The plan by the Economic Community of West Africa States (ECOWAS) to have a common monetary union with a single currency has been put forward several times, leaving business people, cross-border traders and financial analysts sometimes, wondering when the proverbial ‘old lady’ will finally shove off her ‘stick’. Meantime, it is also impeding the potential influx of massive foreign investment into the region.

The idea to have all the 15 countries in West Africa spend, save, invest and trade in a single common currency is as old as ECOWAS itself which was created in 1975. After several failed attempts and postponements in starting dates, ECOWAS has now given member states up to 2015 to put into effect the plan for a second monetary union and a single common currency in 2015 which will run alongside the existing common currency, the CFA franc, used by the French-speaking member states of the regional body. The ultimate goal is to eventually collapse into one the two monetary unions and create a single common currency for the entire sub-region. The President of the Ghana National Chamber of Commerce and Industry (GNCCI), Mr. Wilson Attah Krofa, believes the leadership of the ECOWAS Commission could speed up the implementation process of the second single currency.

In an interview with GB&F in Accra, Mr. Krofa said, “We need the Eco. We need it to facilitate the growth of business in the sub-region. At present, the cost of paying for transactions within the sub-region is too high. For example, if you have to move from Ghana to Nigeria to buy goods, you need to use dollars. And, as you know, we have no control over the rise or fall in the value of the dollar. This does not ensure price predictability. So, our leaders must work hard to give us a single currency without further delay.” Mr. Krofa, who also doubles as the president of the Federation of West African Chambers of Commerce and Industry (FWACCI), added: “I believe the single common currency is very important because if you want to have economic integration, trade is vital. And you can only trade effectively if you have a common currency. This is because, particularly, in West Africa, we have a lot of informal trade. Although officially we say the recorded trade among West Africans is 11%, informally, we know it is about 80%. You can go to Aflao and see the movements across the borders.” Financial analysts estimate that over US$10 billion worth of currency transactions take place annually in West Africa within the parallel money market, otherwise known as the ‘black market.’ These transactions, which constitute a huge loss in revenue to governments (because no taxes are paid on them), are usually carried out by unlicensed moneychangers who swarm around border towns and airports to do brisk business in competition with banks and Forex Bureaux.

The major underlying factor serving as an incentive for these illegal currency dealers can somewhat be linked to the avalanche of national currencies circulating within the sub-region. Indeed, it is very instructive to note that within the subregion of 15 countries, there are eight different national currencies, namely the CFA franc of the Union Economic Monetaire Ouest Africaine (UEMOA), the ESCUDO of Cape Verde, Dalasi of the Gambia, Cedi of Ghana, Guinea Franc, Liberian Dollar, Naira of Nigeria and the Leone of Sierra Leone.

According to Mr. Krofa, one of the major advantages in having a single currency is that, “It creates a situation where the countries become disciplined. This is because if a country is not managing her economy properly, there is moral suasion from the others to ensure that she performs.”

John Atta Mills, President of Ghana

“And that can assist countries in the sub-region to develop quickly and be able to compete with the rest of the world.”

It is on this basis that the business community within the sub-region has always been concerned about the delays in the programme of ECOWAS to introduce a common currency within the sub-region. The monetary union programme has been through several phases, starting from as early as 1975, when the West Africa Clearing House (WACH) was established as a mechanism for the payment of transactions between and among institutions within the member states.

In 1978, the West Africa Bankers’ Association was also established to complement the operations of WACH and, through that, commercial and development banks as well as other credit and financial institutions became part of the overall scheme of monetary integration in West Africa.

Nine years later, the leaders of the sub-region decided to give more vent to the process by launching the ECOWAS Monetary Cooperation Programme (EMCP) which, in turn, led to the creation of the West Africa Monetary Agency (WAMA) in 1995.

This was to ensure that all the various processes were systematically harnessed for the eventual creation of a single monetary zone in the sub-region. The collective objective of the EMCP and WAMA was to adopt common policy measures to achieve a harmonised monetary system and common management institutions among the member states by year 2000.

A three-fold approach was to be used: in the short term, the main objective was to strengthen the payment mechanism by introducing the ECOWAS Travellers’ Cheque and a Credit Guarantee Fund; in the medium term, the objective was to achieve limited currency convertibility; while in the long term, the objective was to achieve a single monetary zone in the sub-region characterised by the use of a common currency and the creation of a common central bank.

However, the monetary progamme to a very large extent has been unsuccessful. This is because the clearing mechanism accumulated several arrears while the Guarantee Fund could not take off on schedule. The ECOWAS Travellers’ Cheque that was later introduced in 1998, after several postponements, also came amid a myriad of challenges. Consequently, the long-term objective of the ECMP and WAMA to create a single monetary zone in West Africa was not met.

But still determined to pursue the programme, the 22nd Summit of Heads of State, held at Lome, in December 1999, recommended the adoption of a two-way fast track approach to the monetary integration process.

To this end, leaders of Nigeria and Ghana met in Accra that same month to fashion out the means of implementing the new approach. They decided to create the West Africa Monetary Zone (WAMZ) as a second monetary zone to the Union Economic Monétaire Ouest Africaine (UEMOA). Ghana and Nigeria were later joined by the other non-UEMOA countries, namely The Gambia, Guinea, Liberia and Sierra Leone, when they met in Accra in April 2000 to make a joint declaration for the establishment of the WAMZ.

That declaration became operational in December 2000 when the heads of state of the above-named countries met in Bamako and signed the ‘Articles of Agreement’. As part of the WAMZ initiative, the West Africa Monetary Institute (WAMI) was set up. It has so far come out with ‘ECO’ as the name for the second common currency for non-UEMOA members. To facilitate the attainment of the WAMZ objectives, member states
are expected to meet a set of primary and secondary macroeconomic convergence criteria before the monetary integration. This involves the commitment to adopt policies that would enable the country’s domestic economy to register price stability, including maintaining single digit inflation of around 5% of GDP and sustainable fiscal position, control of their budget deficit financing of around 10% of GDP and the maintenance
of efficient external reserves of about 6 months import cover; tax receipts of about 20% of GDP and the capacity to generate as much as about 20% of public investment from the domestic economy.

The initial date set for the introduction of the ‘ECO’ was January 2003. However, the implementation suffered a pitfall when by November 2002 it became apparent that the participating countries would not be able to achieve the convergence criteria.

The date was subsequently postponed to July 2005, as it was expected that that would give the countries adequate time to meet the criteria. But, again, this did not happen because the countries failed to meet the target.

It was then decided that, perhaps, the process should be postponed for a longer period to enable the countries make more preparations.

December 2009 was therefore settled upon with the hope that the participating countries will properly gird their loins for the new currency. But, as it turned out, the deadline did not become feasible, and now the new date is 2015.

For some analysts, it remains to be seen whether the proverbial ‘old lady’ would finally shove off her ‘stick’ in 2015 or there would be another postponement to perhaps, 2020.

Reacting to the challenges impeding the implementation of the single currency, Mr. Krofa said, “The difficulty in formalising the single currency is the convergence criteria which all the participating countries are expected to meet. Now, because most economies of the various countries are at different stages of development, it would be very difficult for all the fifteen ECOWAS countries to achieve convergence. Our recommendation is that we should start with those countries whose economies converge in the requirements that have been established as a stepping stone. Then, as we go along, when the others see the benefits, they would be motivated to work hard to join.” Explaining further, he added: “Let’s take the Euro, for example, only about five countries started using it before the rest joined in. Even as we speak, Great Britain is yet to join but the Euro is getting stronger and stronger. And so, with the situation in West Africa, if we say we want to wait till all the countries achieve convergence, it will never happen.”

Asked whether perhaps the leadership of ECOWAS should take a second look at the convergence criteria, Mr. Krofa said: “I believe so. I believe we need to look at the basis for establishing those criteria and see whether with the prevailing trend, there is a certain level that will make it compatible for the various countries to work together. Yes, we can look at that from historical evidence.”

