Apparently Elvis Afriyie Ankrah is not RICH................

Title: I Am Not Rich To Be On Forbes List—Elvis Afriyie Ankrah
Dated: 31-12-2013

REJOINDER: 20 RICHEST PEOPLE IN GHANA

I am by now very used to waking up in the morning to congratulatory messages and phone calls. Reflecting on the year 2013 however, there is a particular call I received one early morning that I wish to refer to,which has compelled me to respond and set the records straight.

A good friend of mine innocently called to congratulate me for making it to a so-called Forbes list of 20 richest people in Ghana. According to him, I was reported to be number thirteen on the list. I tried brushing him off and wondered why he was playing a silly joke on me but he insisted that he had read it from the internet. When he finally forwarded the list to me, I was amused at what I saw to be a joke but it turned into bemusement when I wondered what my name could be doing on such a list.

It is true that I am not a personal banker to anybody, however, the figures being quoted for H. E. President Mahama and others including Ibrahim Mahama, who everybody knows is wealthy are ridiculous, to put it mildly.

Speaking for myself, I don’t see my name appearing even if a list of ten thousand richest people in Ghana was constructed. Admittedly, I am not poor but it is preposterous for anyone to attribute such wealth to my name. I consider myself blessed, in that by the Grace of God, I have enough to take care of myself and my family and indeed, try to share with the underprivileged. Beyond that, what do I have that somebody will classify me as the thirteenth wealthiest person in Ghana, wickedly quoting a figure of $112 million?

As I mentioned earlier, my initial reaction was that of amusement but with time it has grown to bewilderment and lately a resolve to expose the cowards, especially as I continue to receive ‘congratulatory’ messages from friends and relatives both in Ghana and the diaspora.

There have been wild stories about me in the past but in order to remain focused I have always chosen not to pay attention since most of these are distractions as far as I am concerned.

Before this so-called list emerged, it was alleged that I received GH₵120 million from GYEEDA through the former Minister of Youth and Sports. This allegation was made on a radio station by an NPP member of parliament. In order to mask his mischief, he used the word ‘allegedly’, as if by the use of that word, one could say anything and get away with it.After confronting the issue, the story changed to say that it was Hon. Abuga Pele who gave the said amount. The question is, how much is GYEEDA’s entire budget such that Hon. Abuga Pele was able to siphon enough for himself and throw a surplus of GHC120 million at me? When you hear such unintelligent accusations you don’t know whether to laugh or be angry. I was alarmed when one of our youth organizers in Nima confidently came to ask me about that story.

Without disrespecting anybody, I understand when a certain calibre of persons believes anything they hear on radio or read on the internet. However I was alarmed when I read an article in one of the leading newspapers written by a professor from the University of Ghana, Legon. When a whole professor enters the fray and blatantly believes such concocted stories and goes further to cast insinuations based on the wicked lies, it becomes dangerous. The danger for our dear country is even more pronounced when such intellectuals make uninformed and illogical analysis and draw defective conclusions. To the professor, would it be fair if somebody puts on the internet that he sleeps with his students before awarding decent grades to them? Where are we taking this dear nation of ours?

The worst happened last week when I spoke on phone with one of my aunties who lives in the United States with her husband. After congratulating Ghana for qualifying to the world cup they quickly applauded me for making it to Forbes. I heard ‘Fox’ so I thought they were talking about Fox TV. When I enquired whether it was about the world cup draw, they clarified that they meant Forbes-Ghana’s 20 richest people. They had also read and believed the malicious story on both ghanaweb and peacefmonline. They thanked God for my life for being the thirteenth on the list. As a Chemistry teacher in a High School in USA, I was disappointed that my sister’s husband fell for this, just like the professor emeritus.

Out of bewilderment and bemusement, I decided to really consider the level of circulation. I subsequently found out that the malicious fabrication was given a lot of ‘exposure’. In addition to our traditional print and electronic media (including their online news), a lot of online portals including www.ghanaweb.com,www.modernghana.com,www.ghostinfostv.com,www.spyghana.com,www.highlifetoday.com,www.focusghana.com,www.ghanafilla.net published it. No wonder till date, friends, family and loved ones still see the wicked propaganda and call to verify.

For the records, I want Ghanaians to know that the alleged list is preposterous. Secondly, although by the grace of God I am blessed, I am neither worth $120 million nor own a fraction of that. Besides, I am certainly not the thirteenth richest person in Ghana. I have been struggling to fathom why my name will be listed among the others in the first place. The ridiculous figures attributed to them notwithstanding, most of those on the so-called list are atleast men of substance and astute businessmen. What mischief is anybody hoping to achieve by including names like mine and Hon. Haruna’s?

For some reason, some of those who don’t wholly believe assume that the figure represents my total assets and not necessarily bank balance. I take this opportunity to categorically deny earlier stories that I “own six houses in a rowat East Legon”, for which I paid cash. My residence at East Legon is no secret and it is easy to ascertain its value. Such stories may be intended for different agenda but they are affecting me in other ways. All of a sudden people have started making outrageous financial demands because they think I am supposed to be the thirteenth richest man in Ghana. The security implications of this mischief are also obvious,since I can become a target of miscreants who falsely believe I have that kind of money.

