THE Governor of the Bank of Ghana, Dr Henry Kofi Wampah, has stressed how central a well informed and independent media is to the functioning of modern economies and commended the rising quality and depth in financial and economic journalism in the country.
The Governor said improved access to information and public participation in economic decision making were key variables in enhancing the quality of economic management, the principal reason why the central bank had partnered the media to get the right message out to the public.
“Market economies such as ours need to depend on the content and efficient information flows to enable a variety of economic actors to make informed decisions,” Dr Wampah said in a speech read on his behalf by the Assistant Director at the Goivernor’s Department of the Bank of Ghana (BoG), Dr Johnson Asiama.
Speaking at a training on financial and economic reporting for Journalists for Business Advocacy (JBA) at Prampram in the Dangme West District, the governor said the central bank’s monetary policy mandate which had inflation targeting framework as its primary tool required transparency and regular communication for which it used its official website, as well as the partnership of the media to propagate.
However, he said the media which was it critical ally, was often occupied with sensational news and even when they did finance and economic news, it reflected a lack of a good grasp of economic issues, coupled with inaccuracies and distorted facts.
“Inaccurate reports on finance and economic issues always have negative repercussions on the economy and hinder investor confidence. It is ,therefore, imperative that we take public outreach a step further through regular communication,” he said.
The training programme
The two-day seminar on the theme, “Improving knowledge base for effective finance and economic reporting” was the maiden in a series of seminars to be organised nationwide by the Journalists for Business Advocacy (JBA) and sponsored by Ecobank Ghana.
The aim is to help to sharpen the skills and enhance knowledge of journalists to report effectively on finance and economic issues.
About 30 journalists drawn from various media organisations in the Greater Accra Region Accra had the platform to discuss a wide range of issues including basic macroeconomic analysis, the role of financial markets, analysis of the budget statement, money laundering and financial crimes and the role of journalists in economic news reporting.
The General Secretary of the JBA, Mr Suleiman Mustapha, said the association was born out after a training programme by the Ghana Journalists Association (GJA) in collaboration with the Business Sector Advocacy Challenge (BUSAC) to champion a friendly environment for businesses through advocacy and the power of the media.
He said that business journalism should go beyond reporting the facts to influencing policy in a manner that would benefit businesses in the country, and that the JBA had chosen to do advocacy to help draw the attention of policy makers and regulatory bodies to the challenges businesses face for redress. So far, the association has chalked several success stories.
Ecobank Ghana
The Head of Corporate Communications at Ecobank Ghana, Reverend Patricia Sappor, said the seminar was in line with the bank’s vision of contributing to the financial integration and economic development of Ghan and Africa at large.
She said JBA’s aim to promote private sector development and to articulate the interests of small and medium enterprises (SMEs) was concomitant with the Ecobank’s focus on growing SMEs which contribute about 90 per cent of Africa’s economies.
“Most developed countries attribute their achievement to contributions of SMEs. This is why we at Ecobank commend JBA for being the voice of SMEs in developing economy like Ghana. GB
PULLQUOTE
“Market economies such as ours need to depend on the content and efficient information flows to enable a variety of economic actors to make informed decisions.”
KEYNOTE
There is the need for the media to be more informed in order to be able to communicate economic policies to the public. Inaccurate reports on finance and economic issues always have negative repercussions on the economy and hinder investor confidence.
Friday, June 26, 2015
Petroleum deregulation is ill-timed
Some civil society organisations have criticised the timing of the government’s decision to deregulate the petroleum sector.
They have said that due to the unstable macroeconomy, expected benefits might never be realised until such a time that there is an efficient macroeconomy.
In an interview, the Director of the Kumasi Institute of Technology, Energy and Environment (KITE), Mr Ishmael Edjekumhene, said the very reasons why the country did not go for full deregulation were still the same reasons why it should not have done it now, citing the weak performance of the cedi against the US dollar.
