Wednesday, December 22, 2010

Is Gov't Losing Fight Against Poverty?

By Felix Dela Klutse


The ugly trend of poverty is forcing some families in Ghana to cut the amount and quality of food they eat each day.

Meat, a source of protein, is no more an option in the menu of many families. People now opt for less nutritional meals – just to put something in the stomach— which has a bad effect on a child’s growth. It is therefore not surprising that about 22 per cent of children in Ghana below five years are suffering from stunted growth while one out of every nine Ghanaian children die of malnutrition before the age of five.

Government figures indicate a reduction in poverty from 39.5 percent in 1999 to 28.5 percent in 2006 but in absolute terms, poverty is invading the country like a swarm of locust. Ghana, a middle-income country and a signatory to the Millennium Development Goals, has less than five years to halve extreme poverty. Conditions are worst in the rural areas where a sizable number of Ghanaian still live on less than one dollar a day.

The situation is driving a growing number of children onto the streets of Accra with many young girls resorting to prostitution as a way to escape from poverty and cater for their families. In some extreme cases, parents themselves force their children especially girls out of school so that they can look for jobs to support the family. This trend, according to stakeholders, spells doom for Ghana’s economy in the future.

Who are Ghana's poor people?

Majority of Ghana’s poor are in the rural areas where close to 70 per cent of the population resides. Business Guide’s visit to places such as Northern, Upper East, Upper West, Volta, Central and Western Regions where livelihoods are more precarious, saw how people living in those areas are finding it very difficult to make ends meet. The ugly trend is most severe among children, disabled, old people and food crop farmers, who are mainly traditional small-scale producers. About six in ten small-scale farmers are poor, and many are women. In addition to their domestic chores, these women are responsible for about 60 per cent of agricultural production.

During a visit to Mandari in the Bole District, from where Vice President John Mahama hails, dozens of children could be seen playing in the dust. But these children have no biological parents to care for them. Looking after them is their grandmother, Chamunu Mari, a 66-year-old widow, who lost her son and his wife through sickness, leaving behind seven orphans under her care. She lives in one of the most dilapidated single rooms in the community with her seven grandchildren. The building could best be described as a death trap. Mari is unemployed and finds it very difficult to eat.

“My grandchildren and I have to eat once a day,” she said with tears streaming down her cheeks. She cannot even afford to buy soap. She was therefore using sand and water to wash her cooking utensils when this reporter visited her house.

“Poverty was there before I was born and it has become part of life. Poverty is going empty with no hope for the future and getting nobody to feel your pain. It is when your dreams go in vain because nobody is there to help you. Poverty is watching your relatives die in pain and in sorrow just because they couldn't get something to eat. Poverty is hearing your grandmothers and grandfathers cry out to death to come and take them because they are tired of this world. It is watching your own children and grandchildren die in your arms but there is nothing you can do,” Mari explains her situation.

Mari is not the only person in this state. Abdullah Mohammed is 15 years old and lives on the streets of Bolgatanga, the capital of the Upper East Region. He is a cobbler.

“Life in the village where I was born was very hard so I decided to follow my elder brother to Bolgatanga after my father died, with the hope of getting something better to do and send money to support our mother back home but unfortunately she also died three months after we left the village. So I was here with my elder brother all this while until he also died. I don't want to go back to the village because there is nothing better to do over there. I will like to go back to Senior High School but it is very expensive and I can't pay my school fees.”
Mohammed said business was good when his elder brother was alive but now people think he was too young and that he can't repair their shoes the way his brother did so they don't bring their shoes to him anymore.

“Life is hard but what can I do? I am not the only person like this. There are many children like me or even worse who live on the streets. I don't smoke but most of the children living on the streets smoke wee which makes them strong. Most of them are thieves and they rob people. I don't steal and I don't smoke. I only shine and repair shoes for people," the soft-spoken boy stated.

During our visit to the Western Region, this paper met Mr Ernest Nyamekeh who lives at Ankobrah, a fishing community. He is a widower, a virtually-impaired man who looks after two children. Most of the houses in this area are mud houses roofed with thatch. Since the area is also closed to the Ankobrah River, anytime the river overflows its banks, the place gets flooded and water enters his room. This has affected his health as he has scratches all over his body.

Forty-five-year-old Nyamekeh and his children live in a mud and thatch roofed house. The house contains three single rooms. Aside Nyamekeh and his children, is his elder sister, Akua Amoah, 55. His wife, who was the family’s sole provider, died after a short illness two years ago. After her death, Nyamekeh ventured into pillow-making to enable him to take care of his children but the business collapsed. Since then, he and the children have to depend on members of his household for survival.

Though, the two kids were also in school, Nyamekeh finds it difficult to provide them with their basic necessities. Sometimes, the children have to go to school on empty stomach.

“Poverty has really eaten deep into our lives. We sometimes eat twice a day,” he wept uncontrollably when narrating his ordeal.

In the Central Region, this reporter visited the Amisakyir community, a suburb of Cape-Coast which is near the Cape-Coast sea shore. Teenage pregnancy is very rampant in this area. Since most of the inhabitants here do not have places to sleep, they sleep on the roads in the night. Apart from the community being a teenage pregnancy zone, this paper observed that most of the children born in the area are disabled.
Aba Esibu, a 22-year-old single parent with three children, lives here. Out of Esibu’s three children, one is disabled and a sickler. Esibu does not know the whereabouts of the father of the three children. She and her children stay in a dilapidated family house about 30 people whose conditions are nothing to write home about. She single-handedly takes care of the children, though she sometimes receives help from her aged-mother and other philanthropists. Esibu’s children are not in school because it is not easy taking care of them. None of them is also registered with the National Health Insurance Scheme (NHIS) as at the time of filing this story.

