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The Market Place with Daryl Kwawu on JoyNews (21-8-23)
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NewsTranscript
00:00 Hi, good afternoon, welcome to the Marketplace.
00:02 Coming up, Bank of Ghana rejects allegations
00:04 of contract over bloating, procurement breaches,
00:06 and the use of an unregistered company
00:09 to build the 250 million city new headquarters.
00:13 We've got details coming up.
00:15 Also coming up, Economist Intelligence Unit
00:20 predicts that Ghana will reach an agreement
00:22 with its external creditors in the coming weeks
00:24 to pave way for restructuring of foreign loans.
00:28 Meanwhile, government likely to extend
00:30 the second round of domestic debt exchange program
00:33 for about a week, despite receiving 90% participation
00:37 in the domestic dollar bonds and cocoa bills.
00:39 My name is Darrell Clark.
00:44 Thanks for being with us.
00:45 Details coming up.
00:46 (upbeat music)
00:49 Thanks for staying with us, everyone.
01:02 The Bank of Ghana has rejected allegations
01:04 of contract over bloating, procurement breaches,
01:07 and the use of an unregistered company
01:09 to build the 250 million city new headquarters.
01:13 We've got details coming up.
01:14 The Bank of Ghana has rejected allegations
01:16 of contract over bloating, procurement breaches,
01:19 and the use of an unregistered company
01:21 to build the 250 million city new headquarters.
01:25 The Bank has been engaging the media
01:27 on recent developments about its headquarters
01:29 and the 61 billion city loss amidst pressure
01:32 from the minority in Parliament and the NDC
01:34 for the governor and his deputies to resign.
01:37 The Bank of Ghana Governor, Dr. Ennis Addison,
01:39 who addressed the press conference said
01:42 that the government is negatively impacted by the losses.
01:46 Right, we'll bring you that as soon as we have it.
02:02 But I want to link up with George Afu,
02:04 who covered the press conference for us.
02:06 George, first off, what has the governor been saying
02:10 about the losses incurred in the previous year?
02:14 - So basically the governor insisted
02:21 that this was as a result of participating
02:25 in the debt exchange program,
02:27 or more of like bonds and government papers
02:30 that were issued over the year.
02:32 And Daryl, the governor went back to explain
02:35 that these are papers that have been issued
02:37 as far back as 2000 or maybe 1992 rather,
02:41 covering several financing options
02:45 that the Bank of Ghana had participated
02:47 in terms of government bonds.
02:49 So this loss that was posted in 2022
02:52 was not exclusively as a result of financing issued
02:57 to support government in the era of the pandemic.
03:00 And this were running from 1992, 1993, 1994,
03:04 and even in 2000 as well.
03:06 So the argument is that this was not just support
03:11 that the bank has advanced the government in 2022.
03:15 And Daryl, this financing has to do with bonds
03:19 that the government of Ghana owes the Bank of Ghana
03:23 because they had bought them.
03:24 And due to the debt exchange program,
03:27 government decided to move, pass on a serious haircut
03:31 to the central bank.
03:32 And that is why you saw that loss
03:34 of the 61 billion Ghana cities in 2022, Daryl.
03:39 - And the central bank has also faced criticism
03:42 over the construction of a new head office for it.
03:45 What justification did the governor have for that as well?
03:48 - Well, Daryl, earlier you heard the Bank of Ghana
03:56 explain about the fact that this building that we are in
04:00 wasn't fit for purpose.
04:02 And therefore, one of it is a major reason why they decided
04:06 and that the decision to even construct this headquarters
04:09 as over the years, that decision has been taken
04:13 by the board and the Bank of Ghana to go ahead with this.
04:15 He further explained that the decision to go ahead
04:18 to construct this new headquarters was taken
04:21 or kickstarted in 2019.
04:24 And that they are drawing funding or they drew funding,
04:27 Daryl, from the profits made in previous years.
04:31 So it wasn't that the decision was taken to go ahead
04:34 even in late 2021 or 22,
04:37 and that in the time when they were making losses,
04:40 they are going ahead with this project.
