Ghana’s first Islamic Investment Fund launched in Kumasi

An Islamic Investment Fund has been launched in Kumasi with the objective of reviving economic activities within Muslim communities.

The Shari’a complaint financial system is to mobilize funds from the Muslim Ummah for development, whilst creating jobs for the teeming youth in need of jobs.

The Fund is initiated by the Ahlussunna WalJama’a Ashanti Regional Imam (ASWAJ) to offer “ethical investment” tools to investors seeking to invest in profitable “halal” business ventures which have minimal risk but good potential for growth.

“Usually our interest according to Islam is ‘halal’, our economy based on helping the poor not to take the little from the poor; we always want to help the poor,” noted Sheikh Dr. Ismail Saeed, ASWAJ Imam. “So here we are using it as a starter to pull all our resources together, and when they start getting something, then in future when it becomes a bank it will be an encouragement for them [to invest]”.

A Gh100,000 is to be raised in the initial public offering of 200 shares at a share value of Gh500 per share.

The Fund seeks a combination of capital appreciation and current income for shareholders.

The investment plan is established along three minimum risk areas: short term businesses – Cattle Rearing, Washing Bay and Cash-Crop Farming; medium term – Transportation and Commodity Trading; and long term – Real Estate Development, Islamic Microfinance, Project financing and Venture capital.

A 25-member Business Implementation Committee, Chaired by a banker, Issah Mallam Ahmed, was inaugurated at the IPO launch at Sawaba, a predominantly Muslim community in Kumasi.

Municipal Chief Executive for Asokore Mampong, Alhaji Nurudeen Hamidan, is among the first to invest in the Fund.

He is confident Ghana will soon have a number of Islamic Banks spread across the country because of the high profitability based on the “interest and cost sharing principle”.

“In Islamic Banking, the 100% profit is shared accordingly, as against the traditional banks that we have here where a percentage is given to you as profit or dividend on your investment and the bulk of the money is kept by the bank for their operations,” he observed.

Islamic Scholar, Sheikh Osman Bawa Hafiz Olando, is confident the Fund will empower Muslims and reduce crime rates in Muslim communities across the country.

“It is our responsibility as individuals, organizations, churches and mosques, associations to come up with those jobs for our children and grandchildren to have something to do so that they can uplift their lives and localities for a better Ghana,” he said.

Story by Kofi Adu Domfeh 

Kumasi industries exposed to concept of turning waste to wealth

Businesses under the Chamber of Commerce and Industry in Kumasi have been exposed to a new environmentally-conscious concept that connects industries and creates business opportunities.

The Ghana Industrial Symbiosis Programme (GhISP) supports industries to develop smarter ways of resource and waste management.

Ghana is among three countries in Africa to tap into the opportunity, which is supported by the Industrial Symbiosis Limited (ISL) UK and funded by the European Union (EU).

International Manager of ISL, James Woodcock, led a workshop to introduce businesses in Kumasi to industrial symbiosis, including how to turn their waste into resource to save money, create new business opportunities and improve their environmental performance.

Coordinator of the Ghana Programme, Richard Mensah, says there are benefits in effective environmental management, noting that better management of resources will make local businesses attractive for investments.

He emphasized the application of the “waste hierarchy” concept of reuse, reduce, recycle, reengineer and dispose to ensure that waste is turned into a resource.

According to him, “if waste is seen as a resource then it can be diverted to do other things”, including energy from waste, fertilizer production and manufacturing processes.

Executive Secretary of the Chamber of Commerce and Industry, Fosu Yeboah, says the inherent benefits of industrial symbiosis make it worthwhile to adopt.

“There will be reduction in cost of managing their waste; a lot of money is spend on waste management but with this improved system, we envisage a situation where there will be a huge cut in the wage bill,” he said. “Most of this waste could also be turned into raw material for other companies, so there is financial gain here; instead of sending the waste into the landfill, they are now going to sell to other companies as raw materials”.

Power to produce crippled by endemic energy crises

Yaw Opoku is a local footwear producer in the Bantama suburb of Kumasi. He engages five other hands at his production shed, in the quest to meet demands of customers.

The more they produce, the higher they earn to feed themselves and their dependents. But their dependence on electricity to complete the production cycle is on the decline.