Araba Kitiwa is a 22-year-old mother of three who also lives in the same community. Just like Esibu, Araba and her children also live in a cracked family house close to the sea. Araba’s husband rejected her because one of the children is a disabled. Since then, Araba said she has never heard of him again. Life becomes very difficult for her as she has no work to feed herself and the three children. Araba, her children, her sister and her mother, sleep in a single room.

“We find it very difficult to eat sometimes. We have to cut back at the quality and quantity of food we consume a day,” she said.
The story was not different from the Volta Region, where former President Jerry John Rawlings comes from. Here, majority of the population still wallow in extreme poverty even though government claims there has been substantial decline in the incidence.

Ms. Ahiable Sodahoe, 50 years, is a member of Adagbledu community, a suburb of Dzodze in the Volta Region. The major occupation of the people in the area is farming. She lives in a household of 12 members occupying two dilapidated single rooms. In the same household, is the husband of Sodohoe aged 75 years. Apart from the dilapidated rooms, other places in the house such as kitchen and bathroom look nauseating. Members of the household get their source of drinking water from a well which is not hygienic for human consumption. Sodahoe had three children all of whom have given birth and left their children in her care. All the mothers of these babies are nowhere to be found, she said. Sodahoe has to credit food before the entire household could eat.

“I am in abject poverty because I don’t have the money to set up myself and feed my family,” she added.

Atisu Butsomekpor Anthony, a 70-year-old man is another poor person in the region. The name, Butsomekpor literally means “think about tomorrow”. He lives at Aflagatigorme, a suburb of Aflao. Butsomekpor, who was a fisherman, could no longer go fishing because of his age. Consequently, he has to depend on benevolence to survive. He, together with his 15-year-old son, lives in a mud house roofed with thatch. The house has no place of convenience. Butsomekpor revealed that he and his son eat ‘gari’ (popularly known as food for the poor) most often to sleep.

“We sometimes prepare food without meat or fish. Had it not been God, my son and I would have been dead by now. Nature is not fair to some of us at all. I know a lot of people who are going through untold hardships. Consequently, they are forced to drop their children out of school,” Atisu lamented.


Why are Ghana's rural people poor?

According to government’s poverty reduction strategy paper (GPRS II), low productivity and poorly functioning markets for agricultural outputs are among the main causes of poverty especially in the rural areas. The document said small-scale farmers lacked technologies and inputs such as fertilizer and improved seed, which would increase yields.

This paper observed, during the visit, that only a small proportion of farmers in rural areas of the country have access to irrigation. Land ownership and land security are regulated by complex systems that vary widely. Many farmers lacked rural infrastructure and equipment for storing, processing and marketing their products.

Most inhabitants said rural infrastructure in Ghana had been neglected, while investments in health, education and water supply had largely been focused on urban areas.

“The government could play an important role in making farming a profitable business through access to financial services, farm inputs and linkages to agro processors and traders,” Ibrahim Siedu, a farmer in Navrongo stated.


What Is Government Doing To Help The Poor?

In March 2008, the government introduced the Livelihood Empowerment against Poverty (LEAP) programme as a social intervention to provide financial assistance to some extremely poor households in Ghana. More districts are expected to be added to the existing 76 districts nation-wide, which are already covered by the programme.

Beneficiaries of this social assistance scheme, orphaned and vulnerable children, persons with severe disabilities without productive capacity, and extremely poor persons above 65 years, receive free cash ranging from GH¢8 to GH¢15 every two months.

One eligible beneficiary in a household gets GH¢8, two eligible beneficiaries get GH¢10, three get GH¢12, while four or more beneficiaries in a household receive GH¢15.

A survey by BUSINESS GUIDE to some of the LEAP communities in Ghana some time ago revealed that there are changes in the lives of the beneficiaries, some of whom had been able to engage in some form of subsistence business ventures.
Recently, government injected $20 million into the LEAP programme to enable many vulnerable people in Ghana to benefit.

The amount, according to Minister of Local Government and Rural Development, Joseph Yieleh Chireh, was part of the $89.1 million loan facility the government took from the World Bank to help streamline economic activities in northern Ghana and empower the vulnerable.

The Minister said each of the communities would take $3 million with 25 of them coming from the Upper West, Upper East and the Northern regions while the rest of the 15 would be selected from the other regions.

Monday, March 1, 2010

Multi-Million Dollar Project Abandoned

By Felix Dela Klutse
A-$46 million multi-purpose project to be undertaken by Dunkwa Continental Goldfields Limited has been stalled, as some inhabitants of Dunkwa-On-Offin in the Central Region would not allow management of the company to operate.

The project, which is expected to employ about 200,000 people, is lying idle because of serious threats on the lives of the company’s shareholders. Currently some of the firm’s assets are deteriorating and about 300 employees have been sent home.

Dunkwa Continental Goldfields Limited is a limited liability company incorporated to take over the operations of the defunct Dunkwa Goldfields Limited, after a project agreement was signed between the Ghana Government and Continental Construction and Mining Company Limited in 1995.

