Commuters in Accra have received new transport fares announced by the Ghana Private Road Transport Union (GPRTU) on Monday with mixed feelings. The Ministry of Transport approved a 20 percent increase in transport fares after negotiations with the GPRTU and other transport unions over the impact of recent increases in petroleum prices. The increase, the Ministry said, is the result of persistent rises in fuel price and the increasing cost of vehicle spare-parts on the market. Alfred Bekoe, an electrical engineer who commutes between 37 and Tema every day, said there is nothing he can do about the increase even though it will affect his budget. He said since last year there have been several increases in fuel prices, adding that this brings hardship because it is not always the case that employers increase salaries when there is a jump in fares. “I think 20 percent is too much; government must do something about it in terms of payment of allowances to workers, and also increase salaries so that we can get some relief,” he said. By Benson AFFUL & Konrad Kodjo DJAISI

Domestic airline operators are planning to petition the Ministry of Finance and Economic Planning over expansion of the Value Added Tax’s scope to include domestic air travellers. Operators of domestic airlines, who say they are at pains to appreciate why VAT has been extended to local but not international air travel, have asked to meet the Ministry of Transport to discuss the tax impact on the industry. The result of the tax will be higher ticket prices, which could put a brake on the recent surge in domestic air travel, they say. “We have requested a meeting with the Minister of Transport. We will also be meeting with the Ghana Civil Aviation Authority (GCAA) and will send a petition to the Ministry of Finance,” Kwaku Antwi-Boasiako, Chief Commercial Officer of Antrak, told the B&FT.   Domestic airlines currently charge a tax of GH¢20 on ticket prices, comprising a GH¢5 airport tax and GH¢15 fuel surcharge. By Dominick Andoh

The Ghana Gas Company (GGC) and its Chinese contractors, Sinopec, have come under enormous pressure to complete the gas pipeline and processing plant, as volumes of supply from Nigeria have completely gone down, threatening electricity generation. “We are at the crossroads,” the Energy Minister, Emmanuel Armah-Kofi Buah, declared at the project site at Atuabo, in the presence of all who matter in the energy sector. Tullow Oil, operator of the Jubilee oil field, is equally concerned because the gas that is being re-injected into oil wells, awaiting the completion of the pipeline and plant, is standing in the way of attempts to crank up oil output to its peak of 120,000 barrels per day. Sinopec has given indication that barring any hitches, it should deliver first gas by April ending. Mechanical completion of the plant, Sinopec said, is about 93 percent, and they are only “slightly behind schedule.” In the meantime, flaring the gas appears the most likely option, but it is also the most dreaded solution as the government appears keen on upholding its “zero flaring” policy. The Energy Minister insisted that other options to deal with the situation are being explored, including the possibility of cutting oil production. After touring the gas processing plant to familiarise themselves with the progress of work, the parties are going to meet to take a “final decision” on which option to pursue, the Minister said. “We are all going to work closely with Ghana Gas to make sure that we can get this gas to flow. It is very critical; it is very urgent,” he told the press, adding: “It is very clear that while we are going to engage to deal with the issue of gas from Nigeria, our critical focus must be on the gas project.” George Sipa Yankey, Chief Executive Officer of GGC, said the funding challenges regarding the US$850million project have been resolved, and that until the mechanical completion phase is over, no payment is due the contractor. “66 days to mechanical completion” was the message on notice to workers in all the offices of Sinopec on Friday when the Jubilee partners and power sector chiefs visited. Charles Darko of Tullow Oil and Ken Keag of Kosmos Energy said it was gratifying that “a lot of progress” had been made on the project, pledging their commitment to work with the schedules that have been established. Yet even when Jubilee gas starts flowing through the pipeline, Ghana’s gas needs will not be fully met, according to the Volta River Authority (VRA), which says the country will need between 230 and 850 million standard cubic feet per day in the next decade. The Ministry of Energy has therefore being considering, for the long term, importation of Liquefied Natural Gas (LNG) to augment the country’s gas needs. LNG is natural gas that has been converted to liquid form, usually for ease of storage or transportation.   But bringing in LNG will first require the setting-up of a regasification facility. Government says it will not directly import, build or own the LNG infrastructure, but rather provide a clear fiscal and regulatory regime for private sector investment as well as engage friendly LNG-exporting governments to establish supply agreements with off-takers in Ghana. By Basiru ADAM