“My advice is that the business community in West Africa must work together because, if we work together, we can bring pressure on governments to take measures that will work for the benefit of the private sector. You see, we need the governments, the political authority, to facilitate the integration process. But if we leave it to the politicians alone, it will not happen. And that is what we have done all these years. We have allowed the politicians to dictate the pace of the integration process but, because of their own parochial interests, they don’t want to do it. So, we should demonstrate to them that it is in the larger interest of the ECOWAS business community that we work together.

Once we do that and can demonstrate that a bigger market in ECOWAS will improve the economies of all the countries, the politicians will fall in line.”

Ghana’s power challenges and national productivity

As in every other aspect of Ghana’s economic fabric, the demand for electricity power is fast outpacing supply which is evidenced in the increased frequency in outages and now deliberate load shedding in order to ensure that available power is equitably distributed.

How far can Ghana hold out? Is Ghana able to meet the increasing demand for electricity power as its economy continues to expand? Utche Okwuosah attempts finding answers to these crucial questions.

For quite some years, almost a decade now, Ghana has been experiencing spates of jerky power supply which became quite a significant challenge to the NPP administration in the course of their second tenure.

The causes of the challenge were traced to the many years lack of maintenance of equipment which were fast getting obsolete, the seeming lack of vision which failed to anticipate the cost of absolute dependence on hydro power generation and its hydrological shocks, and the growth factor of both Ghana’s population and economy which has driven demand beyond supply.
Stemming the outbreak of this challenge was the last big task that confronted the Kufuor administration. Since the departure of that government till date it has been an engaging task managing the power supply situation to keep both home and industry averagely supplied while efforts continue towards normalising and bettering the situation. The fact of the matter remains that, with the reigning social, political and economic stability Ghana has been enjoying over the past decade, the economy particularly has been growing in leaps and bounds. For instance, the economy experienced an annual GDP growth of 14.4 percent in 2011 compared to 8.0 percent in 2010.

A phenomenal leap in growth, of course, owed to the entrance of the oil and gas sector. Again, spurred by both the sustained strong growth in the mining and oil sectors, it is projected that the real GDP growth for 2012 will increase to about
8.0 percent. Consequently, industries are springing up, the productive sector is expanding and the nation’s population is increasing in tandem with Ghana’s growing prosperity thus overwhelmingly driving electricity power demand beyond what available supply can meet.  Unfortunately, however, the current efforts of the government do not seem to be yielding adequate results soon enough hence the unabating disruption in supply despite the ongoing dedicated reform of the power sector.


According to the statistical data from Research and Markets, from 2000 to 2009, residential demand had risen by 61 percent driven by rapid urbanisation and high economic growth, especially as 52 percent of the population now live in cities (up from 42 percent in 2000). Also, industrial demand has grown as well by well over 64 percent on the back of the strength of the mining and the new oil & sectors. Indeed, Ghana’s electricity sector is evidently going through a period of invigorated reform intended to raise total installed power generation capacity by 65 percent or a total of 3,600 MW by 2013. The government has, over the recent years, sustained its reform program of the power sector which is largely aimed at attracting the private sector’s participation.

Hailed in different quarters as the right thing to do as a way of accelerating supply, the Independent Power Producers (IPP) appear not to be in a hurry to capitalise on the government’s “unbundling” of the sector. Speaking recently to a media house, the Chief Executive Officer of the Volta River Authority, Kweku Awotwi, thought that it was too early to jump to such a conclusion. “It’s still early but we know of two or three other IPP’s that are waiting to come in. The Chinese have already started implementing their plans. There are also two other IPP´s, who signed the “off take agreements” with ECG, so we hope to see results in the next couple of years,” he was quoted to have said.

Considered coming too late, involving the private sector remains a smart thing to do so that Ghana does not go the way other African nations have gone which has resulted in complicated and bureaucracy encumbered power generation and distribution system not even helped by government’s inefficient and wasteful monopoly.

“Broadly, I will say the move to encourage new investment has now started but it was a late start however,” Mr. Awotwi had opined. “There was an act passed four years ago to modify VRA, where VRA will just be the power generator and there will be a transmission company (GRIDCO) that will transmit the power, that was an important first step, because it has allowed for a level playing field, allowing others to come in and generate power. That act was put in place in 2006 and…this is an important
framework to attract new IPPs into the system.”

As far back as 1997, government created an independent regulatory agency, the Public Utilities Regulatory Commission (PURC) to set tariffs, initiate policies and generally encourage competition in the sector. And then there came the Ghana Grid Company (GRIDCO), a public sector energy enterprise incorporated in 2006, to power electricity delivery in Ghana. Its advent is seen to have provided a legal and commercial basis for private sector power generation.

Following the government’s creation of enabling investment environment IPP’s participation in the sector is, nonetheless, inching up gradually.

According to the Research and Markets projection, their participatory share will see an increase “from 19 percent in 2000 to 31 percent of total power generation capacity in the country by 2013.”

Despite the cost of thermal power generation, its introduction has come to diversify Ghana’s energy sources, deemphasising the erstwhile traditional dependence on Akosombo and Kpong’s plants with their peculiar susceptibility to climatic fluctuations.

That notwithstanding, it is still estimated that a greater percentage of Ghana’s electricity power supply still come from hydro sources.


The Volta River Authority (VRA) established on April 26, 1961, under the Volta River Development Act, Act 46 of the Republic of Ghana, with the core business to generate and supply electrical energy for industrial, commercial and domestic use in Ghana, has built a number of diesel and crude oil-fired thermal plants – like the Aboadze and Kpone thermal plants – to back up the hydroelectric power plants and to meet increasing power demand.

To reduce the high cost incurred through the thermal power generation, Ghana, alongside its West African neighbouring States of Togo, Benin and Nigeria, with the backing of the World Bank’s Multilateral Investment Guarantee Agency (MIGA), invested in the West African Gas Pipeline (WAGP) to supply power plants in the country with cheap natural gas from Nigeria.

This investment necessitated the building of gas-fired thermal plants (Aboadze, Kpone and the Domunli (still under construction in the Western Region power plants) with the aim of having thermal power generation as the main source of electricity power for Ghana in the immediate future. Of course, these investments are also made with the added expectation of gas harvest from the newly discovered Jubilee offshore oil field.

Unfortunately, as much as these concerted efforts are being made to meet Ghana’s most crucial developmental need, the incidence of the rupturing of the West African Gas Pipeline occurred to cause a severe setback in government’s plans. Gas supply was disrupted and this, consequently, affected electricity generation thus plunging the nation back to the era of load shedding and incessant power outage. This is aside from the impact it is having on government’s budget as an unplanned expenditure in the purchase of petroleum for powering the thermal plants.

Granted that WAGP authorities have said that full supply would be restored by December at the satisfactory conclusion of repair works on the damaged pipeline yet, it appears that the assurance is hard to believe because of failed deadlines in the past. Hence, the public have been given different and conflicting dates by different government officials on the expected time electricity supply would be restored to normalcy.

Early in the month of November, at an interaction between the VRA Chief Executive and senior editors, Mr. Awotwi reiterated his assurance that the end of load shedding and power supply interruptions were nearly at hand.

The journalists were told that the repair work which began on the damaged WAGP pipeline in September was nearing completion and that Gas was expected to start flowing by the end of this.

Further details spoke of all six units in Akosombo running at full allowed capacity, as well as the three units in Akuse which were running at full allowed capacity.


While one unit in Akuse was out for emergency repair work, all four thermal units in Aboadze were reported to be running at full capacity, including the Steam turbine in Aboadze which was running and producing 50 MW of power.

“Total available capacity now is 1601MW. Peak demand now is 1705MW, leading to a deficit of 104MW,” according to VRA’s report which was presented to the Editors.

The report said that Takoradi 3 (T3) is running with 21 MW of power available, and expected to ramp up to 80 MW by the end of November, and that “CENIT is expected to run by mid-November, once it gets crude oil. Full capacity of these two projects is expected to add a total of 240 MW by year end.” With an assurance that there was “sufficient crude oil to run plants in Aboadze.”

“Ghana has been hailed as “The Gateway to Africa”,” the politician and energy expert, Goosie Tanoh, had said at the last, 3rd Policy Fair Dialogue Series last April.

