Business Analyst - August 9

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Tuesday, August 9, 2022. Vol. No. 179
GH¢2.50
• Rt. Rev. Dr.
Paul Kofi Fynn,
Chancellor of
Wisconsin
University
GovErnMEnt
has promised to
continue to be
proactive in
addressing the
impact of external and
domestic headwinds on the
economy and on the lives and
livelihoods of Ghanaians.
this is coming after
ratings agency, S&P, revised
Ghana’s credit rating to CCC+,
from B-.
But the government in a
statement from the Finance
Ministry said it has
implemented key revenue and
expenditure measures,
including the 30% cut in
discretionary expenditures,
and as such the delays in the
passage of key revenue
measures introduced in the
2022 Budget affected revenues
performance in the first half
of the year.
However, all the revenue
measures introduced in the
2022 Budget, including the
review of the MDA Charges

Tuesday, August 9, 2022
Russia using Zaporizhzhia nuclear
power plant as army base — Ukraine
ruSSIAn forces occupying
the Zaporizhzhia nuclear
power plant have turned the
site into a military base to
launch attacks against
ukrainian positions, the head of
ukraine's nuclear power company says.
Petro Kotin told the BBC the threat to
the plant was "great", but that it
remained safe.
For days, ukraine and russia have
blamed each other for attacks on the site,
Europe's largest nuclear plant, raising
concerns of a major accident.
the complex has been under russian
occupation since early March, although
ukrainian technicians still operate it.
over the weekend, ukraine accused
russian forces of attacking the Soviet-era
site, saying two workers were taken to
hospital with shrapnel injuries and that
three radiation sensors had been
damaged.
Mr Kotin, who heads Enerhoatom,
said 500 russian soldiers were at the
plant, and that they had positioned
rocket launchers in the area, claims that
cannot be independently verified.
"they [russian forces] use it [the
power plant] like a shield against the
ukrainian forces, because nobody from
ukraine is going to do something," Mr
Kotin said.
"the ukrainian Armed Forces know
that these are ukrainian personnel and
this is a ukrainian plant and there are
ukrainian people [there] so we aren't
going to kill our people, our staff and
damage our infrastructure."
Zaporizhzhia nuclear power plant is
the largest in Europe
the plant's staff, Mr
Kotin said, were working
under pressure and in
danger, and some had been
captured, beaten and
tortured.
He said russia's plans
were to disconnect the
plant from ukraine's grid
and eventually connect it
to russia's system.
oleksandr Sayuk, the
mayor of nikopol, which
sits on the opposite side of
the Dnipro river, told the
BBC last week that his city
was under russian
shelling "almost every
night", and that the attacks
were being carried out by
forces at the nuclear plant.
the tensions have led
to growing calls for
international inspectors to
be allowed to visit the site.
the un Secretary
General, Antonio Guterres,
said "any attack [on] a
nuclear plant is a suicidal thing", while
ukrainian President volodymyr Zelensky
described russia's actions as "nuclear
terrorism".
"there is no such nation in the world
that could feel safe when a terrorist state
fires at a nuclear plant," Mr Zelensky said
in his nightly address on Sunday.
russia, however, denied the
accusations, and blamed the ukrainian
forces for the attacks. the country's
defence ministry said a high-voltage
power line had been damaged as a result
of the shelling.
the Institute for the Study of War, a
Washington-based think-tank, said last
week that russia was using the plant to
play on Western fears of a nuclear
disaster, "likely in an effort to degrade
Western will to provide military support"
to ukraine.

Tuesday, August 9, 2022
Addressing external and domestic headwinds on economy
Govt promises
to be proactive
• Continued from front
Bill, the tax Exemption Bill, the E-Levy
Bill, have all now been promulgated by
Parliament, adding “these fiscal
measures are now in full
implementation mode to support our
fiscal and debt sustainability policies”.
“the government is committed and
is confident that it will successfully
emerge from these challenges in the
shortest possible time as we have
demonstrated the track record to do so
in the Akufo-Addo led Government”, the
statement pointed out.
Government unhappy with S&P
over credit rating
Meanwhile, the government has
expressed disappointment by rating
agency, S&P’s, decision to downgrade
Ghana despite the bold policies
implemented in the 2022 to address
macro-fiscal challenges and debt
sustainability which have been
significantly exacerbated by the impact
of these global external shocks on the
economy.
“our current engagement with the
International Monetary Fund for a
programme, incorporating our
Enhanced Domestic Program (EDP), is
expected to support our drive to restore
and sustain macroeconomic stability;
debt sustainability and promote growth
and job creation whilst ensuring social
protection to achieve our vision of a
Ghana Beyond Aid”, it concluded.
Standard and Poor’s (“S&P”) Global
ratings on Friday, August 5th, 2022
downgraded Ghana’s foreign and local
currency credit ratings from ‘B-/B’ to
‘CCC+/C’ with a negative outlook.
According to S&P, the downgrade is
due to intensifying financing and
external pressures on the economy.
In arriving at its decision, the credit
rating agency considered the lingering
effects of the CovID-19 pandemic and
the severe global shock of the russian
invasion of ukraine on Ghana and the
consequent fiscal and external
imbalances; elevated gross financing
needs in the face of International
Capital Market hiatus; the limited
commercial financing options and the
credible steps taken by government to
fast-track fiscal consolidation and the
passage of key revenue bills.
We’ve adequate
LPG for consumers
• LPG Marketers
Association assurance
tHE LPG Marketers Association of Ghana
has assured Ghanaians of the availability
of more of their products to buy from retail
outlets of its member across the country.
the vice President of the LPG Marketers
Association of Ghana, Gabriel
Kumi, who gave the assurance, stressed
that despite the strike costing them they
believe “it was worth it.”
“If a business owner will shut the
business that feeds them and their families
for almost 4 days, you can imagine
what the situation will mean to them. We
cannot even quantify our loss for the past
few days but we believe it is worth it.
Sometimes, you have to lose to gain” Mr.
Kumi explained.
this assurance comes at the back of
an earlier strike by the association over an
embargo instituted by the government on
the construction of new LPG stations in
2017.
that development left many consumers
stranded at the pumps.
the industrial action was finally
called off yesterday after the ban on the
development of new LPG sites was lifted
in a communique by the national Petroleum
Authority.