It is true that I try to be generous to people from all walks of life including our foot soldiers, most of whom I have personal relationship with. It must however be noted that giving is a spirit. A giver sometimes gives out of his/her lack. There are wealthy people who refuse to give but a natural giver doesn’t mind sharing the little he/she has with others. After rising through the ranks and ending up as the Local Government Deputy Minister and finally a Campaign Manager, I have travelled across the country several times and I am in personal touch with a lot of people who contact me for one help or another. This, I do because I love to share and not because I am the thirteenth richest person. At times, I fall on the networks I have created to support such people.

Before I expose how outlandish the so-called Forbes-Ghana list is let me state in clear terms that I am one of the ministers ready and willing to make my assets known to the public. Indeed, I have already filed my assets with the Auditor General and any citizen can use the laid down procedures to check.

Although Forbes lists Ghana as No.69 Best Countries for Business and highlights some business/investment stories about Ghana, Forbes has NEVER tracked and for that matter published the wealth of Ghanaians or residents in Ghana.

Meanwhile, there is nothing like ‘Forbes Ghana’ so how a ghost entity called ‘Forbes Ghana’ managed to ‘intercept’ such hoax of a list of top most rich people in Ghana beats every imagination.

It is obvious that this concocted list is meant not only to throw dust in Ghanaians’ eyes but also calculated to generate hate for H. E. John Mahama and his family, some targeted ministers as well as NDC in general. Notably, names of NDC members dominate the list, giving the impression that NDC and it surrogates are amassing wealth.

What makes it laughable is that President Mahama has been able to allegedly amass $900 million to hit an enviable fifth on the list within the first year of his presidency. Another mischief is the attempt to rope in Alfred Mahama, Lawyer Tsatsu Tsikata and Tony Lithur. Obviously this is because Alfred is the president’s brother and the accomplished lawyers played leading roles in defending the NDC and the President in the Supreme Court case.

The inclusion of me and some key ministers obviously has to do with the roles we played during the 2012 campaign leading to the one-touch victory for President Mahama within four months. Going by the figures indicated, some of these Ghanaians would have made the top richest list in Africa that was published by Forbes recently. How come such wealthy Ghanaians are only confined to the Ghana list and conspicuously missing from the Africa list?

Just by way of education….. In tracking wealth of African citizens this year, Forbes actually calculated net worths using stock prices and exchange rates from the close of business on Friday, November 1, 2013. Usually, to value privately-held businesses they couple estimates of revenues or profits with prevailing price-to-sales or price-to-earnings ratios for similar public companies. Any African descent that starts making above 100 million is closely monitored by Forbes to ascertain his/her rate of income accumulation or decline.

Monday December 30, 2013.

Signed:

HON. ELVIS AFRIYE-ANKRAH

MINISTER FOR YOUTH & SPORTS
credit/Source: http://www.modernghana.com/news/511112/1/i-am-not-rich-to-be-on-forbes-listelvis-afriyie-an.html


Paulina says: I didn't post the list referred to in the above text on La Ghana Rising Blog because there is no such thing as a 'Forbes' 20 richest people in Ghana' -so I can understand why Elvis Afriyie Ankrah felt the need to issue this ---errmm is it a press release!!!

The truth is,.... unlike Nigeria, South Africa and even Angola -Ghanaians just don't discus money let alone boast of their riches.... Thus, it will be very difficult to have such a list --plus...I've said in the past, Ghana's hidden rich, are very hidden. Its just the way we are...

But...what the hidden rich don't know, is that there's a real appetite by 'some' of the masses, some the great-unwashed -to know them and to start celebrating them, these people want to be inspired after-all!!!

But the hidden rich dot, dot, dot -know the true Ghanaian spirit.... They know that the average Ghanaian is very different from -say, those that celebrate Nigeria's oil barons, all those rich-friends/attachés-of-politicians in Nigeria,, and those that worship that political family in Angola --where that first daughter is feted as one of the richest women in Africa...they know that Ghanaians just won't have it, sooo its best to stay hidden until some of the prosperity starts to trickle down (mercy) ...Plus, who has the guts to stand up in 'down graded economy Ghana', where even our president has felt the need to take some sort of pay cut (?????) and say, I am Ghana's number one arm robber????? Jealousy in Ghana is not a small thing......

Anyway for all you curtain twitch-ers out there, the following is that list referred to by Elvis Afriyie Ankrah... Enjoy..


 20 Richest People in Ghana (2013)
1. Ibrahim Mahama -$1.9 billion.

 2. Alfred Mahama -$1.3 billion.

 3. Roland Agambire - $1.1billion

4. Joseph Agyepong - $1.05billion

 5. John Mahama - $900 million

 6. Alhaji Azuma Banda - $724 million.

 7. Ato Ahwoi - $684 million

8. Dr. Sam Jonah - $430 Million

 9. Haruna Iddrisu - $300million

 10. Alex Mould - $282 million

11. Dr. Kwame Addo Kufuor - $250million.

12. Tsatsu Tsikata - $245million

 13. Elvis Afriyie Ankrah -$112 million.

 14. Dr. Kwesi Nduom - $110 million.

 15. Ken Agyapong - $104 million

 16. Prince Kofi Amoabeng - $98million

17. Asiedu Nketiah - $89million

18. Alfred Woyome - $75million

19. Tony Lithur - 30million

 20. Baba Kamara - $ 11million

Source: http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=291630
 

The Collapse of Ghana's Textile Industry....2013 / How Did China & India become sooo Rich?????

