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RE -Hon. Isaac Adongo to Dr. Mahamudu Bawumia On Economics – Abdallah Matin

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RE -Hon. Isaac Adongo to Dr. Mahamudu Bawumia On Economics – Abdallah Matin

Economics is the study of human behaviour and for one not to understand the behaviour of Hon Adongo is to lack the foundation of economics. Real economics, to put basically, focuses on behaviour of human being in the context of unlimited wants and scarce resource. The economics one needs to understand Hon. Adongo’s behaviour can be termed “Political Behavioural Economics”, defined as the erratic behaviour of a politician to coherent and cogent argument using nebulous concept and farcical jargon to score cheap political acceptance and popularity. This political behaviour has always driven Hon. Adongo to say something in response to whatever is being said by Dr. Bawumia. So, I am the least surprised about the so-called reply to excerpts of the speech by Dr. Mahamudu Bawumia at the Central Regional TESCON Conference. Characteristic of any reply by Adongo to brilliance (Dr. Bawumia) is dearth in knowledge.

But as a student of economics and for the fidelity to the economics discipline, it is incumbent on us to disallow the deliberate attempt by characters like Hon. Adongo to encumber the analytical space with unhealthy doses of economic analysis. Unlike his unprofessional and amateur surgery on the issues raised by Dr. Bawumia, I will take all the issues raised by Adongo, fighting the temptation to respond to his lack of decorum, and expose the lack of depth and the inherent self-serving aggrandisement.

1. Naivety, classical economic theories, debt trap, high fiscal risks, external vulnerabilities and extreme hardship. These are the key opening words of Hon. Adongo in reference to the speech by Dr. Bawumia and his management of the economy. It is obvious that Hon. Adongo lacks a proper understanding of the meaning of these words in context. He averred that Dr. Bawumia mismanaged the economy into debt trap, external vulnerabilities and extreme hardship. Interestingly, he never elucidated or pursued these allegations beyond the opening. It must be put on record that Ghana’s periods of debt trap were period before HIPC and between 2012-2016. A country in a debt trap when debt servicing becomes a hindrance to the repayment of principal bogging down the country in a cycle of debt. High interest rates and lower economic growth are the features of such a situation. Are the interest rates on debt high? What has been the average growth rate of the economy under the current government and the previous NDC government, sequestering the effect of COVID-19? Extreme hardship? No better measure than inflation and unemployment and we all know the periods these were very high.

2. Ill-fated Deficient technical analysis of exchange rate development? It is surreal that after 3 years of the debate on exchange rate analytical brouhaha, Hon Adongo has not picked up any new lessons aside the archaic and rigid conceptual framework of exchange rate depreciation. The likes of Dr. Nii Moi Thompson and Dr. Ato Forson jumped into the debate without success. I am not sure this is the time it will be won by Hon. Adongo. Maybe this time around, Honourable will learn in repetition. David Henderson who probably was the first to hold the views now held by Hon. Adongo and his cohorts would have probably changed his position after the facts. Hon. Adongo should go and read about Purchasing Power Parity (PPP). If inflation differential between two countries can double (100%) and PPP can hold, which is does hold, then depreciation can be 100%.

3. Interdependence of economic variables. The economic analysis carried out by Dr. Bawumia was clear and unambiguous. Of course, it cannot be clear to the hollow mind. Not every economist understands the transmission mechanism illustrated by Dr. Bawumia in his analysis of the interdependence of the economic variables. Hon. Adongo does not understand and/or appreciate the illustrated mechanism. If he had understood and appreciated what was expressed, he would not be saying that the expression was an admission of unsustainable borrowing. If he had, he would not have been naïve to call the analysis of Dr. Bawumia naïve. If he had, he would not ask the dumbest of all questions “ will he use inflation and exchange rate to pay for the debt?” Hon. Adongo should read the relationship between public debt and inflationary pressure in a classical research with panel data by Romero and Marin (2017). I am sure he will not ask such a lame question afterwards. Anyone who studied elementary economics does not need to labour to see the direct linkage between exchange rate and public debt (especially external debt which is usually foreign currency/vehicle currency denominated). Dr. Bawumia advanced the need for prudent debt level to ensure stability in exchange rate, inflation, interest rate and economic growth. In essence, to have stable inflation rate, interest rates, exchange rate and economic growth, your debt level must be at prudent level. Put in another way, unsustainable debt level will put the other stated variable in disarray. No theory or empirical evidence can demonstrate otherwise for all these variables. Hon. Adongo could not address this central argument of Dr. Bawumia except to clutch unto peripheral issues.