Today, Yaw and his partners cannot plan their production schedule and they are worried about their future livelihoods.

“As I speak to you now the lights are off”, Yaw complained. “We’re sitting here hoping it will be on for us to resume work. I used to go on trek every week to sell my footwear but now I go when I’ve managed to produce enough”.

These footwear producers are not alone in feeling the heat from Ghana’s inability to produce enough electricity to feed domestic, commercial and industrial consumers – from the service industry to manufacturers, the impact of the power cuts is deeply felt.

The challenges to domestic users are enormous, especially the damage caused to electrical appliances from the power fluctuations.

But manufacturers are most worried. Worst hit are the small-scale businesses, including dealers in frozen products, wielding mechanics, drinking bar operators, beauticians and dressmakers who are constrained in resorting to power generators as alternatives.

In times past, Kumasi’s industrial sector was centered in the Kaase and Ahinsan areas, where the timber firms were concentrated.

This is not the situation today as industries are now scattered across the region. Hence, any planned load shedding targeting industries will not be beneficial.

Producers are therefore finding it difficult to plan production as power goes off sometime unannounced.

The general concern among businesses and industrialists is the rising cost of production. The erratic supply of electricity does not only disrupt production but people have to invest in fuel and maintenance to run their generators.

Now the prices of petroleum products have gone up, which according to the National Petroleum Authority (NPA), are influenced by the government’s decision to withdraw subsidies on the products.

The Volta River Authority (VRA) and the Electricity Company of Ghana (ECG) have also called for hikes in electricity tariffs if they are to boost their capacity to deliver on the country’s energy needs.

According to local manufacturers, a persisting energy challenge would push production levels low and eventually result in layoff of workforce.

They therefore expect government to protect them against cheap imports if they are to absorb the impact of hikes in the prices of petroleum products on productivity.

 

The producers say though the volatile oil market could adversely affect their operation, the major threat is cheap and imitated imports competing with local products.

Story by Kofi Adu Domfeh

The task of easing human and vehicular traffic in Ghana

The Kumasi Metropolitan Assembly (KMA) has indicated that its decongestion taskforce will employ “reasonable force” to evict traders and transport operators occupying unauthorized places within the city.

The taskforce, in enforcement of the Assembly’s bye-laws, is also mandated to confiscate wares and haul recalcitrant traders before the courts for prosecution.

To ease movement of human and vehicular traffic, the Assembly has issued a two week ultimatum for the traders to voluntarily relocate to the newly constructed Afia Kobi Market and other markets within the metropolis.

Areas earmarked for decongestion include the central business districts of Adum, Kejetia and the Central Market areas, the Bantama main street, parts of Suame and Kronum. Metro Mass Transit buses and other cargo truck operators at Dunkirk and Pampaso are also directed to vacate the areas before the February 4, 2013 deadline.

According to the KMA’s Public Relations Officer, Godwin Okuma-Nyame, the assembly needs public support to succeed in the decongestion exercise. Metropolitan assemblies in Ghana are faced with the persistent challenge of keeping hawkers off the pavements as the traders always returned to settle on the pavements. A directive by the Accra Metropolitan Assembly (AMA) for hawkers to vacate the pavements expired on Monday but the traders have remained adamant. Some officials have stated that the decongestion exercise remains a process and not an event, hence the need for the authorities to re-strategize as to how best to clear offenders off the streets and the pavements, anytime they come back to the streets to sell.

In Kumasi, the local assembly has been cited for blame in supervising the construction of stores and other building complexes in the already congested city centre.

But Mr. Okuma-Nyame will not agree to this, stating that “people cannot use that as an excuse to say that because there are lot of buildings around Kejetia and Adum that is the cause of the decongestion there”.

He believes the construction of the Afia Kobi Market, which is close to the central business district, is indicative of the Assembly’s quest to decongest the city.

Story by Kofi Adu Domfeh

2012 business desk news review

The following is a summary of my coverage of business activities in Kumasi and other parts of the country in the course of 2012. The demise of President John Atta Mills and Ghana’s electioneering are some events that had a toll on trading and commercial activities.

Public sector

At the beginning of the year 2012, the Tripartite Committee announced a new daily minimum wage of GH¢4.48, representing a 20 per cent increase.