Title: Haruna Iddrisu's Ministry Collapses Textile Industry

Textile manufacturers have expressed disappointment in government for endorsing the demise of the local textile industry in the country.

The manufacturers say they have been taken aback by the decision of the Trade and Industry Ministry to halt the activities of the task force it had put in place to rid the market of pirated textile products.
According to the manufacture, the decision by the government does not only subvert the growth of the local textile industry, but also constitutes a subtle endorsement of the illicit activities of traders in pirated textiles in the country.

“The Textile Garment and Leather Employer’s Union is shocked and gravely disappointed about the unilateral decision of the Ministry of Trade & Industry to suspend the operations of the Anti-Textile Piracy Task force, without recourse to the stakeholders, thereby EMBOLDENING the perpetrators of the elicit trading activities in the country,” the textile union said in response to the directive.

The manufactures are also questioning government’s commitment to its obligation as a member of the World Trade Organisation to protect intellectual Property Rights and create a congenial environment for industries to grow and retain jobs.

As a result, Textile and Garment workers across the country would be demonstrating tomorrow, to protest against unfair competition from cheap imported pirated goods, which is collapsing the textile industry in the country.

The Workers union was last Friday given clearance by the police to embark on the demonstration.
The textile industry in Ghana has been on the decline, mainly due to unfair competition from pirated designs of local textile manufactures, which are imported into the country from China.

Information gathered by The Chronicle indicates that the major textile manufacturing companies are currently producing just about a third of their capacity, while others are on the verge of collapse, due to the influx of their pirated designs on the market.

The perpetrators of these illegal activities only pirate the designs of the local textile manufactures, take it to China and produce them in large quantities and sold on the Ghanaian market at very cheap prices.

To save the local industry from this unfair competition, the Ministry of trade issued a guideline early this year, for the importation of African print into the country.

The guidelines were intended to provide a frame work of administrative procedure through which numerous unfair trade practices including evasion of imported duties, pirating of patent and trademarks and smuggling among many others could be controlled.

The guideline included directives, which required all such importers to register with the Ministry of Trade to allow effective monitoring and an inspection of all imported African print to ensure they are not pirated designs from any local manufacturer.

It is, however, not clear what informed the Ministry of Trade’s decision to sideline these guidelines to allow a boom in the trade of these pirated prints at the expense of collapsing indigenous industries.
Source: Daniel Nonor/The Chronicle

Credit/ Source: http://www.ghanatrade.gov.gh/Trade-News/haruna-iddrisus-ministry-collapses-textile-industry.html


Paulina say: There are some names in the Ghana's government ----when I see them ---it just makes me wanna *%$£*@!

The thing is.....while the Gods-that-be in Ghana continue to beg, steal & borrow (mercy), many of us, including me, are looking at the Chinese & Indian model and wondering --how did these two great nations became soooo rich etc etc....

How did China, once a poor agrarian country become the second largest economy on Earth????? Surly its worth taking a closer look at 'some' of what the Chinese and the Indians are doing well and emulate it.......

It seems the Ghanaian-Gods-that-be have no ideologies, no plans, no vision for our future!!! For starters we (Ghana) seem hell bent on relaying on 'Aid' and on the land --forever instead of industrialising, hell bent on being 'CONSUMERS' instead of producers, and are busy running the little bit of fabulousness/prosperity/beacon-of-African-light/hope etc etc at the beginning of the 'Mills' government/regime ---into the ground (mercy).....

May 2014 bring Ghana better leaders. Educated leaders who truly want success for Ghana -and won't stop until they achieve it....... May we like China see industries/factories springing up all over Ghana -creating work/wealth and may we become producers/exporters and not 'mere' consumers/importers of cheap goods from economies/countries that have managed to get their 'houses' in order...   -in Jesus Name -Amen...

I must confess, I've found it very difficult to read any books in the past four years, ---tooo busy being busy, but one book I've read over and over again is, Dana Thomas' 'DELUXE, How Luxury lost its lustre'...

I know some of you are thinking --Luxury --again, but as any social commentator will tell you, a growing 'middle-class'  and 'luxury consumption' are the biggest indicator that a nation is on the rise.....

Anyway, the aforementioned book is a must-read for anyone wanting to take a luxury brand or two to Africa!!! Offering a real insight into how the big luxury brands strategized and marketed themselves to the opening Asian market and beyond, 'DELUXE' funny enough, also offered me, a real economic novice an incredible insight into China's rise...

Thus, I'm thinking .... instead of importing, importing & importing or borrowing more money from the Chinese, becoming more indebted to them -only goodness knows what this means for future generations of Ghanaians, ---we should instead -learn from them -now -and maybe start filling our regions with factories and assembly lines etc etc.......

Anyway the following are a few bits 'n 'bobs I've noted from La Internet with regards to China's incredible rise... Please note, I know that China is not perfect, but show me a country that is.....we have to start from somewhere....


How Did China & India become sooo Rich?????
"Well one reason is they EXPORTED things to the United States...so there exporting business is doing quite well. I think we should SELL OUR GOOD there, for starters."