04:42 The profits or the funding was actually gotten
04:45 from previous years where they had made profits.
04:48 And that is why they had made this commitment
04:50 to this building to be constructed, Daryl.
04:53 - And a final one, Joe, the central bank also mentioning
04:57 that it is going ahead with the zero financing
04:59 of government's budget.
05:00 What more did the central bank governor
05:02 have to say about that?
05:03 - So there have been concerns or argument
05:11 that the Bank of Ghana has been in the practice
05:13 of that they've always been financing government.
05:17 The governor explained that over the years, actually,
05:20 there have been strict zero financing
05:23 of government's operations.
05:25 The only time that this didn't happen was in 2022
05:29 because of the pandemic.
05:32 And that is why they had to bend back the rules
05:35 and advance support to government
05:36 because of the crisis that we're in.
05:38 Daryl, a question also came up
05:40 about getting further clarity about whether the governor
05:45 of the Bank of Ghana or even Bank of Ghana
05:47 physically printed money to finance government operations
05:51 in 2022.
05:52 Well, the governor explained that the bank
05:55 has a lot of resources.
05:57 And in terms of this overdraft,
05:59 they fell on these resources to finance government operation.
06:03 They didn't go out there to print French currency notes
06:08 to support government operations.
06:10 And that is what the governor said in trying to clarify
06:13 how the financing was done for government in last year
06:16 during this press conference, Daryl.
06:17 - Quick one, George.
06:18 Was he asked if he intends to resign?
06:21 - No, he wasn't asked.
06:23 And we are yet to get clarity on that one, Daryl,
06:25 whether he will take that action or not.
06:28 - Thank you. Thank you very much, George.
06:29 I feel with that update from the head office
06:32 of the Bank of Ghana.
06:34 The Economist Intelligence Unit is predicting
06:35 that Ghana will reach an agreement
06:37 with its external creditors in the coming weeks
06:39 to pave way for the restructuring of foreign loans.
06:42 This is disclosure from its newest document
06:44 titled "The Bank of Ghana's Financial Report."
06:47 And for the restructuring of foreign loans,
06:51 this is disclosure from its newest document
06:54 titled "Outlook for Global Sovereign Credit."
06:57 There's more in this report.
06:58 - This will come as a piece of good news for the country
07:03 as it will be on schedule to begin
07:05 its external debt restructuring.
07:07 According to the UK-based firm,
07:10 Ghana has advanced with its negotiation
07:12 for external debt restructuring.
07:14 The government has announced
07:15 that it will begin a bilateral debt restructuring
07:19 under the Common Framework for Debt Treatment
07:21 supported by the G20.
07:24 In June this year, the government sent
07:26 a non-binding working debt restructuring proposal
07:30 to official bilateral creditors,
07:32 signifying the beginning of a negotiation process
07:35 that the EIU said it expects to conclude
07:39 in the coming weeks.
07:40 Ghana and five other countries
07:43 were also included in the proposal.
07:45 The EIU also announced that the government
07:48 will begin a bilateral debt restructuring
07:50 under the Common Framework for Debt Treatment
07:53 supported by the G20.
07:55 The government has also announced
07:56 that it will begin a bilateral debt restructuring
08:00 under the Common Framework for Debt Treatment
08:02 supported by the G20.
08:04 The EIU has also announced
08:05 that the government will begin a bilateral debt restructuring
08:09 under the Common Framework for Debt Treatment
08:11 supported by the G20.
08:13 The government has also announced
08:14 that it will begin a bilateral debt restructuring
08:17 under the Common Framework for Debt Treatment
08:20 supported by the G20.
08:21 The government has also announced
08:23 that it will begin a bilateral debt restructuring
08:26 under the Common Framework for Debt Treatment
08:28 supported by the G20.
08:29 The government has also announced
08:31 that it will begin a bilateral debt restructuring
08:33 under the Common Framework for Debt Treatment
08:36 supported by the G20.
08:38 The government has also announced
08:39 that it will begin a bilateral debt restructuring
08:42 under the Common Framework for Debt Treatment
08:44 supported by the G20.
