the potential to reduce poverty.
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