The project agreement mandated the company to undertake activities such as precious, non-precious and industrial minerals, water and electrical power generation, agriculture, timber, and manufacturing of capital goods including processing plants.

“Our short-term plan is to combine precious and industrial minerals dredging and non-dredging operations to turn the project into a multi-layered one and also provide employment to the masses. Unfortunately, this could not be implemented due to harsh resistance from the local communities,” Kris Kapoor, Resident

Director of the company told BUSINESS GUIDE in an interview in Accra last Friday.
He said his company, since taking over the operations of the defunct Dunkwa Goldfields, conducted its activities in accordance with the terms of the project agreement, but had to stop its gold mining business along the way and venture into other business areas such as agro processing due to the fallen prices of gold in the 1990s.

“The company has not folded up as its being speculated. We stopped mining gold because dredging operations have proved to be non-viable due to the poor market price of gold and high cost of operations in the 90s,” Mr Kapoor told this paper further.

He however said efforts to resume gold mining activities in the area to provide employment has over the years proved futile due to constant demonstration and ruthless resistance from the local communities.

Recently, properties of the company worth millions of dollars have been destroyed by some irate youth of Dunkwa-On-Offin.
Reports say the thugs, with offensive weapons, stormed the premises of the company, located at the Upper Denkyira East a few weeks ago to vandalize some of its assets.

“The demonstrators entered our premises that fateful day and destroyed our bungalows, stores, workshops and finally locked-up the premises with their own padlocks to prevent us from entering. They also threatened to kill me and my Project Engineer,” Mr. Kapoor told BUSINESS GUIDE.

He added: “This is not the first time this situation is occurring. It started two years ago and as I speak now, nine persons are occupying our bungalows illegally. The residents of the area have also turned our main office building into a nurses’ quarters and will not allow us to enter into our own premises.”

In 2004, the company in collaboration with the Ministry of Agric, developed a high caliber model facilities in agro/food processing and capital goods manufacturing at its project site at Dunkwa and on the night before commissioning the facilities, some inhabitants of the area carried human faeces and smeared it on all the entrances to the model facilities, Mr Kapoor added.

He recalled that the Chairman of the of Dunkwa Continental Goldfields Limited was in Ghana in August 2006 to meet and inform President John Agyekum Kufuor about the situation but could not get audience as there was no reply to his letter.

The aforementioned development, Mr Kapoor stressed, was as a result of a letter written by the former Minister of Lands, Forestry and Mines, Professor Dominic Fobih, on November 7, 2005, that his ministry had terminated the project agreement signed between the Ghana Government and Continental Construction and Mining Company Limited in 1995.

Mr. Kapoor said the steps taken by the ministry was illegal and was without due process.
“The project agreement contains an arbitration clause which obliges the parties to refer any dispute arising from the agreement to international arbitration under the rules and regulations of the International Chamber of Commerce,” he said.

The project agreement also has no expiry date and enjoys all privileges and benefits under the old and new Minerals and Mining Laws but does not have any obligations under these laws, Mr Kapoor noted, stressing that the ministry could not take a unilateral decision to terminate the agreement without recourse to arbitration.
He therefore appealed to government to help the company to revive its operations.

E-mail: felixklutse@yahoo.com



By Felix Dela Klutse
A-$46 million multi-purpose project to be undertaken by Dunkwa Continental Goldfields Limited has been stalled, as some inhabitants of Dunkwa-On-Offin in the Central Region would not allow management of the company to operate.

The project, which is expected to employ about 200,000 people, is lying idle because of serious threats on the lives of the company’s shareholders. Currently some of the firm’s assets are deteriorating and about 300 employees have been sent home.

Dunkwa Continental Goldfields Limited is a limited liability company incorporated to take over the operations of the defunct Dunkwa Goldfields Limited, after a project agreement was signed between the Ghana Government and Continental Construction and Mining Company Limited in 1995.

The project agreement mandated the company to undertake activities such as precious, non-precious and industrial minerals, water and electrical power generation, agriculture, timber, and manufacturing of capital goods including processing plants.

“Our short-term plan is to combine precious and industrial minerals dredging and non-dredging operations to turn the project into a multi-layered one and also provide employment to the masses. Unfortunately, this could not be implemented due to harsh resistance from the local communities,” Kris Kapoor, Resident

Director of the company told BUSINESS GUIDE in an interview in Accra last Friday.
He said his company, since taking over the operations of the defunct Dunkwa Goldfields, conducted its activities in accordance with the terms of the project agreement, but had to stop its gold mining business along the way and venture into other business areas such as agro processing due to the fallen prices of gold in the 1990s.

“The company has not folded up as its being speculated. We stopped mining gold because dredging operations have proved to be non-viable due to the poor market price of gold and high cost of operations in the 90s,” Mr Kapoor told this paper further.

He however said efforts to resume gold mining activities in the area to provide employment has over the years proved futile due to constant demonstration and ruthless resistance from the local communities.

Recently, properties of the company worth millions of dollars have been destroyed by some irate youth of Dunkwa-On-Offin.
Reports say the thugs, with offensive weapons, stormed the premises of the company, located at the Upper Denkyira East a few weeks ago to vandalize some of its assets.

“The demonstrators entered our premises that fateful day and destroyed our bungalows, stores, workshops and finally locked-up the premises with their own padlocks to prevent us from entering. They also threatened to kill me and my Project Engineer,” Mr. Kapoor told BUSINESS GUIDE.