"China is using the tried and true method of Mercantilism to quickly monopolise industrial assets. They are doing mercantilism / free trade hybrid that 18th century Britain did to get powerful and that Kaiser's Germany did to compete with Britain."

Source http://www.associatedcontent.com/article/1764172/can_europe_exploit_chinas_push

 

"Here's a basic description on the relationship between the two countries: America's economy thrives on spending money - spending money causes economic growth. China imports materials from Australia to make goods, they then lend money to America, then sell the goods to America. So all America is doing, is borrowing money from China to import goods from China! By doing so, they build up their debt while China keeps getting richer. Japan has a similar relationship. America is now printing money to pay off their debt. They cannot borrow money to pay off debt for another country or that will make the situation worse."

There are a lot of reasons; it’s a very complex situation. Contrary to popular opinion, it isn’t because Americans are lazy or the Chinese notably hard working, it’s simply a matter of economics.

One reason is simply that they are going through their own industrial revolution. They have massive populations and any given person is able to produce exponentially more than they could have before, so the gross national product is amplified greatly.

Reason number two is also due to the massive population. There is a greater quantity of manufacturing jobs demanded and a lower supply, so companies can pay their labour much less than in the U.S., and the workers will still be happy, because the jobs are better than what they would have had before. It’s not that Americans are lazy or don’t want the jobs, it’s because they literally cannot live off of the wages paid in China (a dollar or less per hour for a manufacturing job). The cost of living is just too high, and there’s a minimum wage anyway. Interestingly enough, the manufacturing jobs in China have raised the average wages enough, that China is losing some of it’s attractiveness to other nations.

Another big reason was that until 2005, China was fixing their exchange rate. They kept their currency, the Yuan, purposefully weak, compared to the dollar. This means the dollar had more buying power in China than it ought to have had. Because of this China’s exports were extremely attractive. If you follow economic news, this was actually one of the biggest sources of tension between the U.S. and China; just as big, if not bigger, than the outsourcing issue.

India has such a large IT industry because not only do they have inexpensive labour, their labour is also highly educated, comparatively.

As far as goals of China and India, they simply want to do well for themselves; expand their wealth, and their world influence; the same as any country.

Would China or India be hurt by other countries becoming competitive economically? Somewhat. They do so well because their labour force is so large and so impoverished. As they continue to grow wealthier, their workforce will be more highly paid, and other countries will be even more attractive than China for labour and exports; it’s already happening in some industries. So, the more China grows, the more downward pressure there will be on that growth to slow it down.

Source:http://www.manufacturingnews.com/news/06...
http://www.danwei.org/china_information/...

"The same way anyone becomes rich. They make things that others want."


"The reason why the US is making China rich is because we owe them loads of money. they loan us money so we can buy their stuff and keep our economy from sinking even further. this is the reason why. Also you don't piss off the people who loan you money, you just do as they ask."


India & China are prospering because they provide inexpensive well educated labour at less than 1/4 the cost of American, Japanese or European labour. Because the well educated & relatively well paid labour force injects money into their economy, the less skilled members of society are also enhanced financially with more & better paying jobs. Therefore outsourcing of American, Japanese & European jobs, while destroying the economy of the afore mentioned countries, is building the economy of India & China.

As an engineer that knows many American scientists & engineers seeking employment in their fields, I've concluded outsourcing of jobs & technology has damaged our ability to compete in the future. People do not wish to spend the time & money training for non existent jobs.

Because the manufacturing fields are the driving force behind science & engineering, the US is destined to become an obsolete nation dependent upon the Chinese & Indians to produce even our military equipment.

India & China want what every country wants... the ability to influence the rest of the World & be the major player in the drive to develop of the World to their advantage.
Credit: http://answers.yahoo.com/question/index?qid=20090717222957AAogktm


"They make a lot in technology, vehicles, toys, clothings. ALOT of things are made in China and then distribute everywhere."

Same way every other developed country grew. They are industrializing. All this talk about "slave labour" is nonsense. When Europe and the US were industrializing, labour rights were non-existent too! People would have to work 16 hour days and if you got hurt on the job then you were SOL. They also manipulate their currency in a way that makes their exports cheap to other countries. Just about every country in the world has done this including the US. This is how countries industrialize! Because wages are so cheap there, many companies want to set up shop in China which creates jobs there and causes their economy to grow even more. Of course, this means taking jobs from somewhere else (US & Europe) but some would argue that it also allows companies to grow even more and create more upper level management positions back in the country where they closed down the factory. This may or may not be true but economies are constantly shifting. The US is shifting from a manufacturing economy to a service sector economy. This includes jobs such as working at a fast food restaurant to working for a consulting or financial firm.

This is how the globalized economy works. I guarantee you China won't be growing at 10% GDP forever. Once they industrialize and catch up to the rest of the developed world, people there will begin complaining about how all of their manufacturing jobs are being outsourced to Africa (the next continent to industrialize).


"Yes, a poor country can become rich. Japan, Korea, Brazil, China have all done it, or are doing it right now. None of them have many minerals though. Mineral wealth is easily pocketed by ruling elite, leaving most people as poor as they were. Just look at Arab countries and Venezuela. The economic "miracles" come from hard-working people and a development-oriented government."


