Rising household power consumption in Ghana is thwarting attempts to increase electricity supply to spur industrialisation, the Volta River Authority (VRA) has said. The country’s electricity demand and consumption is rising at between 8-10 percent annually. Demand and consumption hit 1,664 megawatts in 2011 and grew to 1,800 megawatts in 2012. However, the bulk of this demand, according to the VRA, is for domestic or household consumption. The Authority estimates that household electricity consumption currently accounts for 62 percent of total power consumed, while commercial consumption -- which describes power consumed by small or micro businesses -- accounts for 18 percent. Industrial or large-scale consumption accounts for 20 percent of the total. “A large percentage of the power generated in this country is consumed domestically, leaving very little for commercial and industrial use. If we want to develop our industries and create employment, the opposite must be the case,” Ekow Acquah, Manager, Sales Contracts and Regulations of the VRA, said in an interview with the B&FT. “In advanced countries, domestic consumption is very little, leaving enough power for commercial activities and industrial use. In Ghana, we build glass and concrete houses and fit in large air-conditioners and lights that work even during the day.” Mr. Acquah said “We must work at reversing the current trend in order to develop the industrial sector.” VRA estimates that for a country growing rapidly at a rate of about 10 percent per year and using under 2,000 megawatts of electricity, Ghana ought to be bringing on-stream 200 megawatts of new capacity every year. This additional capacity will require US$200million of investment; however, Government is not able to keep up with that kind of investment. Government at present is pinning its hopes on gas fuel -- expected from the pipeline project being undertaken by the Ghana Gas Company -- to secure sufficient, cost-effective supply of electricity in the medium-term. Industries have urged Government to attract the private sector into the production and distribution of electricity by laying down clear-cut and transparent contractual arrangements, and revamping the entire value-chain of production. By Dominick ANDOH  

Stanbic Bank Ghana says it expects to grow its loan book by between 35-40 percent this year, targetting sectors such as manufacturing, agriculture, financial services and infrastructure. “Our loan book this year is expected to grow by between 35 to 40 percent, and from the way things are going I am sure we can meet those numbers,” Managing Director Alhassan Andani said in an interview. “Since the bank is a universal one, we are targetting every aspect of the economy; including manufacturing, agriculture, financial services and infrastructure.” Last year, the bank’s loans and advances to customers increased by 31 percent to GH¢659.87million, while customer deposits doubled from the previous year to GH¢1.28billion. Credit impairment charges fell by 8 percent to GH¢12.23million.The bank posted a profit after tax of GH¢56.9million in 2012, an increase of 97 percent from 2011. Mr. Andani said Stanbic experienced a significant improvement in the quality of its loan portfolio, the result of a deliberate strategy to focus on priority segments and key client sets. He said oil and gas as well as infrastructure present tremendous opportunities for banks, which must find the necessary capital and skills to invest in these areas. “The wide infrastructure financing gap presents an array of opportunities for banks. Ghana is a growing economy and the economy cannot grow and prosper without the support of infrastructure. So where there is the need and there is incremental value to be created, then there are opportunities for banks.” On the high interest rates on bank lending, Andani said banks are “price-takers” and do not have control over all the factors that determine the cost of credit -- which the Bank of Ghana (BoG) said averaged 27.1 percent per annum in April. “Even though banks rent out money and our rent is called interest rates, we are not the ones that naturally create it. We have an element in it -- which is all of our operating costs, risk measures and profit margins -- but that is just a part of it. There is a core of it, which is what we take from the market and build into our own business because we are modelled to lend.” By Bernard Yaw ASHIADEY  

  The Ghana Stock Exchange (GSE) says it has deferred launch of the Alternative Exchange as it is still in talks with small- and medium-scale enterprises to convince them to list on the new market. In an interview with the B&FT, GSE General Manager Elizabeth Mate-Kole said the Ghana Alternative Exchange (GAX) will only be launched when it receives listings. “We cannot launch the market when we don’t have any listings. We want to launch the market with one or two listings,” she said. Mrs. Mate-Kole was speaking on the sidelines of an Association of Chartered Certified Accountants (ACCA)-GSE Conference in Accra on Thursday. The GAX is a new market with weaker listing rules targetting SMEs with high growth potential and desirous of raising equity capital. The launch of the market was initially mulled in 2012, but its launch was rescheduled to allow some outstanding issues, such as creation of a governance committee, to be resolved. Last month, GSE Deputy Managing Director Ekow Afedzie told B&FT the bourse had finally resolved all outstanding issues which prevented GAX’s full enrolment in 2012. “What delayed the launch of GAX was the absence of a governing committee; now the team has been formed. After their first meeting, we will go all out to start promoting GAX,” Mr. Afedzie said. The GAX will accommodate companies at various stages of development, including start-ups and existing enterprises -- both small and medium. Access to affordable capital is one of the most critical challenges of the SME sector, and bank credit often tends to be expensive -- if available at all. Companies considering listing on the GAX must have minimum capital of GH¢250,000 (US$146,600), lower than the GH¢1million required for the main market. They must also have a minimum of 20 shareholders, compared with 100 for the main bourse. Companies listed on the GAX will also be able to access the SME Listing Support Fund -- which will be used to assist companies meet their listing expenses. The fund has been set up with an initial GH¢1million contribution from the African Development Bank, the GSE and the Venture Capital Trust Fund. By Richard Annerquaye ABBEY