UT Bank introduces ‘Bank on Wheels’

THE 2011 Bank of the Year, UT Bank, has unveiled its new innovation, dubbed: ‘UT Bank on Wheels’, a mobile branch of the bank to provide full banking services to clients.

The service, which is the first of its kind in the banking industry in the country, is a mobile branch equipped with communications and technology systems to offer real time online banking services to the public.

Key features include an automated teller machine (ATM), two teller service points, a customer service area, state of the art telecommunications system, a television for viewing the bank’s messages and the ability to offer service from remote locations.

Unveiling the new product at the bank’s annual general meeting, the deputy Managing Director of UT Bank, Mrs Pearl Essua-Mensah said, the innovation was in line with UT’s vision of re-defining banking and bringing it to the doorstep of the people.

The UT Bank on Wheels would provide services such as cash payments and withdrawal, current accounts and savings accounts opening, international money transfers, foreign cash deposits and withdrawals, E-zwich, ATM and other retail banking services.

She said, “the essence of the implementation of the bank on wheels is to effectively and efficiently reach out to this segment of the bankable population by taking banking to their doorstep.”

Mrs Esua- Mensah indicated that the van would provide convenience, reduced turn-around time, accessibility and security for the markets, secondary and tertiary institutions.

“Customers do not have to leave their shops or businesses for a long period of time to conduct business in brick and mortar branches. The ‘Bank on Wheels’ enables them to conduct their transactions close to their business,” she said.

Meanwhile, the bank posted a profit before tax of GH¢26.7 million for the 2012 financial year as against GH¢17.3 million recorded in 2011.

It also grew its total assets by 38.5 per cent to GH¢987 million. Its non-performing loans reduced from 13.9 per cent in 2011 to 11.9 per cent in 2012.

The Chief Executive Officer of UT Bank, Mr Prince Kofi Amoabeng said, the bank’s income grew by 32.6 per cent from 2011 to GH¢105 million in 2012.

He said shareholder’s funds increased by 109.8 per cent from GH¢61 million to GH¢128 million in 2012.

The bank declared a dividend of GH¢ 0.02 per share.

Software to manage credit risk introduced

SOFGEN Group, an IT solutions company, has partnered Harland Financial Solutions to introduce a software that would help banks manage their credit risks effectively.

Dubbed ‘credit quest,’ it is expected to help credit risk managers develop initiatives that would enhance their credit quality and ensure regulatory compliance without sacrificing efficiency.

The group has subsequently met with top level executives of banks in Ghana at a forum organised by SOFGEN West Africa, the SOFGEN group’s local subsidiary, on the theme ‘Improving Bank’s Credit Quality- Challenges and Opportunities.’

The forum exposed the top executives on how banks could improve their credit risk management capabilities by implementing sound lending practices.

According to the Chief Executive Officer of SOFGEN, Mr Tunde Oladele, recent global banking crises have made it painfully clear that when credit decisions are made based on assumptions and/or incomplete information, the results could be catastrophic.

“Lenders, therefore, have the responsibility to adopt credit risk management initiatives that will guarantee a high level of credit quality,” he added.

The Chairman of SOFGEN West Africa, Mr Emma Asiedu Mantey, said the software would assist banks to make use of technology to improve asset and loan quality.

He explained that the high lending rates stemmed from inability of credit managers to recover loans granted to their creditors, as it is factored in before pegging interest rates.

According to him, most banks depended largely on lending to make profits, adding that the ability to recover loans would translate into a reduction in interest rates and non performing loans in banks.

The two companies have assisted several banks in establishing a risk-focused structure in the area of credit management.