08:46 The government has also announced
08:47 that it will begin a bilateral debt restructuring
08:50 under the Common Framework for Debt Treatment
08:52 supported by the G20.
08:54 The government has also announced
08:55 that it will begin a bilateral debt restructuring
08:58 under the Common Framework for Debt Treatment
09:00 supported by the G20.
09:02 The government has also announced
09:03 that it will begin a bilateral debt restructuring
09:06 under the Common Framework for Debt Treatment
09:08 supported by the G20.
09:10 The government has also announced
09:12 that it will begin a bilateral debt restructuring
09:14 under the Common Framework for Debt Treatment
09:17 supported by the G20.
09:18 The government has also announced
09:20 that it will begin a bilateral debt restructuring
09:22 under the Common Framework for Debt Treatment
09:25 supported by the G20.
09:26 The government has also announced
09:28 that it will begin a bilateral debt restructuring
09:30 under the Common Framework for Debt Treatment
09:33 supported by the G20.
09:34 The government has also announced
09:36 that it will begin a bilateral debt restructuring
09:38 under the Common Framework for Debt Treatment
09:40 supported by the G20.
09:42 The government has also announced
09:44 that it will begin a bilateral debt restructuring
09:46 under the Common Framework for Debt Treatment
09:49 supported by the G20.
09:50 The government has also announced
09:52 that it will begin a bilateral debt restructuring
09:54 under the Common Framework for Debt Treatment
09:57 supported by the G20.
09:58 The government has also announced
10:00 that it will begin a bilateral debt restructuring
10:02 under the Common Framework for Debt Treatment
10:05 supported by the G20.
10:06 What's keeping the rates up?
10:08 - Good afternoon, Darrell.
10:11 What we are seeing is that
10:12 as the time for the GDP coupon payments
10:19 is coming near,
10:22 the target for government also rises in the market.
10:26 And we are seeing interest rates going up
10:29 because investors are equally bidding higher
10:32 than we see in the previous weeks.
10:35 Also, inflation could also be a reason
10:37 because we've seen inflation inching up
10:40 by some basis points in the past week.
10:42 So we expect that trend to continue for some time.
10:46 - Well, so government got 12.91% lower
10:50 than its target for the past week
10:52 during the T-Bills auction.
10:54 Give us a rundown from last week's auction.
10:57 - Well, okay, so we've seen that the 182-day
11:03 was the most desired for last week.
11:05 It took about 49% of the total bids accepted.
11:10 Against 91-day,
11:12 inching up to 47% of the total bids accepted.
11:16 And then 364-day,
11:18 taking 4% of the total bids accepted.
11:22 The 91-day closed at 26.71%,
11:27 inching up by 61.55 basis points.
11:31 The 182-day closed at 27.88%,
11:36 increasing by 28.33 basis points.
11:39 And then the 364-day closed at 31.08%.
11:44 - And so we expect mixed performance
11:46 on the stock market this week.
11:48 Tell us how trading went last week
11:50 and what to expect this week as well.
11:52 - Well, for last week,
11:54 we saw GCP dominating both trade volumes and values.
11:58 We expect more interest in the stock this week as well.
12:02 We saw stocks like Total, Societe, Bob,
12:05 and GCB increasing in some pairs.
12:09 We saw losers like GGBL and Ecobank Ghana
12:13 dropping some pairs to close at 2.52
12:18 and 4.32 respectively.
12:22 - Thank you so much, Patrick Ogama,
12:26 head of trading at Republic Securities.
12:29 I appreciate your time with us.
12:30 You're watching the Marketplace.
12:31 We wanna cross over now to a press conference
12:35 by political parties in response
12:37 to the limited voters registration exercise
12:40 taking place right now.
12:41 - These guidelines outline procedural rules
12:48 and regulations for the Special Electoral College,
12:52 which is to elect five presidential aspirants
12:55 for the National Congress in November.
12:58 The updated operational guidelines have been shared
13:01 among all aspirants and relevant key stakeholders.