“Over the past decade alone, we have witnessed the burgeoning growth of some very important industries. Our communications network is now one of the best and most affordable in Africa. Our roads and transport system, although still work is in progress, has seen some massive expansion in recent times. Even the educational sector has enjoyed some much needed boosts lately and is churning out more skilled manpower than ever before.
“There is however, one major area in which this country has been slow to achieve the desired growth. Sadly, this is also one of the most fundamental catalysts to any country’s rapid industrialisation and subsequent development. I speak of course, about Ghana’s Energy Sector with particular reference to electrical power generation, transportation and distribution.”

Those words echo today with reverberations that appear to be probing any claim to great achievement in meeting the nation’s dire need for electric energy. Really, the situation is a question of check and balances. Thus, one could say that, in the past four years government appears to have made efforts to see that it met its own set goals in making electricity power supply available to Ghanaians yet, if today, both homes and industry are still being denied constant supply of the same electricity power, would one find justification in concluding that the nation’s electricity need has been met? In the recent Association of Ghana Industry’s Business Barometer, poor power supply emerged as the topmost
constraint to the growth of businesses in Ghana.

“According to the respondents, the combined effect of frequent power outages and regular power surges from July-September, 2012 has resulted in an increase in the unit cost of production.” That is how worrisome the power supply situation has become firing the hope that government would, as a matter of urgency, facilitate VRA in all ways possible to meet the country’s need for electricity “if the country is to attain upper middle income status in the next three years.”

I scribbled this from seat 26A on a flight from Accra to Cotonou, the premier city of the West African state Benin, just beside my nation, Ghana. Around me were other colleague-journalists, marketing executives and other travelers. The look on their faces epitomised jitteriness, especially when the routine safety measures were announced by the flight attendants.

Accra and Cotonou is 350 kilometers apart and a road traveler will take not less than eight hours to reach the Benin capital, but here we were in the skies spending only 45 minutes approximately, and 20,000 feet above the ground to get to our destination. This was an inaugural international flight of one of the relatively new domestic airlines in Ghana. With my laptop on my lap I thought: “Ghana’s domestic aviation sector is going somewhere”. Hitherto, the mention of air travel sent ordinary folks thinking that the affluent are it again, they have got some monies to throw into the air. These days it is no more a symbol of luxury and aggrandisement to fly from one city to the other in this part of the world.

Like mobile phones and personal computers, air transport is fast becoming a necessity for a lot of Ghanaians. The pertinent socio-economic benefits of air transport have bugged the ordinary African folk including the Ghanaian. Air travelers fly in the local skies for a myriad of reasons, ranging from as casual as “enjoying how it feels to fly in an airplane” to beating deadline to append a signature to kick-start a multi-million business enterprise. Generally speaking, the sector is seeing a steady, tremendous growth in terms of operations and affordability. No wonder it has been rewarded with confidence from the air-travelling public in Ghana. With four carriers flying in the local skies, albeit not at the same time, except on different routes, the local aviation industry is strongly gaining international recognition and reputation from aviation watchers and experts. The fast-improving state of this transport sub-sector is luring the monies of expats who are partnering with indigenes to invest in the industry; Starbow, Fly 540 and the incoming Africa World Airlines, being cases in point. Even though the industry is experiencing a golden age of business growth in investments and development, this transport sub-sector has not really been explored and exploited yet, in terms of its potential contributions to economic development for a nation like Ghana.

Few African states have paralleled the west in appreciating and exploiting the vital contributions of aviation to a nation’s economic agenda. Kenya, Ethiopia and South Africa are some of the few African states which have in significant dimensions exploited the aviation sector to the optimum. Paul Steele, the Executive Director of Air Transport Action Group (ATAG) asserts that, “while not everyone on earth can afford to fly today, the benefits of air transport spread far beyond the people involved in the flight itself”. According to the International Air Transport Association (IATA), global economic growth is a key driver of growth in air traffic demand. However, while air traffic demand has increased as economies have grown, air transportation is factually a key cause and facilitator of economic growth for many economies globally.

Not only is the aviation industry a major industry in its own right, employing large numbers of highly skilled labour force, but more importantly it is an essential input into the rapidly growing global economy. Greater connections to the global air transport network has boosted the productivity and growth of economies by providing better access to markets, enhancing links within and between businesses and providing greater access to resources and to international capital markets.

Tony Tyler, the CEO for IATA noted recently that for many of Africa’s governments, aviation is not the top priority. “Eliminating poverty, improving health, raising living standards, and generating jobs rank much higher. My message is not to shift priorities, but to ask governments to see aviation as an economic driver and develop policies to support that important role.”

The facts and figures are available to tell the story of aviation’s colossal contribution to the development of economies. In 2011, over 2.8 billion passengers were carried by the world’s airlines. The sector contributed $2.2 trillion of global GDP and $67.8 billion in Africa representing about three per cent of the world figure, including catalytic impacts. Worldwide, the amount contributed to the global economy by aviation jobs is roughly three and a half times higher than that contributed by other jobs. Aviation is indispensable for tourism, which is a major engine of economic growth, particularly in developing economies.

Globally, 51 per cent of international tourists travel by air. Over 56 million people are employed worldwide in aviation and related tourism. Of this, 8.36 million people work directly in the aviation industry and Africa represents 12 per cent of the total jobs. When Iceland’s Eyjafjallajokull volcano erupted in 2010, a week-long disruption of air traffic in Europe caused 10 million passengers to be affected and cost the global economy $5 billion. Reports say passengers were not the only ones affected, parts of the automotive industry were forced to slow production as supply chains remained grounded and African economies lost up to $65 million in exports of time sensitive perishable goods. Obviously, aviation could play an even bigger role in facilitating Africa’s growth and development. To achieve this, however, we need a team effort of government and industry focused on improving safety, adopting a coordinated policy approach and implementing global standards,” said Tony Tyler, IATA’s Director General and CEO in a keynote address to open IATA’s Aviation Days in Dakar, Senegal.

Oxford Economics forecast that aviation’s direct contribution to GDP in Africa will increase by 5 percent per annum in real terms over the next 20 years helping to create an additional 66,000 jobs across the region by 2030. Passenger numbers in Africa are expected to expand from 67.7 million in 2010 to 150.3 million in 2030, with RPK growing at an average annual rate of 5.1 percent. Meanwhile, cargo volumes are projected to rise at a similar rate of 5.2 percent per annum.

“Africa has the greatest potential of any continent for aviation to contribute even more to its development. Supported by adequate infrastructure, the proper cost structure, and operating within a policy framework that values its contribution, aviation could play a much larger role in the African economy as a whole. Aviation connectivity is about people doing business, products moving to markets and new opportunities being discovered. With a few kilometers of runway even the most remote location can be connected to the global village. This has a huge and positive impact on development. And that is the best reason for governments across Africa to care about aviation and work together to ensure its safe, efficient and sustainable progress,” said Tyler.

It is quite evident then that the aviation industry is crucial to the growth of the global economy, hence, governments, including Ghana’s must invest more in the sector and also encourage private participation in this sub-sector of the transport industry. Ghana’s aviation industry, with an average growth-rate of 10 percent, is one of the fastest growing and most competitive in the West Africa sub-region, albeit Nigeria’s highly competitive aviation industry and market. The Ghana regulator has encouraged private participation on the basis of local content and local participation policies. “There is great potential in the aviation sector in West Africa. This presents an opportunity for domestic carriers to explore the possibility of operating regional flights,” Air Commodore Kwame Mamphey (Rtd.), Director-General of the GCAA, said.

For now, air travelers are quite satisfied with the current state of air transport, that is, reliability, safety and affordability. Meanwhile industry operators are decrying the high cost of jet fuel currently on charge. In an interview with GB&F, the Co-Chief Executive Officer of Starbow Airlines, Dr. Brock Friesen said the cost of jet fuel in Ghana is relatively higher as compared with charges on the European and other African markets. According Dr. Friesen hike in charges surges the operational costs of operators, yet they manage to keep fares at a reasonable amount in order to stimulate demand from the market.