However, the Petroleum tanker Drivers
who were also on strike alongside the
LPG marketers Associations say they will
not call off their industrial action until
their concerns with the trackers installed
on their trucks are addressed.
Chairman of the Ghana national Petroleum
tanker Drivers union, George
nyaunu explained that the tracker system
is not favourable to the drivers who
ply Ghanaian roads with petroleum products.
He said, “because of the nature of our
roads, even when you drive from Achimota
to nsawam with several potholes on
the road, the tracker will have been indicating
to nPA that the seal is being tempered
with when nothing of the sort
happened”.
Mr. nyaunu also noted that the drivers
fear they will not be given a listening ear
should the industrial action be called off
hence their decision to not return to the
steering wheels until their concerns are
addressed.
the group is expected to meet with
the national Petroleum Authority later
today and the outcome of the meeting
will determine whether they continue
with their strike.
Govt urged to intensify
implementation of
programmes designed
to expand economy
Accounting and auditing firm, Deloitte
Ghana is advising government to intensify
its implementation of the programmes
designed to expand and
improve the economy such as the agricultural
modernisation programme, industrialisation,
and supporting
businesses to take advantage of the
Africa Continental Free trade Agreement
(AfCFtA).
this is coming after the government
revised its growth rate forecast to
3.7% in 2022, from the earlier 5.8%.
the government considered increasing
domestic inflation and the disruption
in global supply lines from the
ongoing russia-ukraine war.
overall real GDP for the first quarter
of 2022 grew by 3.3% compared to an
initial target of 5.8% for 2022.
Ghana, like other developing countries
on the continent, has suffered severely
from the impact of the general
global economic slowdown caused predominantly
by the russian-ukraine
tensions and the CovID19 pandemic.
revision of initial GDP growth projections
is in the right direction, Deloitte
Ghana said, given the
uncertainties surrounding tensions between
the aforementioned nations
which is expected to aggravate the
country’s current situation.
“the implementation of the Enhanced
Domestic Programme supported
by the International Monetary
Fund is expected to improve the government’s
fiscal situation and re-instill
investor confidence. We expect these
interventions, together with government’s
initiatives on digitalisation and
improvement in commodity prices, to
yield favourable results in the medium
to long term”.
“the country’s present inflation situation
replicates that of the global
economy caused largely by the disruptions
in the global production and trade
of goods and services, coupled with
soaring oil prices. the situation in
Ghana has been worsened by the depreciated
cedi value caused by heightened
investor concerns on the country’s fiscal
stance and food supply challenges
from the shortage of fertilizer supply”,
it pointed out.
With continuous monetary tightening
and weakening supply-side price
pressures, it said, “we expect inflation
to stabilise in the medium term, however,
still above Bank of Ghana’s (BoG)
long term target of 6-10%.

Tuesday, August 9, 2022
BE PRAGMATIC WITH
EXPENDITURE CUTS
ON July 25, the Finance Minister, Mr Ken
Ofori-Atta, presented the 2022 mid-year
budget review to Parliament in which he
pledged the government’s commitment to
fiscal consolidation to help engender market
confidence and quicken the repair of key
macroeconomic indicators.
The pledge followed marked challenges to
the government’s fiscal programme, as
witnessed in the strong debt build-up, weak
revenue inflows, a widening deficit and
spiraling inflation.
The cedi has also suffered extreme
deterioration due to the lack of adequate
cover at a time when market sentiments
have heightened portfolio reversals and
disinvestments from developing economies,
including ours. To help contain these
challenges, the government announced in
March that it was cutting its spending by up
to 30 per cent to help align expenditures with
revenue.
In his presentation, the Finance Minister
said the implementation of the 2022 Budget
from January to June indicated that the
government’s expenditure control measures
had largely been successful, in spite of
significant fiscal constraints and mounting
fiscal pressures. He said those challenges had
been exacerbated by the less robust revenue
performance for the period.
Provisional data on government fiscal
operations for January to June 2022 show
shortfalls in revenue performance and a
faster execution of expenditures.
The newspaper noticed from the budget
review, for instance, that this resulted in an
overall budget deficit of GH¢28.15 billion (5.6
per cent of GDP), against a programmed
deficit target of GH¢19.73 billion (3.9 per
cent of GDP). The corresponding primary
balance for the period was a deficit of
GH¢7.68 billion (1.5 per cent of GDP), against
a deficit target of GH¢672 million (0.1 per
cent of GDP).
It is evident, in our view, that beyond the
bulging debt, the biggest challenges facing
the economy are spending pressures and
weak revenues.
While rigid expenditures, such as wages
and salaries, interest costs and statutory
funds, continue to rise, revenues have been
disappointingly low.
This, to us, is among the factors that have
created a cyclical problem where more
money is needed to plug holes but at the
same time more borrowing risks keeping the
economy in a dangerous debt web forever.
This calls for credible measures to boost
revenue for the pressure on borrowing to
reduce.
When the public
ratifies your business
BY MAXWELL
AMPONG
there are many
definitions of
“success” when it
comes to owning a
business.
Good marketing begets
business. So does targeted
lobbying. So does nepotism.
the list can be long. But
customer recommendation
and good reviews are cheap
and effective ways that can
get your business to be the
preferred choice in your field.
BRAND FAMILIARITY:
Familiarity is a very powerful
tool.
In the 1960s, a research
psychologist named robert
Zajonc discovered that when
people are repeatedly
exposed to a certain stimulus,
they start to react favourably
to it.
He called it the Mere Exposure
Effect, and it works. It works really
well.
When Mtn started out in
Ghana, it was really literally
everywhere you go in every sense of
the word. I literally couldn’t drive for
30 minutes without seeing
somewhere and somehow that
bright yellow box with the Mtn
initials in it. that consistency I
believe played a vital role in them
being so ahead of the other telecom
companies in many respects. We
engage the brands that we trust. We
trust the brands that we’re familiar
with. We’re familiar with
what we see every day.
EXTRAORDINARY
CUSTOMER SERVICE:
Human emotion is a very
important factor in what
we buy.
Even when emotion
comes second, there will
be many others that will
give you the efficacy you
seek and at that point,
emotion jumps in again.
People like people they
like; it’s that simple.
