Ghana is one of the few countries in Africa where more than 50% of the population is permanently resident in cities. This urban population is located primarily in two cities; the capital Accra, and Kumasi. Both Accra, and Kumasi are home to 2 million people.

In the face of rapid urbanisation, the existing infrastructure continues to be extensively overstretched. This includes markets, housing, water, sanitation, roads and power. To meet the growing demand for urban infrastructure and services, the central and city governments have implemented a number of urban regeneration projects.

These include market redevelopment, reconstruction of roads, bridges and interchanges, and redevelopment of drains. They have been designed to address pressing problems of urban infrastructural decay. But the projects have also had a negative impact on the socioeconomic activities of urban residents.

Ghana’s national urban policy states that city authorities must include citizens whenever urban development activities are being undertaken. The reality, however, is different. Participation of residents in the development process is limited. As a result, urban regeneration projects are often met with citizen resistance.

Previously, resistance mainly took the form of street demonstrations during the early phases of urban regeneration. But this yielded very little. Governments knew that if they survived the early resistance, subsequent phases would be free of contention.

Urban residents, however, have begun to devise new strategies to push through their concerns. A recent study I was involved in examined the redevelopment of the Central Market in Kumasi. Our findings demonstrate that things can be done differently.

Making their voices heard

The Central Market in Kumasi, and its adjoining Kejetia Lorry Terminal, were built in Ghana’s colonial era. Over the years, the market fell into a state of disrepair due to overcrowding. The inability of the market to accommodate new traders resulted in a spillover into the terminal and onto the streets.

In 2014, the local authority, the Kumasi Metropolitan Assembly, secured funding to redevelop the market. The aim was to expand the market infrastructure to provide trading spaces for existing traders and to admit new or street traders willing to secure space in the market.

Due to the size of the Central Market, the metropolitan assembly took the decision – unilaterally – to undertake the redevelopment in three phases. The first phase affected the lorry terminal while the subsequent phases involved the demolition of the Central Market.

This decision led to a drawn out confrontation between Kejetia trader activists and city authorities.

In our study we found that trader activists didn’t confine their collective action to the early phases of urban regeneration. Rather, they extended it to subsequent phases. They deployed multiple and simultaneous strategies of contention, subversion and self-governance to attract public attention and seek positive responses from city authorities.

They delivered a petition to the regional minister. They also picketed at the inauguration of a major amusement park in Kumasi, calling for the intervention of then President of Ghana, John Dramani Mahama.

The activists also ran a full scale media campaign. They made regular appearances on radio and television to counter the claims of the city authorities. They also organised press conferences and exploited social media to publicise their concerns.

They also made unconventional demands that required the collaboration of state institutions. One was for a written agreement which stated the compensation they were entitled to. This was based on the intervention of the paramount chief of the Asante, Otumfuo Osei Tutu II, and his Asanteman Traditional Council. The chief compelled city authorities to cooperate with Ghana’s Lands Commission to achieve this.

As the project progressed, the trader activists modified their strategy from contention to subversion. Subversion took the form of quiet encroachment. Traders abandoned allocated stores in the temporary markets to secure trading spaces around the wall of the ongoing construction work. This action led to an intensification of street trading in the metropolis; an act that is considered illegal.

The outcome

The activism of the Kejetia traders achieved some positive results. The city authorities had initially indicated that the traders at Central market would be the first group to be allocated stores in the newly completed market. However, upon actual completion of the project, the Kejetia traders were the first to be allocated stores.

More so, due to the activism of the Kejetia traders, the Otumfuo and his Asanteman council have assumed oversightof the market project to ensure that justice is served to all displaced traders.

Our findings suggest that governments in West Africa should pay more attention to the recent waves of activism among urban residents.

In many West African countries there is legal, ideological, and policy support for collaborative governance of urban development. What is lacking is implementation by governments.

For example, in Ghana the government recently repealed an old law, the Local Government Act, 1993, Act 426 with a new Act that dedicates eight sections to participatory governance at the local level. But not much has changed since the passage of this new law.