He added: “This is not the first time this situation is occurring. It started two years ago and as I speak now, nine persons are occupying our bungalows illegally. The residents of the area have also turned our main office building into a nurses’ quarters and will not allow us to enter into our own premises.”

In 2004, the company in collaboration with the Ministry of Agric, developed a high caliber model facilities in agro/food processing and capital goods manufacturing at its project site at Dunkwa and on the night before commissioning the facilities, some inhabitants of the area carried human faeces and smeared it on all the entrances to the model facilities, Mr Kapoor added.

He recalled that the Chairman of the of Dunkwa Continental Goldfields Limited was in Ghana in August 2006 to meet and inform President John Agyekum Kufuor about the situation but could not get audience as there was no reply to his letter.

The aforementioned development, Mr Kapoor stressed, was as a result of a letter written by the former Minister of Lands, Forestry and Mines, Professor Dominic Fobih, on November 7, 2005, that his ministry had terminated the project agreement signed between the Ghana Government and Continental Construction and Mining Company Limited in 1995.

Mr. Kapoor said the steps taken by the ministry was illegal and was without due process.
“The project agreement contains an arbitration clause which obliges the parties to refer any dispute arising from the agreement to international arbitration under the rules and regulations of the International Chamber of Commerce,” he said.

The project agreement also has no expiry date and enjoys all privileges and benefits under the old and new Minerals and Mining Laws but does not have any obligations under these laws, Mr Kapoor noted, stressing that the ministry could not take a unilateral decision to terminate the agreement without recourse to arbitration.
He therefore appealed to government to help the company to revive its operations.

E-mail: felixklutse@yahoo.com

Fraud Alert At Accountant-General

Story By Felix Dela Klutse

The Controller and Accountant General’s Department is entangled in widespread scandal that is costing public sector workers millions of Ghana cedis.

BUSINESS GUIDE gathered that certain unscrupulous workers of the department have leaked the staff ID numbers of some public sector employees, which is supposed to be confidential, to fraudsters who are using it to secure loans from some financial institutions across the nation.

Mostly affected in this widespread scam are teachers whose salaries have been withdrawn without their knowledge on allegation that they supposedly took bank loans.
The development has sent panic to the teaching fraternity and it is likely that the situation will aggravate if nothing is done about it.

One of the victims of this scam, Ivan Yao Akrobotu, a science teacher at Nima 2 Junior High School in Accra, has already petitioned the Commission on Human Rights and Administrative Justice (CHRAJ) over the issue and indications are that many such victims are likely to also follow suit with similar petitions.
According to the petition dated July 10, 2009 with reference number 2009/HQ/01348,

Mr. Akrobotu, upon receiving his June 2009 payslip on July 7, 2009, he realised that a deduction of GH¢119.85 was made from his salary in the name of Bayport Financial Services.

He said when he followed up to the Kokomlemle branch of the financial institution, near Accra Technical Training Centre to enquire why the deduction was made, the manager (name undisclosed) admitted that it was a mistake on the part of Bayport, stating that “a client of ours in the Western Region uses your staff ID number to apply for loan from us.”

“My request to see the documents the supposed client used to request for the loan was not fulfilled. My request for an immediate refund and a communiqué to Controller and Accountant General to immediately stop the deductions from my salary also received no response,” Mr. Akrobotu stated.

He added: “I further proceeded to the Controller and Accountant General Greater Accra Salaries Unit where I was directed by a worker in the office to see one Mr. Allotey for my complaint. After narrating my story to Mr. Allotey, he told me ‘These people (Bayport) are always involved in these sorts of things, they benefit from it I suppose.”

Mr. Akrobotu’s petition to CHRAJ is therefore calling on Bayport Financial Services to produce the document the supposed client used in applying for the loan from Bayport and the name of the supposed client for further investigation.
He is also calling on the Controller and Accountant General to produce the documents that Bayport submitted to them, which leads to the deductions in his salary for June 2009.

Mr. Akrobotu also demanded that Bayport refunded the amount deducted from his salary with undisclosed interest.

“This is to take care of my expenses during pursuance of this matter and emotional torture that I am going through. Again, that my GH¢119.85 is being used to run their Bayport business, hence the need for the interest,” he explained.

When reached for comments, Public Relations Officer of the Controller and Accountant General’s Department, who failed to disclose his name to this reporter, said it is the responsibility of employers to keep the staff ID numbers of their employees confidential, stressing that his outfit could not accept responsibility for the scam.

The Deputy Manager of the Kokomlemle branch of Bayport Financial Services, who gave his name only as Augustine, told this paper that the problem might have been from the Controller and Accountant General’s Department, noting that it is the department which does the deduction on behalf of Bayport.

“The Department does the deduction on our behalf based on the information we give to them,” another worker at Bayport, who gave her name only as Patricia told BUSINESS GUIDE.

As at the time of going to the press, Bayport pledged to solve the problem.