"Basically, China is under communist government, but market economy. This was started in 1978 with Deng Xiaoping's Economic Reforms:

* In 1978, Deng launched what he called a "second revolution" that involved reforming China's moribund economic system and "opening up to outside world." The market-oriented economic reforms launched by Deng were described as "Socialism with Chinese Characteristics." Deng insisted the reforms were not capitalistic: "I have expressed time and again that our modernization is a socialist one," he said.

* The Deng era is known in China as the Period of Reform and Opening. Deng needed great political skill and patience to get his reforms past hard liners in the Chinese Politburo. There was always the belief that the Deng reforms would be reversed at any moment. Deng himself insisted the reforms kept the Communist party from being "toppled."

* The Deng reforms decentralized the state economy by replacing central planning with market forces, breaking down the collective farms and getting rid of state-run enterprises. One of the most successful reforms—the "within" and "without” production plans—allowed businesses to pursue their own aims after the met their state-set quotas. Enterprises and factories were allowed to keep profits, use merit pay and offer bonuses and other incentives, which greatly boosted productivity.

* In the Deng era there was a shift from central planning and reliance on heavy industry to consumer-oriented industries and reliance on foreign trade and investment. The 1978 reforms included efforts to boost foreign trade through the establishment fo 12 state companies to control imports and exports and the creation of Special Economic Zones (SEZs) along China's southern coastline. In 1982, communes began to be dismantled and peasants were allowed to grow and sell produce. In 1985, tariffs were cut from 56 percent to 43 percent beginning the long, gradual reduction of import barriers.

In the 1980s Deng Xiaoping said, "To get rich is glorious" and later added "some should be allowed to get rich first." Many Chinese have taken this maxim to heart and have become very rich.
http://factsanddetails.com/china.php?ite...


It's a lot more complicated than that, but another brief summary would be that the government allows the people to "get rich" provided they don't try to topple the government. That's why he came down so hard on the students in Tian'anmen Square in 1989 . . . Deng felt that he "gave an inch, but they tried to take a mile" and brutally ended the self-expression. Since then, economic "freedom" has been even greater . . . all with the subtle message of "don't mess with the government, though."

(You should note that these changes came about AFTER Mao's death in 1976. He and Deng Xiaoping were often at odds over how the economy of the nation should be run.)
http://answers.yahoo.com/question/index?qid=20090628230243AA7L3kx


The US is becoming poor because it's no longer the worlds top manufacturing economy or powerhouse. The same thing happened to Britain when the US took over from it after WWII....loss of British manufacturing jobs/ power to the US meant bad economic times for Britain 1970's-1990's. Now loss of manufacturing jobs/ power from the US to China mean bad times for the US (2000-2020's or so).

These things happen for real economic reasons and economic facts instead of 'mysteries'.
Manufacturing has high wages and very high multiplier effect (for every dollar of product a manufacturer turns out, it creates lots of other business needing raw materials, supplies, labor, the physical plant, transportation, and pays high wages a factor of about 10 for 1).
'Service' economies don't really work. Service jobs have low wages 'and' a low multiplier (all you really need to provide a service is an office and a phone, a multiplying business factor of about 2 for 1).

The other problem the US has is that it's immigration based population growth grew way too fast from 2000-2010 (5-10 times the rate for Europe), Way too much for a slowing service economy to ever absorb. The US now has therefore too many workers for available jobs, and this is a population demographic that will take decades to work through.

So, get rid of 25 million manufacturing jobs in 25 years, invite 10's of millions of extra people into your slowing service economy of falling wages and low multiplier....and you see the effects.
It would happen to any country and happened in Britain 1970's/ 1980's.
P.S. It has of course nothing to do with 'socialism', the US actually has practiced...right wing conservative Reagan-Thatcherism for most of the last 30 years, about as far from 'socialism' as Margaret Thatcher herself." Yahoo....


"China has not become rich, China has become more like the USA. It is called "reward of iniquity". The central bank creates money to build malls and even whole cities that nobody needs, just so the numbers appear in the nation's GDP. That makes it look like the country is prospering, but it is nothing more than a charade.

A country can not stand phony money very long. In every case so far the limit has been 40 years. The USA is entering its 41st year since gold backing was discontinued. It is significant that all countries are now accumulating gold as fast as they can. When the money crashes, gold will be the only collateral that is still any good. But it has to be physical metal. No more promises." Yahoo

 

“Increased borrowing must be matched by increased ability to repay. Otherwise we aren’t expanding the economy, we’re merely puffing it up.” Henry C. Alexander

Business: Could the proposed new Ghana Investment Promotion Centre Act ---end up making access to capital more difficult?

Title: Will Ghana shoot itself in the foot through new investment act

Dated: 2-12-2013

In Ghana, small and medium enterprises form 92% of all companies and contribute 70% to GDP but their biggest constraint has been access to finance. A number of measures taken by the government have helped to ease this situation but a new act, argues Elikem Nutifafa Kuenyehia*, could reverse all the gains made so far.

While researching for a book on entrepreneurship over a five-year period, most Ghanaian entrepreneurs running micro, small and medium-scale enterprises (MSMEs) I interviewed cited access to capital as their biggest constraint. 