This means profit margins will reduce. Obviously such a trend, in the long term, would cost both operators and the aviation sector in general. Since operators tend to have slim profits, it stands to say they cannot invest to a larger extent in order to enhance growth of the sector. There is the need for serious consideration to review the prices of jet fuel, given Ghana’s new status as an oil producing economy. It is a fact that reviewing jet fuel periodically, in conformity to globally trends would help reduce the operational costs of managing airplanes in Ghana.

There are many problems that hinder the growth of the industry and affect the expansion of operators’ business. It is high time operators of domestic airlines presented a united front in order to present their grievances in a concerted fashion. Like in telecommunications where operators present their common interest through the Ghana Chamber of Telecommunications, it is imperative that operators of domestic airlines reach a consensus so that they can sing from the same song sheet on matters of common interest. It is apparent that such a move would galvanise operators towards a common vision, yet sustain a healthy competition among operators. Birds of the same feathers must fly together but in different directions.

The Commerce Ministry and Indian High Commissions and Embassies of eleven African countries arranged an interaction over Digital Video Conference (DVC) over two days, on 3rd and 6th May 2019, with the Indian business community in Africa. The interactions with Indian Diaspora were held in Tanzania, Uganda, Kenya, Zambia, and Mauritius, Nigeria, Mozambique, Ghana, South Africa, Botswana, and Madagascar. This initiative was held in order to build an effective engagement withthe Indian Diaspora in Africain order to further deepen and strengthen India-Africa trade ties.

The DVC was attended by over 400 members of Indian business community in 11 African countries.

India’s total trade with the African region during 2017-18 was USD 62.69 billion (8.15% of India’s total trade with the World). India’s share of exports to African countries as a percentage of India’s total exports to the world was of the order of 8.21% in 2017-18.  Africa region’s share in India’s total imports from the World accounted for 8.12% in 2017-18.

Today, African countries present immense opportunities for India with the world’s largest land mass, 54 countries, a population growing to be almost equivalent to that of India, huge mineral resources, oil wealth, a youthful population, falling poverty levels and increasing consumption patterns.

Thus, Africa has a huge demand for new business models for market entry, stable market access, entrepreneurship and investments in transport, telecom, tourism, financial services, real estate and construction.

This initiative of the Commerce Ministry emphasizes the need for a multipronged strategy for further enhancing trade and investment ties between the two regions. Commerce Ministry recognizes that for formulating an effective export strategy it is imperative to engage the Indian business community in Africa for mutual gain for both sides as trade relations between the people of same origin instill greater confidence amongst trade partners.

The Indian community in Africa is playing a vital role in all fields like politics, business and education.As per the latest available estimatesthe current strength of the Indian Diaspora in the African countries is 2.8 million out of those 2.5 million are PIOs and rest 220967 are NRIs.Total overseas Indians are 30.83 million of which 17.83 million are PIOs and 13 million are NRIs. (Ministry of Overseas Indian Affairs, 2016). Indian Diaspora in Africa constitutes 9.11% of the total Diaspora of India.

The inherent strength of India in Africa is its rich and vast Diaspora which has established strong links with the political, economic and social fabric of the African continent. In order to formulate astrategy to boost India-Africa Trade & Investment, the Indian Diaspora in Africa has to be leveraged furtherin order to ensure that the strategy is effective. Suggestionswere sought from the India business community.

The major issues highlighted by the Indian Business Community in these 11 countries are:

  • Improving the Line of Credit system and developing a facility for an affordable and competitive funding.
  • Setting up of Indian Banks/financial institutions in Africa
  • Enhanced Buyers’ Credit facility for promotion of trade between the two regions
  • Reviewing and liberalizing visa policies from both sides
  • Need for direct flights between the India and African countries
  • Exploring the possibility of rupee trade to address the issue of shortage of dollars in region.
  • Creation of common database of buyer-suppliers in the two regions for facilitating matchmaking for enhancement of bilateral trade.
  • Development of a robust trade dispute settlement mechanism
  • More frequent and structured country/sector specific trade exhibitions in Africa
  • Establishment of country chapters of FICCI or CII in Africa
  • Frequent visits of policy makers, chamber of commerce and investors for familiarization with local business and investment regime for informed decisions


Department of Commerce welcomed the suggestions of the Indian business community and assured them that these suggestions will be shared with relevant stakeholders /Departments in order to incorporate the suggestions in the India-Africa strategy for trade promotion.

Senior officers from Department of Commerce and Ministry of External Affairs were present during the interactions.

Ghana is still grappling with the perennial housing deficit due to the excess of demand over supply of the housing stock. With the fiasco of the STX deal, it appears that the only hope now is the private sector developers, who also have their peculiar challenges to confront. What are we to do now? Effah Amponsah asks.


For almost two decades, governments of Ghana have made significant strides in stabilising and advancing the Ghanaian economy to better the lots of its people. Although, significant gains have been made in overturning Ghana’s economy, some areas in the economy, such as the housing sector, have borne the brunt of receiving inadequate attention. The housing situation is dire and the country needs an urgent answer, which is likely to require the concerted responsibility of all stakeholders.

At year-end 2010, the slum population of Ghana as a result of the shelter dearth had hit 5.8 million, nearly a quarter of the national population. According to survey findings, an estimated average of 8.7 people share a house in urban areas owing not only to population increase, but also to the rural-urban drift. At the moment, the majority of Ghana’s 25 million people are living in sub-standard homes. This dire situation has enabled landlords of rental units to charge exorbitant and inflexible rents to the displeasure of most Ghanaians.

The resultant action has been the creation of slums, shanty and illegal and indiscriminate constructions in waterways, flood-prone areas and project-designated areas. The poor planning of many neighbourhoods have enabled them to serve as safe havens for hoodlums and other social deviants. Year after year, the housing deficit keeps gravitating towards ominous dimensions, with the
low income folks suffering  the greatest neglect.


Even though factual information on the exact magnitude of the problem is piecemeal and sometimes disputed, the gravity of the problem is widely recognised.

Ghana is estimated to have a 1.5 million housing deficit, and housing experts say that it would take not less than 15 years to meet the demand, if the real estate industry and the government as the lead player work closely together to even deliver 100, 000 housing units per annum.

Currently, the combined efforts of Public-Private Partnerships and private developers are able to deliver less than half of the annual housing demand. The question remains whether the housing industry and its related stakeholders have the capacity and the impetus to construct the number of housing units needed to overturn the situation.

It seems that the crux of the housing problem lies in the lack of conspicuous commitment and a sense of direction of past and present governments. To be sure, the Nkrumah and Rawlings governments are on record as having constructed some respectable housing units for the lower and medium-income earners.

Yet, industry analysts are of the view that Ghana has deployed predominantly direct intervention policies for the housing sector instead of a comprehensive, sustainable and transcending housing programme or policy road map to set the nation on a course to overturn the current situation. According to the Bank of Ghana (BoG) report on the Housing Market in Ghana, these direct intervention policies did not yield the needed results, neither did they provide an impetus for the sector’s development due to prevalence of adverse and unstable macroeconomic environments at the time.

The situation argues for the expeditious adoption and implementation of the long-awaited National Housing Policy, which according to sources at the Ministry of Housing, has been at the draft stage for the past seven years. At the time of going to press, the source said, the Housing Policy was still on the table of the Cabinet, and was yet to reach Parliament for deliberations. Tied to the lack of political commitment is the lack of a sense of policy direction which has bedeviled governments in the last decade. Interestingly, governments have also lacked the political will to continue programmes and projects instituted by preceding governments. A typical case in point is the abandonment in 2009, of the Affordable Housing Project commenced by the former government for reasons of lack of funding for completion, only for an eight-member committee to be constituted in April 2012, to explore ways to reactivate the projects.

Again, the absence of a transcendental national policy on housing has contributed to the situation. The Kpone flats scheme continues to lie fallow, more than three years after construction came to a standstill. The fiasco of the STX deal seems to be last straw that has broken the camel’s back, considering the huge housing deliverables it could have offered to the nation.

Reading the 2012 Budget Statement and Government’s Economic Policy before Parliament in November last year, the Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, assured that; “Government will ensure that the objectives of the National Housing Policy are achieved to support the private sector to increase housing delivery in the country and to improve mortgage affordability”.