We recommend that governments change their approach to governance by deepening collaborative delivery of urban infrastructure. This way of doing things is particularly important because it gives citizens the opportunity to participate in decision-making, seek accountability, and contribute resources to the delivery of urban infrastructure.The Conversation

 

Lewis Abedi Asante, Doctoral Researcher, Humboldt University of Berlin

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Isaac and Bless Boahen saved for months to fund her economics doctorate, but when the time came to cash in the investment, they were left empty handed.

The couple are among at least 70,000 investors who have become collateral damage from a cleanup of Ghana’s banking industry. The crackdown, which reduced the number of lenders by a third and saw the closure of 23 savings and loans companies, also triggered a run on fund managers, who couldn’t sell their holdings fast enough to meet demand.

That’s tying up as much as 9 billion cedis ($1.6 billion) of investments, more than a third of the 25 billion cedis in assets that private fund managers oversee for retail and institutional investors.

“My wife was very disturbed,” the 36-year-old said by phone from Kumasi in Ghana’s Ashanti Region. They’re not getting answers and are now worried they’ll never get back the 12,000 cedis they expected back from their investment. “If I knew this would happen, I wouldn’t have gone there.”

They’re in for a long wait. The nation’s markets regulator is looking into whether 21 fund managers violated rules by placing their clients’ money into illiquid assets. The Securities and Exchange Commission has stepped up the pressure, blocking these money managers from accepting new investments for fear they may use the funds to pay out existing investors.

“The harm has already been done,” Lord Mensah, a senior finance lecturer at the University of Ghana, said by phone. “Assets need to be protected.”

As much as 5 billion cedis is tied up in unlisted bonds, direct private-equity stakes and other deals with small- and medium-sized businesses, according to the SEC. Another 4 billion cedis is stuck in fixed-term investments with banks rescued during the clean up, savings and loans companies, and microlenders.

The SEC hasn’t yet released a list of all the fund managers it is investigating. An 11.2 billion-cedis bailout for lenders that were closed down and another package of about 925 million cedis for microcredit companies whose licenses were revoked is helping to release some of the funds locked up in those segments.

“It’s cutting across all the finance houses and when it happens like that the government needs to step in to build confidence again,” Mensah said. “There’s nothing we can do apart from making sure that we create that necessary environment to regain investors’ confidence again.”

That’s of little comfort to the Boahen’s, who were going to use the money to cover the costs of field-data collection for Bless’s thesis with the University of Ghana. After being promised a return of 26% a year on the investment, Isaac, an accountant, had to borrow money against his provident fund.

While he got the loan at a reduced rate of 10% a year, Boahen didn’t want to go the route of raising debt, he said. “It’s costing me more now.”

 

- Bloomberg

Ghana’s Atewa forest is one of the most beautiful and scenic landscapes in the country. It is seen as the better of only two Upland Evergreen forests left intact in the country, forming part of the six dominant vegetation zones of Ghana based on different climates zones.

The Atewa forest is part of the Guinean Forests of West Africa which stretch from southern Guinea into eastern Sierra Leone and through Liberia, Côte d'Ivoire and Ghana into western Togo. Deforestation has massively reduced the size of the forests and the Upper Guinea Forest is now restricted to a number of more or less disconnected reserves and a few national parks acting as man-made refuges for the region’s biodiversity.

The Atewa forest landscape is remote and pristine, providing the habitat for a major collection of Ghana’s biodiversity. It has been named as one of Ghana’s 30 globally significant biodiversity areas.

But the forest is under threat. Last year Ghana signed a memorandum with China to explore Ghana’s deposits of bauxite – the primary ore in aluminium. The deposits are found in two locations – Awaso with very high deposits in the moist semi-deciduous forest zone of western region of Ghana, and Atewa, with minimum deposits and located in the Upland Evergreen forests in the Eastern Region of Ghana.

Under the memorandum Ghana will cede 5% of its bauxite resources to the Chinese. In turn, Beijing will finance $2billion worth of infrastructure projects that include rails, roads and bridge networks. The Ghanaian Parliament has passed the Ghana Bauxite Integrated Aluminium Industry Act which would provide a legal framework to exploit country’s bauxite deposits.

Yet the government says it still has to validate the true worth of the bauxite deposit in the forest.

As a botanist I view the Atewa landscape as a scientific gold mine. A recent impact assessment by the US Forest Service corroborates the concerns of several conservation groups about the potential damage that mining would cause.