E-mail: felixklutse@yahoo.com

Monday, December 7, 2009

More US Investors Storm Ghana

Story By Felix Dela Klutse
Editor of Business Guide and Business Editor of Daily Guide, Ghana
Mobile: 0243226596

American businesses in the country are expected to escalate next year as a number of US firms, both small and large, have lined up to set up in Ghana, Mona Boyd, President of the American Chamber of Commerce in Ghana has disclosed.
Already, giant computer maker, IBM has set up a small office in the country with the aim of expanding and perhaps assembling computers in the near future.
Other blue chip companies are expected to follow suit and thus expand their frontiers when economic prospects in the country become brighter, BUSINESS GUIDE has learnt.
Ghana is one of the few countries in Africa that have so far achieved political and economic stability for almost two decades, culminating in American firms using the country as a strategic location to spread their operations in sub-Saharan Africa.
In the last two decades, three US Presidents, namely Bill Clinton, George Walker Bush and lately Barrack Obama, have paid working visits to Ghana, heightening US attention on Ghana. Their visits, especially that of Mr. Bush and Mr. Obama, which occurred in 2008 and 2009, appear to have ignited a new trend of American business interest to propel Ghana into the global market.
Importantly, the American businesses are contributing immensely to the country’s Gross Domestic Product (GDP) or growth rate and revenue mobilization to government among others. Their total capital runs into billions of dollars, looking at the large nature of some of the entities that are employing some thousands of people.
US businesses in Ghana include large, medium and small scale and are running into some hundreds. They are into mining, pharmaceuticals, finance, airline, trading, ICT and others. Some are also operating in the free zone enclave.
Among the large blue chip firms are Newmont Ghana which is the second largest gold mining company in the world; Golden Star Resources, a mining firm operating at Prestea and Bogoso in the Western region; Coca-Cola and Kosmos Energy which recently announced the sale of its 30 percent shares in the Jubilee Oilfield.
Liberty Capital, a finance and investment company, American Airlines and Delta Airlines are some of the firms considered as medium scale US businesses in Ghana.
Small businesses owned by US nationals are also doing brisk business in the country.
Those operating in the free zone enclave include Rising Data Solutions and Cargill Cocoa Processing Company.
Some local firms are also serving as representatives to some American businesses in Ghana whilst others such as Mechanical Lloyd hold the franchise to sell Ford vehicles in Ghana on behalf of General Motors.