People gravitate to those
that make them feel
warm. there’s a saying
that people will forget
what you did but never
forget how you made
them feel. that’s what
customer service is all
about.
Aim to build a
reputation for so good a
customer service that people will
want to pass by just to feel that
warmth. Build a reputation for being
the one guaranteed nice experience
in someone’s day. Adulthood is very
hard for the majority of people. they
end up projecting their frustrations
onto the people they deal with, and
that person can be you or your staff.
If you manage to not get sucked into
that air of negativity, you might
retain that client because guess
what: who else will deal with all of
their craziness. You! the answer
must be You!
CONCENTRATE ON IMPROVING –
RIGHT YOUR WRONGS: Perfection
is a journey, not a state.
Clients are human beings. they
do not like to feel played and
chances are you are not going to do
everything right every time. the
most important thing is that you
keep working at it.
Believe in mistakes. Believe in
avoiding them by learning about
and from other’s mistakes. But more
importantly, believe in working on
not making them twice.
Chances are that a majority of
clients will remain with your brand
if they know that you can steer your
boat right when it gets off its course.
A mistake only irritates in the
beginning. An unresolved mistake is
what breeds harsh sentiment and
bad reviews. Bad reviews spread
faster by the way because people like
to avoid loss and bad experiences. So,
whether the mistakes are your fault
or that of the customer, it’s your
fault that you couldn’t curate a
smooth experience for your
customer; think of it like that.
When we started, I was
notorious for apportioning blame
during a pitch, and for good reason. I
spoke to the team about it and they
fell in line with it perfectly. My
reasoning was, if the buck stops
with me, and I am wrong, then we
are all wrong. Better to demonstrate
a clear path to solving the problem
in order to salvage whatever trust is
left from the client.
one time, many many years ago,
we gave this disastrous first pitch
and when I say “we”, I mean I.
Whenever the prospective client
exclaimed at some misguided point,
one team member would apologise
for not doing enough research or
something like that and then
another will apologise for mixing
our facts and so on and so forth. If
we lost that business, it would have
been understandable. But after the
pitch, I gave the client a firm
assurance that I was going to handle
his account personally henceforth, I
apologised for the errors of my staff
(go figure!), took his advice on how
to run my team better (they always
do that), and then I totally aced the
next pitch alone (to demonstrate a
change).
I have expanded on 3 how’s.
Build brand familiarity, give
extraordinary customer care, and
work on accepting and improving
mistakes. there are others. offer a
guarantee one way or the other and
do not fail to deliver on that
guarantee. Build home support
wherever your business is, for people
like to support their own, arguably.
Have Loyalty Schemes. Execute good
pricing strategies. Partner with
popular people to increase your
approachability. utilise Social Media.
Provide Free WiFi (it’s a people
magnet in 2020). Create scarcity.
there are many other how’s.
Here is where all that should be
headed: people should walk into
your office without question. Your
name should be the first they
mention instinctively when they
need the services you can provide.
You should have people come to you
for value, and for reliability.

Tuesday, August 9, 2022
Wisconsin Chancellor commits 10k
to GJA’s Journalists Support Fund
tHE Chancellor of
Wisconsin International
university
College, Dr.
Paul Kofi Fynn,
has committed
an amount of GH¢10,000 seed
money to the Journalists Support
Fund.
the money is to help build
the capacities of journalists
and as well support their welfare.
Dr. Paul Kofi Fynn gave the
money at the opening ceremony
of the three-day retreat
at the Mount Pleasant Inns
and Apartments at obosomase-
Akwapim in the Eastern region.
the Ghana Journalists Association
(GJA) held its first retreat
to brainstorm over
policies and programmes that
will strengthen the GJA as well
as offer hope to its members.
the three-day retreat,
dubbed, "Building Legacies in
Welfare, professionalism, and
rebranding to reposition GJA
for A better future", also focused
on some critical subjects
including the welfare of journalists.
Speaking at the event, Dr
Fynn expressed the hope that
more institutions will also contribute
so that the aim of the
Journalists Support Fund can
be achieved.
He also implored journalists
to promote the good things
about Ghana to the world, noting
that the pen was more
powerful than a weapon.
He noticed that people had
a bad impression of the African
Continent, debunking the notion
that Africa is not bad as
some people see it.
"We are depending on you
to tell the whole world that
Africa is not a dark Continent,
a place of suffering. Africa, especially
Ghana has a lot of good
things in it. Write balanced
stories to promote the image of
Ghana and help make Ghana a
better place," he added.
GIPC signs MOU for deeper
collaboration with GSE
tHE Ghana Investment Promotion Centre
(GIPC) and the Ghana Stock Exchange (GSE)
have today signed a Memorandum of understanding
to facilitate a deeper collaboration
between the two institutions.
the Mou was signed on behalf of the two
institutions by Yofi Grant, CEo of GIPC, and
Ekow Afedzie, Managing Director of GSE, at
the Centre's head office in Accra.
the Mou establishes a practical framework
for developing greater cooperation between
the GIPC and the GSE. As a result, the
GIPC and the GSE, which have the same goal
of attracting and advancing investments in
Ghana, will pursue more innovative and
proactive approaches to attracting and retaining
both Portfolio and Foreign Direct Investment.
"the GIPC and the GSE have long been
partners," said Yofi Grant, CEo of the GIPC, at
the signing. "the signing of the Mou today
represents an important milestone under
which we will jointly explore ways to work together
to attract greater investment into the
country and advance our visibility and connectivity
with international markets."
Both parties have been looking forward to
this partnership to accelerate the collaboration
needed to attract more
investments into Ghana and
to use the GSE platform to
raise patient capital to catalyze
the much-needed
growth of several industries
for the development of the
Ghanaian economy.
According to Ekow
Afedzie, Managing Director
of the GSE, the partnership
will go a long way toward
supporting the exchange's
activities. He said: ‘’the GSE
strategic plan aligns with the
national strategy of making
Ghana the financial hub and
the preferred investment
destination in the sub-region
and I believe that this historic
Mou will help leverage
each other’s strength and
networks to grow investment
and support national economic development.’’
Gracing the occasion as a special guest
was the Director General of the Securities and
Exchange Commission (SEC), rev. Daniel ogbarmey
tetteh. In his remarks, he said: “the
synergistic opportunities between Foreign Direct
Investment (FDI) and Foreign Portfolio
Investment (FPI) cannot be overemphasized.