A critical analysis of the situation shows that the housing deficit is mainly at the level of lower-income homes, which is considered as requiring major government intervention. The private sector, for its part, has generally skewed its interest towards the provision of high-quality, high-value residential estates for the high-end and middle class markets, because of the high returns-on-investment.

Explaining why it is so, Dr. Alex Tweneboah, the President of the Ghana Real Estate Developers Association (GREDA), said the high input and operational costs of developing an estate with no intervention or assistance from government or the public sectors are mitigating factors that constrain private developers from venturing into the lower class end of the market. Speaking to GB&F, he attributed the low supply of rental housing units to the high cost of real estate investment and the inadequate long-term finance available to developers. With the sort of short-term financial facilities developers are able to access, their returns must be quick and high enough to justify the investment.

“Also, the level of rents that people can afford to pay in Ghana is also relatively low. Hence it does not encourage developers to go into long-term rental units. That’s why we have such a huge housing deficit at the social level. If you compare the costs of our (private developers) with that of other countries, ours is relatively low, it is not the case that our houses are expensive, but
people’s incomes are very low”, Dr. Tweneboah asserted.

One of the age-old challenges confronting the private sector is the lack of long-term loans and other financial incentives. A sharp increase in borrowing costs is taking its toll on the construction sector, pushing some developers to suspend new projects and easing the average price of middle income and high-end residential houses. Today, estate developers are becoming more cautious of rising interest rates — which are now eating into their margins while not all the additional financing costs can be passed onto the buyers.

The country is in a situation of arguably 1.5 million housing deficit which housing experts say, will take not less than 15 years to meet demand, if the real estate industry with government as the lead player is able to deliver 100, 000 houses per annum. …government’s solo efforts, PPPs and the private developers are able to deliver less than half of the annual housing demand.

“The problem is, many banks do not understand the real estate sector. They lend you the money and say pay back in six months, it doesn’t happen like that. That puts real estate companies under a lot of pressure, sometimes resulting in shoddy work, because they need to get the houses completed quickly in order to repay the loans”, Dr. Tweneboah told GB&F.

According to the BoG’s report on the housing market, more than 80 percent of real estate developers partly attributed the high cost of estate houses to the high cost of construction materials. According to the GREDA boss, “80 percent of the materials we use in building homes are imported”, stimulating the question as to why local materials have been largely neglected in construction. Only three out every ten estate developers deploy local construction materials for construction.

Here again the issue of lack of local content and participation rears its head. Some developers have argued that the development of core and allied construction industries in Ghana are still in their nascent stage coupled with their inability to meet the dynamic changes in the tastes and preferences of housing consumers, leading to the importation of foreign materials for construction.

Until 2011, private developers enjoyed a five-year tax holiday as an impetus to step-up their efforts at augmenting governments efforts to alleviate the housing deficit. “The policy is now being abused by some of these local real estate companies who are investing in condominiums and luxurious houses for the upper class and yet enjoy tax holidays, so we are emphasising that for any company to enjoy these tax holidays, they have to partner government. They benefit from sweat and toil of all of us because the money they [make as a result of the tax holidays] are entering into their private pockets”, said Alban Bagbin, the former Minister for Housing, giving reasons for the abolition of the tax-holiday policy.

The demise of the policy has subtly aggravated the situation since developers who import the construction materials must now bear the full financial costs of the imported materials or more likely let their clients bear the brunt of the snowball effects.

Industry experts say that issues surrounding land acquisition and procurement are a bigger headache for those wishing to buy. Ghana has a notoriously defective land tenure system.

Ownership is often unclear, the processes are bogged down by bureaucracy and there are  persistent reports of corruption whereby multiple people are allowed to sell the same land, severally depriving the legitimate owners of their property. Industry watchers say, with a wry sense of humour, that one does not buy land in Ghana; one rather buys litigation.

Building on the outskirts of major cities is the new trend in the real estate developing business. Communities within twenty-five miles of Accra, such as Oyibi, Dawhenya, Amasaman, Budumburam, Prampram, Dodowa, Pokuase, Kuntunse among others are enjoying a boom in home construction In new areas of development, the lack of infrastructure and utilities also adds to the cost of business. Often, firms have to ensure the provision of such basic infrastructure as roads, sewage and drainage, water, electricity and telecommunications. Naturally, these add to the cost of construction and eventually, the buildings on sale.

According to Housing Market in Ghana Report by the Bank of Ghana, anecdotal evidence suggests that it takes between 5 and 15 years for an individual household to build a house and this time frame increases construction cost in an unstable macroeconomic environment.

Therefore, the hope of Ghana’s housing demand is hinged on the capacity of the private sector to alleviate the housing situation. Dr. Tweneboah suggests a housing fund to cushion the financial costs incurred by private players in the real estate industry.

According to BoG’s report, empirical evidence on the housing sector suggests that governments that pursue housing policies based on the “enabling markets approach” have better results than those that pursue traditional policies based on direct public sector supply and financing of houses for low-income families.

“This ‘enabling markets approach’ relies on the private sector as the main supplier of houses and the issuer of long-term financing for households of all income levels, with the government playing a role as regulator and facilitator of housing markets. The approach minimises the direct influence of government in direct construction and financing of houses, and rather promotes government interventions on the development of private financing for housing, the facilitation of land sub-divisions for residential uses, the improvement of the construction industry and the support of affordable housing solutions for low-income households, Ghana’s housing sector remains undeveloped”, the report concludes.




The Mantse Ankrah and E.B. Tibboh families, the customary owners of large tracts of land in Ghana’s capital Accra, having long suffered expropriation of their lands under colonial British and post-colonial Africa governments, have awoken and decided to sit up and take long-delayed action to protect their patrimony. New evidence of some improprieties in the seizure and re-allocation of their ancestral property has quickened them into a more assertive posture. Their quest for the truth to be established and justice to be done has been compelled by the Mantse Ankrah’s sense of dedication to the family heritage as well as the government’s new policy, pursuant to relevant sections of the Constitution, and the announcement of its willingness to release unused lands to original owners.
Ghana Business and Finance (GB&F), a Ghanaian monthly business magazine with global readership has learnt that after persistent failure to address their concerns by previous governments, the Mantse Ankrah family petitioned the President of the Republic of Ghana, Prof John Evans Atta-Mills before signing an agreement with a man called Nii Tetteh Yemoh, imbuing him with powers as a lawful attorney from the Mantse Ankrah family to either lawfully eject or to renegotiate and recoup all compensations and rents due the family.

New “Prince” of Ga Lands Runs After Corporate Ghana

If carefully calculated legal suits being prepared and presented by the lawful attorney of the Mantse Ankrah and E. B. Tibboh families of Accra are successful, the stability and business plans of many prominent businesses in Ghana will be affected in the coming months and years. Big corporate names such as Standard Chartered, Melcom, Barclays Bank, Ghana Commercial Bank, Unilever, MTN, Japan Motors, Graphic Corporation, and a host of big names in the recent political history of Ghana are amongst the institutions and individuals who are expected soon to show proof and evidence of their lawful ownership of lands on which have been built massive multi-million cedi edifices. Given that an acre of land in some prime areas of Accra now sells for no less than one million dollars, the law suits that cover several thousand acres, could become amongst the largest multi-billion dollar land cases ever decided on in Ghanaian courts.

The interesting revelations shown to GB&F investigative team, coming out of the efforts of Nii Yemoh, assisted by a team of lawyers, led by a senior man at the bar, Kojo Antwi Abanquah (Esq), is that even where colonial and post-colonial governments may be deemed to have lawfully acquired lands “in the public interest” and or “for public purposes” as prescribed by law, such lands have subsequently been freely and openly traded and leased, sold or assigned to other entities, including total foreigners, to the detriment of the original owners of the land. In many of these cases, no compensation was paid at the time of the initial acquisitions to the relevant Ga families, or where modest compensation was paid, the families were supposed to still receive a token annual rent to demonstrate that they are the original owners. However, often such annual rents have not been paid, as various heads of Ga families have died without leaving good records of their stewardship and their descendants too have taken to either litigation or total abstinence in dealing with these matters.