 

MSME entrepreneurs regularly have to pass up on several opportunities that are a natural corollary of a stable economy, a significant oil find and an increased demand for goods and services by a growing middle class and foreign investors.

 

There is a near absence of capital to finance early stage MSMEs in Ghana. The funding pool provided by personal savings, friends and family, angel investors and venture capital is insignificant relative to demand. The majority of banks, unable to properly evaluate and price credit to these businesses, treat them as an amorphous set and demand collateral regardless of industry or whether the entrepreneur has proven his concept. 

 

Even an MSME with a history of both revenue and profit will struggle to obtain an overdraft without providing unencumbered real property as collateral. In the unlikely event that such a business is able to obtain an overdraft, a rate less than an APR of 30% would be considered a bargain. 

 

Yet MSMEs make up 92% of all businesses in Ghana and contribute over 70% of GDP. Conscious of this, Parliament in 2004 established the Venture Capital Trust Fund (the ‘Fund’) and has subsequently provided incentives for Venture Capital Financing (VCF) Companies. These are companies whose sole object is to assist small and medium enterprises (SMEs) to develop through equity and quasi-equity investments and/or business and managerial expertise. 

 

SMEs are defined as businesses employing 100 people or less with assets (excluding land and buildings) of $1m or less.

 

The Fund is set up as a fund of funds, and it invests indirectly in SMEs by investing in VCF companies. VCF companies and their investors are entitled to generous tax incentives, including exemption from dividend and corporate taxes for 10 years whether or not the VCF companies also seek funding from the Fund. Investors can offset their investments in VCF companies against income to reduce tax liability. 

 

After operating for almost 10 years, the Fund has invested over $12.5m in 180 companies. In addition, it has paired up angel investors with SMEs seeking funding through its Ghana Angel Investor Network. 

 

Given how illiquid the Ghana Stock Exchange (GSE) is, the Fund and the GSE have collaborated to set up the Ghana Alternative Market (GAX). This is a separate public market, parallel to the main market, and acts first as an avenue for VCF companies and angel investors to exit investee companies and more generally to provide a channel for SMEs with high growth potential to raise patient capital through the GSE. 

 

The requirements for GAX are less demanding than those for the main market. In addition, provision has been made for a fund to initially cover listing expenses of these companies. 

 

Missing the wood for the trees
However, it now seems that the proposed new Ghana Investment Promotion Centre Act (which replaces the 1994 Act) and which is now awaiting Presidential assent, could undermine the work done by the Fund, VCF companies and the GSE. 

 

The new Act increases the minimum capital requirements for companies wholly owned by foreigners from $50,000 to $200,000, for companies owned jointly by Ghanaians and foreigners from $10,000 to $50,000 and for trading companies from $300,000 to $1m. As was the case under the previous law, the minimum capital must be brought into Ghana as cash, equipment or, in the case of trading companies, as goods.

 

Parliament justified the increases in minimum capital as a means to end unfair competition between foreign investors and Ghanaians. In doing so, the body seems to have ignored the rationale for reducing capital requirements from higher thresholds in the original 1985 Investment Code ($100,000 for wholly owned foreign companies and $60,000 for joint ventures with Ghanaians) which the 1994 Act replaced. 

 

The rationale, articulated at the time the original Investment Code was replaced with the previous Act in 1994 was to encourage joint ventures between foreign investors and SMEs who may require useful but expensive technologies which they could not afford.

 

It appears that Ghana’s Parliament is killing a fly with a sledgehammer and has missed the wood for the trees.

 

The real issue is ensuring compliance with the law by foreigners who flout it. An increase in capital requirements would not ensure compliance but would deter legitimate foreign organisations from investing in Ghana to the detriment of Ghanaian MSMEs facing capital constraints. Parliament should have taken a broader view of the contribution MSMEs currently make and the even bigger potential contribution they could make given the framework now established by the venture capital incentive regime and GAX. 

 

With unemployment at historic highs, any legitimate investor should be welcomed with open arms irrespective of the size of initial capital. This is especially so as anecdotal evidence suggests that the typical foreign direct investor is himself an MSME entrepreneur who comes to Ghana initially because of personal, family or ancestral connections or as a tourist. Such investors typically invest between $10,000 and $300,000, with the greater majority on the lower side. In many cases, the enterprises grow beyond the initial capitalisation.

 

Unlike the situation 10 years ago, the same SME investor looking for a stable African country could invest for equally impressive returns in countries without minimum capital requirements such as Sierra Leone, Rwanda, Mozambique, Liberia and Zambia.

 

What Ghana requires to properly align its current economic and political credentials with its aspiration to achieve upper middle-class status is an investment regime that is nationality-indiscriminate and size-indifferent.

 

An immediate benefit of this approach, given the platform that GAX offers, would see more MSMEs list and trade their shares. One reason why the GSE remains illiquid is cultural – the notion of opening up companies to the general public is a concept alien to the vast majority of Ghanaian entrepreneurs, who typically also superintend companies with nonexistent or questionable corporate governance practices. 

 

Given that the majority of investment into Ghana is from Western countries with well-developed capital markets, my suggested approach will ultimately import the values of these countries as they relate to public capital markets and corporate governance and create a critical mass of entrepreneurs. Until Ghana is able create such a critical mass of entrepreneurs, its aspiration to achieve upper middle class status will remain a pipe dream.    