FDI Inflows assist in the value creation, required
to generate attractive portfolio investment
opportunities. FPI, on the other hand,
helps to deepen the capital market, improve
liquidity, and provide more scope for investment
and capital raising. Ghana is very ripe
for both FDIs and FPIs given the compelling
opportunities existing today and therefore it
is time,
more than ever, for an even stronger collaborative
effort between the GSE and the
GIPC to garner higher FDI and FPI inflows
into the country.”
Both parties pledged their commitment to
the flawless execution of the Mou to ensure
the full optimization of investment and capital
mobilisation opportunities from the collaboration
to support the growth of the
Ghanaian economy.
S&P downgrade: Gov’t
urged to quicken pace of
fiscal consolidation
EConoMISt with Databank,
Courage Martey has reiterated calls
for government to hasten the pace
of fiscal consolidation in the short
to medium term.
In an interview with Citi Business
news, the economist said this
will restore the country back above
the current downgraded position
that the country is facing.
His call comes as international
ratings agency, S&P Global ratings,
last week revised Ghana’s rating
from B-/B to CCC+/C, a situation
that threatens Ghana’s debt sustainability
efforts with investors demanding
higher credit risk
premium.
“there are a number of things
that need to be done for us to get an
upgrade. It significantly hinges on
rebuilding fiscal and external
buffers because that has been the
main point of concern for investors.
there must be an improvement in
our fiscal deficit position. now, if
you look at the S&P statement, for
instance, they essentially considered
the need to record a primary
surplus equivalent to 2% of GDP.”
“that is a tall order though government
has already signalled that
it is working to record a primary
surplus equivalent to 0.4 worth of
GDP. We are not far from the direction
that the fiscal situation should
be heading, except that it is moving
slower than the rating agencies
would anticipate. thus, government
should be able to quicken the pace
of fiscal consolidation. that would
be good news towards, reinstating
us back above the current downgraded
levels we have found ourselves
in,” he said.
S&P Global ratings said though
government has taken steps towards
consolidating the fiscal
deficit, including the recent passage
of the Exemptions bill, high borrowing
costs and softening growth
make it difficult to put debt to GDP
on a downward path.
After a careful assessment of the
economy, S&P also reviewed the
country’s economic outlook to negative.
the negative outlook, in a statement
issued by S&P on Friday,
August 5, 2022, reflects Ghana’s limited
commercial financing options,
and constrained external and fiscal
buffers.”
S&P Global ratings also noted
that the Covid-19 pandemic and the
russian invasion of ukraine have
worsened Ghana’s fiscal and external
imbalances.
Demand for foreign currency
has been driven higher by various
factors, including non-resident outflows
from domestic government
bond markets, a lack of access to Eurobond
markets, retail dollar purchases,
dividend payments to
foreign investors and higher costs
for refined petroleum products.
Currently, the local currency
which has seen a sharp depreciation
in recent times is nearing ¢9 to
one uS dollar.
It would be recalled that government
earlier this year introduced
some revenue generation measures
such as the E-Levy, the tax Exemptions
Bill, some cuts in discretionary
spending.
However, S&P notes that while
these changes could improve revenue
generation going forward, the
situation remains challenging.
Credit: Citinewsroom

Tuesday, August 9, 2022
Soaring inflation puts Central
Banks on a difficult journey
CEntrAL banks in major
economies expected as
recently as a few months
ago that they could tighten
monetary policy very
gradually. Inflation seemed to be driven
by an unusual mix of supply shocks
associated with the pandemic and later
russia’s invasion of ukraine, and it was
expected to decline rapidly once these
pressures eased.
now, with inflation climbing to
multi-decade highs and price pressures
broadening to housing and other
services, central banks recognize the
need to move more urgently to avoid an
unmooring of inflation expectations
and damaging their credibility.
Policymakers should heed the lessons
of the past and be resolute to avoid
potentially more painful and disruptive
adjustments later.
the Federal reserve, Bank of
Canada, and Bank of England have
already raised interest rates markedly
and have signaled they expect to
continue with more sizable hikes this
year. the European Central Bank
recently lifted rates for the first time in
more than a decade.
Higher real rates to help push
down inflation
Central bank actions and
communications about the likely path
of policy have led to a significant rise in
real (that is, inflation-adjusted) interest
rates on government debt since the
start of the year.
While short-term real rates are still
negative, the real rate forward curve in
the united States—that is, the path of
one-year-ahead real interest rates one
to 10 years out implied by market
prices—has risen across the curve to a
range between 0.5 and 1 percent.
this path is roughly consistent with
a “neutral” real policy stance that
allows output to expand around its
potential rate. the Fed’s Summary of
Economic Projections in mid-June
suggested a real neutral rate of around
0.5 percent, and policymakers saw a 1.7
percent output expansion both this
year and next, which is very close to
estimates of potential.
the real rate forward curve in the
euro area, proxied by German bunds,
has also shifted up, though remains
deeply negative. that’s consistent with
real rates converging only gradually to
neutral.
the higher real interest rates on
government bonds have spurred an
even larger rise in borrowing costs for
“To illustrate, marketbased
measures of
inflation expectations
point to a return of
inflation to around 2
percent within the next
two or three years for
both the United States
and Germany. Central
bank forecasts, such as
the Fed’s latest
quarterly projections,
point to a similar
moderation in the rate
of price increases, as
do surveys of
economists and
investors.
consumers and businesses, and
contributed to sharp declines in equity
prices globally. the modal view of both
central banks and markets seems to be
that this tightening of financial
conditions will be enough to push
inflation down to target levels relatively
quickly.
to illustrate, market-based
measures of inflation expectations
point to a return of inflation to around
2 percent within the next two or three
years for both the united States and
Germany. Central bank forecasts, such
as the Fed’s latest quarterly projections,
point to a similar moderation in the
rate of price increases, as do surveys of
economists and investors.
this seems to be a reasonable
baseline for several reasons:
the monetary and fiscal tightening
in train should cool demand both for
energy and non-energy goods,
especially in interest-sensitive
categories like consumer durables. this
should cause goods prices to rise at a
slower pace or even fall, and may also
push energy prices lower in the absence
of additional disruptions in commodity
markets.