E-mail: felixklutse@yahoo.com

Chinese Take African Market By Storm

Story By Felix Dela Klutse
Business Editor
Daily Guide Newspaper
Accra-Ghana

Chinese have gradually taken over the African market with a primary focus on the textiles industry where the growth of its exports constitute a double agony for Africa.
Exports of Chinese textiles to Africa are especially undermining local African industries while the growth of Chinese exports to the United States is shutting down the promising growth of African exports.
In Ghana, the textile industry continues to face challenges, amid growing competition from cheap imports from China.
A source told CITY & BUSINESS GUIDE that apart from Akosombo Textile Limited (ATL), which is operating fully, household names such as Ghana Textile Print (GTP) and Printex have all shut down their spinning and weaving departments due to cheap imports from China.
These sections employed a chunk of the labour in the industry. However, the companies could no longer afford to accommodate these numbers and pay over 30 times the amount of cheap imports from China.
Textiles that come from China do not only carry the designs of Ghanaian cloths, but are imitated to let them appear as if they were produced in Ghana. Although the Chinese textiles are not durable, compared to made-in-Ghana cloth, they sell far below Ghanaian textiles.
Consequently, most retailers of local textile companies such as ATL, Printex, and Ghana Textiles Prints (GTP) are said to have abandoned the local cloth and are now selling wax prints from China, which is far cheaper.
Due to the hardships, the companies have all resorted to the importation of gray baft and semi-finished cloth for printing in the country.
Industry watchers are thinking about the fate of tertiary graduates who pursue Industrial Art programmes with textile option on the labour market as the sector faces imminent collapse. No wonder students now opt for business programmes at the tertiary level rather than technical courses.
Some members of the Textile, Garments and Leather Employees Union (TEGLEU) recently revealed that the problems with Ghana’s textile industry still existed and were getting worse each day.
They argued that there was the need for government to find out why the sector is collapsing and why Ghana cannot compete with China in order to find lasting solutions rather than taking a defeatist approach.
Though stakeholders in the country have made frantic efforts to revitalize the textile and garment industry, this seems to have hit the rocks since the economy is recording a rapid surge in the sale of fake logos and designs of Chinese textile firms on the market.
A worker at Gregory Knitting, George Annan told this paper that “we in the clothing and manufacturing sector are seeing shocking times. Sales in 2003 were reasonable; they were better in 2004, but very bad since 2005 to date.”
Mr. Annan wondered how some Chinese inferior products get to the local market.
“Who allow them into the country?” he questioned.
Industry watchers are worried that if the flood gates are opened for the Chinese textiles to saturate the Ghanaian market, then the industry will totally collapse.
They contended that current situation had made it difficult for local producers of textile to sustain production levels and to operate profitably.
They believe that the dwindling fortunes can be addressed if the state strengthens agencies such as the Customs Excise and Preventive Service (CEPS) to intensify border patrols. They further suggested that port operations should be tightened to ensure that cheap imports do not slip in.
But how well and soon will the authorities respond to the calls that remain an issue of concern to industry players whose hope of continued survival in the business depend on it.
With regards to the construction industry, Chinese firms are winning important public works due to the very competitive prices that they offer.
China won a contract to build the Bui Dam, the Burma Hall Complex in Accra, one wing of the 37th military hospital, among other projects. However, the sad news is that the wages paid to the Ghanaian workers are below the minimum wage.
“One thing about China is that after they have given you funds for a project, they then bring in their own people to head managerial positions, leaving most Ghanaians to do the menial jobs.
“The issue of technology and skill transfer is not working,” a worker at Bui Dam, who pleaded anonymity, told this paper in a telephone interview.
Apart from the textile industry, investigation shows that Chinese investors have succeeded in flooding the African market with food, beverages and tobacco products in addition to minerals, animal, vegetable oils, wax and chemical products and machinery. These goods are not so different from the one from the United States.
Chinese investors, most of whom have registered with the Ghana Investment Promotion Centre (GIPC) as manufacturers, have metamorphosed into retailers, serving as conduits for the massive importation of Chinese products into Ghana.
A Research Consultant with the Ghana Trade Union Congress (GTUC), Kwabena Nyarko Otoo, told this paper in Accra last week that Chinese investors deliberately register as manufacturers to evade the payment of requisite fees for foreign retailers, placing the blame at the doorstep of the Inspectorate Division of GIPC and Registrar-General’s Department.
He described the approach of both institutions as sluggish and ineffective.
Mr Otoo stated that investigations by his outfit on some of the registered Chinese manufacturers revealed that they were no more manufacturers, stressing, “A call to a Chinese manufacturer who has registered with GIPC as a mattress manufacturer showed that he was in serious retail with about five indigenous staff.
“Another visit to a company at Tema also revealed the expatriate was not into manufacturing and had only 3 workers.”
According to Kwasi Adu Amankwa, Secretary General of Africa Regional Organisation of the International Trade Union Confederation (ITUC-Africa), Government has failed over the years to properly interpret the Chinese language of Ghana’s business policies and code.
This, he explained, has led to the undue exploitation of indigenous people by Chinese employers. The minimum basic wage for indigenous staff of Chinese companies is GH¢3, while that of the Ghanaian worker is pegged at GH¢2 instead of GH¢2.655 as required by the law.
Should any indigene get sick or hurt by any machinery during work, the Chinese employers ask them to seek for treatment at their own cost and pay the salaries of indisposed workers based on how many days they have worked.
K.F Young, a Chinese national working with the Ghana Judicial Service told this paper that his people come to Ghana with the aim of doing business.
“Chinese produce more than what they need; hence there is the need to export what is left,” he stated.
In Nigeria, Vanguard Newspaper reported that two 220,000 workers in the textile industry have lost their jobs in the past 10 years due to the closure of factories as a result of imports from China.
80 percent of the affected workers have since taken to the riding of commercial motorcycles, popularly called “okada,” the report stated.
The Director General of Nigeria Textile Manufacturing Association (NTMA), Jolaoso Olarewaju, said between 1996 and 2006, the number of employees on the association’s employment data had reduced from 250,000 to less than 30,000.
He said within the period under review, the numbers of closed textile companies namely Kaduna Textile Mill, UNT PLC, Supertex, Enpee, Afprint, among others also fell to 40 from 175, while cumulative production dropped from 1.5 billion to less than 400 million metres of fabrics per year.
Mr Olarewaju attributed most of the problems affecting operators in the sector to smuggling, faking and counterfeiting of locally made fabrics by the Chinese.
Low cost imports from China have largely devastated the Nigerian textile and other consumer industries at Kano and Kaduna.
Given Nigeria’s underdevelopment and unreliable power supply, which forces most industries to rely on back-up diesel generators, the prospect of the country in regaining a competitive edge seems remote.
South Africa is another country that provides a good example. Reports say Chinese exports of textiles to South Africa grew from 40 percent of clothing imports to 80 percent by the end of 2004.
Out of 100 T-shirts imported into South Africa, 80 were from China. From 1996 to date, employment in the textile industry had decreased. By the end of 2002, reports revealed that 75,000 had lost their jobs in the industry.
South Africa’s clothing exports to the United States also dropped from $26 million in the first quarter of 2004 to $12 million for the first quarter of 2005 due to growing competition from cheap imports from China.
The situation has compelled South African industrialists and workers to clamour for protective action, which was also joined by church leaders and opposition leader, Tony Leon.
The country’s trade union federation is also calling for a restriction on Chinese imports, urging retailers to stock 75 percent of locally made goods. Industry players are also calling for customs officials to impound undervalued Chinese imports.
In Lesotho, more than 10 clothing factories were closed down in 2005, throwing at least 10,000 employees out of work due to the growing competition from cheap imports from China.
Though China has been forthcoming in providing assistance and investment in Africa with few strings and considerable cash, it has equally been firm in defending its export policies.
The interesting thing is that while some people want African Governments to restrict or ban the import of non-essential commodity from China; others think otherwise.
China’s Economic and Commercial Counselor in South Africa, Wen Jiabao warned Africans recently that “unfair and discriminative restrictions will never be accepted by China.”
He pointed out that China was within its rights under the WTO and had invested carefully during the last 10 years to become efficient and competitive.
“Thanks to the arduous efforts over the years, the Chinese textiles and clothing industry managed to sharpen its international competitive edge and gained the comparative advantages its now enjoys,” Wen Jiabao stated.
He added that even if African countries placed restrictions on Chinese goods, they would not be able to control the substitute flow of goods from India and Pakistan. The solution, he said, was for Africa to adopt a “positive attitude.
The Chief Executive Officer of Ghana Chamber of Commerce and Industry, Sal Doe Amegashie, told the media recently in Accra that a ban would not solve the problem.
“China is the economy of today and tomorrow and Africans must learn from them. We need to send people to China to learn about their work ethics, among other things,” he suggested.
The question then is does China want to be seen in Africa as the defender of rogue states and an aggressive seeker of Africa’s natural resources without regard to transparency, development and stability ?
Is there room for developing some rules in which Chinese economic gains for Africa and itself can come side by side?
The writer of this piece suggests that it is better to explore these possibilities than to start down the path of trying to limit Chinese influence.
Next week, the writer of this piece would look at why majority of Ghanaians prefer Chinese products to others in the market even though they are considered inferior.
Grab your copy of Daily Guide next week and read this interesting article, which is being supported by Panos Institute of West Africa (PIWA).