IMF supports Ghana's economy

Economic growth in Ghana continued at a robust pace of eight per cent in 2012 amid rising fiscal and external imbalances, a mission from the International Monetary Fund (IMF) to Ghana has said.
The fund said in a statement after the mission had concluded discussions with gvernment officials that “the mission strongly supports the government’s ambitious transformation agenda centred on economic diversification, shared growth and job creation, and macroeconomic stability.
It urged the government to gain control over the rising public sector wage bill. It further recommended a thorough audit of the 2012 payroll and welcomed that the government had already started that process.
“The government’s deficit target of 6 per cent of GDP by 2015 will keep public debt high and buffers low.
The mission led by fund’s Chief of Mission to the country, Ms Christina Daseking, visited Accra from April 2 to 12, to conduct discussions for the 2013 Article IV consultations.
They met President John Mahama, Vice-President Paa Akwesi Amissah-Arthur, Finance Minister, Mr Seth Terkper, Bank of Ghana Governor, Dr Henry Kofi Wampah, members of parliament, and representatives of the private sector, think tanks, trade unions, and civil society.
Ghana has, meanwhile weaned itself of support from the fund following the end of its programme in the country.
It, however, does not mean that recommendations and findings of the fund on the country’s economy would not be considered by the government.
The Minister of Finance and Economic Planning, Mr Seth Terkper, said at a media briefing after the IMF concluded itsc consultative meeting with Ghanaian officials that although the country’s programme has ended, the Article IV Consultations would continue as it is done for every member state of the fund.
The IMF provided critical support for the economy to achieve stability for business planning and growth.
“It is not every country that has a program with the fund but currently as we speak our program has ended but the article 4 consultations is done so long as you are a member of the IMF,” he explained.
Under the Article IV consultations, discussions went on between led by Ms Daseking, and the government of Ghana as well as the Ministry of Finance, Bank of Ghana, representatives of the private sector, think tanks, trade unions and civil society.
The interaction was to brief the media on discussions that had gone on between the Ghanaian government and the IMF from April 2 to 12 as well talk about the health of the economy according to their findings
The fund’s Chief of Mission to Ghana explained that “we are here to do the Article IV consultation, although we do not have any program with Ghana any more, it does not mean our discussions are less interesting.
She said the mission had “very candid and open discussions” with various people to get a good picture of the economy.
Presenting their findings on the macro economy at the end of the mission, she said “economic growth continued at a robust pace of 8 per cent in 2012 amid rising fiscal and external imbalances.”
She was however quick to add that despite Ghana’s strong economic potential, short-term stability risks have risen adding “low external buffers and a rising domestic debt ratio expose the economy to risks, such as weaker terms of trade, reduced capital inflows, or unanticipated spending needs.”
Ms Daseking added energy sector problems could curtail growth, while excessive government borrowing is raising the cost of credit to the private sector adding “both factors have been identified as key growth constraints in Ghana.”
She also urged government to control the “ballooning” wage bill which if untamed, will bring debt levels that could endanger the government’s transformation agenda.
The IMF however projects a reduction in the fiscal deficit to 10 per cent of deficit of GDP this year, about 1 per cent higher than the budget projections, assuming a delayed adjustment in utility tariffs.

Rise in CPI not surprising - ISODEC

The upward review of the inflation rate for the economy comes as no surprise to policy analyst  of  the Integrated Social Development Centre (ISODEC), Mr Dennis Nchor who says it was expected.
Mr Nchor who is also the Head of Budget at ISODEC told the GRAPHIC BUSINESS that  it was expected considering the impact of the recent hikes in petroleum prices.
“It is largely due to the effect of the fuel price increment but it was expected,” he said.
He said this after the release of the inflation rate for March 2013 by the Ghana Statistical Service (GSS), the national statistical data computing body for the country.
Inflation for March 2013 went up by 0.4 percentage points from 10 per cent recorded in February 2013 to settle at 10.4 per cent, the highest rate of inflation since June 2010.
The monthly change rate however recorded a decline from 2.6 per cent in February to 1.7 per cent in March 2013.
Inflation rate which is measured by the Consumer Price Index (CPI) looks at the change over time in the general price level of goods and services that households acquire for the purpose of consumption.
The increase according to acting Government Statistician, Dr Philomena Nyarko was as a result of positive pressure from both the food and non food components of the rate.
The year-on-year non-food inflation rate was 13.2 per cent compared to12.6 per cent recorded in February 2013 while the year-on-year food inflation rate was 5.5 per cent, up from 5.3 per cent rate recorded for February 2013.
Mr Nchor however explains that the surprise was that the Greater Accra region recorded the highest year-on- year inflation rate in March adding “it is however explained by the influence of the transport sector.”
On the regional level, Greater Accra recorded the highest year-on-year inflation rate of 12.2 per cent, followed by Ashanti Region with 11.2 per cent while the Western Region recorded the least rate of 8.2 per cent.
Looking ahead, Mr Nchor explained that although achieving single digit inflation was still possible it requires some level of fiscal tightening.
“If the proposed removal of subsidies and increment in utilities tariffs are implemented then inflation will further increase,” he told the GRAPHIC BUSINESS.
Meanwhile, according to the 2012 revised Gross Domestic Product (GDP), the services Sector remained dominant contributing about 50 per cent to the total value of goods and services produced in the country, followed by industry with 27.3 per cent while the former largest contributor, the agricultural sector lagged behind with a 22.7 per cent contribution.
Again, the services sector recorded the highest growth of 10.2 per cent, followed by Industry with 7.0 per cent with agriculture recording the lowest growth of 1.3 per cent.
Data released by the GSS however indicate that the total value of goods and services produced in the country in 2012 stood at GH¢73.1 billion while the rate at which the economy grew also pegged at 7.9 per cent above the projected 7.1 per cent in September last year.GB