Supply-side pressures should ease as
the pandemic relaxes its grip and
lockdowns and production disruptions
become less frequent.
Slower economic growth should
eventually push down service-sector
inflation and restrain wage growth.
Substantial risk inflation
runs high
However, the magnitude of the
inflation surge has been a surprise to
central banks and markets, and there
remains substantial uncertainty about
the outlook for inflation. It is possible
that inflation comes down more
quickly than central banks envision,
especially if supply chain disruptions
ease and global policy tightening
results in fast declines in energy and
goods prices.
Even so, inflation risks appear
strongly tilted to the upside. there is a
substantial risk that high inflation
becomes entrenched, and inflation
expectations de-anchor.
Inflation rates in services—for
everything from housing rents to
personal services—appear to be picking
up from already elevated levels, and
they are unlikely to come down quickly.
these pressures may be reinforced by
rapid nominal wage growth. In
countries with strong labor markets,
nominal wages could start rising
rapidly, faster than what firms
reasonably could absorb, with the
associated increase in unit labor costs
passed into prices. Such “second round
effects” would translate into more
persistent inflation and rising inflation
expectations. Finally, a further
intensification of geopolitical tensions
that ignites a renewed surge in energy
prices or compounds existing
disruptions could also generate a longer
period of high inflation.
While the market-based evidence
on “average” inflation expectations
discussed above may seem reassuring,
markets appear to put significant odds
on the possibility that inflation may
run well above central bank targets over
the next few years. Specifically, markets
signal a high probability of inflation
rates of over 3 percent persisting in
coming years in the united States, euro
area and the united Kingdom.
Consumers and businesses have
also become increasingly concerned
about upside inflation risks in recent
months. For the united States and
Germany, household surveys show that
people expect high inflation over the
next year, and put considerable odds on
the possibility that it runs well above

Tuesday, August 9, 2022
target over the next five years.
More forceful tightening
may be needed
the costs of bringing down
inflation may prove to be markedly
higher if upside risks materialize and
high inflation becomes entrenched. In
that event, central banks will have to be
more resolute and tighten more
aggressively to cool the economy, and
unemployment will likely have to rise
significantly.
Amid signs of already poor liquidity,
faster policy rate tightening may result
in a further sharp decline in risk asset
prices—affecting equities, credit, and
emerging market assets. the
tightening in financial conditions may
well be disorderly, testing the resilience
of the financial system and putting
especially large strains on emerging
markets. Public support for tight
monetary policy, now strong with
inflation running at multi-decade
highs, may be undermined by
mounting economic and employment
costs.
Even so, restoring price stability is
of paramount importance, and is a
necessary condition for sustained
economic growth. A key lesson of the
high inflation in the 1960s and 1970s
was that moving too slowly to restrain
it entails a much more costly
subsequent tightening to re-anchor
inflation expectations and restore
policy credibility. It will be important
for central banks to keep this
experience firmly in their sights as
they navigate the difficult road ahead.
“Amid signs of already
poor liquidity, faster
policy rate tightening
may result in a
further sharp decline
in risk asset prices—
affecting equities,
credit, and emerging
market assets. The
tightening in
financial conditions
may well be
disorderly, testing the
resilience of the
financial system and
putting especially
large strains on
emerging markets.

Tuesday, August 9, 2022
INSURANCE
Insurance penetration: a battle
that could be surmounted with
little but assiduous efforts
tHE insurance penetration
rate in Ghana was below 1
percent in 2009. Fast forward
to 2022, the penetration rate
has now surpassed the 1
percent mark and is currently hovering
at a rate which is less than 2 percent.
the life and non-life insurance
penetration rate is growing steadily
across the globe, and countries like
China, the united States of America
(uSA) and the united Kingdom are
experiencing double digits penetration
rates.
Insurance against unexpected risks
is all but a very important trump card
not only for businesses, but also
individuals who seek to hedge the
limitless risks that they face ranging
from property risks to individual
personal risks. Data has shown that the
patronage of Life insurance products
and services in Ghana has been on the
horizon, with the aged and the youth
now regarding Life insurance as an
avenue to secure their future against
the inevitable, death.
Life insurance products provided by
insurance companies in the country do
not only offer death or funeral benefits
which have been the toast of most
customers, but also an avenue to save
toward a particular goal for a specific
period of time. Insurance companies are
now revolutionising their insurance
products by blending insurance services
with savings and investment options.
Individuals can now save and invest,
and at the same time, insure themselves
against the unexpected.
Despite the innovative approaches
embarked on by insurance companies
in the country, the patronage of
insurance services in general is
nonetheless very low. Despite the
emergence of insurance brokerage firms
which total over eighty on the
insurance market, the patronage level
hasn’t seen any significant
improvements, with the penetration
below 2 percent. nonetheless, the influx
of insurance brokerage firms has gone a
long way to allay some of the fears that
is usually often than not associated
with insurance. Insurance brokers serve
as an intermediary and a liaison
between customers and the insurance
companies.
Insurance brokerage firms do some
of the marketing and case closing for
most insurance companies. With the
emergence of the insurance brokerage
business, insurance companies can now
get closer to understanding the
customers better, and thus, tailor
customer-centric products to meet their
demands. Customers can also rely on
their brokerage firms in the claims
settlement processes which is the
headline reason for the nonchalant
feedback to insurance services in the
country.
“
Insurance companies
and players in the
industry should
critically review their
claim settlements
processes. Advantages
could be taken of the
digitalised economy to
streamline processes
and procedures in
claim settlements.
Mobile money services
could help sort out
problem.
the Insurance Brokers Association
of Ghana (IBAG), which was set up on
27th october 1988, regulates the
insurance broking business in Ghana.
the association periodically organises
conferences for registered insurance
brokerage members to educate them on
best insurance broking practices and
new developments in the insurance
fraternity. Member-companies pay
subscriptions to keep their membership
in good standing, and also adhere to
code of conducts and other disciplinary
procedures in the broking business.
the crux of the matter is that
despite the fact that the insurance
industry is developing innovative
marketing strategies and initiatives to
rake in patronage of its services, they
need to push a little further. With little
but assiduous efforts, the insurance
industry can surmount the many
bottlenecks that bedevil the industry.
the institutionalisation of the
brokerage business is a step in the right
direction toward achieving double
digits penetration rates. Insurance
companies should descend the
hierarchical industry ladder and
continue their strong partnership with
brokerage firms in convincing the
Ghanaian market.