The National Insurance Commission (NIC) has set April 1, 2014 to begin implementation of the “No premium, no cover” policy, which will require insurance firms to collect premiums upfront before providing insurance cover. This follows a meeting convened at the instance of the NIC on Thursday in Accra with heads of insurances companies and brokerage firms who are members of the Ghana Insurers Association and Ghana Insurance Brokers Association. The agreement at the meeting is for the NIC to issue a public announcement on the new policy as part of the awareness creation exercise on a policy, which is largely seen as a game-changer for the industry as insurance companies will no longer be required to sell insurance products on credit to customers. The NIC is worried some insurance companies have resorted to unconventional practices by reporting huge amounts of outstanding premiums while at the same time making equally large amounts of provision for bad debts without significant subsequent recoveries -- thereby putting the entire industry at risk. Figures from the operations of insurance companies last year are not available. However, available data indicate that insurance companies were owed a little over GH¢130million in premium debts at the end of December 2012; a situation that makes it difficult for insurers to honour claims when they fall due. The debt, which is 0.35% less than was recorded in 2011, was incurred as a result of people who took various insurance covers without paying the required premium. At the same time, claims paid by insurance companies increased by 35.8% from the previous year to GH¢99.8million at the end of 2012. The NIC says it is concerned the outstanding premium profile could hurt the industry, necessitating the formulation of the “No premium, no cover” policy to protect the interest of all stakeholders in the insurance industry as the present practice exposes the industry to liquidity risks. “The huge outstanding premiums have had a significant knock-on effect on reinsurers. Firstly, insurance companies are unable to pay their reinsurance premiums while the premiums remain unpaid by the policyholders. Subsequently, the reinsurers are unable to pay their retrocessionaires. This creates serious credit risk exposures for both the insurers and reinsurers. “Secondly, when the premium debts are eventually declared bad or doubtful and have been written off, it creates complications for reinsurers as they would have already placed the business with their retrocessionaires,” the commission said. Some insurance practitioners have told the B&FT that the practice of some insurers issuing policy covers without collecting the appropriate premium has arisen in the face of growing competition in the industry. Industry players believe the difficulties in accessing claims when they fall due have dampened public confidence in the industry. Currently, there are 43 insurance companies in both the life and non-life insurance sectors who are all competing in a market where insurance penetration is less than two percent. The NIC has said that its efforts to encourage people to take up insurance policy cover will be hampered if insurers continue to undertake practices that put them in difficult situations to honour claims when they fall due. “The current state of affairs has not only increased the credit risk of insurers, but has also introduced uncertainty in the market as to the capacity of many insurers to meet their obligations to insurance policyholders and other stakeholders. “It has contributed significantly to the inability of insurance companies to pay claims promptly and adequately,” it added. The NIC said it will ensure strict adherence to the “No premium, no cover” policy in a bid to bring sanity into the industry. It said it has instituted a number of punitive measures for insurance companies that fail to adhere to the policy, including charging insurers 10 times the amount involved for granting cover without premium.       By Elliot Williams & Evans Boah-Mensah

Government has welcomed the desire of Marubeni Corporation, a Japanese business conglomerate, to operate as an independent power supplier. This will help shore-up electricity supply across the country. Vice President Kwesi BekoeAmissah-Arthur on Thursday gave the assurance that the government will expand the framework for “that kind of business” and encourage more companies. “We will encourage some more companies to improve the quality of power supply,” the Vice President said at the Flagstaff House in Accra when a business and investment delegation from the Corporation, led by Mr. Naoto Nikai, the Japanese Ambassador to Ghana, paid a courtesy call on him. The delegation, on a three-day working visit to Ghana, has since held discussions with the Ministries of Finance and Trade and Industry, and will soon hold talks with the Ministry of Energy as well as hold a business networking session with Ghanaian business persons. Vice President Amissah-Arthur urged the Corporation to move beyond the supply of equipment to the Volta River Authority (VRA), the main generator of electricity in Ghana, to a more direct participation in power generation. He also invited the Corporation to invest in Ghana’s vast agricultural opportunities, adding that they could take advantage of the fertility of the soil in northern Ghana and establish sugarcane plantations and sugar processing plants there, an opportunity that has so far been limited to the southern sector. Mr. Shigero Yamazoe, Marubeni Board Member for sub-Saharan Africa, said Maruabeni is one of the largest investment firms in Japan and expressed the Corporation’s strong interest for investment in Ghana. Marubeni is involved in the handling of products and provision of services in a broad range of sectors. These areas encompass importing and exporting as well as transactions in the Japanese market related to food materials, food products, textiles, pulp and paper, chemicals, energy, metals and mineral resources, transportation, machinery and offshore trading. The company's activities also extend to power projects and infrastructure, plants and industrial machinery, finance, logistics, real estate development and construction. Additionally, Marubeni conducts business investment, development and management on a global level. GNA

Mr. Haruna Iddrisu, Minister of Trade and Industry, on Thursday reiterated government’s commitment to increase the nation’s electricity generation capacity from the current 2,800 megawatts to 5,000 megawatts by the end of 2016. He said there are as many as 500 rural communities across the county in the Western, Central, Upper East, Upper West, Northern, Brong-Ahafo and Volta Regions which are still desirous of getting connected to the national electricity grid. Mr. Iddrisu made these disclosures during a meeting with a Japanese trade delegation that included Marubeni Corporation, and assured Ghana's industrial players that government will continue to ensure adequate and sustainable supply of utilities, particularly water and electricity. The Trade Minister appealed to Marubeni Corporation to secure concessionary funding from Japan for the extension of rural electrification under the self-help rural electrification initiative. “We will be happy to work with you to extend electricity in order to give meaning to President Mahama’s declaration of energy for all by the year 2016,” he said. He also explained that it is the expectation of President John Dramani Mahama that more rural communities in Ghana are connected to the national electricity grid. He pointed out that Ghana remains an oasis of peace, stable social and political order, and has put in place legal and regulatory regimes to protect any investments. Mr. Iddrisu assured Marubeni Corporation of the security of its investments, and appealed to the corporation to assist in building an energy plant to be dedicated to industries in the Tema area and Western Region since they have interest in the energy and power sector. He said Northern Ghana remains the most viable place for commercial farming and agriculture in Ghana, adding that the Brong-Ahafo, Western and Central Regions, are also fertile grounds for commercial agriculture investment. “I am aware of Marubeni’s interest in development of sugar plantation in Northern Ghana in Depale and Kukubla in the Northern Region of Ghana,” he said. He pledged President Mahama's absolute support for the initiative to establisha sugar plantation and sugar factory in Northern Ghana. He said government will play its role in facilitating the acquisition of land together with Marubeni in developing accessible roads to the site. Mr. Naoto Nikai, Japanese Ambassador in Ghana who led the delegation, said Marubeni Corporation is one of the largest Trade and Investment Companies in Japan, operating all over the world in energy and other areas. He added that Marubeni Corporation’s powerful delegation to Ghana shows its strong interest in expanding business relations in Ghana. The Japanese Ambassador s optimistic that there will be fruitful results from expanding the economic business relationship between his country and Ghana. Mr. Shigeru Yamazoe, Senior Managing Executive Officer of Marubeni Corporation, said Ghana is currently one of the most important partners of Marubeni Corporation from the sub-Saharan region. Yamazoe pledged the corporation's desire to organise and promote various projects according to the needs of the country, adding that the company will create employment and develop the various industries. GNA