E-mail:felixklutse@yahoo.com
Blog: www.klutsespots.com

Chinese Take African Market By Storm

By Felix Dela Klutse

Chinese have gradually taken over the African market with a primary focus on the textiles industry where the growth of its exports constitute a double agony for Africa.
Exports of Chinese textiles to Africa are especially undermining local African industries while the growth of Chinese exports to the United States is shutting down the promising growth of African exports.
In Ghana, the textile industry continues to face challenges, amid growing competition from cheap imports from China.
A source told CITY & BUSINESS GUIDE that apart from Akosombo Textile Limited (ATL), which is operating fully, household names such as Ghana Textile Print (GTP) and Printex have all shut down their spinning and weaving departments due to cheap imports from China.
These sections employed a chunk of the labour in the industry. However, the companies could no longer afford to accommodate these numbers and pay over 30 times the amount of cheap imports from China.
Textiles that come from China do not only carry the designs of Ghanaian cloths, but are imitated to let them appear as if they were produced in Ghana. Although the Chinese textiles are not durable, compared to made-in-Ghana cloth, they sell far below Ghanaian textiles.
Consequently, most retailers of local textile companies such as ATL, Printex, and Ghana Textiles Prints (GTP) are said to have abandoned the local cloth and are now selling wax prints from China, which is far cheaper.
Due to the hardships, the companies have all resorted to the importation of gray baft and semi-finished cloth for printing in the country.
Industry watchers are thinking about the fate of tertiary graduates who pursue Industrial Art programmes with textile option on the labour market as the sector faces imminent collapse. No wonder students now opt for business programmes at the tertiary level rather than technical courses.
Some members of the Textile, Garments and Leather Employees Union (TEGLEU) recently revealed that the problems with Ghana’s textile industry still existed and were getting worse each day.
They argued that there was the need for government to find out why the sector is collapsing and why Ghana cannot compete with China in order to find lasting solutions rather than taking a defeatist approach.
Though stakeholders in the country have made frantic efforts to revitalize the textile and garment industry, this seems to have hit the rocks since the economy is recording a rapid surge in the sale of fake logos and designs of Chinese textile firms on the market.
A worker at Gregory Knitting, George Annan told this paper that “we in the clothing and manufacturing sector are seeing shocking times. Sales in 2003 were reasonable; they were better in 2004, but very bad since 2005 to date.”
Mr. Annan wondered how some Chinese inferior products get to the local market.
“Who allow them into the country?” he questioned.
Industry watchers are worried that if the flood gates are opened for the Chinese textiles to saturate the Ghanaian market, then the industry will totally collapse.
They contended that current situation had made it difficult for local producers of textile to sustain production levels and to operate profitably.
They believe that the dwindling fortunes can be addressed if the state strengthens agencies such as the Customs Excise and Preventive Service (CEPS) to intensify border patrols. They further suggested that port operations should be tightened to ensure that cheap imports do not slip in.
But how well and soon will the authorities respond to the calls that remain an issue of concern to industry players whose hope of continued survival in the business depend on it.
With regards to the construction industry, Chinese firms are winning important public works due to the very competitive prices that they offer.
China won a contract to build the Bui Dam, the Burma Hall Complex in Accra, one wing of the 37th military hospital, among other projects. However, the sad news is that the wages paid to the Ghanaian workers are below the minimum wage.
“One thing about China is that after they have given you funds for a project, they then bring in their own people to head managerial positions, leaving most Ghanaians to do the menial jobs.
“The issue of technology and skill transfer is not working,” a worker at Bui Dam, who pleaded anonymity, told this paper in a telephone interview.
Apart from the textile industry, investigation shows that Chinese investors have succeeded in flooding the African market with food, beverages and tobacco products in addition to minerals, animal, vegetable oils, wax and chemical products and machinery. These goods are not so different from the one from the United States.
Chinese investors, most of whom have registered with the Ghana Investment Promotion Centre (GIPC) as manufacturers, have metamorphosed into retailers, serving as conduits for the massive importation of Chinese products into Ghana.
A Research Consultant with the Ghana Trade Union Congress (GTUC), Kwabena Nyarko Otoo, told this paper in Accra last week that Chinese investors deliberately register as manufacturers to evade the payment of requisite fees for foreign retailers, placing the blame at the doorstep of the Inspectorate Division of GIPC and Registrar-General’s Department.
He described the approach of both institutions as sluggish and ineffective.
Mr Otoo stated that investigations by his outfit on some of the registered Chinese manufacturers revealed that they were no more manufacturers, stressing, “A call to a Chinese manufacturer who has registered with GIPC as a mattress manufacturer showed that he was in serious retail with about five indigenous staff.
“Another visit to a company at Tema also revealed the expatriate was not into manufacturing and had only 3 workers.”
According to Kwasi Adu Amankwa, Secretary General of Africa Regional Organisation of the International Trade Union Confederation (ITUC-Africa), Government has failed over the years to properly interpret the Chinese language of Ghana’s business policies and code.