Selling Galore!

In another large number of cases, some unscrupulous lawyers, some of them Ga, noting that their family elders were asleep at the wheel, have surreptitiously leased or sold these lands “legally” to total strangers, some Lebanese, others Indian and increasingly in recent years, Nigerians and other foreigners. Speaking on condition of anonymity, a senior official at the Lands Commissions said, “My brother, in Ghana today, you can buy beautiful land without showing any proof of identity or even nationality. Just ask anybody who has bought land at East Legon or Airport Residential whether they were ever asked to present their passport or birth certificate at any stage of the proceedings.”

The fury of the Ga-Dangbe people over the loss of their prime lands has become even more acute by virtue of the recent spate of commercialisation of lands in Accra by successive governments. Whereas, the colonial UK government may “legally” have taken some lands in the Accra area “in the public interest” and for “public purposes”, and the successor Ghanaian governments after independence in 1957 have continued this practice, the legal and constitutional question has arisen in recent years whether after forcibly acquiring such lands even “legally”, the government then has the right, without recourse to the original land owners, to sell these lands on near-commercial terms to real estate developers? It is well known in Ghana that anyone who succeeds in obtaining any lands leased by the government in prime residential areas stands to mint money almost with limit effort. This, over the last two decades in particular, governments have sold or leased Accra lands to commercial developers, who have turned around and “flipped” such lands to other developers for a quick profit, or have cannibalized the land by packing a number of homes on the lands and selling or renting them out for huge returns. All these transactions have taken place while the children and descendants of the original owner have stood and watched in silence and disbelief.

Speaking to GB&F at his offices in Accra, Nii Yemoh said: Look, I can take you to a number of lands and buildings in Accra and you will be shocked to hear of those who are supposed to own these lands. In many of these sad cases, prominent politicians and even former heads of state and their wives are behind such ownership or leases. And some collect rent on these properties every single month, without us the real owners getting anything! The time for justice has arrived, I tell you!” said Nii Yemoh, in a scarcely concealed rage.

Continuing, Nii Yemoh said, “Many are those who have used twisted legalities, false misrepresentation and fraudulent documents to acquire their properties. Indeed, it would shock you to find that in some cases, people are living in fine houses and using multi-storey office blocks and industrial estates without any papers whatsoever. Indeed, in a recent case, when we confronted a prominent Lebanese business family, they advised us quietly that indeed they have no documents and cannot prove that they are the land owners. They invited us to go ahead and sell or lease the land to another willing buyer or tenant, as long as we give them some percentage of any money we realize from the sale or lease. Can you believe that?” he asked in pained amazement.

…even State Officials?

Another interesting case is pending in Ghanaian courts where former ministers and top officials of the Kufuor administration are suing the Government of Ghana for recovering the land that had been known for decades as the International Students Hostel, since the era of Kwame Nkrumah. In another case, a former Kufuor minister, is defending himself against a suit brought against him by two NDC deputy ministers challenging his right to buy an acre of land with a massive government bungalow on it that is directly opposite the Mormon Church in Accra. The deputy ministers of the current Mills administration claim that it was improper for President Kufuor to have sold that government land to one of his ministers. Similarly, the NDC government as a whole is also of the belief that the International Students Hostel land should not have been divided up and sold to some NPP ministers and officials.

Whether the NDC or the NPP ministers are right is not the focus of this story. What, however, should be of interest to any fair-minded reader is how come government officials of one political party or another should be fighting over land that does not belong to either. What about the original land owners from whom these lands were taken “for the public interest” long ago by a colonial government? Is it really for “public purposes” and “in the public interest” for political party officials and government ministers to be fighting for the ownership of lands that belonging to other people?

The disdain with which the Ga people are treated by successive governments can be gleaned from the fact that neither of the disputants in these cases or even the Lands Commission which facilitated these transactions has found it necessary to attach the relevant Ga chiefs or families to the law suits almost as if these people are irrelevant or do not exist.

Herein lies the challenge that faces the descendants of Mantse Ankrah and E.B. Tibboh, as well as their lawful attorney, Nii Ben Tettey Yemoh. As long as the descendants of these Ga families are determined to recover most or all of their patrimony, the business and financial sector in Ghana needs to sit up, sharpen their legal skills and determine to negotiate in good faith for the smooth running of their businesses.

Give Back Our Lands or Renegotiate…or else?

The position of the Mantse Ankrah family is that the North Industrial Estate was compulsorily acquired for industrial purposes, but there has been a change of the use of the compulsorily acquired land as against the original purpose of the acquisition. In other words, some outfits which are not industrial at all have been acquiring portions of the land for other purposes. Amongst these are mere traders, bus transporters, and even churches. Now the Mantse Ankrah family is claiming the North Industrial Estate on the basis of a judgment of the Court of Appeal dated 31st January, 1966.

This claim is in consonance with Article 20 (1) of the 1992 Constitution of the Republic, which provides that ‘No property of any description, or interest in or right over any property shall be compulsorily taken possession of or acquired by the State unless the taking of possession or acquisition is necessary in the interest of defense, public safety, public order, public morality, public health, town and country planning or the development or utilization of property in such a manner as to promote the public benefit and the compulsory acquisition is made under a law which makes provision for the prompt payment of fair and adequate compensation’.

The Constitution further provides that any property compulsorily taken possession of or acquired in the public interest or for a public purpose shall be used only in the public interest or for the public purpose for which it was acquired. Where the property is not used in the public interest or for the purpose for which it was acquired, the owner of the property immediately before the compulsory acquisition, shall be given the first option for acquiring the property and shall on such re-acquisition refund the whole or part of the compensation paid to him as provided for by law or such other amount as is commensurate with the value of the property at the time of the re-acquisition.

The Mantse Ankrah family acting per their lawful attorney, Benjamin Tetteh Yemoh, has in this regard served writs of summons and sued a number of companies and churches situated in the North Industrial Area in consonance with the Constitutional provision. The churches affected include: Winners Chapel International, Winners Chapel Ghana, Christ Embassy, Lighthouse Chapel International (the Qodesh) among others.

The family has also served writ of summons to some organizations including Mantrac, Melcom group of companies, VIP transport, SSNIT among others. It is the case of the Mantse Ankrah family that these companies and religious bodies are not supposed to be there in the first place. The family claims that these organizations are also paying rents to people who are not customary family representatives. Family sources say some of the churches pay as much as US$6000 monthly as rent to people who are not the rightful owners of the land, including to officials of a Government agency, which had originally been allocated the land.

Now, the Roll Call….

On Friday, August 5, 2011, the Mantse Ankrah family published in the New Crusading Guide, the list of some of the companies that are situated on these lands. They included: Ghana Rubber Products, Glo Mobile Ghana, TFT, KIMO Homes, Allutrade, Interplast Ghana Limited, Agropack Limited, Ghana Mirror Factory, Prestige Motor Company, P.H.C Motors, Modern Auto Services, Graphic Communication Group Limited, Rana Motors, Toyota Ghana Limited, Good Year, KIA Motors, Express Maintenance, Rainbow Trading, Azar Paints, Multi Tech, Sickens Paints, Zenith Bank (Tamakloe House), Honda, Japan Motors, Pepsi, Stanbic Bank, Audi, Orca Deco, New Times Corporation, African Concrete, SSNIT (Feo Oyo street), State Transport Company, MTN Head Office.

Others include: Accra Brewery Limited, Fan Milk Ghana Limited, Chandirams Shops, U.A.C Companies, Circle Station, Rawlings Park Accra, Adjabeng AMA Buildings, Kaneshie Market, Ghana Supply Company, Ghana Cocoa Board, Divestiture Implementation Committee, Ridge Hospital, Glico House, Novotel (Accra), Bank of Ghana, SSNIT property owners, Judicial Service premises, Electricity Company (Accra), A.M.A from Awudome and across, Despite Stores, Lebanon House, Latex Foam and Ashfoam Limited (all of Industrial area), Dakman House, former Ringway Hotel, Paloma Hotel, all occupants of Okaishie, Allston House, all occupants of Agbogbloshie, Pyramid House, La GNTC distribution yard, Coffee Shop (Labone), Chinese Commodities wholesalers and Gospel Light International Church.

