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Mahama’s attack of the economy defies logic – John Kumah

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John Kumah(Dep Fin Minister)writes: Mahama’s attack of the economy defies logic – Part

My attention has been drawn to Mr. John Dramani Mahama’s recent address dubbed “thankGhana.” In the address, Mr. Mahama made commentary on different facets of Ghana, including political governance, economic development, and job creation. I, however, would not spend time exposing the hypocrisy of Mr. Mahama on all the issues he raised but on the economy.

As a Deputy Minister of Finance, I feel compelled to provide some facts and figures to aid the understanding and appreciation of the former President on the excellent work President Nana Addo has done to correct the mess he left and the quest to build forward better post-COVID-19 pandemic.

Perhaps it is important for me to elucidate to Mr. Mahama the government’s strives to weather the devastating effects of COVID-19. Thanks to the “people first” policy of Nana Addo when COVID first came to our Country, lives were saved, businesses were protected, and the economic cost of the pandemic largely attenuated. As a result, Ghana is currently seeing a rebound in growth, inflation is on a downward trend albeit the recent blips, the Cedi’s depreciation is at an all-time low, and international reserve is at an all-time high of 6 months of import cover.

The government has continued with the much-needed flagship programmes expected to aid the Country’s economic transformation, including the recently introduced GhanaCARES programme. However, equally crucial to Ghana’s economic rebound is the maintenance of the Country’s security given the volatile security situation of the sub-region. Indeed, the government has provided the required resources to guarantee that the territorial integrity of Ghana is maintained. Also, the massive roll-out of COVID-19 jabs is facilitating the quicker rebound of the economy.

The former President repeatedly intimated that Ghana’s economy is in a dire state and require IMF support. Indeed, the former President said that the NPP Government has refused to accept and acknowledge the Country’s economic predicaments. The ex-President’s statement is surprising, especially when Nana Addo’s government has been honest with Ghanaians on the economic situation he inherited and the measures to turn around the fortunes of the Country. Maybe, a bit of macroeconomic statistics will enable the former President to appreciate the excellent work of Nana Addo’s Government.

By the end of 2016, when Mr. Mahama was the President, real Gross Domestic Product moniker GDP was 3.4 percent. End year inflation was at a high of 15.4 percent and a currency depreciation of 9.6 percent. Central government Fiscal deficit for 2016 was 6.5 percent. Indeed, if one look at the deficit front general government where all contingent liabilities are included, the deficit could be much higher. Primary balance, which indicates the Country’s ability to service its debt, was negative at 1.4 percent. Government’s short time securities were selling at an all-time high, with 91-day bills at 16.9 percent. Current account was in the negative at 6.6 percent of GDP. Trade balance was also negative, and Ghana’s international reserves could cover only 3.5 months of imports.

Since the NPP government assumed office, real GDP has been growing with a 8.1 percent in 2017, 6.3 percent in 2018, 6.5 percent in 2019. Even with COVID-19, where the global economy plunged into recession, Ghana still recorded positive growth of 0.4 percent. According to the World Bank, the pandemic upended over a decade of growth witnessed in Sub-Sahara Africa, with an estimated negative growth of 2.4 percent in 2020. The negative growth was Africa’s first economic contraction in a generation and the deepest recession since the 1960s. Fitch Ratings acknowledged that Ghana’s 0.4 percent growth in 2020 was one of the few sovereigns globally to record positive growth, and they project a growth rebound of 5 percent in 2021.

On inflation, NPP’s record is unmatched. Nana Addo’s government has implemented policies and programmes which have resulted in a reduction in inflation from high end-year inflation of 15.4 percent in 2016 to 11.8 percent in 2017, 9.4 percent in 2018, and 7.9 percent in 2019. By 2020, with COVID-19, inflation increased to 10.4 percent but was lower than Mr Mahama’s 2016 record.