I believe strongly that Atewa is not for mining and that it must be preserved. Firstly, it needs to be preserved as a living natural history laboratory. Secondly, it should be protected because it provides a vital resource – water. Thirdly, it is a precious gift whose value cannot be quantified, but which must be lived, felt and appreciated. Finally it is a naturally bequeathed heritage that must be protected for future generations to enjoy.

The forest

An interesting characteristic of the Atewa forest is that the canopies of its trees are not easily visible as they merge with the surrounding clouds creating a beautiful cloud cover line. This is very rare in the Ghanaian landscape. This feature is described in local parlance as the phenomenon in which the trees are in direct communication with the firmament of the heavens and bring good tidings to the ground underneath.

Scientifically, the phenomenon is responsible for the daily condensation of water vapour which falls as precipitation. As a result the mountain top is kept permanently moist. This in turn explains the interesting hydrological networks beneath the soil surface. The water percolates down to create under ground water ways as well as water falls and many streams and tributaries that coalesce or combine to form Ghana’s famous three rivers. These are the Ayensu, Birim and Densu.

The three eventually drain their basins as they meander through the forests and farm fields providing essential water resources to over 5 million inhabitants. They also deposit suspended clay and silt materials as fertile alluvial for crop production during the rainy periods when they burst their banks and overflow.

The Atewa landscape provides rich forest cover for climate regulation, a show piece to illustrate climate adaptation to avoid drought, reduce poverty and enhance sustainable livelihoods and improve human well being in its catchment area.

The landscape has been the subject of research by geologists, hydrologists and geo-morphologists. A geologist studies studies the solid, liquid, and gaseous matter that constitute the Earth while a geo-morphologist studies the earth’s surface. A hydrologist is a scientist who researches the distribution, circulation, and physical properties of the earth’s underground and surface waters.

Studies of the fauna and flora of the area have brought up new scientific discoveries of species like the critically endangered white-naped mangabey Cercocebus lunulatus. This shows that the knowledge of the faunal and floristic diversity and to a large extent the microbial diversity is still at the exploratory stages.

I would strongly argue that the Atewa landscape is an important species discovery destination, awaiting extensive research and studies. It should, therefore, not be disrupted or destroyed by mining.The Conversation

 

Alfred Oteng-Yeboah, Associate Professor of Botany, University of Ghana

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Ghana’s Atewa forest is one of the most beautiful and scenic landscapes in the country. It is seen as the better of only two Upland Evergreen forests left intact in the country, forming part of the six dominant vegetation zones of Ghana based on different climates zones.

The Atewa forest is part of the Guinean Forests of West Africa which stretch from southern Guinea into eastern Sierra Leone and through Liberia, Côte d'Ivoire and Ghana into western Togo. Deforestation has massively reduced the size of the forests and the Upper Guinea Forest is now restricted to a number of more or less disconnected reserves and a few national parks acting as man-made refuges for the region’s biodiversity.

The Atewa forest landscape is remote and pristine, providing the habitat for a major collection of Ghana’s biodiversity. It has been named as one of Ghana’s 30 globally significant biodiversity areas.

But the forest is under threat. Last year Ghana signed a memorandum with China to explore Ghana’s deposits of bauxite – the primary ore in aluminium. The deposits are found in two locations – Awaso with very high deposits in the moist semi-deciduous forest zone of western region of Ghana, and Atewa, with minimum deposits and located in the Upland Evergreen forests in the Eastern Region of Ghana.

Under the memorandum Ghana will cede 5% of its bauxite resources to the Chinese. In turn, Beijing will finance $2billion worth of infrastructure projects that include rails, roads and bridge networks. The Ghanaian Parliament has passed the Ghana Bauxite Integrated Aluminium Industry Act which would provide a legal framework to exploit country’s bauxite deposits.

Yet the government says it still has to validate the true worth of the bauxite deposit in the forest.

As a botanist I view the Atewa landscape as a scientific gold mine. A recent impact assessment by the US Forest Service corroborates the concerns of several conservation groups about the potential damage that mining would cause.

I believe strongly that Atewa is not for mining and that it must be preserved. Firstly, it needs to be preserved as a living natural history laboratory. Secondly, it should be protected because it provides a vital resource – water. Thirdly, it is a precious gift whose value cannot be quantified, but which must be lived, felt and appreciated. Finally it is a naturally bequeathed heritage that must be protected for future generations to enjoy.