Dr. Stephen Kwabena Opuni, Chief Executive Officer of the Ghana Cocoa Board (Cocobod) has directed all local cocoa processing companies accessing credit facilities from the board to submit an appropriate guarantee from a reputable bank to ensure business continuity. “What I have done is ensure that before any company will be given any credit, it will have to provide a guarantee from a reputable bank; that will be easier for us to retrieve our monies, because we need to encourage local business -- and at the same time they should also live up to their responsibilities,” Dr. Opuni told B&FT in an interview in Accra. A lot of the local cocoa processing companies and the Licenced Buying Companies owe Cocobod huge sum of monies. Some of these local cocoa processing companies have not lived up to expectation, he said. Cocobod has over the years been supplying cocoa beans to local processing companies on credit at a discount of 20 percent, targetted at growing local businesses and creating employment. Over US$200million debt is owed by these local cocoa processing companies to Cocobod, dwindling government’s balance sheet. Speaking on output target for the season, Dr. Opuni explained that the sustained hi-tech and Cocoa Disease and Pest Control programmes (CODAPEC) have helped to raised national production. The industry regulator has set cocoa production target of 850,000 metric tonnes for the ongoing crop season. This country, the second-biggest producer, runs a two-cycle cocoa season consisting of the October-June main crop harvest which is mainly exported, and the July-September light crop that is discounted to local grinders. The current 2013/14 main crop season opened on October 18 with an initial target of buying around 830,000 tonnes. The country produced 835,410 tonnes of cocoa during the 2012/13 crop-year, down 5 percent on the previous season. An unprecedented one million tonnes of cocoa was produced during the 2010/11 crop-year, thanks to good weather and improved farming techniques -- but production declined to about 850,000 tonnes in the 2011/12 season. By Ekow Essabra-Mensah

  Mr. Kwabena Adu-Gyamfi, Managing Director of Agri Commercial Services at Wenchi in the Brong Ahafo Region, has urged farmers -- especially vegetable growers -- to embrace greenhouse technology as a new vehicle to enhance and change their mode of farming in order to better their lot. Adoption of greenhouse technology, he says, among other things brings change to the farming system so as to guarantee massive yield increase, quality produce, investment security and a prolonged farming season. A greenhouse is a structure that allows for greater control over the growing environment of plants. Depending upon the technical specification of a greenhouse, key factors which may be controlled include temperature, levels of light and shade, irrigation, fertiliser application, invasion of diseases and atmospheric humidity. It can also be used to overcome shortcomings in the growing qualities of a piece of land, such as a short growing season or poor light levels, and can thereby improve food production in marginal environments. Mr. Adu-Gyamfi made the call when he briefed the B&FT about the progress of a GH¢250,000 greenhouse technology project at Wenchi. The 18-month-project, the first of its kind in the Brong Ahafo Region, is being funded by COTVET-Skill Development Fund (SDF). The ten-tunnel project is expected to be up-scaled to serve as a guaranteed source of raw material for the defunct Wenchi Tomato Factory, which is primed to be re-opened by 2015. The Wenchi Tomato Factory, a subsidiary of Agri Commercial Services was shut down in 2007 as a result of non-availability of the required fresh tomatoes for processing. The factory was largely dependent on out-grower farmers they had trained and supported with inputs -- but the farmers upon harvesting circumvented the factory managers for the open market. It is estimated to cost about GH¢10.5million to breathe life back into the ‘dormant’ factory. Managers of the factory are looking at diversification including sweet-corn, mango and other fruit/vegetable-processing when it re-opens as scheduled. “We are concentrating on greenhouss to produce the bulk of our raw materials. We anticipate producing about 2,000 tonnes from a land cover of five hectares. Though the technology is capital intensive, it’s the best that we can hope for. A 120square metre greenhouse tunnel costs about GH¢12,000. “The knowledge-base for vegetable cultivation in Ghana is extremely low. This is driving the high prices of vegetables, particularly tomatoes, in the country. Vegetable farms are always vested with a lot of disease, thereby producing very poor and small yield,” the Managing Director said Ghana’s tomato-consumption rate is estimated at about 400,000 metric tonnes per yearm, but the country locally produces only about 30% of its demand. The balance is made up with imported tomatoes (fresh, puree and paste), making Ghana one of the leading importers of the commodity in the world. It is against this backdrop that Mr. Adu-Gyamfi believes the time has come for farmers to move away from open-air cultivation to greenhouse technology so as to boost production of tomatoes and others vegetables in the country, adding that: “We can emulate the examples of countries like Kenya and Mozambique who have been successful with the technology”. By Edward Adjei Frimpong, Wenchi