Regarding the Cedi’s depreciation against the major currencies, the performance of Nana Addo is unparallel. From a high of 9.6 percent in 2016, the average exchange rate dropped to 4.9 percent in 2017, 8.4 percent in 2018, and reduce to a low of 3.5 percent in 2021. Indeed, in February 2020, the Cedi was the best performing currency in the world. This clearly indicates that the NPP government has managed the currency better than we saw in the past. The Cedi’s performance so far this year has been phenomenal, especially when compared to 2019’s end-year larger depreciation of 12.9%, 15.7%, and 11.2% to the US Dollar, Pound Sterling, and Euro respectively.

For the most part of this year (Jan.–June 2021), the Cedi appreciated to the dollar and the Euro. As at 1st June 2021, the Cedi appreciated by 0.23% and 0.35% against the dollar and the Euro, respectively. But it depreciated against the GBP by 3.26%. This performance certainly is attributable to several measures initiated by Government and the Bank of Ghana (BoG), including the novel FX Forward Auction which has reduced pressure at the FX spot market and the Country’s relatively stable sovereign credit rating.

Other factors include the credible plan of Government to build back better the economy (restore macroeconomic stability) post-COVID-19 and return to the Fiscal rule by 2024, which has given confidence to investors. Also, the relatively large reserves and the excellent performance of the managers of the economy have contributed in keeping the Cedi in check. This has been achieved despite the deleterious external headwinds, including strengthening the dollar on the back of positive economic data, risk-off sentiments, and growth in US job numbers. By the end of August 2021, the Cedi depreciated by 1.6 percent against the US Dollar.

The figure attached shows the exchange development in Ghana from 2018 to September 2021.

It is important to note that developments in the exchange rate market under the NDC were much direr. Indeed, the Cedi as at the end of September 2012 had depreciated by 17.9% to the dollar, 14.1% to the GBP and 13.1% to the Euro at the interbank market. By September 2013, the Cedi gained marginally when it depreciated by 4.12% to the dollar, 9.97% to the GBP and 14.1% to the Euro. By the end of 2013, the Cedi maintained its level at 4.12% depreciation. However, the GBP further depreciated from 9.97% to 16.73% and Euro from 14.1% to 20.05%.

By September 2014, the currency saw it worse when it depreciated by a whopping 31.19% to the dollar, 29.32% to the GBP and 23.63% to the Euro. This development certainly reflected the competence or otherwise of the managers of the economy at that time. However, the situation improved slightly when the local currency depreciated by 14.8%, 12.6%, and 7.8% to the dollar, GBP, and Euro, respectively, by September 2015.

By the end 2016, the Cedi depreciated by 9.6% to the dollar, appreciated by 10% to the GBP and depreciated by 5.4% to the Euro. There is no denying that the NDC’s performance in the exchange rate market was dismal.

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Accomplished Diaspora Entrepreneur and Philanthropist Chairs GIPC BOARD

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Accomplished Diaspora Entrepreneur and Philanthropist Chairs GIPC BOARD

Entrepreneur, Philanthropist and Executive Chairman of KGL Group, Mr. Alex Apau Dadey, has been conferred the board chairman of the Ghana Investment Promotion Centre, GIPC. This comes off after he was in January 2018, appointed onto the Governing Board of the Ghana Investment Promotion Centre (GIPC) by the President of Ghana, His Excellency Nana Addo Dankwa Akufo-Addo, in recognition of his contribution towards the promotion of investment in Ghana.

Mr. Alex Apau Dadey has over 30 years’ experience working across multiple industries and sectors such as Fintech, Logistics, Agric, Property Development and Commerce around the globe, with major focus of his practice in the United Kingdom and Ghana.

As part of his responsibilities as Board Chair, he will be responsible for leading the Board and focusing on strategic matters, play a pivotal role in overseeing the Centre’s business as well as setting high governance standards.

Most recently, Alex Dadey established the KGL Group – a wholly owned Ghanaian group, consisting of six subsidiaries operating in several jurisdictions and multiple sectors including Fintech, Logistics, Agric, Property Development and Commerce, where he serves as Executive Chairman.

Underpinning Alex’s three-decade track record of success is his commitment to building an inclusive financial environment that provides high-value partnerships for small business to thrive and succeed across Ghana.

Mr. Alex Apau Dadey is married with 3 beautiful kids, a proud product of Mfantsipim School, Cape Coast, and holds a BSc. (Admin) degree from the University of Ghana Business School, Legon.