The forest

An interesting characteristic of the Atewa forest is that the canopies of its trees are not easily visible as they merge with the surrounding clouds creating a beautiful cloud cover line. This is very rare in the Ghanaian landscape. This feature is described in local parlance as the phenomenon in which the trees are in direct communication with the firmament of the heavens and bring good tidings to the ground underneath.

Scientifically, the phenomenon is responsible for the daily condensation of water vapour which falls as precipitation. As a result the mountain top is kept permanently moist. This in turn explains the interesting hydrological networks beneath the soil surface. The water percolates down to create under ground water ways as well as water falls and many streams and tributaries that coalesce or combine to form Ghana’s famous three rivers. These are the Ayensu, Birim and Densu.

The three eventually drain their basins as they meander through the forests and farm fields providing essential water resources to over 5 million inhabitants. They also deposit suspended clay and silt materials as fertile alluvial for crop production during the rainy periods when they burst their banks and overflow.

The Atewa landscape provides rich forest cover for climate regulation, a show piece to illustrate climate adaptation to avoid drought, reduce poverty and enhance sustainable livelihoods and improve human well being in its catchment area.

The landscape has been the subject of research by geologists, hydrologists and geo-morphologists. A geologist studies studies the solid, liquid, and gaseous matter that constitute the Earth while a geo-morphologist studies the earth’s surface. A hydrologist is a scientist who researches the distribution, circulation, and physical properties of the earth’s underground and surface waters.

Studies of the fauna and flora of the area have brought up new scientific discoveries of species like the critically endangered white-naped mangabey Cercocebus lunulatus. This shows that the knowledge of the faunal and floristic diversity and to a large extent the microbial diversity is still at the exploratory stages.

I would strongly argue that the Atewa landscape is an important species discovery destination, awaiting extensive research and studies. It should, therefore, not be disrupted or destroyed by mining.The Conversation

 

Alfred Oteng-Yeboah, Associate Professor of Botany, University of Ghana

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Tullow Plc has made oil discovery in its Jethro-1 exploration well, drilled on the Orinduik licence offshore in Guyana.

The well is expected to hold 100 million barrels of oil in excess of expectations. Tullow Guyana B.V. is the operator of the Orinduik block with a 60 per cent stake. Total E&P Guyana B.V. holds 25 per cent with the remaining 15 per cent being held by Eco(Atlantic) Guyana Inc.

Mr Kweku Andoh Awotwi, the Executive Vice President, Tullow Ghana, said the initial discovery suggested that it was in commercial quantities.

Mr Awotwi was speaking to journalists on the sidelines of the Tullow Ghana Media Capacity Building Programme on Essentials of Upstream Oil and Gas Industry in Accra.

The two-day training is designed to equip participants with fundamental knowledge of the oil and gas sector. It is also to provide an in-depth understanding into technologies, coverage and operations, particularly in Ghana of the sector.

The event was facilitated in collaboration with the Aberdeen Drilling School and the RigWorld Training Centre. He said the discovery in the South American country meant that there are opportunities for people in the Tullow organisation.

“At one hand it is good for Tullow PLC and at the other hand it is good for staff of Tullow Ghana, currently half of the people on the rig are Ghanaians,” he said.

The Executive Vice President said more wells needed to be drilled to see what was in there.

A statement issued by the Company said the Jethro-1 was drilled by the Stena Forth drillship to a Total Depth of 4,400m metres in approximately 1,350 metres of water. It said an evaluation of logging data confirmed that Jethro-1 was the first discovery on the Orinduik licence and comprises high quality oil bearing sandstone reservoirs of Lower Tertiary age.

The well encountered 55m of net oil pay which supports a recoverable oil resource estimate which exceeds Tullow’s pre-drill forecast.

It said Tullow would now evaluate the data from the Jethro discovery and determine appropriate appraisal activity.

This discovery significantly de-risks other Tertiary age prospects on the Orinduik licence, including the shallower Upper Tertiary Joe prospect which will commence drilling later this month following the conclusion of operations at the Jethro-1 well.

The non-operated Carapa 1 well will be drilled, later this year, on the adjacent Kanuku licence to test the Cretaceous oil play.