Stanbic Bank boss faults businesses - Over harsh credit regime

The Managing Director of Stanbic Bank Ghana is asking the private sector to look within for solutions to the low flow and high cost of credit to businesses. Maxwell Adombila Akalaare and Jessica Acheampong report

The Managing Director of Stanbic Bank Ghana, Mr Alhassan Andani, has identified financial indiscipline among private and public sector institutions, bad corporate leadership and wrong pricing of government securities as the bane of credit flow to businesses in the country.
Such practices, he said, lowered the confidence of financial institutions in the private sector and cause them to hold on to their credit or at best channel it into other investments rather than lending to businesses.
"From where I stand as a banker, it's the level of corporate governance and indiscipline in the private sector that is the problem and not the banks."
"Banks have no other place to play than to play with the private sector but we are sometimes cautions of the kind of leadership in the private sector in this country," Mr Andani said at a breakfast meeting with Chief Executives and captains of industry in the country.
The meeting, dubbed:  'Breakfast Meeting With CEOs,' was an initiative of the Ghana Chamber of Commerce and Industries' (GCCI).
The meeting  was under the theme 'Moving from a lower middle income to upper middle income; the role of the private sector'
The event  brought together captains of industries, the academia and government officials to deliberate on the concerns of businesses and suggest ways of minimising them.
The Stanbic Bank MD, the Chief Executive of the KAMA Group of Companies, Dr Michael Agyekum Addo; and the Dean of the University of Ghana Business School (UGBS), Prof. Kwame Ameyaw Domfeh; were the resource persons.
Speaking on the topic 'Financing the the private sector; the role of banks,' Mr Andani said although banks were more willing to lend  to businesses to grow, lack of optimism among the private sector "to grow beyond their little territories" hindered the level of financial intermediation.
"We (banks) often do not see the optimism and prospects in our companies.
"Globally, the private sector is regarded as the most discipline but can the same be said of Ghana? Financial discipline and corporate governance here is not up to standard and that makes us (the banks) cautious in our dealings," Mr Andani said.
His comments come in the midst of heightened complaints from the private sector that banks and non-banks are insensitive to the credit plight of businesses in the country.
The soaring interest rates, which currently averages at about 27 per cent, and less flow of credit to the private sector have dominated such discussions with some business concerns calling for a regulated interest rate regime.
Mr Agyekum-Addo said at the meeting that private sector growth was constantly impeded by the limited and high cost of credit from banks, noting that the few banks that lend to businesses do that under stringent measures.
"Their borrowing rates are high and if you are unable to repay, they come chasing you."
"Of late, they are even sell people's properties because that is what they used as collateral knowing that if you default, they will rely on something," the KAMA Group CEO said.
"It's about time we also went on strike to force the banks to lower their rates because it seems thats the only way that will make them listen," he said in a presentation titled 'Creating an enabling environment for the private sector to thrive.'
The Stanbic Bank boss, however, disagreed, citing the private sector's inability to conscientiously expend loans on areas for which they were taken and manage their internal finances properly as the causes.
Taking inspirations from the Akan song which translates into 'money is blood,'  Mr Andani said any improper handling of cash by a private or public institution would affect the operations of that institution but consequently "poison the entire system"
“For example, if you lend to people, and they default, you will see it at your level but we as bankers  would see it at the portfolio or group level. That affects quality and it deteriorates the ability to repay,” he said.
The non-performing loan (NPL) ratio, a per centage of total loans disbursed over defaulting ones, currently stands at about 13.5 per cent, down from about 20 per cent a year ago, data from the Bank of Ghana showed.
However impressive that may, Stanbic Bank's MD said more still needed to be done to bring the rate down if more credit is needed to fuel growth in the private sector.
He called for a wholistic approach to financial management in the country, noting that "if one part of the economy is affected by bad financial management and corporate indiscipline, the whole system suffers."
"Let's collectively look into financial management and stop pointing accusing figures," he said.
Mr Andani also lashed out on government for indirectly pushing interest rates up by pricing its Treasure Bills high while private sector reels under the pressures of insufficient funding.
Reacting to concerns by the participants on high interest rates, the Stanbic Bank MD said although government borrowing from the public is seen as less risky and can therefore be done at a low or moderate rate, the Ghanaian government had decided to do that at a higher rate, forcing commercial banks to follow.
"If you sitting here were the chairman of my company and the government is borrowing at 23 per cent yet the private sector wants me to lend to them at 15 per cent and I did that, what would as my chairman say to me? A bad manager of course," he said.
He thus called on government to take a second look at its borrowing rates, taking into consideration the various parameters that guide the setting of treasury bill rates.
On other sources of funding to businesses, Mr Andani advised that businesses float part of their stake on the Ghana Stock Exchange (GSE) to help open up their ownership and attract more capital.
"My recommendation is that let the GSE flourish. For those who have companies, let's put them on the exchange and attract more capital; capital that is sitting there not just with the banks alone but also with other individuals willing to invest," he added.GB