But the public sector was hit by series of industrial action, mostly in agitation towards the implementation of the single spine salary structure.

The Polytechnic Teachers Association of Ghana (POTAG), Teachers and Educational Workers Union (TEWU), University Administrators and the Civil and Local Government Staff Association of Ghana (CLOSAG) among others laid down their tools.

Power supply was also most erratic in the cause of the year as the Electricity Company of Ghana could no longer work with a time table on power rationing.

Residents and businesses experienced intermitted unannounced blackout. The ECG explained the company was at the mercy of the Volta River Authority, but the Consumer Protection Agency dismissed assertions that the Volta River Authority (VRA) should be held accountable for the outages and therefore asked Ghanaians to sign onto a petition in protest of the incessant power outages.

Health delivery in Ashanti suffered with the piloting of the health capitation under the National Health Insurance scheme.

Private medical practitioners declared their inability to participate in the pilot Capitation exercise, whilst the Asante Development Union launched a crusade to compel the National Health Insurance Authority (NHIA) to suspend the capitation implementation.

Public-Private linkages

The United Nations observed 2012 as the International Year of Cooperatives to raise awareness among national governments on the diverse strengths of cooperative enterprise.

Ashanti Regional Department of Cooperatives called for critical attention in the use of the cooperative concept in Ghana’s poverty reduction programmes.

With the upsurge in microfinance institutions, the Ghana Association of Microfinance Companies (GAMC) braced up to protect the industry and help safeguard funds of depositors.

The group cautioned the public against giving money out without cross-checking the background of the receiving company.

Poor building construction and non-adherence to health and safety provisions in the execution of contracts led to loss of lives in parts of the country.

Association of Building and Civil Engineering Contractors of Ghana therefore continued to push for the establishment of a regulatory body for the building and construction industry.

The Kumasi Metropolitan Assembly also continued with its decongestion exercise at Bantama and the race course area. The forceful eviction of traders and transport operators to a new terminal at the Abinkyi market was resisted by some commercial transport owners, who insisted the Assembly allocated a bus terminal for them on the Kumasi-Tamale road because the proposed space was too small to accommodate them.

The Assembly however said the concerns of the traders and drivers had long been addressed.

In the cause of the year, Tullow Ghana Limited reiterated its commitment to support local manpower development for Ghana’s for the budding oil and gas industry.

The company announced that artisans at the Suame light industrial area in Kumasi would benefit from Tullow Oil’s investments to upgrade steel fabrication facilities in parts of the country.

Emphasis was placed on capacity building for effective technology transfer.

The Inter-Agency Task Force on non-Ghanaians in Retail Business resumed an operation to close shops operated by foreigners, after a 3-month ultimatum had elapsed.

The Ghana Union Traders Association was at the forefront of the exercise and was more concerned about shops operated by Ghanaians fronting for foreigners.

The Nigerian business community in Kumasi sought avenues to jaw-jaw with the GUTA to protect mutual interests as the group cautioned the Ghanaian authorities not to breach the long-lasting relationship between the two West African countries.

The Chinese phenomenon in Ghana’s illegal mining activities was most profound in 2012 as interest groups demanded that local assemblies acted to discourage foreigners from evading the country’s small scale mining sector.

There were also calls for support to indigenous miners to form cooperatives to gain from mining.

Meanwhile, with the passage of the local content law for mining firms, local artisans asked for capacity building to meet contract requirements.

The Suame Magazine Industrial Development Organization (SMIDO) launched a policy document to attract funding for the development of a modern automobile industrial centre in Kumasi.

Taxation and Finance

The Ghana Revenue Authority (GRA) continued to realign its personnel to access maximum benefit from available human resource for revenue collection.

Officials noted the integration of the agencies had significantly enhanced the administration of domestic tax and customs revenue in Ghana.

But some taxpayers had not been enthused with what they described as ‘tax holiday’ for the informal sector, which the GRA explained there were arrangements to rope in majority of players in the sector into the tax net.

A tax consultative forum organized by the Tax Policy Unit of the Ministry of Finance also identified some weak links in existing tax policies.

Players in the quarrying industry particularly made a strong case for the exemption of the sub-sector in the imposition of a 40 percent increase in corporate tax for mining companies.