4. Discounting the relevance of the interdependence of major economic variables. Hon Adongo without cogent argument to discredit the transmission and interaction of the major economic variables with public debt level resorted to the argument that these variables are not relevant in explaining unsustainable debt level. Really? Why do we then have to worry about sustainable debt levels if it were not concerns about economic growth? What are the relevant variables then? Guess what! Hon. Adongo could not provide any. Rather, he resorted to the 2021 budget (a period government was concerned about fighting the pandemic) to create a dishonest picture of government using 91% of tax revenue to finance public debt. This speaks to the honesty of Hon. Adongo with which he accused Dr. Bawumia of dishonesty.

5. Dishonesty in an alleging dishonesty. In a substantial part of what is supposed to be response to the current statement of the Vice President on the management the economy, Mr. Adongo, focused on questioning the credibility and honesty of Dr. Bawumia. He commented on the limited fiscal space and current debt levels without factoring in COVID-19 but in subsequent argument, he factored in the pandemic to wither away the competence in managing the currency. Incredulous! Aside from this marked dishonesty in alleging dishonesty, to dedicate a page to his usual theatrics and lousy comments about “Mallam-Atta Market Inflation” and Hajia Samira buying tomatoes and onions for Okro Soup speaks to the ineptitude of a person suppose to be representing the good people of Bolgantaga Central. Heavens know that Ghanaians cannot take sermon on credibility and honesty from Mr. Adongo.

6. “Dr. Bawumia attributed exchange rate movements to the fundamentals of the economy without due consideration for exogenous shocks”. Did he make such a statement? The lawyers will say, you can’t approbate and reprobate! You fault Dr. Bawumia for exchange rate depreciation but you attribute any gains of the currency to a benevolent spirit external to the system. Did I read from him that the Cedi was doing well because of reduced importation occasioned by COVID-19? For the records, the Cedi ended the first quarter of this year as the best performing currency in Africa, outperforming 15 currencies. For the records, the gain of the cedi profited from growth-related interventions such as diversified exports of cocoa and gold and the Forex forward market initiatives of the Central Bank. None of this is exogenous. The widespread of COVID-19 cases across the globe will zero-out or sedate its effect on foreign exchange. It would have been honourable for Mr. Adongo to live his name and tell his readers the exogenous factors.

7. Ghana’s debt burden. Neither the government nor Dr. Bawumia is denying that the debt stock of the country has increased significantly over the past one year on the back of COVID-19. Revenue shortfall and COVID-induced expenditure for the containment of the virus mainly explained the situation. The admission by the Vice President was a sign of respect and fidelity to the facts. Dr. Bawumia will never hide and has never hidden from economic data and facts. But the appetite for low-interest debt instruments of the Republic is a vote of confidence in the management of the economy. To have a Eurobond oversubscribed under this current global debt financing architecture is a sign that the investors have faith in the prospects of the borrower to repay. For who lends money to unworthy borrower?
As stated at the beginning, I understand why Mr. Adongo will want to respond to Dr. Bawumia even when the response is empty. But it will be worthwhile for Mr. Adongo to be a merchant of pork than to venture into the hawking of economic concepts for fame.

 

Abdallah Matin
[Former TESCON President, UG]

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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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