Enforce construction industry laws

THE Minister of Roads and Highways, Mr Amin Amidu Sulemana, has underscored the need for the construction industry to be formally regulated, explaining that lack of enforcement of regulations for the industry had led to shoddy work by players in the sector.
He said the lack of enforcement of building and construction regulations had resulted in low ethical standards.
He made the comments at the opening ceremony of a two-day workshop aimed at sanitising and regulating the construction industry.
The workshop was organised by the Chartered Institute of Building (CIOB) – Ghana, a group of professional builders in the country.
“People are now cutting corners at the expense of quality,” the minister said, and thus challenged the CIOB to help flush out the miscreants in the industry.
He further called on all stakeholders to join in the fight to ensure that the industry was properly sanitised and regulated.
The Minister of Water Resources, Works and Housing, Alhaji Collins Dauda said eventhough there were enough rules to sanitise the industry,  the lack of its enforcement posed a great challenge and thus called on all stakeholders to help in sustaining efforts aimed at ensuring that this challenge was fully resolved.
He stressed the need for another look at the issuance of permits to developers stressing that any difficulty would result in people devising other means of building, which accounted for various buildings springing up without permits.
The Center Chair of the Chartered Institute of Building, Ghana, Mr Rockson Dogbegah said the forum was imperative to check defects in newly built buildings as a matter of urgency to forestall any impending disaster.
“It is important to check defects in newly built schools and roads and it is important for surveyors, architects planers, engineers and government to deliberate on how to prevent such tragedies from occurring again,” he said.
He explained that lessons drawn from the collapse of buildings was a wake-up call to do something about buildings which were fast springing up, making reference to the collapse of the Melcom building in Accra last year.
 He thus stressed the need  to review protocols and make recommendations to help grow the industry which he said was at its infant stage adding “Ghana will not evolve organically, it has to be built.”
Mr Dogbegah also explained the need to “change the urban landscape of the country to a nation on the rise moving to a new future of prosperity and progress that regulated its construction industry with enforcement of laws to avoid dire consequences.”
He also said total disregard for compliance with regulations, undue delay in securing permits, changes in the use of structures for which licenses had been granted without proper permit and appropriate technical adjustments must all cease.