The 2012 National Financial Literacy Week was held under the theme “Financial Literacy-Creating Wealth and Financial Stability”.

The Ghana Microfinance Institutions Network (GHAMFIN) emphasized the need for financial institutions to be transparent and open to the public, whilst financial service providers observed that most business start ups were not getting finance because they are not tooled with knowledge on how to access credit from the right institutions.

Food and Agriculture

The 2012 World Food Day celebration highlighted the concrete ways in which agricultural cooperatives and producer organizations help to provide food security, generate employment, and reduce poverty.

However, youth engagement in farming and agribusiness remained central in most agricultural discussions.

Interestingly, a youth emerged national best farmers whilst most regions, including Ashanti had young persons as regional best farmers.

The UN’s Food and Agricultural Organization (FAO) emphasized the need to integrate youth in agriculture into national policies, but officials of Ghana’s Youth in Agriculture Programme (YIAP) observed that the Ghanaian youth are interested in venturing agriculture but financial constraints remained major obstacle.

Agricultural economists also observed that the more smallholder farmers produce, the poorer they become when there are no markets for their produce.

They therefore solicited government’s intervention in price control to critically protect farmers against selling bellowing cost-price.

Climate mitigation has took centre stage at the national and global levels; agricultural extension officers observed growing farmer’ awareness on the changing climate and the concept of ‘climate-smart agriculture’ was advocated as the way to go for life.

Cocoa farmers in parts of the country were exposed to information on the use and application of a new fertilizer product on the Ghanaian market.

Yara Ghana introduced the ‘Nitrabor’ product after five years of research at the Cocoa Research Institute of Ghana (CRIG) to offer farmers high yields and improvement in the quality of cocoa.

Meanwhile, farmers in parts of the country were worried at the perennial delay in taking delivery of government’s subsidized fertilizer for the current crop season.

Licensed cocoa buying companies also called on the Cocoa Marketing Company and partners to pay critical attention to addressing perennial challenges in the haulage of cocoa beans.

There were calls as well for the government to pay critical attention to the pineapple industry to create jobs and contribute significantly to Ghana’s foreign exchange earnings.

The Alliance for a Green Revolution in Africa (AGRA) noted that the private sector could drive the agenda of improving agronomic practices to increase food production and called for private-public partnership to aid farmers to access good seeds, fertilizer and credit.

Bizness Year 2011 in Review

In his State of the Nation's address 2011, President Mills said the country maintained a good growth rate in 2010 and therefore expected a higher level this year.

He reiterated his focus on achieving his better Ghana Agenda at a time petroleum prices had just been increased.

Series of industrial actions however hit the labour front in 2011 as a result of challenges in the implementation of the single spine pay policy.

Doctors, teachers, civil servants and others agitated better placements on the Spine, which dominated issues in this year’s May Day celebration.

Ashanti regional Acting Secretary of the Ghana Trades Union Congress, Clement Kaba, told Luv Biz Report things could have been better.

The pricing of sachet water brought producers face-to-face with city authorities.

The Kumasi Metropolitan Assembly challenged the basis for increasing the retail price of the sachet of water from 5 to 10 Ghana pesewas.

The Association of Sachet Water Producers however justified the price adjustment citing rising utility and raw material cost as well determination to protect consumer health.

The year 2011 has been full of entrepreneurial activities. Several events were held in Kumasi aimed at empowering the youth to establish their enterprises.

Business advocates encouraged young graduates to look beyond government and other establishments for employment.

Young Entrepreneur of the Year and Chief Executive of rLG Communications, Roland Agambire urged the youth to regard failure as part of life and be anxious to dare into the world of business.

Ghanaian pharmacist and entrepreneur, Dr. Michael Agyekum Addo also schooled business students on creativity and innovation in business.

Local businesses were afforded an opportunity to enlist onto a website by produce marketing company, Made In Africa Investment Company.

Managing Director, Ms. Zuliatu Morton was upbeat about the success of the project in Kumasi.

The Association of Ghana Industries also resuscitated the Industrial and Technology Fair INDUTECH to support local industrial development for job and wealth creation.