Moreover, more innovative products
that seeks to commingle insurance
services with investments and savings
services should be targetted. Micro
insurance is one key area that could
spearhead the agenda to penetrate the
informal sector. Individuals are seeking
to pay premiums digitally rather than
cash. Mobile money services should be
taken into deep cognisance in
permeating the informal sector.
Additionally, to allay fears and build
trusts in insurance services, insurance
firms should fulfill claim settlement
timely. Most complaints from the
general public regarding insurance
services in the country have to do with
claims settlements. the conundrum of
claims settlement resounds on the
streets of the country. Patrons of
insurance services and non-patrons
alike have questioned the claims
settlements of insurance companies.
they argue that claim settlements have
to go through several bottlenecks before
payments would be processed, resulting
in delays and inconveniences.
Insurance companies and players in the
industry should critically review their
claim settlements processes.
Advantages could be taken of the
digitalised economy to streamline
processes and procedures in claim
settlements. Mobile money services
could help sort out problem.
Finally, the regulating authority of
the insurance industry in the country,
the national Insurance Commission
(nIC), should enforced the minimum
capital requirements in the insurance
industry. In June 2019, the minimum
capital requirement of life and non-life
companies was increased from
GH¢5million to GH¢50million. that of
reinsurance companies moved from
GH¢40 to GH¢125million, that of
insurance brokers increased from
GH¢300,000 to GH¢500,000, and that of
insurance reinsurance brokers was
maintained at GH¢1million. A well
capped insurance industry would
strengthen the insurance industry and
increase the trust the customers have in
the sector.
the battle to hit double figures in
the insurance penetration rate is well
on course. Massive efforts should be
made to educate the general populace
on the importance of insurance in
ameliorating general risks. the
insurance business sector is at the bud
stage, and more investors can venture
into it. With little but painstaking
efforts, we can make the insurance
sector a better sector for all of us.
The writer is an Accountant

Tuesday, August March 9, 1, 2022 2022
Financial Wellness With Richmond Kwame Frimpong:
Before you invest,
investigate! (I)
WHEn it
comes to
investing, it
does not
matter
whether
you are a beginner or have been
investing for many years. It is never
too early or too late to investigate. We
see too many investors who could
have avoided losses if they had
investigated just a little more.
Investigating before you invest
comes in two forms; the first
represents questions you ask yourself
as an avid investor, and the second
represents questions you ask your
potential investment house (advisor).
In this edition, we throw more light
on the questions you ask yourself.
these are the questions to ask and
answer yourself before you invest.
How much risk can i
take?
It is a common saying in
investments that: “the higher the risk, the
higher the returns, and the lower the risk,
the lower the returns”. Some investments
entail what we call a level five investment
risk; the risk that can result in absolute loss
of almost all your money. these
investments are too risky for most people
(particularly the risk averse). one easy way
to reduce investment risk is to diversify. By
doing so, you may still experience swings in
investment value, however, you can reduce
the risk of a complete loss due to bad
timing or other unfortunate circumstances.
to build a solid investment plan, you may
have to be cautious of buying only for high
yield investments. there is no such thing as
high returns with low risk. Better to earn
moderate returns than swing for the fences.
If you decide to swing, remember, it can go
wrong and you can experience big losses.
Kindly refer to our publication on risk
profiling to know your risk appetite.
What is my investment
objective?
An investment objective is the purpose
for which an individual invests.
Investments decisions must be made with
a clear goal or objective in mind: regular
income, liquidity, capital preservation, or
growth. the first thing you need to decide is
which of those characteristics is most
important. In other words, are you looking
for safety, income or growth from the
investment? Do you need current income to
live on in your retirement years, growth so
the investments can provide income later,
or is safety (preserving your principal value)
your top priority? For example, if you are 50
years or older before you invest, you really
should define your objective (for instance, a
retirement income plan). this type of
objective, for instance, will help you project
your future sources of income and
expenses, and your financial account values
including any deposits and withdrawals. It
helps you identify the point in time where
you will even need to use your money and
once you have a clear time-frame you know
whether to use short, mid, or long-term
investments.
What is my investment
duration?
How long one plans to invest their
money can alter their investment plans
and pivot the level of risk an investor can
take. Same is true of how easy to get your
money back if your need it urgently. Just
having a longer time horizon does not
guarantee a higher return, but it does mean
you have time on your side to consider
other investment options and strategies
that might give you an advantage in the
long run. Establishing a time
frame(duration) you can stick with is of
great importance. If you, for
instance, need the money to buy a
car in a year or two, you will choose
a different investment product
compared to if you are doing the
same to buy a property in 10 years.
In the first case, your primary
concern is safety – not losing
money before the future purchase.
In the second case, you are
investing in a long-term goal, and
anticipating significant growth in
returns. What you care about is
what choices are most likely to help
your account be worth the most by
the time you are ready to make your
withdrawal.
Do I understand the
investment product?
never invest in something you
do not understand. Before you
invest, ensure you understand the
investment well enough to explain
it to someone else. How will the
investment make money?
(Dividends, Interest? Capital gains?) What
specific risks are associated with the
product, what type of securities does the
product invests in etc. too many people buy
the first investment product presented to
them (by friends, family or bank sales reps).
With a good understanding of the
investment product, you are able to lay out
a thorough list of all the choices that meet
your stated goal, and it gives you a better
appreciation of the pros and cons of that
particular investment. next, narrow your
final investment choices down to a few that
you feel confident about. Some investments
are great for long-term retirement money.
others are more speculative, which means
maybe you can put some ‘play money’ or
‘take a chance’ money into them, but not all
of your retirement savings.
Where should I invest?
Where you invest your money is as
important as why you are investing the
money. Before you invest, it is imperative to
take time to investigate who would be
managing that investment and how safe
your money can be with them. one of the
smart ways of knowing who watches over
your money and their credibility is to take a
look at the governance structures, how well
they are regulated, as well as their track
record (have they been successful in the
past?). Investigate if the investment
product is licensed and regulated. Get to
know the board of directors, get to know the
management team, get to know how the
company is doing, compared to their
competitors and it will guide you in your
investment decision.