Economy worth GH¢73.1b in 2012

THE value of goods and services produced in the country, measured by gross domestic product (GDP), currently stands at  GH¢73.1 billion, data from the Ghana Statistical Service (GSS), has showed.
The per capita –  the average income of each citizen – also rose from GH¢1.87 million in 2011 to GH¢2.8 million in 2012, according to the data.
The data, which was released yesterday, also showed that the economy grew at 7.9 per cent in 2012.
The current data is a revised version of an earlier one released in September last year.
The provisional data at the time showed that the economy grew at 7.1 per cent in 2012, while annual GDP was estimated at  GH¢71.8 billion.
 “In nominal terms, the revised GDP estimate for 2012 is GH¢73.1billion, compared to the provisional estimates of GH¢71.8 billion for the same period released in September 2012,” the acting government Statistician, Dr Philomena Nyarko,  said at a news conference in Accra.
She said the revision to the provisional data was “based on 2012 full year data on most of the activities” in the economy.
She explained that the services sector recorded the highest growth of 10.2 per cent, followed by industry which grew by 7.0 per cent. The agriculture sector recorded the least growth rate of 1.3 per cent in the year.
The services sector maintained its dominance as the largest contributor to the country’s GDP, accounting for about 50 per cent of the total goods and services produced in 2012.
Industry became the second with 27.3 per cent followed by agriculture which contributed 22.7 per cent to the year’s GDP.
Dr Nyarko said GDP for the fourth quarter of 2012 also grew by six per cent with the services sector again recording the highest growth rate of 13.7 per cent, followed by the agricultural sector with 0.6 per cent.
Growth in industry, however, declined by 3.6 per cent, Dr Nyarko said.
Meanwhile,inflation for March went up by 0.4 percentage points to the current level of 10.4 per cent.
The March 2013 rate is the highest of its kind since June 2010.
Inflation, which measures the average change in prices of goods and services in the country over a time, was 10 per cent in February.
Comparing monthly inflation in February 2013 to March 2013, there was a decline of 2.6 per cent in February to 1.7 per cent last month.
According to Dr Nyarko, the rise in inflation in March was as a result of positive pressure on the food and non food basket.
She also mentioned the January hikes in fuel prices as another cause but said it would take a while before such impact finally subsides.
She said the year-on-year non-food inflation rate was 13.2 per cent compared to12.6 per cent recorded in February 2013.
On the regional level,the Greater Accra Region recorded the highest year-on-year inflation rate of 12.2 per cent,followed by Ashanti Region with 11.2 per cent, while the Western Region recorded the least rate of 8.2 per cent.

Mining industry wants windfall tax reviewed

The mining industry wants government to review the 10 per cent windfall profit tax it intends introducing after the recent changes in the industry’s fiscal regime. Jessica Acheampong reports