Products showcased at the one week fair included building materials, agro-processed products, cosmetics, fabrics and other services to propel industrialization.

The fair was beneficial according to AGI’s Robert Nkatia.

The Bamboo Bikes initiative in Kumasi is perhaps the most innovative project in 2011, with thousands of bikes expected to be manufactured for the Ghanaian, European and US markets.

Bernice Dapaah, Executive Director of Bright Generation Community Foundation, said the project is helping to improve the environment and creating employment opportunities for the youth and people with disability.

The KMA also faced a difficult task in the ejection and relocation of traders at the Race Course Market, to pave way for construction of the Sun City project.

The Over 10 thousand traders were eventually moved to the new Abinkyi market and other satellite markets but the traders complained of inadequate arrangements for their resettlement.

Shop owners and other businesses at Ahodwo whose structures were demolished in a decongestion exercise by the KMA petitioned the Ashanti regional minister to investigate the motive behind the exercise.

They alleged the removal of their facilities was born out of mischief rather than beautification of the city.

Former Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Kodwo Ewusi projected Ghana will achieve real per capita income of $4,800 dollars per annum by 2015.

Speaking at the 1^st Economic Conference of the KNUST’s Department of Economics, he said by exceeding the $4,000 mark, Ghana will become a true middle income economy.

A number of businesses in the course of the year established branches in Kumasi, and leading the pack were financial service providers and dealers in consumer products.

However, real investments in tourism, agro-processing and manufacturing remain unattractive to investors.

Investment promoters like the Coordinator of the Millennium Cities Initiative, Abenaa Akuamoah-Boateng, decried the centering of economic development in the Greater Accra Region.

There were also signs of mergers and acquisitions in the local business environment with the financial industry leading the pack.

Managing Director of Fidelity Bank, Mr. Edward Effah, told Luv Biz there will always be room for different size of players but it is most important for indigenous institutions to survive.

2011 was a year of much talk about agriculture.

The Asantehene, Otumfuo Osei Tutu the second noted Ghana can serve as a model for the World Bank in identifying missing links to solving problems for developing agriculture in Africa.

He observes the country has the requisite human resource capacity, adding what is left is how to harmonize and coordinate agricultural projects to achieve the desired objectives.

Farmers and food processors in the country were exposed to improved crop varieties to increase yield and add value to production.

The Crop Research Institute (CRI) of the Council for Scientific and Industrial Research (CSIR) developed new technologies emanating from the West Africa Agricultural Productivity Programme (WAAPP).

Programme coordinator, Dr. Joe Manu-Aduenning, told Luv Biz farmers and processors can take advantage of different crop varieties to enhance food production.

On the heels of the 27^th National Farmers and Fishers Awards Day, concerns were raised that majority of Ghanaian farmers were interested in empowering their children to take up professions other than farming as their future economic activity.

Executive Director of Kuapa Kokoo Farmers Union, Emmanuel Arthur, observed food production and export of cash crops like cocoa would be negatively impacted if the youth are not made to be active in agriculture.

Farmers in the country were also asked to avoid using workforce that does not commensurate with the physique and stature of children, on cocoa farms.

Deputy Minister of Employment and Social Welfare, Antwi Boseiko-Sekyere said the country’s middle income status will be meaningless unless children’s education and wellbeing are promoted.

Over 100 firms in the northern sector of the country registered with the Ghana Association of Microfinance Companies to play under the Bank of Ghana’s new rules and guidelines.

But Cooperative credit unions felt threatened by activities of microfinance companies in competition for clients.

Chairman of the Crops Research Institute (CRI) Credit Union, Michael Kofi Adu, called for the speedy passage of the Credit Union Bill to enable them retain and grow members.

The pozzolana cement factory at Gomoa Mprumem in the Central Region was shut down for lack of local patronage of its products, barely four months after production commenced.

This did not go down well with the workers who decried government’s foresight in things that matter to national development.

Climate change was topical in 2011 and one of the urgent calls was for Ghana to begin harvesting rain water for sustainable development.

Environmental rights activist, Nana Dwomoh Sarpong warned against the unbridled drilling of borehole facilities, which he identified as “a great threat to our water resources” and food security.

According to Nana Dwomoh, the reality of climate change requires the country to critically look at alternatives to access water.