Alex’s formative career began in the United Kingdom in 1986 where he progressively moved up the ranks from Export Sales Supervisor to Export Sales Director at the Gordon Richman Textiles Limited overseeing key accounts in ten countries spread across Europe, Middle East and Africa.

In 2001, Alex set up a joint venture – Qualitexx Limited, with DCD Finance Group PLC., based in the city of London. As Executive Director, he was instrumental in developing the company’s trade finance and venture capital businesses across the globe. This included providing financing for several local Ghanaian businesses through the DCD Finance Group. Since then, Alex has become renowned as a strong advocate for the inclusion of the Ghanaian diaspora in the political and socio-economic transformation of Ghana.

He functions in various c-suite capacities and serves on boards of multiple institutions including Ecom Agro Industrial, Premier Textiles Group in the United Kingdom, Birchfield Investments Limited in Jersey, Channel Islands and Dubai, KGL Capital (UK) Limited and Dominion Direct (UK) Limited to name a few.

He is credited with initiating the Ghana Diaspora Homecoming Summit in 2017 and the Ghana Investment and Opportunities Summit UK in 2018, both of which are now held biennially.

Among his many achievements, the ones that stand out are.

*Excellence in Organizational Leadership*, 2017, awarded by the Ghana Diaspora Homecoming Summit Committee for the successful Execution of the Ghana Diaspora Homecoming Summit.

*Diaspora African Forum Excellence Award*, 2017, awarded at the Ghana Diaspora Summit for his prominent role in ensuring a successful summit.

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Take Advantage Of Ghana’s Business-Friendly Climate  – President Akufo-Addo To Norwegian Business Community 

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Take Advantage Of Ghana’s Business-Friendly Climate  – President Akufo-Addo To Norwegian Business Community

The President of the Republic, Nana Addo Dankwa Akufo-Addo, has urged the business community from Norway to take advantage of the business-friendly climate currently existing in Ghana, and invest in the country.

According to President Akufo-Addo, “We will continue to create and maintain the conducive investment environment that not only guarantees the safety of investments, but good returns as well. We will continue to protect legitimate investments, and preserve the atmosphere of peace, stability and security that has been an important contributor to the increasing presence of Norwegian businesses in Ghana.”

Speaking at the Ghana-Norway Business Forum, held on Friday, 26th November 2021, at the Kempinski Hotel, the President stated his government has, over the last four (4) years, done a lot of work in correcting the fundamentals of the economy which were all pointing in the wrong direction when he took office in 2017.

“We have, over the period, put in place measures needed to reduce the cost of doing business, improve the business environment, and made the Ghanaian economy not only one of the most business-friendly economies in Africa, but also one of the fastest growing economies in the world between 2017 and 2020, averaging annual GDP growth rates of 7% for those years, up from the 3.4% GDP growth rate we inherited from the previous government in 2016,” he said.

With COVID-19 wreaking havoc on economies the world over, President Akufo-Addo reassured that Government is “working to grow the economy at a much faster rate this year, which will enhance the prospects of a win-win environment for both private sector and country; an environment where companies do not just survive, but actually thrive.”

The major programme driving the revival and revitalization of the Ghanaian economy, he said, is the one hundred-billion-cedi (GH¢100 billion) Ghana CARES ‘Obaatampa’ Programme, whose main elements include supporting commercial farming and attracting educated youth into commercial farming; building the country’s light manufacturing sector; developing engineering/machine tools and ICT/digital economy industries; amongst others.

“It continues to be an exciting time to be in Ghana, and to do business in the country. Already, global car manufacturing giants, Toyota and Nissan of Japan, Sinotruk of China, have established assembly plants in the country, as first steps towards the production of vehicles in Ghana,” he said.

President Akufo-Addo continued, “Twitter is establishing its African Headquarters in Ghana, and Google’s first African Artificial Intelligence Centre is located in Ghana. We are privileged to play host to the Secretariat of the African Continental Free Trade Area, which represents, currently, a market of some 1.2 billion people, spread over fifty-four (54) countries, with a combined GDP of $3 trillion. Trading in the emerging single market began on 1st January this year”.