GNA

Access to energy plays a critical role in economic development. But bad government policies have affected energy security in many developing countries.

It is estimated that two out of three households (almost 600 million people) in sub-Saharan Africa have no access to electricity. Ghana has also had its challenges. A shortage of generating capacity led to rationing in 2014 and 2015, with serious consequences for the economy.

Nearly five years later the country faces the exact opposite problem: excess electricity. Ghana’s Finance Minister Ken Ofori-Atta set out the scale of the problem in his mid-year review budget on July 29. He said that the problem posed grave financial risks to Ghana’s economy. This is because the government is carrying legacy debt in the energy sector, which threatens to put a huge strain on its finances.

According to Ofori-Atta, plans have been put in place to deal with the challenges in the energy sector. A recommendation has since been made to Parliament to support the renegotiation of all take-or-pay contracts to take-and-pay.

How did Ghana move from not having enough power five years ago, to being burdened with a massive energy bill as well as too much electricity?

At the heart of Ghana’s problem was how it responded to the power shortages in 2014. These hit the economy hard, leading to the mining and manufacturing sectors contracting, and unemployment going up. To address the problem, the government fast-tracked private power plants. The current glut in electricity – as well as the cost overheads – can be attributed directly to the way in which the contracts were drawn up.

Ghana’s experience is a cautionary tale for countries that find themselves in a situation of having too much electricity at any given point. Without careful forward planning, proper data-driven analysis, and transparent, competitive, corruption-free contracting processes, any country could find itself in the same situation as Ghana.

Emergency power producers

Due to challenges with public financing of energy infrastructural projects, many countries – including Ghana – have been turning to the private sector for investment in the energy sector. As a result independent power producers are receiving much more attention on the continent.

At the heart of Ghana’s energy sector challenges were the take-or-pay contracts signed by the government. To address the shortfalls it was facing, it contracted three emergency power producers during the 2014 - 2017 period. The contracting was done without a competitive process. On top of this the government signed 43 power purchase agreements.

But the demand for electricity never went up at the anticipated rate due to tariff increases and slow economic growth. As a result, the plants ended up producing excess capacity. The installed capacity according to the Energy Commission of Ghana is 5,083 MW, almost double the peak demand of 2,700 MW. Of this, 2,300 MW has been contracted on a take-or-pay basis. This means that Ghana is contractually obliged to spend money for excess capacity that’s not being consumed.

The result is that the government is paying over US$500m (almost Ghana Cedis 2.5 billion) annually for power generation capacity that’s not being used.

There is also an overhang for gas. And because the government contracted gas supply on a take-or-pay basis, it must pay whether the gas is utilised or not. Thus, from 2020, if nothing changes, Ghana will face annual excess gas capacity charges of between US$550 and US$850 million yearly. This is even after the current government terminated two other liquefied natural gas contracts in 2017.

Independent power producers

Ghana’s excess electricity problem – and its solution – boils down to the arrangements made with independent power producers.

The contracting process failed to avoid a number of pitfalls. These included:

  • A lack of flexibility in contracts. The terms and conditions are often difficult to change once purchase power agreements are signed because of a fear of putting off future investors.

  • Fixing prices in foreign currency exchange, typically US dollars.

  • Threatening competition. According to a World Bank report, independent power producers often suffocate competition once in operation. There is huge potential for inefficiencies if the independent power producers meet a large share of the load.

  • Inflated prices: the World Bank report argues that independent power producers often inflate supply prices for utilities, which raises end-user prices.

  • Currency risk protection: unlike other foreign investments, investors in independent power producers are often shielded from currency risk. Most negotiate take-or-pay contracts where all the power generated must be bought whether needed or not. Because payments are made in dollars, this becomes more like international debt than equity investment.

  • Corruption. This often creeps in when the stakes are high in contract negotiations. They are often done secretly and only become visible when there is a change of government. As the Public Services International Research Unit puts it: “Establishing power generation in excess of the country’s requirements is a feature associated with corruption ….if the process provides an income source for those negotiating the contracts”.

  • Political expediency. According to a Business Insurance report “the fundamental problem with creating independent power producers in developing countries is that initially it is based on political expediency. These things sometimes bear no relation to economic reality.”