“When we started the deregulation in 2005, we knew it will come to this. But the bottom line is that citizens have their responsibilities and the state has its own responsibility. If I don’t get to choose how I buy my fuel and the price is determined by market forces, it is also fair that the government lives up to its responsibility by making sure that we have a stable macroeconomy,” he said.
He added, “If you cannot fix that then you don’t load all those effect of what appears to be your own incompetence and inefficiency onto the consumer. So yes it’s a good policy that we have all known that it is going to come today but I’m concerned about the timing.”
KITE is a non-profit development organisation and a leading actor in the energy, technology and environment sectors in Ghana and the West Africa Sub-region.
Govt’s announcement
Government recently announced plans to take the petroleum sector regulator, National Petroleum Authority, out of the process of pricing petroleum products to allow importers and marketers to reduce their prices as well as pull in more private players into the sector.
Bulk Oil Distribution Companies (BDCs), Oil Marketing Companies (OMCs) and other commercial actors in the sector are backing the directive which gives them the free hand to price their products to reflect the prices according to world market prices.
Deregulation
The government announced a policy of deregulation of the petroleum sector in the 2004 Budget with a view to addressing the fundamental problems of the petroleum industry in the country.
This was aimed at removing the inefficiencies in the sector by allowing private sector participation in the procurement of oil, which had previously been limited to the Tema Oil refinery (TOR).
Under the deregulated regime, the private sector is allowed to import finished petroleum products (about a third of total oil demand) into Ghana through open and competitive bidding. The first such tender for the import of finished petroleum products took place in March 31, 2004.
When will be the best time?
Dr Edjekumhene said the country could not allow unfettered market forces to determine everything in this world and that price increase would continue.
“The world market prices are the same but has to do with depreciation and the only reason why they mention subsidy is the fact that government usually promise the BDCs that it will take the differences which they never do. But the billion dollar question is what is government’s role in where we are and what is the government doing to ensure that it doesn’t wash its hands of the problem that is at stake,” he said.
He said it was bound to happen but it had not happened because of the very reasons why they should not have pushed it through this time round.
Taxes on petroleum
He said government was still taking its taxes on petroleum products and had not done anything about it and that consumers did not have a choice because petroleum products were not something they could do away with.
He said ex-pump prices of petro products were around between 30 and 40 per cent and were all levies and taxes, which had nothing to do with markets but rather increase when government was able to charge more because they were percentage of the ex-refinery price.
“What is the government doing and is it prepared to forgo its revenue to cushion consumers? If we are going to do full regulation then what is the starting point if they are saying that market forces should determine the price?, he said.
Dr Edjekumhene deduced that prices should have been lower than they are to reflect the changing price of the world market but then government said there was debt to be paid.
Therefore, he said, if the Oil Marketing Companies (OMCs) were doing their own pricing and prices were already high, then it was not going to cost the OMCs what consumers were paying to bring the products in.
“So are they going to be allowed to take all the profit or government is going to collect to pay the debt that is said to have been piled up? That supernormal profit who is going to keep the difference. If government is out of the equation, then the true market cost should be lower than what is happening now,” he said.
Pull Quote
“What is the government doing and is it prepared to forgo its revenue to cushion consumers? If we are going to do full regulation then what is the starting point if they are saying that market forces should determine the price?
Key note
Economic experts have said that in spite of how much mo money we generate from the petroleum sector, the desired socio-economic benefits will not be met if government does not manage public spending.
They have said that due to the unstable macroeconomy, expected benefits might never be realised until such a time that there is an efficient macroeconomy.
In an interview, the Director of the Kumasi Institute of Technology, Energy and Environment (KITE), Mr Ishmael Edjekumhene, said the very reasons why the country did not go for full deregulation were still the same reasons why it should not have done it now, citing the weak performance of the cedi against the US dollar.
“When we started the deregulation in 2005, we knew it will come to this. But the bottom line is that citizens have their responsibilities and the state has its own responsibility. If I don’t get to choose how I buy my fuel and the price is determined by market forces, it is also fair that the government lives up to its responsibility by making sure that we have a stable macroeconomy,” he said.