How often can I invest?
Automating your investment deposits
consistently over a period of time is still the
best way to invest more and worry less. this
helps the investor not to cede to the
temptation of spending unnecessarily, and
the laziness that comes with having to
physically walk or drive to the financial
advisor every month to make a deposit.
Automating your investment deposits can
thus be done via standing orders or direct
debit with your regular bank, and that will
save you a whole lot of time. It also helps
you to leverage on the power of
compounding at any time “t”.
How much can I invest?
Many investment accounts (i.e.,
collective investment schemes, fixed-term
deposits, bonds, etc.) have minimum
investment amounts. So, before you take
your investment decision, you have to
determine how much you can realistically
set aside to invest. Is the amount you are
investing a lump sum (a large sum that is
paid in one single payment instead of
broken up into installments), or are you
able to make regular monthly
contributions? Some collective investment
schemes, for instance, allow you to open an
account with very little amounts and then
set up an automatic investment plan
monthly which would transfer funds from
your bank account to your investment
account. Investing monthly in this way is
called cedi-cost-averaging, and it helps
reduce market risk. If you have a larger sum
to invest, obviously more options are
available to you. In that case, you’ll want to
use a variety of investments, so you can
minimise the risk of choosing just one. the
most important decision you will make is
how much to allocate to the various
investment classes.
Conclusion
When you ask these questions, write
down the answers you receive, and what
you decided to do. Share those conclusions
with your investment advisor (if possible,
via mail) to be sure you are on the same
page with them. So that just in case
something goes wrong in the future, your
notes/email would help establish what was
agreed on, and what has been breached. At
the point of asking these questions, let your
investment professional know you are
taking notes of whatever is being said, and
they will know you are a serious investor.
You may send comments, questions or
suggestions if any to info@flfafrica.org and
@richmondkwamefrimpong across all
social media platforms

Tuesday, August 9, 2022
Quality and Operational Excellence:
Thinking typologies for solving
organisational problems [7]
Parallel Thinking
Intro to Parallel Thinking- The
Rationale Behind Group
Problem-Solving
tHE essence and
importance of group
problem-solving and
decision-making are
frequently emphasized in
academia and the business world.
Because the majority of decisions
today are made by groups of people,
the subject of group problem-solving
becomes an important one.
Although individuals can learn and
demonstrate knowledge about group
size, cohesion, conflict, and
participation in problem-solving and
decision-making, being placed in a
group facing a specific problem and
having to think and interact in a way
that assists the group in solving the
problem is quite another story.
Edward de Bono (the main
proponent of Parallel thinking) posits
that the main obstacle to thinking is
confusion. We frequently attempt to
think about too much at once. When
we encounter a problem; facts, feelings,
and fresh ideas all arrive at once,
confusing us. When a group is working
on the issue, this confusion is only
made worse. the group generally thinks
at odds with one another
(perpendicular) rather than in unison
(parallel).
Along with the confusion, de Bono
talks about thinking as challenging due
to its nebulous nature and intangibility
this makes it challenging to be
conscious of your own thinking and
even more challenging to communicate
it to others. By identifying and naming
particular thought patterns, we can
start to recognize them and give them a
physical form. By giving the thought
process a more concrete form, we can
start to consider our own thinking as
well as that of others. In doing so, we
begin to equate thinking with solving a
capital budgeting problem.
Group Parallel Thinking vs.
Conventional Thinking for Problem-
Solving
the best way to understand parallel
thinking is to compare it to
conventional argumentative or
adversarial thinking. In a traditional
argument or adversarial thinking, each
side adopts a different stance before
attempting to attack the opposing
viewpoint. Each side tries to disprove
the other side’s claims. the Greek Gang
of three (Socrates, Plato, and Aristotle)
established this school of thought over
2,400 years ago. there is not a single
element of constructive, creative, or
design in adversarial thinking. It was
never meant to be used to construct
anything; only to learn the “truth.”
on the other hand, parallel
thinking is presented when all parties
think simultaneously in the same
direction. to get a complete picture of
the situation, the direction of thinking
can be changed. Each thinker, however,
is constantly thinking simultaneously
with every other thinker. there is no
requirement for agreement.
Contradictory claims or ideas are not
refuted, but rather laid out side by side.
De Bono encourages problem-solving
teams to mentally put on a hat of a
certain colour and switch them when
necessary.
Parallel Thinking is a Collaborative
Process
At its core, parallel thinking is a
collaborative and ideally
multidisciplinary approach. that is the
biggest difference from classical design
as well as from other disciplines. While
traditional projects in the corporate
world, the classical design world, and
also in the social sector are usually
based on cooperation, parallel thinking
is based on collaboration. Cooperation
in this sense means that people work
together as a team but are not
necessarily all involved in all steps of
the process.
A parallel-thinking team on the
other hand ideally works together and
decides together, therefore each team
member is involved in all steps of the
process. In order to ensure that this
collaboration works well for the team
members and also that it produces
results within an acceptable time
frame, design thinkers make use of
three core elements: people, place, and
process.
Figure 1 Cooperation and
Collaboration [Source: Augsten and
Gekeler (2018)]
the Six thinking Hats
In his 1985 book Six thinking Hats,
de Bono describes how the method is
used by deliberately donning and
removing each of the six thinking hats.
the different colors of the hats enable
the thinker to picture or imagine
donning or removing a particular hat.
the right moment arises to invoke each
way of thinking. the various forms of
thought become more concrete and,
consequently, more approachable when
they are given names. We develop a
map of the problem space by looking
into a subject in this way. the point of
the six thinking hats method is to have
the mind focus on mapping entire
possibilities for solutions before
choosing the best course of action.
Here, an individual’s imagination is
engaged. By purposefully donning
various hats using imagination, we are
able to get around ego defense, which is
the primary obstacle to creative
thinking. It is possible to temporarily
put one’s ego aside because donning
one of the thinking hats is similar to
playing a part. the method also
narrows our focus to one aspect of our
thinking, such as the knowledge we
have of certain facts or information or
the fresh approaches we can come up
with to a problem.
Figure 2 The Six Thinking Hats
the method also concentrates our
thoughts on a particular aspect of our
thinking, such as what data or
information we are aware of or what
fresh concepts we can come up with to
address the issue. Additionally, it
creates a set of guidelines for thinking.