With Ghana witnessing a significant rise in interest from Norwegian investors, in several sectors of the economy, including agriculture, building and construction, general trading, manufacturing, oil and gas, and tourism, President Akufo-Addo commended some of his government’s flagship policies to them.

“Government is also embarking on an aggressive public private partnership programme to attract investment in the development of both our road and railway infrastructure. We are hopeful that, with solid private sector participation, we can develop a modern railway network with strong production centre linkages and with the potential to connect us to our neighbours,” he said.

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KGL Group Fully Committed to Delivering Value in Excess of GHc100Milllion Per Annum to the National Economy and Government

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KGL Group Fully Committed to Delivering Value in Excess of GHc100Milllion Per Annum to the National Economy and Government

The successful operations of KGL Group and its subsidiary companies, KGL Technology Limited, KEED and KGL Foundation, are set to contribute significantly to the national economy and Government of Ghana at an expected cumulative value in excess of 100 million Ghana Cedis per annum.

KGL Group has contributed significantly to revenue growth and capacity development across its operations in the lottery industry, collaborations with the Ministry of Youth and Sports, Ghana Football Association and social intervention programs under its CSR wing, the KGL Foundation.

The Group is set to continue its value creation drive across its ecosystem of strategic partners and envisages a total value of 100million Ghana Cedis per annum to be committed.

The key levers to guide the allocation of funds by KGL Group in concert with strategic partners and to the national economy are as follows:

1. Growth in the contribution of Corporate Taxes and other taxes to the Ghana Revenue Authority (GRA) and the Government of Ghana.

2. Value within the lottery industry from:

a. Digital lotto marketer licensing and operational fees to the National Lottery Authority (NLA) in accordance with the ongoing review of license and operational terms and conditions for KGL Technology Limited.

b. Payments to the Stabilization Fund that seeks to provide support to revenue shortfalls of the Lotto Marketing Companies as a result of the digitalization policy of NLA-KGL Technology Limited.

c. Seed capital to set up a Pension Scheme for the Lotto Marketing Companies which is currently non-existent.

3. Undertaking of Corporate Social Responsibility activities in the areas of Education, Healthcare Delivery, Sports Development, Culture, and Tourism.

4. Growing investments in the media ecosystem and the entire value chain of marketing and advertising.

In the case of the lottery industry, this announcement is singularly one of the most profitable agreements the National Lottery Authority (NLA) has brokered considering zero investment made by the Authority towards infrastructure set up and operations of KGL Technology encompassing setting up the entire architecture to run digital lottery operations on the *959# Short Code and 5/90 mobile App under consumer brand name 590Mobile by KGL’s KEED subsidiary.

To put this in context, NLA would need to generate over GHc450 million volume of gross sales at Point-of-Sale Terminals per annum for the Authority to be able to accumulate a net profit of GHc50 million which will now be delivered at no cost by KGL Technology to the Authority pursuant to reviewed agreement.

This makes the current terms of the agreement between KGL Technology Limited and the National Lottery Authority (NLA) under review by the current Board definitely a game-changer for the revenue mobilization efforts of the National Lottery Authority (NLA), Lotto Marketing Companies, and the Government of Ghana as a whole.

KGL Technology Limited since its inception has contributed significantly to the fortunes of the National Lottery Authority (NLA) and the national economy.

In the area of sports development, the KGL Group has also partnered with the Ministry of Youth and Sports, the Ghana Football Association, and the Senior National Team, the Black Stars ahead of the AFCON and 2022 World Cup Campaigns. Besides this collaborative project, KGL Group recently also committed significant financial resources to the Ghana Football Association for the development of Juvenile Football for a strategic period of 5 years.

KGL Group through its KGL Foundation has equally supported several Charity Organizations, Cultural and social-economic activities across the Country.

KGL Technology Limited has at all material times honored its tax obligations to the Ghana Revenue Authority (GRA) and Government of Ghana and as a responsible corporate citizen, KGL Technology Limited reiterates its full commitment to the revenue mobilization efforts of the National Lottery Authority (NLA) and Government of Ghana, thereby contributing significantly to the Nation’s development agenda.

Issued by: Management of KGL Group

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