He added, “If you cannot fix that then you don’t load all those effect of what appears to be your own incompetence and inefficiency onto the consumer. So yes it’s a good policy that we have all known that it is going to come today but I’m concerned about the timing.”
KITE is a non-profit development organisation and a leading actor in the energy, technology and environment sectors in Ghana and the West Africa Sub-region.
Govt’s announcement
Government recently announced plans to take the petroleum sector regulator, National Petroleum Authority, out of the process of pricing petroleum products to allow importers and marketers to reduce their prices as well as pull in more private players into the sector.
Bulk Oil Distribution Companies (BDCs), Oil Marketing Companies (OMCs) and other commercial actors in the sector are backing the directive which gives them the free hand to price their products to reflect the prices according to world market prices.
Deregulation
The government announced a policy of deregulation of the petroleum sector in the 2004 Budget with a view to addressing the fundamental problems of the petroleum industry in the country.
This was aimed at removing the inefficiencies in the sector by allowing private sector participation in the procurement of oil, which had previously been limited to the Tema Oil refinery (TOR).
Under the deregulated regime, the private sector is allowed to import finished petroleum products (about a third of total oil demand) into Ghana through open and competitive bidding. The first such tender for the import of finished petroleum products took place in March 31, 2004.
When will be the best time?
Dr Edjekumhene said the country could not allow unfettered market forces to determine everything in this world and that price increase would continue.
“The world market prices are the same but has to do with depreciation and the only reason why they mention subsidy is the fact that government usually promise the BDCs that it will take the differences which they never do. But the billion dollar question is what is government’s role in where we are and what is the government doing to ensure that it doesn’t wash its hands of the problem that is at stake,” he said.
He said it was bound to happen but it had not happened because of the very reasons why they should not have pushed it through this time round.
Taxes on petroleum
He said government was still taking its taxes on petroleum products and had not done anything about it and that consumers did not have a choice because petroleum products were not something they could do away with.
He said ex-pump prices of petro products were around between 30 and 40 per cent and were all levies and taxes, which had nothing to do with markets but rather increase when government was able to charge more because they were percentage of the ex-refinery price.
“What is the government doing and is it prepared to forgo its revenue to cushion consumers? If we are going to do full regulation then what is the starting point if they are saying that market forces should determine the price?, he said.
Dr Edjekumhene deduced that prices should have been lower than they are to reflect the changing price of the world market but then government said there was debt to be paid.
Therefore, he said, if the Oil Marketing Companies (OMCs) were doing their own pricing and prices were already high, then it was not going to cost the OMCs what consumers were paying to bring the products in.
“So are they going to be allowed to take all the profit or government is going to collect to pay the debt that is said to have been piled up? That supernormal profit who is going to keep the difference. If government is out of the equation, then the true market cost should be lower than what is happening now,” he said.
Pull Quote
“What is the government doing and is it prepared to forgo its revenue to cushion consumers? If we are going to do full regulation then what is the starting point if they are saying that market forces should determine the price?
Key note
Economic experts have said that in spite of how much mo money we generate from the petroleum sector, the desired socio-economic benefits will not be met if government does not manage public spending.
‘Pay attention to insurance’ — Keli Gadzekpo
The Chief Executive of the Enterprise Group Limited, Mr Keli Gadzekpo, has urged Ghanaians to pay attention to their insurance needs so they can have something to fall on in times of disasters.
Insurance penetration in the country is estimated at about 1.5 per cent currently, something the Insurance Commission hopes to increase soon. This can be attributed to the low level of insurance literacy among most Ghanaians.
Speaking to the GRAPHIC BUSINESS on the sidelines of a donation to the Plastic and Burns Centre at the Korle-Bu Teaching Hospital in Accra, Mr Gadzekpo said, “we are also appealing to our fellow Ghanaians, we need to pay attention to insurance. It is not a luxury we can afford, those who are at risk, the highest need insurance the most.”