Having a clear paradigm makes
thinking fun. now we have the ability
to ask people to don a certain thinking
hat or take it off. We can also put on or
remove the hat we’ve chosen. It
gives us a technique for making
thinking concrete so that we can
discuss and act on the thinking
process. de Bono notes that
naming various thinking
techniques helps us to
understand a foreign process.
Six Hats Technique:
Integrating Multiple thinking
Styles, Personas and Perspectives
Green Hat
thinking Style: Green-hat
thinkers tend to be creative,
imaginative and look for
alternatives, but may not think
through the consequences.
typical response: “of course, we
could always buy a new system.”
Blue Hat
thinking Style: Blue-hat thinkers
tend to see things from a broader
perspective. they have the ability to
stand back and look at the bigger
picture.
typical response: “When the new
system is in place it will speed up the
process throughout the whole
business.”
Yellow Hat
thinking Style: Yellow hat thinkers
tend to be positive, constructive and
look for ways of making something
work.
typical response: “I’m sure we can
make the old system work if we all put
our minds to it.”
Black Hat
thinking Style: Black hat thinkers
tend to play ‘devil’s advocate’ and point
out what might go wrong.
typical response: “the new system
is only half the solution, what about
late deliveries from our supplier, it
won’t resolve that problem?”
White Hat
thinking Styles: White hat thinkers
tend to focus on facts, figures and logic.
typical response: “How much is the
new system going to cost and how
many customers can it cope with?”
Red Hat
thinking Style: red hat thinkers
tend to use hunches, ‘gut feel’, intuition
and previous experience.
typical response: “I have a good
feeling about it, I’m sure it will work
because I’ve seen it work for other
• Continued on Page 11

Tuesday, August 9, 2022 PAGE 11
Ensuring food security demands
change in fundamentals of
production – Experts
tHE Director of the Institute
for Statistical, Social and
Economic research (ISSEr)
at the university of Ghana,
Prof. Peter Quartey, has said
that with food being one major driver
of inflation, pragmatic measures must
be adopted to ensure its security and
prevent any imminent crisis.
He suggested that it is crucial for
the agriculture sector to take advantage
of irrigation to allow for all-year-round
farming which would ensure that there
is more to meet the country’s demand.
Prof. Quartey added that
government must increase investment
in domestic food production and
employ measures to make available
cheaper credit for large-scale
commercial farmers who will, in turn,
pull along the small-scale farmers to
increase production.
“I believe we have not changed the
fundamentals of food production in
this country. We provide fertilisers and
even now, the rate at which fertilisers
are supplied to farmers has reduced
because the suppliers have not been
paid.
We only farm, sometimes, just four
and five times a year because we rely on
rainfed agriculture. We are blessed with
a lot of rivers so we need to invest in
irrigation – irrigation is key. Also, we
have to invest in the value chain as a
whole.
Internally, we know it is food
inflation that is the highest, as well as
imported inflation. With food inflation,
if we can enhance food production, we
will be able to reduce the effect of
inflation. once you address food
security issues, the country will
minimise its reliance on imported food
items,” he said in an interview with the
B&Ft.
Government programmes
demand swift inputs
For the Executive Director at
Peasant Farmers Association of Ghana,
Dr. Charles nyaaba, changing the
fundamentals of production includes
government following its own
agricultural policies with investment
plans, swift inputs, and committing
resources.
He argued that a reason why
agricultural policies, such as the
Planting for Food and Jobs (PFJ), seem
to be struggling is that along the line,
government failed to put in money.
“If you come out with a policy and
you do not commit resources, how will
it work? that is where we find ourselves
with the Planting for Food and Jobs…
Along the line, though the policy is
ongoing, government failed to put in
money. We have gotten it wrong with
how we are going about it,” he said.
Predicted food crisis in 2023
recently, some agricultural sector
groupings have warned of a looming
food crisis in 2023, hence, urging
government to increase investment in
domestic food production to avert the
problem.
According to them, the increasing
cost of production would have a
detrimental influence on the number
of farmers who would plant for the
upcoming season, which would then
have an impact on market output.
the group told Daily Graphic that
the cost of cultivating an acre of maize
and legumes had risen from GH¢1,581
in 2020 to GH¢4,681 in 2022.
the groupings include the General
Agricultural Workers union (GAWu),
the Peasant Farmers Association of
Ghana (PFAG), the Ghana national
Association of Poultry Farmers
(GnAPF), and the Chamber of
Agribusiness, Ghana (CAG).
Quality and Operational Excellence: Thinking
typologies for solving organisational problems [7]
• Continued from Page 10
businesses.”
Making a Strong Case for
Parallel Thinking
Most of the major problems
in the world today persist
precisely because we have such
an excellent method of problemsolving.
this statement is not
intended to be sarcastic. We do
have an excellent method of
problem-solving. It is so good,
however, that we have come to
believe that it will solve all
problems. So, we have not
bothered to develop any other
method. the good is often the
enemy of the best. If something
is very good then we stop there
and cloak ourselves in
complacency.
What is this excellent,
traditional, method of problemsolv
ing? It is yet another
example of the basic belief that
if you `remove the bad things’
you will be left with the good
things. So, the general method is
that you analyse the problem,
identify the cause and then
proceed to remove the cause. the
cause of the problem is removed
so the problem is solved. It
works! Well, de Bono argues that
this general method is simple
and it works well, when it works.
But there are some problems
where you cannot find the cause.
there are other problems where
there are so many causes that
you cannot remove all of them.
then there are problems where
you can find the cause, but you
cannot remove it. What do we do
in such cases?
By adopting a parallel
thinking stance, while
acknowledging the excellence of
the general method of solving a
problem by identifying and
removing the cause, we also
need to do something about
those instances where the
method simply does not work.
Are these insoluble problems?
Possibly, but we ought at least to
try some other methods.
Conclusion: Practising
Parallel Thinking
now, why don’t you give this
wonderful methodology a try
within your teams
Select a topic for discussion
(e.g. an idea a team came up
with).
Have someone lead the
meeting (blue hat).
Explain each hat in turn and
give the group some time to
discuss the subject from that
particular hat’s point of view.
Encourage them to record
the conversation on a board so
that you can expand on it later.

Tuesday, August 9, 2022
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