 

*Elikem Nutifafa Kuenyehia is the managing partner of Oxford & Beaumont in Accra and London and a lecturer in entrepreneurship at the Ghana School of Management and Public Administration. His book Kuenyehia on Entrepreneurship has been described as a ground-breaking resource on Ghanaian entrepreneurship.

Source/Credit: http://africanbusinessmagazine.com/special-reports/country-reports/ghana-africas-rising-star/will-ghana-shoot-itself-in-the-foot-through-new-investment-act

Paulina says: Heaven help the ordinary Ghanaian man and woman in 2014...... We need the Gods-that-be to be sensitive to the survival needs of the general public...and to encourage the banks to start giving out loans to innovative and sustainable businesses in Ghana...

Fashion & Lifestyle: Timberland Set to open in Ghana....................

Title: Timberland uses SA base for African expansion
Dated: 9-12-2013

US OUTDOOR lifestyle brand Timberland, which has 25 stores in South Africa, is opening in Angola and Mozambique this month.

The company, which first launched in South Africa in 1996, has a distributorship and retail development agreement with local firm Keystone Apparel Company, which also owns the rights to high-end men’s label Hackett London in South Africa.

The country has attracted a slew of international brands, many of which are eyeing it as a stepping stone to other sub-Saharan markets.

The fast-growing economies of Africa present a compelling investment case. By 2030, the continent’s top 18 cities could have combined spending power of $1.3-trillion.

Timberland’s brand image, recently renewed, blends outdoor craftsmanship and contemporary design aimed at a younger, millennial customer.

"African expansion is important on our growth agenda … it will include further Angolan openings, Ghana and Botswana," Timberland South Africa director Abdullah Mayet said last week.

European men’s fashion brand Suitsupply is testing the African waters through its e-commerce website, Africa.suitsupply.com. Payment options have been tailored to include cash on delivery, and processors such as Kenya’s M-Pesa and Nigeria’s Interswitch. The company is eyeing Nigeria, Angola, Kenya and South Africa for store roll-outs.

The launch of franchise stores and shop-in-shops also reduces the potential risk of entering new markets and ensures that a retailer gains local market knowledge. It also enables rapid expansion, where premium sites are scarce.

Senior analyst at London’s Planet Retail, Isabel Cavill, says that for a long time retailers shied away from South Africa because of the logistics and the seasonal differences, although they are now starting to get around these problems by creating ranges that are less season sensitive.

"There are also wholesale opportunities for retailers looking to open in South Africa via a strong department store network."

Last year, brand management company Brand Capital introduced the Ted Baker brand in South Africa at Stuttafords and it has just launched UK handbag and accessory brand Radley.

Brand Capital CEO Marco Cicoria says: "Our strategy for Ted Baker is based on a three-to five-year plan.

"The first two years we’re looking at a shop-in-shops concept in Stuttafords and then for wholesale we will choose another retail partner, possibly another department store.

"The third phase would then be a careful look at locations for standalone stores."

With the proliferation of international retailers such as Zara and Topshop expanding in South Africa, local groups are boosting their fashion credibility.

Woolworths last week showcased the autumn-winter 2014 collections of Witchery and Mimco, fashion brands it will bring to South Africa in March.

Along with new brands in its arsenal, Woolworths’ enhanced procurement strategy and better relationships with its suppliers has allowed the group to shorten lead times. The up-market player, which wants to be a leading fashion retailer in the southern hemisphere, hopes to emulate the success of its other Australian labels, Country Road and Trenery.

Edcon has also beefed-up merchandising teams and introduced brands such as TM Lewin, Lucky Brand and Tom Tailor.

Noah Capital Markets retail analyst Roger Tejwani says international brands coming into the country collectively added "a little bit" of pressure on local fashion retailers. H&M will open its first store in South Africa in 2015.

Source: http://www.bdlive.co.za/business/retail/2013/12/09/timberland-uses-sa-base-for-african-expansion

Paulina says: Fabulous news...I can't wait....  

Economy: South Africa's Credit Rating Fate.........

  

         

SA to know credit rating fate by year-end, says Fitch

Dated: 11-12-2013

SOUTH Africa will know by the end of the year whether it has received another sovereign credit rating downgrade.

Analysts from Fitch Ratings have been in South Africa for several days interviewing South African Reserve Bank and Treasury officials, private economists, political parties, national planning commissioners and Eskom executives.

In terms of new European Union (EU) regulations, credit rating agencies must file a credit report on each country they rate twice a year. That means Fitch has until December 31 to update its assessment of South Africa.

In January this year Fitch was the last of the three main rating agencies to reduce South Africa’s credit rating by one notch to BBB. But it kept South Africa on a "stable" outlook while the other two main rating agencies, Moody’s and Standard & Poor’s, which downgraded South Africa before last year’s Mangaung conference, have placed South Africa on a negative outlook.

The deterioration in South Africa’s growth prospects, a widening in the current account deficit, delayed fiscal consolidation and heightened political uncertainty associated with high unemployment, social inequality and strikes led Fitch to downgrade South Africa’s sovereign ratings.