The 2013 Budget Statement and Economic Policy of the government reiterated its decision to introduce the Windfall Profit Tax of 10 per cent after due consultation with stakeholders.
This, however, is not going down well with the industry players who think the industry has undergone a rigorous fiscal regime change and as such is already bogged with several high tax measures.
According to Mr Sulemanu Koney of the Ghana Chamber of Mines, “the Industry is of the opinion that with the cumulative effect of recent changes in the mining industry’s fiscal regime, it will be defeatist for government to introduce a Windfall Profit Tax.”
He said already the LI 2191 Fees and Charges (Amendment) Instrument, reviewed the ground rent for Mining Concessions from GH₵0.5/Km2 to GH₵36.5/acre- equivalent to about GH₵9000/Km2, something which he said the Chamber has subsequently registered its displeasure because the rate was revised without consulting stakeholders in the industry.
He was speaking at a mining workshop organised by the Journalists for Business Advocacy (JBA), a group of business journalists drawn from various media outlets to deliberate on reporting effectively on the extractive industry in Ghana.
Mr Koney also explained that operators in the industry also pay mineral royalty, which was revised from a Range of three to six per cent to a flat rate of five per cent in 2011 part of which 2.25 per cent goes to the Stools also derived from the same land for which ground rent is paid.
The industry’s corporate tax was also increased from 25 per cent to 35 per cent in 2012 while  capital allowances was also varied from 80 per cent in the first year and 50 per cent on declining balance to a flat rate of 2 per cent over 5 years.
He also explained that there were inordinate delays in refunding surplus Value Added Tax (VAT) to operators in the industry which tend to lock up their working capital.
He was thus of the opinion that there was the need for the government to consult widely especially mining companies prior to changes in fiscal regime so as to avoid surprises and make sure changes are justifiable and implementable.
“Government should adopt a Life Cycle and Integrated Approach to mining taxation, consider more prudent utilisation of mining revenues to ensure sustainability and future generation issues,” he said.
 Speaking on the economic and social impacts of mining in Ghana, Mr Jerry Ahadzie, an officer with the Minerals Commission said it was imperative to improve local content in the industry.
“The drive for augmenting local content is not just an African or developing country phenomenon. In Ghana, efforts at improving local content  that is, Human Resource and Goods & Services included Government developing and expanding training institutions,” he said.
He said government and the industry have identified 28 products required by industry together with the supplier managers of the Chamber of Mines as well identified some local companies with capacity to provide some services to mining companies.
“Some major mines started patronising products and services and with IFC Support, initiative to build additional local enterprise capacity underway,” he said.
With respect to value addition, he said increase in gold refinery capacity/scale was being considered by some investors as well as governments policy to use the bauxite and iron ore resources to catalyse industrialization.
According to him, small-scale mining (SSM) is a significant sector that provides livelihood for millions of people around the world and therefore has the potential to provide substantial benefits to esp. in areas focused on reducing poverty and stimulating economic growth.
Mr Ahadzie therefore reiterated the need to develop an all inclusive framework to ensure mining catalyzes development through the corollary linkages rather than leakages which he said could be achieved through stakeholder commitment and participation.
“Therefore, stakeholder responsibilities must be clearly identified and mainstreamed in sector policies, programmes and activities for implementation,” he said.
He said for Small-scale mining, whilst there is no single solution to the challenges, deepening stakeholder engagement is key to developing strategies to address them.
“For example, Mining and Exploration Companies could offer to explore some of the blocked out areas for SSM as part of their CSR in mining communities,” he explained.
Mr Ahadzie also stressed that significant investment over the years and consequently mineral outputs led to an increased sector contribution to the economy of “27 per cent of government revenue as collected by the Ghana Revenue Authority in 2012.”
“Average 38 per cent of total merchandise export earnings over last 10 years while the industry also employed 28,000 for large scale and estimated over one million people for small scale mining,” he said.
General Secretary of JBA Mr Suleiman Mustapha called for a fair, balanced and objective reportage of the extractive industry especially mining. GB

Govt to open GIHOC to private sector

THE Minister of Trade and Industry, Mr Haruna Iddrisu, has hinted that government plans to open up GIHOC Distilleries Company Limited, a state-owned enterprise, to private sector partnership.

This, he says, is in line with the government’s vision to boost the production capacity of local companies and create employment through Public Private Partnership (PPP).

Mr Iddrisu made this known when he paid a visit to the company last Monday to acquaint himself with their operations.

He was accompanied by the Chief Director at the ministry, Nii Ansah-Adjaye, and was conducted round by the Managing Director of GIHOC, Ms Kay Kwao- Simmonds.

According to him, GIHOC, which is a major producer of alcoholic beverages in the country, was the only state-owned institution that was able to pay dividend to government and had also made humble gains in the past years.

Consequently, the company is to be listed on the Ghana Stock Exchange (GSE) as a way of raising more capital to match the expansion process.

He said he was impressed with the results the company was churning out, stressing government’s support to assist the company bridge its infrastructural gap with respect to curtailing flooding in the premises of the company.

Ms Kwao- Simmonds said the idea of PPP was a laudable one as it would help to increase their capacity.

She explained that the company was to start the production of non-alcoholic beverages, adding, “it is actually alcoholic and non-alcoholic beverages, so if you watch in the next three months you will be seeing non-alcoholic beverages.” 

Susu collectors to take deposits via mobile phones

PEOPLE who employ the services of susu collectors will soon be allowed to deposit their savings into their accounts through their mobile phones.

This follows moves by the Ghana Co-operative Susu Collectors Association (GCSCA), the umbrella body of registered susu collectors in the country, to introduce Information Technology (IT) into the operations of its members to make their work faster and easier.

The association thus intends to have a pilot programme with at least 50 members in Accra and Kumasi on the use of mobile phone application software for deposit mobilisation.

The General Secretary of the association, Mr Obed Asamany, said at their eighth annual general meeting (AGM), that “we envisage that this will reduce drastically, the use of manual data entry practice and as well remove the stress collectors go through submitting their prudential returns.”

He noted that the mobile phone data entry software application will also increase the speed with which collectors operate, thereby increase their daily collections.