The rest are Top Kings, Odo Rice (Circle), Forewin Ghana Limited, City Paints, Nayak Plaza, U.T.C Building, GEO Pharmacy, Ministries and National Lotteries, all occupants from Kojo Thompson Road and beyond, shell Filling Station, Goil Filling Station, Total Filling Station, Barclays Bank, Standard Chartered Bank, S.I.C Life, Prudential Bank, Tigo Head Office, the National Museum (all within Accra Central), Volvo Company Limited and lastly GIHOC Pharmaceutical at Achimota.

The popular defense of most of the companies and religious organizations is that their sites and locations were given them by the government of Ghana acting through the Lands Commission, but the stance of the Mantse Ankrah family is that, in contravention to the Article (20) of the Constitution of the Republic, many of the lands in the North Industrial Area are not been used for the intended purpose as stated by the government during acquisition. Car and tractor dealerships, selling of generators or air-conditioners, and praying to God cannot be considered as industrial activities, worthy though they may be, avers the lawful Attorney of Mantse Ankrah. The family sources say they are in court to demand their pound of flesh, since the government has breached the agreement and has offended the constitution.

The family has also discovered that large tracts of lands in the South Industrial Area were never acquired by the government of Ghana. According to Benjamin Tettey Yemoh, the lawful attorney and Kojo Antwi Abankwa (the family solicitor), the whole of South Industrial Area was never acquired by the government of Ghana. Hence, the Mantse family, acting per its lawful attorney, has sued the Lands Commission for taken over the lands without the consent of the family and also for giving out the lands in the South Industrial Area to certain companies. The question as to how these companies were granted the lands without the appropriate compensation is an issue that is still been resolved in the Lands Court between the Mantse Ankrah family and the Lands Commission and other co-defendants.

Now that several cases have been filed in court by the Mantse Ankrah and Tibboh families, nobody can make comments on the substance and merits of specific cases until the final rulings which are expected to occur in the early parts of 2012. Whichever way the cases may end, it is expected that companies would learn their lessons and ensure that they get proper titles from land owners before they transact major business.

Source: (GB&F)

Anadarko highlights Ghana operations

Oil exploration firm, Anadarko, plans to use Ghana as a launch pad for its West Africa operations where it currently holds exploratory projects in Sierra Leone, Liberia and Cote d’Ivoire. International business accounted for 11% of the company’s total sales volumes in 2010, and one quarter of its 2011 oil and gas budget is allocated to pursuing international exploration and production. As at December 2010, 16 wells had been drilled by Anadarko and its partners in the Jubilee Field of Ghana with one additional well to be drilled later in 2011.

The company awaits the approval of a plan of development for the Mahogany East Field after submitting a declaration of commerciality in 2010 to the government. The company plans to continue in 2011 with 7-9 exploration or appraisal wells in Ghana. Aggregate proven reserves in Ghana however, as well as other international sites including China and Algeria account for less than 15% of the company’s total proven reserves. Anadarko’s income from continuing operations for 2010 totaled US$761 million compared to a loss of $135 million in 2009 and the company generated US$5.2 billion in cash flows. Anadarko owns a 31% working interest in the West Cape Three Points exploration block.

Property market faces brighter growth prospects

Real estate investment is drawing millions of dollars into the Ghanaian economy, thereby filling in the infrastructure deficit and providing
better prospects for growth.

The skyline of Accra is beginning to reflect the image of an oil exporting middle-income country. Since the rebasing of Ghana’s Gross Domestic Product (GDP) from 1993 to 2006, per capita income changed from under US$800 to US$1,318. As Ghana’s economy has grown, so has the demand for high quality residential property.

“There is a persistent need for sustainable, high quality real estate in Ghana but too often, buildings remain unfinished because of a lack of capital and development expertise,” noted Carlo Matta, the chief executive officer of Laurus Development Partners, a new entrant to the property market in Ghana.

Neither the Ministry of Water Resources, Works and Housing or the Ghana Real Estate Developers Association, keeps accurate and current data on housing needs in Ghana.
But anecdotal evidence estimates annual shortfall at about 30,000 units.

Mr Matta, who heads Laurus, a company incorporated in Ghana in 2009 believes that the trouble with the country’s real estate industry is the lack of synergy between the property market and the financial sector.

“I think there is a huge housing deficit especially in the mid and lower segment in Ghana. Obviously, there is no proper mortgage industry. But the problem will be solved by increasing the supply and also by being able to support the development of the mortgage industry.”

“Obviously for us it is an interesting sector and we are exploring it actively and hope in the near future to be able to launch mid-income housing projects in Ghana,” he said.

According to data gathered by the Ghana Investment Promotion Centre, the real estate industry is an alluring sector for foreign investors as it promises high investment returns.

However, most of the housing units on the market are targeted at high-income earners and Ghanaian returnees with price tags of villas recorded as high as US$500,000 on average.

“We are not looking at the high-end market in the immediate future. We think that it is a market that is already crowded so we think a better opportunity for us is mid-income housing units where there is a huge and unsatisfied demand,” Mr Matta.

For now, Laurus is focused on challenging the status quo and developing environmentally sustainable, large-scale residential and commercial properties.

The firm will soon begin the construction of a US$60 million office space complex at Airport City, one of the fastest growing commercial districts in Accra. With the address of ‘One Airport Square,’ the project was designed by the award winning Italian architect, Mario Cucinella. It comprises shops and offices and is expected to create jobs.

The 17,000 square metre multi-storey complex scheduled to be completed in 20 months is envisaged to become a hub for visitors from around the world and will allow Ghanaians to enjoy the same world-class working and leisure experience as they would overseas.

“The buildings we develop are conceived and designed to be relevant not only today, but in the next 20 or 30 years. It is very important that we show this long-term commitment to Ghana,” he said.

Carlo Matta, CEO of Laurus Development Partners and Amanda Jean Baptiste, Director of Real Estate of Actis,
unveil One Airport Square project in Accra

“The buildings we develop are conceived and designed to be relevant not only today, but in the next 20 or 30 years. It is very important that we show this long term commitment to Ghana,” said Mr Matta

Laurus draws its financial power from Actis, a project investment company, which partly owns the landmark Accra Mall shopping centre. Actis provides Laurus with the financial muscle to deliver complex, long-term projects in the challenging West African business environment.

“The Accra Mall and One Airport Square are very different products and projects. I will say Accra Mall was good encouragement for us because it was very successful and became a landmark in Accra. Definitely, One Airport Square follows a completely logic because it is an office building. We want to build quality buildings and quality does not necessarily mean luxury, but rather it means doing the right thing, all the time, no matter where you are building,” Mr Matta said.

Actis, which has so far invested more than US$150 million in the real estate industry in Africa, believes that its involvement with Laurus Development Partners will give the company a stronghold on the continent and an additional footprint on Ghana’s property market.

The Director of Real Estate of Actis, Amanda Jean Baptiste explained that the company aims to double its real estate investment in the next five years and wants to use Ghana as a launch pad to control the real estate market in West Africa.

“Ghana is of course key to our strategy. For Actis, Ghana was the obvious choice for Laurus’ base. Accra is fast becoming the business hub of the region with a flourishing economy and
growing numbers of multinationals choosing to locate here.”
“We see great demand for office and leisure facilities. This is what Laurus will deliver,” Ms Baptiste said.

“The key driver for our entry into the real estate market is our recognition of the increase in consumer expenditure in this market and the need for retailers to formalise value chain offerings.”

“Everyone expects to walk into a modern shopping centre wherever we are in the world. We have done so with the Accra Mall and the Palm Shopping Centre in Lagos. We are also developing the Ikeja City Mall right now. So we want to replicate what you see everywhere else in the world – it should be here in Africa and it should be here in Accra,” she added.

“We expect to invest another US$80-100 million in Accra in the next five years and critical to that strategy is setting up Laurus Development Partners. Laurus is our key factor in realising our vision,” Ms Baptiste said.

“We see the need to build multi-purpose office space in sub-Saharan Africa and we think the market is right for us to do this in Accra,” she said.