13:06 Successful balloting casting on Wednesday,
13:12 26th, July, 2023.
13:15 The elections committee in collaboration with officials
13:19 from the Electoral Commission of Ghana
13:22 successfully conducted a balloting exercise
13:25 for the candidates for the election.
13:28 Below is the order in which the candidates
13:32 will appear on the ballot paper.
13:34 Position one, Honorable Kenneth Ajepon.
13:38 Position two, Honorable Alan Kodjoe-Trematin.
13:43 Position three, Honorable Joe Gatti.
13:46 Position four, Honorable Kodjoe-Koku.
13:49 Position five, Dr. Owusu-Efriyakotu.
13:52 Position six, Engineer Kwabena Ejepon, Eje Ejepon.
13:57 Position seven, Engineer Francis Adainimu.
14:03 Position eight, Dr. Kofi Kunedu-Apriku.
14:08 Position nine, Honorable Bache Ejakun.
14:13 Position 10, His Excellency, Aladji Dr. Mahmoud Bawamian.
14:19 (murmurs)
14:21 - All right, you rather watched an MPP press conference
14:28 on the party's upcoming delegates conference
14:32 or Congress supposed to take place this weekend.
14:35 We will go back to the political party's press conference
14:39 on the limited voters registration exercise
14:41 when we have that feed.
14:42 But I want to take you now to South Africa
14:44 where South Africa's President Cyril Mapusa
14:47 is alarmed that recent incidents of coup d'etats
14:49 across the continent could undermine
14:51 the African continental free trade area.
14:54 Ghana, which is hosting the framework seeking
14:56 to promote free trade and mutual growth,
14:58 is facing serious threats of instability
15:00 given the rise in military takeovers
15:03 and violent extremism in the West African sub-region.
15:06 Speaking in a televised address as the break summit
15:09 takes off in South Africa, Cyril Mapusa indicated
15:13 that for Africa to thrive, the guns must be silenced.
15:17 - We are working towards the full implementation
15:20 of the African continental free trade area,
15:24 which is set to eliminate trade barriers,
15:27 boost intra-African trade and achieve prosperity
15:32 for all of Africa.
15:33 It will also accelerate manufacturing
15:37 and industrial capacity on our continent.
15:40 The vibrant trading Africa we seek to build
15:45 depends on Africa being stable and peaceful.
15:49 For our continent Africa to thrive,
15:54 we must silence the guns.
15:56 We continue to work within the African Union
16:00 to end several ongoing conflicts on the continent
16:04 and restore constitutional and democratic government
16:09 to countries that have recently experienced coups.
16:14 South Africa is directly involved in a number of efforts
16:18 to bring peace to Africa.
16:20 We are currently involved in supporting the people
16:23 of Mozambique and the Democratic Republic of Congo
16:28 to ensure that there is peace and stability
16:31 in their countries.
16:32 - Well, Executive Director of the Policy Initiative
16:35 for Economic Development, Dr. Daniel Mbate,
16:38 and him joins us on Zoom to discuss a break summit.
16:41 As you know, these countries are forging an agenda
16:45 to sort of break away from US influence.
16:49 And so, de-dollarization is going to be an important agenda.
16:53 They've also been discussing a common currency.
16:55 But question, Dr. Mbate, is can Brexit
16:59 call for dominance of the US
17:01 and is it a feasible idea in the first place, you think?
17:05 (silence)
17:07 - Thank you very much.
17:14 Yes, there has been the agenda of break summit period.
17:19 And the idea is to break away from the use of the dollar,
17:23 have their own currency.
17:24 And as it stands within the geopolitics,
17:27 as well as the global economics,
17:29 the United States of America are very mindful
17:33 about the dollar.
17:34 And anything that will undermine the use of the dollar,
17:38 they will definitely come after you.
17:41 That has been their position.
17:43 But interestingly, looking at the bricks,
17:44 the likes of Russia, the likes of China,
17:47 and emerging economies like Brazil,
17:49 it is, there are economies that are very, very,
17:52 emerging strongly, very dominant, especially China.