“Full-scale implementation of this system after the pilot will also increase the confidence of depositors in the traditional susu system since SMS messages and printed receipts will be given to them upon withdrawals and deposits,” he said.

The Head of the Microfinance Unit of the Bank of Ghana (BoG), Dr Yaw Gyimah Larbi, said BoG had to   regulate activities in the industry to protect public funds and ensure sanity in the operations of the micro-finance sector.

He also said the central bank would continue to educate the public on the need to deal with licensed members and cautioned unlicensed operators to regularise their operations since they could be prosecuted when caught.

Presenting a report on the monitoring and supervision activities of the association, the Head, Monitoring and Supervision at GCSCA, Mr Edmund Benjamin-Addy, said they found out that many susu collectors were still engaged in activities which the BoG frowned on.

Such activities, he said, included giving of loans, hire purchases and all kinds of  savings, adding that some members were still not keeping proper records of their activities.

He, therefore, recommended that members should be made aware of the existence of the monitoring and supervision department and be informed that a greater part of their activities would be carried out without prior notice.

He also stressed that the department would organise refresher training programmes to help members in the areas of proper book keeping and BoG prudential monthly reporting very soon.

SMEs feeling the pains of power cuts

The impulsive power supply being experienced country-wide is weighing down operations of businesses within the small and medium size enterprises (SMEs). Jessica Acheampong writes

Small and medium enterprises (SMEs) operating in the country are feeling the full brunt of the erratic power supply as they have to incur extra cost to ensure constant source of power. 

This is because most of these SMEs want to remain in business, and has such resort to the use of generators to power their machines to efficiently and effectively run their businesses.

Power supply in the country in recent times has been described as very critical characterized by inadequate generation reserve margins, excessive transmission network constraints and poor voltage support during peak demands.

The phenomena which seems not to be ending anytime soon,  will increase the cost of the operations of SMEs thereby passing on any additional cost to the consumer  through high prices.

Information gathered by the GRAPHIC BUSINESS shows that businesses have slowed down especially with those in the processing industry as they have to work according to the unreliable schedule of the load shedding by the Electricity Company of Ghana.

The Managing Director of mSimps, Ms Mabel Simpson told the GRAPHIC BUSINESS that  lights go off almost every other day without schedule and it lasts for long periods.

According to her, she records a high cost of production with regards to buying fuel for a generator she has acquired to ensure a constant supply of electricity for her operations.

“It also slows down production when you have to use machines that do not use electricity as compared to electric machines that makes work easier,” she said.

Responding on how she is footing the extra cost incurred with the use of the alternative power supply, she said “it is difficult to pass the cost onto consumers because as a business person who wants to retain clients, you cannot keep changing prices all the time.”

“The recent increase in fuel has made sales go down so you cannot also increase your prices, so as a producer you need to bear that cost,” she said.

She was however of the opinion that there was no justification for the Volta River Authority (VRA) to increase tariffs in the face of the current crises adding “it will collapse manufacturing companies because tariffs have been increased in the country before and nothing happened.”

Another local cereal processing company, Renny Foods being managed by Ms Irene Ofori Ghartey, also shared her frustrations with the GRAPHIC BUSINESS.

“It has really being affecting us. We have to postpone production because there is no light. If there is shortage of goods we have to mill, and because there is no light we cannot,” she said.

According to her, in spite of the load shedding schedule given by the Electricity Company of Ghana (ECG), lights go off unexpectedly.

“Apart from the load shedding, it sometimes goes off when you are not expecting it. We can have lights for 24 hours then it will go off for 12 hours,” she said.

She however explained that they do not work at night so even when the lights come on in the evening, it doesn’t mean anything for her business.

“Sometimes when the light comes on at night, workers will say they are not willing to work in the night,” she explained.

Ms Ghartey also said unlike the past where they were assured of constant supply of electricity during the day, the trend has changed. This therefore implies, less production adding, “sometimes it takes a whole week before we are able to mill one bag.”

She also hinted of price increments resulting from increase in process of raw materials as well as packaging materials.”

“Already since January, sales has gone down a bit and we are going to increase prices further increase will mean sales will go down further. That means if we are supposed to do production twice a month we will do it just once and that is going to affect us more,” she stressed. GB