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ADI gets tough on BoG over lack of credit support to private sector

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ADI gets tough on BoG over lack of credit support to private sector

The Alliance for Development and Industrialization, (ADI), one of the leading think tank groups in the country, has taken a swipe at the bank of Ghana, demanding from the governor to show clearly how he is going to mandate the banks to support the private sector, and not to create a safe haven for the banks.

The bank of Ghana spent close to GHC18 billion of tax payers’ money to clean up and also providing liquidity support for some banks.

According to the ADI, after this GHC18 billion clean up exercise by the bank of Ghana, to what extend has this impacted on the economy. “The banks are not ready to support the private sector, so why should the government uses tax payers money to support the banking industry, especially banks that were technically insolvent, due to bad corporate governance and mismanagement” the statement said.

“We want the governor of Bank of Ghana, Dr Ernest Addison to unveil to us what percent of banks’ capital should go to support the private sector. In Nigeria for instance, the Central Bank of Nigeria has come out with a caveat that 50 percent of banks capital should be lend to the private sector. We want the same policy to be replicated here”, according to Francis Mensah, the Convener of ADI.

The decision by the Central Bank of Nigerian was at the back off how banks repatriate huge profits from the country to their parent companies without the much need support to the private sector.

“You cannot keep taxing the private sector while you are not committed to their agenda. You don’t set rules, for the rules to favor one party. We must replicate what the central of Nigeria is doing to grow our private sector” the statement said.

This would feed into the continental free trade agenda, since most of the companies would become more competitive on the global market.

The banking sector profitability growth soars for the first months of 2019 but has decided to tighten their credit stance to the private sector.

The latest banking report from the statutory regulator, the Bank of Ghana has revealed that profitability of the banking industry improved during the first four months of 2019 compared with the same period last year.

The industry recorded an after-tax profit of GH¢1.1 billion, representing a year-on-year growth of 38.9 percent compared with 5.8 percent growth for the same period last year. The higher growth in net profit was underpinned by higher growth of net interest income during the review period.

Surprising to note, growth in gross loans and advances slowed from 6.8 percent in April 2018 to 6.1 percent in April 2019. In nominal terms, growth in the stock of credit to the private sector comprising private enterprises and households slowed by 3.5 percent to GH¢34.0 billion in April 2019 compared to 5.5 percent annual growth in April 2018.

In real terms, private sector credit contracted by 5.4 percent in April 2019 compared with a contraction of 3.7 percent a year ago. Credit to households amounted to GH¢8.4 billion in April 2019 compared with GH¢7.2 billion in the same period last year, indicating a yearly growth of 16.4 percent. Real growth in credit to households, accordingly slowed to 6.3 percent in April 2019, compared with 28.6 percent in April 2018.

Banks profitability growth has continued to increase, which means banks are making more money in the country but have decided to squeeze the private sector in terms of credit.

Source: Ruth Aboagye

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Africa’s three richest men have more wealth than the poorest 650m people across the continent

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Africa’s three richest men have more wealth than the poorest 650m people across the continent

Three African billionaires today have more wealth than the poorest 50% – or 650 million people across the continent, reveals a new Oxfam report today.

The report, called “A Tale of Two Continents”, is launched as African political and business leaders gather this week for the World Economic Forum Africa meeting in Cape Town, South Africa. It shows how rising and extreme inequality across Africa is undermining efforts to fight poverty.

A Tale of Two Continents reveals that while the richest Africans fortunes are increasing, extreme poverty is rising in the continent. The report also looks at how unsustainable levels of debt and a rigged international tax system are depriving African governments of billions of dollars in lost revenue each year – money that could otherwise be invested in education, healthcare and social protection.

The continent is rapidly becoming the epicentre of global extreme poverty. While the number of people living on less than $1.90 a day has plummeted in Asia, this number is rising in Africa. The World Bank estimates that 87% of the world’s extreme poor will be in Africa by 2030, if current trends continue.

Winnie Byanyima, Executive Director of Oxfam International, said:

“Africa is ready to rise – but only once it’s leaders have the courage to back a more human economy that works for the many and not a few super-rich men. They can achieve this by investing in inequality-busting, universal and quality public services like health and education and by developing truly progressive tax systems. These are particularly powerful for women and girls living in poverty. They can also back a transformation towards decent and dignified work that protects the rights of workers, especially in the age of the African Free Trade Area and the new digital era.”

The report features a first-ever ranking of African nations on their commitment to tackling inequality. The Commitment to Reducing Inequality Index, developed by Oxfam and Development Finance International, ranks countries on their policies on social spending, tax, and labour rights – three areas the organizations say are critical to reducing inequality. South Africa and Namibia take first and second place respectively, with their strong social spending and a progressive tax system. Nigeria meanwhile has an unenviable distinction of being at the bottom of the Africa ranking, as well as the global ranking for two years running.

The report shows that:

3 African billionaires now have more wealth than the poorest 50% – or 650 million people across the continent

The most unequal country in the region, Swaziland, is home to one billionaire, Nathan Kirsh, who is estimated to have $4.9bn. If he worked in one of the restaurants that his wholesale company supplies on a worker’s minimum wage, it would take him 5.7 million years to earn his current level of wealth

The combined wealth of the 5 richest Nigerians is more than enough to end poverty in Nigeria. Nigeria’s girl population makes up 60% of the more than 10 million children who do not go to school.