Independent power producers have contributed immensely to Ghana’s quest to meet its power generational capacity. But lessons from Ghana’s excess electricity challenges show that unless negotiations are done with utmost transparency and care, agreements that are struck can pose financial risks and breed corruption.

This precautionary principles would save many countries from experiencing the same fate as Ghana.The Conversation]

 

Samuel Asumadu Sarkodie, Research fellow, Nord University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Ghana has been chosen by the African Union (AU) to host the secretariat of the African Continental Free Trade Area. It beat other competing countries including Egypt, Eswatini, Ethiopia, Kenya, Madagascar and Senegal to win the bid.

As a free trade area, member countries have come together and agreed not to impose tariffs, quotas and other trade barriers on goods and services. The agreement is expected to enlarge markets and diversify exports, particularly manufactured goods. According to US-based think tank the Brookings Institute, intra-African trade stands at about 14%, while the share of manufactured goods to the rest of the world stands at 18%. Trade among Asian countries is much higher – at 59% – and even higher among European countries at 69%. The hope is that the African free trade area will boost trade across the continent by 52% by 2022 .

The core mandate of the secretariat will be to implement the free trade agreement, which has been ratified by 25 out of 54 countries. Once all have ratified the deal, it will create the world’s largest free trade area since the formation of the World Trade Organisation in 1995.

Africa’s free trade area will cover a market of 1.2 billion people with a combined Gross Domestic Product (GDP) of US$2.5 trillion.

The secretariat’s job will be to recruit personnel, train them, and develop organisational capability. The secretariat will also have to implement policies handed down by the governing body, keep the media informed, organise conferences and identify potential funding sources. It will also monitor and evaluate the progress of policies and programmes.

This is a first for Ghana which has not hosted a continental secretariat. The hope is that it can emulate the success of other African capitals that have befitted from hosting the AU and the United Nations. Addis Ababa is home to the AU headquarters while Nairobi hosts two of the UN’s biggest bodies. For its part, South Africa hosts the Pan-African Parliament.

The presence of the AU in Addis Ababa has been credited with an increase in property valuations as well as job creation.

In making its bid, Ghana took advantage of its strategic geographical location in West Africa. It has put a great deal of effort into making the country a gateway and a trade hub in West Africa.

Hosting the free trade area secretariat will come with costs and benefits - direct and indirect.

Why Ghana

In establishing its credentials to host the secretariat, the Ghanaian government would have set out the country’s most notable achievements.

These would have included the fact that it’s been an exemplary member of the AU. For example, in 2007 it was among the first countries to be reviewed by the African Peer Review Mechanism – the self-assessment mechanism used to measure good governance.

The fact that it put its hand up sent a signal to other countries that the peer review process was credible.

Other factors that would have played in Ghana’s favour are that the country’s economy has been showing strong growth.

It is one of the fastest growing economies in the world with an average GDP growth of about 6%. In addition, it comes second to Cape Verde in West Africa in terms of the United Nations Human Development index.

In one of the most unstable sub regions in the world, Ghana also has a tradition of relative peace and security, a key parameter for hosting a secretariat.

In addition, Ghana has had the advantage of learning about trade collaboration through its membership of the Economic Community of West African States (Ecowas).

Costs and benefits

Ghana has been part of the 15-member Ecowas since its formation in 1990. The regional body introduced a common external tariff in 2015 .

While Ghana has enjoyed benefits from the arrangement, like many other West African States, it has not been able to harness its full potential. For example, border controls remain cumbersome, delaying transits due to the numerous check points, huge unofficial payments at the borders.

The most direct cost to the country will be the $10 million pledged by President Nana Addo Dankwa Akufo-Addo to support setting up the secretariat. The AU is also expected to contribute funds and appeals have been made to international funding agencies.

Ghana’s hope is that hosting the secretariat will boost the hospitality sector – and more broadly the services sector – and generate increased international exposure.

There should also be a boost for job creation as the secretariat hires staff; ranging from economists to translators, administrators and technicians.

There is no clear deadline on when the secretariat is expected to be up and running. The AU itself still has to clear a number of hurdles,, including adopting a structure, staff rules and regulations, and the secretariat’s budget.The Conversation

 

Adu Owusu Sarkodie, Doctor of Economics, University of Ghana

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Ghana and Cote d’Ivoire have agreed to legislate the minimum producer price to be paid to cocoa farmers as a means to safeguard their income. 