Government is seeking international cooperation to help move the country from being a primary processor of mineral resources to value addition of the minerals to create job opportunities and boost earnings for the country, President John Mahama has said. “We need to move some of that secondary processing into Ghana to create additional jobs for the young people to be able to do. We cannot continue to export gold in its raw form; we don't even refine them, we don't do polishing [and] we don’t do jewellery. “We export bauxite in its raw form and then we import alumina to feed our aluminium smelter and then we export and re-import the aluminium to feed our industry; it just doesn't make sense,” he said. President Mahama made this statement at the opening of the World Economic Forum session on Responsible Mineral Development Initiatives in Davos, Switzerland, aimed at helping countries develop their mineral resources in a socially and economically responsible manner. President Mahama explained that the country can still boast its accolade as the Gold Coast, but the sector faces a few challenges such as illegal mining and foreigners taking over large land areas and mining in an environmentally unsustainable way. Speaking on illegal foreign mining operations, the President disclosed that over 4,700 foreign illegal miners deported last year were mainly Chinese nationals arrested by the government taskforce on illegal mining. They were accused of flouting the mining laws by engaging in small-scale mining without permits. “Unlike the big mining companies whose operations can be monitored and regulated by state agencies, the opposite pertains with illegal mining operators. Government is determined to adopt measures to keep illegal miners at bay.” He indicated that although the country has entered into sustainability agreements with the large mining companies operating in the sector, implementation of the agreements has faced some challenges. For instance, he said, while the government introduced the windfall tax to ensure that the country earns benefits when gold prices go up on the international market, the companies opposed implementation of the tax. The President said the tax had to be shelved following concerns by the companies that it could lead to a cut in jobs. “There is need for technical expertise to manage the system, with some legislation being enacted to inject sanity into the sector,” he said. “Nothing will be left to chance in ensuring that responsible mining is practiced in Ghana,” President Mahama said.

  Poverty has been a subject of discussion for many centuries, dating back to civilizations before Christ. Poverty has been described as the enemy of mankind. It strips people of their livelihood, making them live through s in life. Many nations, especially developing countries, have had to deal with poverty for many ages. Various reasons have been assigned to explain why people are poor in Africa. Economists have long argued that people are poor because of a low level of savings. Their argument is deeply rooted in the concept of a vicious cycle of poverty. This concept holds that low productivity leads to low income, low income leads to low savings, and low savings leads to low investment and low investment to low productivity. According to a World Bank report on Gender, Poverty and Environmental Indicators on Africa (2002-2003), the major causes of poverty vary across countries. The report stressed that the main factors behind chronic poverty in Africa is low levels of production technology, high illiteracy rates and underdeveloped rural infrastructure. The concept of a vicious cycle of poverty has dominated modern economic thinking. We believe the time has come for Africans to break away from the vicious cycle of poverty. The irony of Africa’s problem is that the continent is the richest in terms of resources in the world. According to African Kingdom Business Forum, Africa today is known from statistics to be the most resource-rich continent on the face of the earth. Available statistics as at 1997 confirmed that Africa has 99% of the world’s chrome reserves, 85% of the world’s platinum reserves, 70% of the world’s tantalite reserves, 68% of the world’s cobalt reserves, and 54% of the world’s gold reserves. There is therefore no correlation between the richness of resources in Africa and the current state of poverty that pervades the continent. This situation has led civil society and social commentators to argue that it is politically wrong, economically unjustifiable, socially immoral and intellectually unacceptable for Africa in general and Ghana in particular to still wallow in the quagmire of poverty. It is in this light that Ghanaians are being called upon to embrace a new concept known as the virtuous cycle of wealth-creation as a stepping-stone for their economic development. This is a time-honoured key to breaking away from the vicious cycle of poverty. The virtuous cycle of wealth-creation draws its validation from the biblical maxim wealth obtained by fraud dwindles, but one who gathers by labor increases it -- Proverbs 13:11. The main thrust of this concept is that with a little bit of sacrifice and hard work on the part of the leadership and citizens of a nation, a low-income economy can translate itself into a high savings economy over time, as an increase in savings is a prerequisite for a corresponding increase in investment. Research has shown that there is a direct relationship between investment and productivity. With increase in investment, the productive sectors of the economy will pick up -- which will then translate into high income and high investment for the virtuous cycle of wealth-creation to continue. The reason for this is that though a country is poor, putting a small amount of money aside as savings through the principle of compounding interest will enable such a country to be transformed from a once-low-income country into a middle-income country over time.   