17:56 So that will make it very difficult for the United States
18:00 even to undermine these economies
18:02 by whatever tactics.
18:04 So to me, I think it is a step in the right direction.
18:08 If they are able to achieve that,
18:10 what it means is that they will be able
18:14 to quickly begin to warm up other economies
18:18 into that block.
18:20 And if that is a standard further,
18:22 that could, within the medium to long-term perspective,
18:25 undermine or minimize the use of the dollar.
18:28 And what it means is that the power,
18:31 the financial power that the United States controls,
18:33 even in terms of trade, could be undermined going forward.
18:36 So to me, I think it's a step in the right direction,
18:39 so far as these economies are concerned,
18:42 to minimize our reliance on the dollar
18:44 and to help them better to focus on their economies
18:47 and grow their economies better.
18:49 And also help them to kind of have a certain degree
18:52 of influence within the global economic geopolitics.
18:56 - How much of our dependence on the US foreign currency,
18:59 how much of that has got to be blamed
19:02 for the current economic crisis
19:04 that developing countries like Ghana are facing?
19:06 - Yes, because you know, predominantly,
19:10 we price almost everything in the US dollar,
19:13 in terms of importation, whatever we do.
19:16 And because we do not, so to speak,
19:19 print the US dollar domestically,
19:21 so we need to attract inflows to be able to have it.
19:25 So anytime our reserves drops, then we are in difficulty.
19:28 And that affects the performance of the city.
19:30 But unfortunately, economies like Ghana,
19:32 it will be very difficult for us to stand still,
19:35 to kind of shift our way from the use of the dollar,
19:38 because we are too insignificant.
19:39 Now, if the United States should cough,
19:41 we could, our economy could significantly be undermined.
19:44 And that's the reason which AU ought to be very vibrant,
19:49 so that we will have our own currency
19:53 as a continental bloc,
19:54 and that will make us very resilient
19:56 against any other forces like the United States
19:59 that may try to undermine that particular process.
20:01 And I believe strongly, the reason which up to now,
20:03 we couldn't have a common currency
20:05 is because of this invisible hands, you know,
20:08 from the States and other Western blocs
20:10 that know very well that if we should have
20:12 our own currency working very well,
20:14 the economic mind of United States
20:18 and other Western bloc could be undermined.
20:20 So it's as, the use of the dollar, as we all know,
20:25 significantly dictating the pace of our economy,
20:27 the direction of the economy,
20:29 and then even the performance of our local currency.
20:32 - How would this agenda work to the benefit of our economy?
20:37 And what are the potential challenges of a common currency
20:41 at the BRICS level going forward, do you think?
20:44 - Yes, to me, let me start with a positive.
20:47 What it means is that the countries within the BRICS
20:51 will be able to trade among themselves
20:53 with that particular currency.
20:54 So what it means is that their local currency
20:56 could have a very significant value
20:59 because they will not be depending on the United States.
21:01 Okay, that is the first thing.
21:03 Secondly, countries that are aligned to, let's say,
21:06 China, Russia, and the rest,
21:09 could gradually begin to align,
21:11 and then that will make them have a certain dominance,
21:14 in terms of the global dominance.
21:16 So these are the positives.
21:17 Now, in terms of the negatives is that
21:19 they should be able to have a master plan in place
21:21 to be able to mitigate any kind of reaction
21:24 from the United States.
21:26 That one, I can assure you that by now,
21:28 the United States is definitely planning attacking mechanisms
21:32 by way to frustrate the efficient use of whatever currency
21:37 that they may come up with.
21:38 So they need to put in any mechanism to be able to.
21:40 And other thing is that any other country,
21:42 like smaller countries like Ghana,
21:44 which may skew towards the BRICS,
21:47 we are likely to be, in quote, to be sanctions on.
21:52 Yes, so I'll say these streets may be pulled up,
21:53 may affect our relationship with the nest.
21:58 So to me, these are some of the challenges
22:00 that they need to work towards.