At the time, Fitch also cited "rising corruption and worsening government effectiveness" for having constrained government’s ability to improve living standards and reduce unemployment rapidly. As a result, it noted, social and political tensions had increased.

"Nothing has changed in South Africa," said Richard Fox, head of Fitch sovereign ratings for the Middle East and Africa, speaking from London.

"Our sentiments are as we said in January: South Africa’s potential growth rate has been coming down since the global financial crisis and this is affecting public finances.

"The big question is how South Africa is going to raise growth to address the many social issues. We know the National Development Plan (NDP) is very good on diagnosis and the political parties have bought into it, but there’s been very little in the way of implementation."

The need to improve the business climate and reform education and the labour market had been on South Africa’s shopping list for a long time, said Fox, but rating agencies now wanted to see the actual implementation of this reform agenda.

A key question Fitch is pondering is whether the outcome of the 2014 election will result in an acceleration of structural reform. Another major unknown is how the country will be affected next year once the US Federal Reserve commences tapering its bond-buying programme.

The agency expects South Africa’s real gross domestic product (GDP) growth rate to accelerate moderately from 1.9% in 2013 to 2.8% in 2014, but has warned that South Africa is one of the most vulnerable economies in sub-Saharan Africa, along with Ghana, to the effects of Fed tapering.

Source: http://www.bdlive.co.za/economy/2013/12/11/sa-to-know-credit-rating-fate-by-year-end-says-fitch

Ghana Rising Blog's Best Fashion News of 2013: Edcon to open UK brand River Island in Ghana..................

Title: Edcon to distribute UK brand River Island in South Africa
Dated: 18-12-2013

UNLISTED retail group Edcon has signed a franchise deal with British high street brand River Island, providing the local leading company with sole distribution rights in South Africa.

The first flagship store is set to launch in Rosebank, Johannesburg, in June next year, with additional flagship stores expected to open in Cape Town in October.

Edcon has introduced a slew of international brands like Topshop, Dune London and Lucky Brand through both franchise and store-in-store formats in an aim to attract footfall boost profitability.

 The group’s strategic initiatives also include improved sourcing and a beefed-up merchandising team for its core Edgars brand.

Local players such as Truworths, Woolworths and The Foschini Group have streamlined their fashion supply chain in the face of heightened competition as global players such as Zara and others expand in South Africa.

"River Island is a complete shopping experience all in itself. Not only is it extremely fashion forward but it is also very versatile and possesses its own unique flair. We expect it to be a hugely popular addition to our current range," Edcon CEO Jürgen Schreiber said.

With more than 65 years of fashion retail experience, River Island continues to grow globally and has more than 300 stores in the UK, Ireland, Russia, Poland, Holland, Belgium and the Middle East.

"We are very excited to be entering into the South African market in partnership with Edcon. We are confident that together, with our combined knowledge and experience, we can deliver fantastic fashion and a great store experience to our South African customers," River Island CEO Ben Lewis said.

Edcon, which also owns Jet, CNA and Boardmans, has grown from opening its first store in 1929, to trading in 1,368 stores in South Africa, Botswana, Mozambique, Namibia, Swaziland, Lesotho, Zambia and Zimbabwe.

The company would open stores in Ghana and Nigeria next year, Mr Schreiber said.

As the world’s second fastest-growing region, the continent’s booming economies have caught the eye of retailers in search of higher yields and untapped consumer spending potential.

Edcon continues to use discount fashion brand Jet as a beachhead to move into new African markets. The budget-conscious offerings of Mr Price and Pep are proving to be increasingly appealing to an emerging middle class, which is still price-sensitive.

"This (Africa) remains an exciting opportunity going forward," Mr Schreiber said. "We normally go into a new country with Jet. In Zambia though, we went in with Edgars too — it’s working well. In the second half of next year, we’ll go into Ghana with both Edgars and Jet, because the market is quite strong. In Nigeria we’ll take a discount approach and not an Edgars one at this point."

Credit/Source: http://www.bdlive.co.za/business/retail/2013/12/18/edcon-to-distribute-uk-brand-river-island-in-south-Africa


Paulina says: 2013 brought many trying news for Ghana, but it was also a year of aspirational haute fashionable happenings... Make-up giant MAC announced its interest in Ghana (https://www.facebook.com/MACcosmetics), Marina Mall -a hub of luxury goods was officially launched (https://www.facebook.com/MarinaMallAccra) and Fifth Avenue -Ghana's premier retail destination for both the Ghanaian and International elite, with merchandise from world leading brands including Hublot and Breitling (https://www.facebook.com/fifthavenueghana) brougt uber luxe fashion house Hermes watches et al to Ghana... But nothing beats the prospects of Edcon bringing UK brand River Island to Ghana...I'm soooooo excited I can't wait...

Only...I'm wondering...... where will said anticipated store be located? Will this much feted brand be situated in Accra Mall, Marina Mall, the soon to open luxurious Kempinski Gold Coast City Hotel on Gamel Abdul Nasser Avenue (http://www.kempinski.com/en/accra/hotel-gold-coast-city/welcome/) or as a stand alone store in the heart of Accra? I just can't wait -can you?

For more info about River Island visit: http://www.riverisland.com/ & https://www.facebook.com/riverisland