The two countries agreed to pay farmers a guaranteed minimum price of 70 per cent of the floor price of $2,600 per tonne.

Mr Joseph Boahen Aidoo, Chief Executive of Cocobod told a press conference on Monday, that farmers would be entitled to bonus payment when the achieved average gross Free On Board (FOB) price at the end of the Cocoa season is between the minimum of $2,600 ($2,700 Cost Insurance Freight (CIF) - $2,900 ($3,000 CIF).

He said the countries agreed that a stabilization account be created under the Cocoa initiative of both countries and provided for in the Charter.

In this respect, two accounts would be set up for each country within the secretariat in Accra where any extra value above $3,000 CIF or $2,900 Gross FOB of the Achieved Weight Average will be deposited.

Mr Aidoo said the only mandate for which monies could be disbursed from the account was for the sole purpose of supporting the Achieved Weight Average if it falls below $2,300 CIF or $2,200 Gross FOB.

“It is instructive to note that, this new arrangement fixes a constant $400 for each tonne of cocoa from the two countries. So for example, with the 900,000 metric tonnes of cocoa produced last year, it would have fetched about $360 million dollars from the upper level of the supply chain to us here in Ghana at the lower level of the cocoa value chain,” he explained.

 

GNA

Ghana’s economy grew 6.7 per cent year-on-year in the first three months of 2019 compared to 5.4 per cent in the same period last year, the Ghana Statistical Service said this week.

The quarter-on-quarter seasonally adjusted growth rate was 1.6 percent compared to 1.7 per cent for the last three months of 2018, Professor Samuel Kobina Annim, Government Statistician said at a News briefing.

Non-oil growth for the first quarter stood at 6.0 per cent year-on-year compared to 4.2 last year.

For the first quarter of 2019, the Services sector expanded 7.2 per cent year-on-year with the information and communication sub-sector recording the highest year-on-year quarterly GDP growth rate of 37.0 per cent.

On the other hand, the Finance and Insurance sub-sector recorded the lowest growth of 2.1 per cent, Prof. Annim said.

The year-on-year quarterly GDP growth rate for Agriculture is 2.2 per cent for the first quarter of 2019.

The livestock sub-sector recorded the highest year-on-year growth rate of 5.5 per cent, while the Forestry and logging sub-sector recorded the lowest, with a contraction of 5.8 per cent.

The year-on-year quarterly GDP growth rate for the Industry sector is 8.4 per cent for the first quarter of 2019.

The Mining and Quarrying sub-sector recorded the highest year-on-year quarterly GDP growth rate of 20.9 per cent for the period, while the construction sub-sector recorded the lowest, with a contraction of 8.7 per cent.

Meanwhile, the Producer Price Inflation fell slightly to 6.7 percent in May from 7.1 per cent in April.

The Mining and Quarrying sub-sector recorded the highest year-on-year producer price inflation rate of 15.1 per cent, followed by the manufacturing sub-sector with 6.2 per cent.

The utilities sub-sector recorded the lowest year-on-year producer inflation of 1.1 per cent.

GNA

Ghana and Ivory Coast announced that they had won concessions from stakeholders in the cocoa industry, including acceptance of a $2,600 floor price for a tonne of cocoa.

The two nations had threatened to stop selling their production to buyers unwilling to meet a minimum price.

Following a two-day meeting called by the two top cocoa producers who together account for over 60% of the world’s production, Joseph Boahen Aidoo, chief executive of the Ghana Cocoa Board, told a news conference that their demands had been accepted in principle by the participants.

“Ivory Coast and Ghana have suspended the sale of the 2020/2021 crop until further notice for preparation of the implementation of the floor price,” he said.

Calling the move “historic”, he said that “this is the first time when the producers have called consumers and the first time whereby suppliers have called buyers to come and engage on price,” he said.

“Over the years it has been the buyers who have determined the price for the suppliers.”

Aidoo added that there would be a follow-up meeting to work out how to implement the agreement.

The world’s chocolate market is worth around $100 billion, of which only $6 billion go to cocoa producers.

 

AFP

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