22:01 I'm very mindful that with China, with its economic mind,
22:06 emerging economies like India and then Brazil,
22:09 as well like the military might of Russia,
22:13 they should be able to come up with something
22:15 that should work for them.
22:16 - All right, before you go,
22:18 quick thoughts on this story of fooling for you,
22:21 the governor of the central bank addressed the press today,
22:24 of course, on issues concerning the central bank's losses.
22:28 It has been justifying spending,
22:30 the construction of a new head office,
22:33 also is financing for government's budget.
22:36 Mind you, it says that going forward,
22:38 there'll be zero financing for government's budget.
22:42 Your thoughts on how the central bank
22:44 has handled the matter so far,
22:46 and if you support calls
22:48 for the central bank governor to resign.
22:50 - The call for him to resign is a very difficult one.
22:55 There are laws, there should be a justification
22:59 in the sense that he has maybe willfully undermined
23:04 systems put in place at the Bank of Ghana,
23:09 deliberately facilitated the kind of losses
23:13 that we have witnessed from the BOG,
23:17 the kind of policies that they were pursuing.
23:19 It is politically motivated,
23:21 it's not from a professional perspective.
23:23 And of course, the call for him to resign may be appropriate.
23:26 I think we've not got into that stage yet.
23:28 I must admit that looking at the report that came,
23:32 I'm not so much enthused with some of the happenings,
23:37 of course, in terms of administrative expenses
23:39 and the like, but as we all know,
23:41 some of these expenditures were as a result
23:43 of the debt exit program,
23:45 which probably may fall to some extent
23:50 out of their scope.
23:52 Now, in respect of the new edifice,
23:54 my point is that the current edifice
23:58 was constructed somewhere in 1957 or so,
23:59 when the Bank of Ghana was established.
24:02 We've got it to a state that they having a new edifice
24:04 shouldn't be a major issue.
24:06 To me, it is an issue because of the current dynamics
24:09 within the economy and the amount involved.
24:12 So, BOG explanation that it is not just a one-shop something
24:16 but they have made certain investment over the period
24:21 and as a result of that, they have what it takes
24:22 to be able to put out that edifice.
24:25 If that is factual, then to my mind,
24:27 I don't think there's anything,
24:29 because it's an edifice that become a state property.
24:33 So in that sense--
24:34 - No, just conclude on your sentence.
24:39 - Right, so all that I'm trying to say is that,
24:42 I wasn't so much enthused in terms of
24:44 how issues were handled recently by the Bank of Ghana,
24:47 but in terms of the edifice,
24:49 I think if it will not undermine
24:52 our current economic position,
24:54 then there's nothing wrong with it.
24:56 - All right, thank you so much, Dr. Daniel Amate,
24:58 NIEM Executive Director,
25:00 Policy Initiative for Economic Development.
25:03 Up next, MoneyLab.
25:05 - Hello, and welcome to MoneyLab.
25:11 My name is Kofi Poli,
25:12 Chief Operations Officer of People's Pension Trust.
25:15 We are continuing our pension debates on MoneyLab.
25:20 In our last episode, we look at how two types of pensions.
25:24 Today, we are going to look at reasons
25:26 for having a pension plan.
25:28 In fact, we are being told that by 2050,
25:32 one in every five persons will be 60 years and above
25:36 in developing countries.
25:38 It is also a known fact that life expectancy is going up,
25:42 and therefore, there's a need for us to plan our life
25:45 beyond our working life,
25:47 and this is why we need to look at income security
25:50 in our old age, and that's how can pension fits in.
25:53 We will continue the reasons in our next episode.
25:56 Thank you for being with us.
25:57 - All right, and that's our program this afternoon.
26:02 Thanks for watching, everyone.
26:03 More news on our website, myjoeonline.com/business.
26:08 We have more on the Bank of Ghana's press conference today
26:11 at the Gafna, Bank of Ghana Gafna,
26:13 special press conference on the 2022 laws
26:16 and the new head office.
26:17 As you'd hear, he says that it is not an ordinary building.
26:21 myjoeonline.com/business.
26:24 Thanks for watching.
26:25 We are back same time tomorrow.
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