75% of the wealth of African multi-millionaires and billionaires is held offshore, as result the continent is losing $14billion annually in uncollected tax revenue.

Dangerous and unsustainable levels of debt are hurting social spending. In 2018, Angola spent 57% of government revenue on debt repayments while public spending was cut by 19% between 2016 and 2018. Similar trends are present in Ghana, Egypt, Cameroon and Mozambique

African women and girls are also most likely to be poor. They also stand to lose the most when public services like healthcare and education are underfunded. In Kenya, a boy from a rich family has a one-in-three chance of continuing his studies beyond secondary school. However, a girl from a poor family has a 1-in-250 chance of doing so. Women and girls also bear the brunt of failing healthcare systems, clocking in hours of unpaid care work looking after sick relatives. In Malawi, women spend seven times the amount of time on unpaid care work than men.

Ms Byanyima said:

“African political and business leaders face a clear choice. They can stay on the path of increasingly extreme inequality, where poverty continues to rise while wealth in the hands of a tiny elite and foreign companies’ spirals. Or they can choose another way: towards a more prosperous and equal Africa that invests in and respects the dignity of all its people.”

Source: Oxfam International

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Breaking!!! Transport fares to go up by 10%

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Breaking!!! Transport fares to go up by 10%

The Ghana Private Road Transport Union (GPRTU) says effective September 16, public transport fares will go up by 10 per cent.

Explaining the basis for the increment, the Union said the various components that go into the running of commercial transport services has gone up.

“This is to accommodate predominantly an increase in fuel prices,” Kwame Kuma, the National Chairman of GPRTU said in a statement, Tuesday.

For some time now, the Union has called for an increment in their fares as prices of spare parts have gone up.

The increased fares will cover intra-city (trotro), intercity (long-distance ride) and shared taxis.

Mr Kuma advised all members of the Union to comply with the “new fares and post the fare list at the loading terminals so as to avoid any confrontation with the travelling public.”

The last time fares were increased was in January 2018.

Source: Myjoyonline.com

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Tema Aflao road to be expanded into six lanes – Expert

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Tema Aflao road to be expanded into six lanes - Expert

The Tema-Aflao road which forms part of the Abidjan Lagos corridor will be expanded from the current two (2) lanes to six (6) lanes, an environmental and climate climate change consultant, has revealed.

“This means that the width of the road will take 100 meters with 50 meters on each side. The Lower Volta Bridge at Sogakorpe in the Volta Region will be expanded as well, “Mr Divine Odame Appiah told stakeholders at a consultation forum on the proposed construction.

The Ada West District falls into the ECOWAS’s Abidjan to Lagos Highway expansion alignment hence the engagement to discuss how its enhance the positive effects and mitigate the negatives on the people.

He said, “The Abidjan – Lagos Corridor Road is a highway divided into three(3) Lots. Lot 1 is from Abidjan in Ivory Coast to Apemenim in the Western Region of Ghana. Lot 2 starts from Apemenim to Akanu in the Volta Region of Ghana and Lot 3 falls from Akanu to Lagos in Nigeria. PEARL Consultancy has been awarded Lot 2.

We are therefore here to gather information to do what we call scoping reports to the Environmental Protection Agency (EPA), ” He explained

According to him, “There are five Regions, Western, Central, Greater Accra, Eastern and Volta regions with 14 districts in all which have been captured within the alignment of the exercise. Sege, Koluedor, Adokorpe, Kasseh and communities along the road will be affected in the Ada West and East districts.”

Compensation

He said, “Because of this, ECOWAS will compensate owners of various properties that may be affected either in cash or in kind if only one can claim ownership of the said property with evidence of documentation, approved by the district assembly.

This action is in line with World Bank and African Developments Bank’s regulations and Ghanaian laws which reinforce the fact that property that will be destroyed should be replaced or, compensation must be awarded to the owner.”

Impacts

Both positive and negative impacts were realised during the open forum.

The stakeholders identified some positive impacts as, movement within and outside the district to other places like Tema, Accra, Abidjan, Togo and even Nigeria will be very easy and time saving.

They said, this move will attract businesses to the district and will also boost trading activities, economic activities will improve and will reduce the rate of accidents as drivers will be comfortable when driving,

Others expressed fears that prices of plots of land and rents would rise.

They said the development would bring about kidnapping, child abuse and other malpractices by foreigners in communities along the road.

Inputs

The stakeholders suggested that education on the exercise must reach every corner of the affected districts to create proper awareness to the indigenes to prevent distractions during the exercise.

Also, write ups on the exercise should be pasted at the various district assembly’s premises, church premises and even the community radio and information centres for clear understanding of everything.

They also wanted the assembly to make property registration flexible so that everyone could have access to documents backing the ownership of their properties.

Meanwhile, PEARL Consultancy is expected to finish their work in mid 2021.

Source: ghananewsagency.org

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