The Airport City project was conceived about two decades ago as part of the Ghana Gateway programme.

The area has so far attracted multimillion dollar investments and the presence of the country’s top banks, hotels, and telecom and auto companies is gradually turning the area into a prominent multiplex.

A major example of the growing credit-worthiness of Ghana in global financial markets may be gleaned from the high-quality and volumes of financing that the Ghana cocoa sector has been enjoying in recent years.

Cocoa has over the years proven to be one of the major pillars of the economy of Ghana, being the second largest export earner after gold. And the industry has been boosted with the pre-export facility offered every year to the Ghana COCOBOD – the state-owned purchasing and global marketing agency – to facilitate the purchase of the commodity from farmers. The syndication book runners for last year’s financing for COCOBOD were Bank of Tokyo-Mitsubishi UFJ Ltd, Dresdner Kleinwort, Natixis, Societe Generale and Standard Chartered Bank, among others.

This year also the COCOBOD and a consortium of 36 banks with Standard Bank as one of the joint mandated lead arrangers for the transaction along with Credit Agricole, International Commercial Bank of China, Ghana International Bank and Sumitomo Mitsui Banking Corporation have signed a trade finance facility for the purchase of cocoa for the 2010/2011 season. This year’s transaction was oversubscribed at $1.8 billion and the borrower, COCOBOD, increased the facility size to $1.5 billion from last year’s $1.2 billion.

Such has been the growing appetite of financial institutions for supporting the cocoa industry, Ghana’s most stable agro sector, thereby helping to raise the production levels and overall foreign income earnings for the country. Ghana currently produces about 20 percent of world traded cocoa bean volume, and the country’s cocoa is considered one of the most superior by way of quality and trades at about 10% premium on Global Cocoa exchanges. The health-related benefits of the crop – as recent scientific study has confirmed that, the antioxidants and other  plant-based nutrients in chocolate and cocoa products are highly associated with the amount of non-fat cocoa-derived ingredients in the product – is expected to drive world demand for the commodity and Ghana’s cocoa bean, with its premium quality, will continue to attract growing international demand. One of the challenges that COCOBOD must manage  is to ensure that there is an adequate production volume of cocoa beans to cover the financing facility. The successful track record of the Board is such that  it has never defaulted in its obligations under any of the previous financing facilities arranged. Over the last ten crop seasons, a total of USD 7.09 billion has been raised by the COCOBOD.

The total facility drawdown over the years totalled USD 6.74 billion for the period. The COCOBOD’s achievement of 100 percent repayment record in all facilities arranged to date provides a high level of integrity for the organisation.

Considering the total number of 36 international commercial banks involved in the cocoa business in Ghana, the total drawdown of such huge amounts with a 2.5 percent interest rate against a collateral of a minimum of 441,000 MT of fixed cocoa contracts valued at about USD 1.32 billion, it is remarkable that there have been no defaults ever.

Repayment obligations to the financial institutions have been met from the collection of sales proceeds paid into the COCOBOD’s Collateral Accounts.

A COCOBOD official at a seminar on Trade Finance Facility in London in June 2010 noted that “our obligations have already been met and it is anticipated that the total collateral amount will be used to repay the loan in full.”

The part being played by other industry stakeholders, such as the Cadbury’s of the United Kingdom, or Nestle’s of Switzerland, has been commendable regarding the support to cocoa farmers and the provision of social amenities to farming communities. The chocolate sector looks set for further consolidation with the smaller players struggling to offset higher cocoa prices, claims one market analyst, and therefore chocolate manufacturers whose primary raw material is cocoa will face stiff competition amongst each other. Cadbury purchased about 70 percent of cocoa beans it requires for chocolate manufacturing from Ghana. In January this year, the company marked its 100th year anniversary of cocoa buying from Ghana.

Allison Ward, Head of Global Corporate Responsibilities told GB&F that the company spent £30 million out of a total of  £45 million on social amenities globally in Ghana alone over the last decade. Cadbury is also exploring carbon reduction techniques to secure more sustainable cocoa farming. “By 2018, Cadbury estimates, it will have made a demonstrable difference to the lives of half a million Ghanaian farmers.” Mrs Ward noted.  A lot is going on to ensure the flourishing of the cocoa industry. However, there is a view that if the cocoa industry is to grow substantially, then increased local consumption by Ghanaians of cocoa products must be encouraged.
Figures available from the COCOBOD indicate that the level of Ghana’s cocoa production has nearly doubled with massive increase in annual production from 389,000 metric tons (MT) to 700,000MT over the past nine years. The country continues to target an annual production of one million metric tons of raw beans even as it also attempts to process locally more beans into value-added products like cocoa butter, cocoa cake, cocoa powder, cocoa milk and chocolates. The growth and continued diversification of the industry has been hailed by all stakeholders as very encouraging. Indeed the Government of Ghana, the cocoa farmers, the COCOBOD and all its six affiliate organisations as well as the foreign partners in the Ghanaian cocoa industry such as the buyers and processors, and the industrious lenders have all in their diverse ways been a part of the huge success. COCOBOD, the statutory public board, established in 1947, to regulate Ghana’s cocoa industry has six subsidiary companies responsible for; quality control, research, produce buying, seed production, disease control and marketing. Farmers, who are the primary source of the commodity, have been involved in most major decisions and programmes in the industry.

They have also seen a sturdy rise in remuneration. For example, farmers currently earn 75 percent of the net of the “Free On Board” (FOB) price, paid in the local currency equivalent, compared to 71 percent during the previous season. Mr. Theophilus Agyare-Asare, General Manager . Operations for Akuafo Adamfo, one of several independent licensed cocoa purchasing companies, remarked that the Ghanaian cocoa farmer has seen a lot of improvement in their standard of living.

The corporate social responsibility programmes of COCOBOD and other corporate bodies with interest in the industry both local and foreign have included such assistance over the years as scholarship schemes, rural housing schemes, health services, access to clean water, roads and even solar street lights in certain parts of the cocoa growing areas. This obviously has meant significant investments in infrastructure and other facilities by the COCOBOD and the other stakeholders. The COCOBOD, for instance, successfully arranged a US$200 million medium term capital expenditure facility in March 2007 to facilitate the expansion of storage facilities and improvement in quality assurance.

Currently there are no official figures on how many cocoa farmers there are in the country, but it is estimated that the 14 buying companies have registered nearly one and half million farmers around the country. The two top licensed buying companies (LBCs), Kuapa Kookoo and Akuafo Adamfo, have altogether more farmers on their registers than all others like Adwumapa, Cocoa Merchant, Transroyal, Royal Commodities, Olam and Fedco Evando among others. The LBCs have formed an association to work towards the interest of farmers and the development of the industry.
Known as The Licensed Cocoa Buyers Association of Ghana (LCBAG), the companies have joined forces to help combat the spate of smuggling of the commodity to neighbouring countries which has over the years contributed to Ghana’s production decline.  In general, smuggling has occurred when Ghanaian farmers, buying agents or other criminal foreign operatives have tried to take advantage of differentials in the purchase prices, currency exchange rates, corrupt customs officials, and porous borders between Ghana and its neighbours. In most years, Ghana has suffered because cocoa prices  offered in adjoining countries in the CFA currency zone, has been higher than the price offered locally, and this has provided opportunities for arbitrage to enterprising criminals. The chairman of the buyers association, Nana Adade Boamah, has admitted the negative effect of cocoa smuggling “threatened the existence of licensed cocoa buying companies in particular and the cocoa industry in general.”

The high commitment of the association has also seen the association investing in weighing scales, tarpaulins, vehicles, and the development of other facilities. “Our interest is directly linked to the interest of cocoa farmers, the cocoa haulers, COCOBOD, and the government,” he said. As of the end of September 2010, provisional figures from the industry regulator, COCOBOD, for both the main and light crop seasons stood at 632,024 tonnes, 10 percent lower than the projected figure of 700,000 tons.

The highest cocoa production figure in Ghana of 740.458 tonnes was recorded in the 2005/2006 crop season, but the highest export figure was rather in the following season,
2006/2007. That season’s production stood at 614.528.