Encouraging people to save no matter how little their income is a sine qua non for accelerating Ghana’s economic development. Experimental studies and empirical observation shows that most of the economic development that took place in the East, especially among the Asian tigers, can be attributed to a strong internal resource mobilisation and a high level of savings. Just think about this: If 3 million Ghanaians decide to save and invest GH¢50 a month, this is how much money we can mobilise -- Month 1 = GH¢150,000,000. Assuming we invest this amount in a money market mutual fund at a rate of 20% per annum. Year 1 = ¢180,000,000. At the current Exchange rate of GH¢2 to a dollar, we should be expecting around US$90,000,000 in a year. We can channel this amount of money into developmental projects. It is evident that we have been sitting on pure gold and crying about poverty. I believe it is more than possible for only 3 million Ghanaians out of over 20 million citizens to contribute a minimum of GH¢50 every month. On the family and individual level, let see how a poor family was able to break away from the vicious cycle of poverty. A story is told of a Ghanaian who hails from a poor village. His great grand-parents were poor and had been wallowing in poverty for many years. Though his parents were very poor, they determined to put him through school. The first thing they did was to rationalise their expenses. They cut down on the amount of money they spent on funerals, and sometimes they had to work long hours just to save enough to put their son through school. Though it was very difficult, through determination they managed to help their son complete his education. The young man is now a pharmacist and earns regular income, of which he remits part to his parent back home. He has been able to support his younger sibling to complete college. From the little savings and sacrifice of his parents, they have been able to break away from the vicious cycle of poverty. Poverty to them is now a vestige of the past. The time has come for Ghanaians to rise up and confront the problem of poverty. In order to confront poverty, one needs to make a conscious effort to move out of poverty into wealth. Here are a few steps that can lead a person to wealth-creation: Take a Decision to be Rich It is important for every person to make a conscious decision and effort in order to be rich. A decision to be rich comes with responsibilities and sacrifices. Sometimes it is important to sacrifice luxury in the present in order to build wealth for the future. It is prudent to remember that every amount saved or invested is paving the way for acceleration into riches. It is also imperative to remember that every decision of the day either makes you richer or poorer; once you are aware of that fact, better decisions can be made each day. Build Assets, Shut Down liabilities Robert Kiyosaki stated that the rich buy assets while the poor buy liabilities. Assets in this instance are defined as anything that puts money in your pocket, while liabilities are anything that takes money out of your pocket. Every Ghanaian must make a conscious effort to increase their assets, bearing in mind that expenditure makes another person richer instead of themselves. Conclusion Every day of our lives, we have a number of resources that we regularly trade away to make our world turn around. The three most important resources are time, money and relationships. Time is, of course, the most valuable resource we have because it’s completely finite, and once lost can never be recovered. If you’re not using your time to build something that increases in value, this is a dire emergency. We must use our time to build assets that create wealth. It’s time to pause and re-evaluate how you spend your day. Relationships are vital because we lean on them each day to enjoy the comforts of life and get all the things we need to be done. For example, spouses cover your chores, colleagues pick up slack at work, friends and relatives lend a hand during hard times and help to accomplish what we can’t accomplish by ourselves. The people we relate to may make us richer or poorer. It’s time to pause and re-evaluate who you spend your time with. Money however is only a tool, but it’s a valuable one to be respected. If you manage your life properly, you can use the money you have to create more of it. In a nutshell, life offers more opportunities to people who have money to take more opportunities. It’s time to pause and ask yourself, “What am I spending my money on, and is it returning more of it to me than what I sent away?” If the answer is no, it’s time for a money make-over. Make good use of the money you are earning today and create a better future tomorrow.