The company, in partnership with their South African counterpart, Sanlam Group, donated GHC85,000 to the centre to assist victims of the twin disaster that hit Accra on June 3, 2015.
Over 150 lives were lost in the fire and flood disaster, while others lost their properties and survivors being taken care of at various health facilities in Accra.
According to him, paying attention to insurance needs would provide a certain level of relief should any disaster occur.
“We are also hoping that people will pay a little attention to when it comes to matters like that. In times like this, when you have an advantage, you have no problem. We really hope that our contribution is useful and helpful,” he added.
Responding to concerns about the upspring of several insurance companies whose claims payments are questionable, Mr Gadzekpo said it was important for people to look at the quality of the company it was dealing with, especially in the insurance sector.
“One of the things we all do so well when it comes to decision making is to look at who you are dealing with. When you go to Makola market, you just don’t walk to anybody; you walk to the woman you have been buying yam from for long, or who has been referred to you. So I think the quality of the insurance company you are dealing with is very important,” he said.
He also said the regulator of the insurance industry in Ghana, the National Insurance Commission (NIC) was instituting strict guidelines for claims payment in the country and as such insurance companies could not unduly delay claims payments as and when the need arose.
“As we are speaking now an insurance company owing you claims cannot unduly delay it. If I am not mistaken, I think the insurance guidelines reduced it to a number of days, in terms of car claims. We at Enterprise understand the need to quickly come to your aid. Really it is not your assistance, it is your right. Internally, we have our own mechanisms and we try as much as possible to pay claims within a matter of days,” he said. GB
PULL QUOTE
“We are also hoping that people will pay a little attention when it comes to matters like that. In times like this, when you have an advantage you have no problem. We really hope that our contribution is useful and helpful and at the same time,” he added.
Insurance penetration in the country is estimated at about 1.5 per cent currently, something the Insurance Commission hopes to increase soon. This can be attributed to the low level of insurance literacy among most Ghanaians.
Speaking to the GRAPHIC BUSINESS on the sidelines of a donation to the Plastic and Burns Centre at the Korle-Bu Teaching Hospital in Accra, Mr Gadzekpo said, “we are also appealing to our fellow Ghanaians, we need to pay attention to insurance. It is not a luxury we can afford, those who are at risk, the highest need insurance the most.”
The company, in partnership with their South African counterpart, Sanlam Group, donated GHC85,000 to the centre to assist victims of the twin disaster that hit Accra on June 3, 2015.
Over 150 lives were lost in the fire and flood disaster, while others lost their properties and survivors being taken care of at various health facilities in Accra.
According to him, paying attention to insurance needs would provide a certain level of relief should any disaster occur.
“We are also hoping that people will pay a little attention to when it comes to matters like that. In times like this, when you have an advantage, you have no problem. We really hope that our contribution is useful and helpful,” he added.
Responding to concerns about the upspring of several insurance companies whose claims payments are questionable, Mr Gadzekpo said it was important for people to look at the quality of the company it was dealing with, especially in the insurance sector.
“One of the things we all do so well when it comes to decision making is to look at who you are dealing with. When you go to Makola market, you just don’t walk to anybody; you walk to the woman you have been buying yam from for long, or who has been referred to you. So I think the quality of the insurance company you are dealing with is very important,” he said.
He also said the regulator of the insurance industry in Ghana, the National Insurance Commission (NIC) was instituting strict guidelines for claims payment in the country and as such insurance companies could not unduly delay claims payments as and when the need arose.
“As we are speaking now an insurance company owing you claims cannot unduly delay it. If I am not mistaken, I think the insurance guidelines reduced it to a number of days, in terms of car claims. We at Enterprise understand the need to quickly come to your aid. Really it is not your assistance, it is your right. Internally, we have our own mechanisms and we try as much as possible to pay claims within a matter of days,” he said. GB
PULL QUOTE
“We are also hoping that people will pay a little attention when it comes to matters like that. In times like this, when you have an advantage you have no problem. We really hope that our contribution is useful and helpful and at the same time,” he added.
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