This, he explained, has led to the undue exploitation of indigenous people by Chinese employers. The minimum basic wage for indigenous staff of Chinese companies is GH¢3, while that of the Ghanaian worker is pegged at GH¢2 instead of GH¢2.655 as required by the law.
Should any indigene get sick or hurt by any machinery during work, the Chinese employers ask them to seek for treatment at their own cost and pay the salaries of indisposed workers based on how many days they have worked.
K.F Young, a Chinese national working with the Ghana Judicial Service told this paper that his people come to Ghana with the aim of doing business.
“Chinese produce more than what they need; hence there is the need to export what is left,” he stated.
In Nigeria, Vanguard Newspaper reported that two 220,000 workers in the textile industry have lost their jobs in the past 10 years due to the closure of factories as a result of imports from China.
80 percent of the affected workers have since taken to the riding of commercial motorcycles, popularly called “okada,” the report stated.
The Director General of Nigeria Textile Manufacturing Association (NTMA), Jolaoso Olarewaju, said between 1996 and 2006, the number of employees on the association’s employment data had reduced from 250,000 to less than 30,000.
He said within the period under review, the numbers of closed textile companies namely Kaduna Textile Mill, UNT PLC, Supertex, Enpee, Afprint, among others also fell to 40 from 175, while cumulative production dropped from 1.5 billion to less than 400 million metres of fabrics per year.
Mr Olarewaju attributed most of the problems affecting operators in the sector to smuggling, faking and counterfeiting of locally made fabrics by the Chinese.
Low cost imports from China have largely devastated the Nigerian textile and other consumer industries at Kano and Kaduna.
Given Nigeria’s underdevelopment and unreliable power supply, which forces most industries to rely on back-up diesel generators, the prospect of the country in regaining a competitive edge seems remote.
South Africa is another country that provides a good example. Reports say Chinese exports of textiles to South Africa grew from 40 percent of clothing imports to 80 percent by the end of 2004.
Out of 100 T-shirts imported into South Africa, 80 were from China. From 1996 to date, employment in the textile industry had decreased. By the end of 2002, reports revealed that 75,000 had lost their jobs in the industry.
South Africa’s clothing exports to the United States also dropped from $26 million in the first quarter of 2004 to $12 million for the first quarter of 2005 due to growing competition from cheap imports from China.
The situation has compelled South African industrialists and workers to clamour for protective action, which was also joined by church leaders and opposition leader, Tony Leon.
The country’s trade union federation is also calling for a restriction on Chinese imports, urging retailers to stock 75 percent of locally made goods. Industry players are also calling for customs officials to impound undervalued Chinese imports.
In Lesotho, more than 10 clothing factories were closed down in 2005, throwing at least 10,000 employees out of work due to the growing competition from cheap imports from China.
Though China has been forthcoming in providing assistance and investment in Africa with few strings and considerable cash, it has equally been firm in defending its export policies.
The interesting thing is that while some people want African Governments to restrict or ban the import of non-essential commodity from China; others think otherwise.
China’s Economic and Commercial Counselor in South Africa, Wen Jiabao warned Africans recently that “unfair and discriminative restrictions will never be accepted by China.”
He pointed out that China was within its rights under the WTO and had invested carefully during the last 10 years to become efficient and competitive.
“Thanks to the arduous efforts over the years, the Chinese textiles and clothing industry managed to sharpen its international competitive edge and gained the comparative advantages its now enjoys,” Wen Jiabao stated.
He added that even if African countries placed restrictions on Chinese goods, they would not be able to control the substitute flow of goods from India and Pakistan. The solution, he said, was for Africa to adopt a “positive attitude.
The Chief Executive Officer of Ghana Chamber of Commerce and Industry, Sal Doe Amegashie, told the media recently in Accra that a ban would not solve the problem.
“China is the economy of today and tomorrow and Africans must learn from them. We need to send people to China to learn about their work ethics, among other things,” he suggested.
The question then is does China want to be seen in Africa as the defender of rogue states and an aggressive seeker of Africa’s natural resources without regard to transparency, development and stability ?
Is there room for developing some rules in which Chinese economic gains for Africa and itself can come side by side?
The writer of this piece suggests that it is better to explore these possibilities than to start down the path of trying to limit Chinese influence.
Next week, the writer of this piece would look at why majority of Ghanaians prefer Chinese products to others in the market even though they are considered inferior.
Grab your copy of Daily Guide next week and read this interesting article, which is being supported by Panos Institute of West Africa (PIWA).

E-mail:felixklutse@yahoo.com
Blog: www.klutsespots.com

Friday, September 25, 2009

The Freedom of Information and the Whistleblowers Act 2006

Compiled By Felix Dela Klutse

Business Editor of Daily Guide & Business Guide Newspaper


Introduction

Ghana has passed the long-awaited Freedom of Information and the Whistleblowers Act last year. Under the act, disclosures may be made regarding:

  • breaches or likely breaches of the law;
  • miscarriages of justice;
  • environmental degradation;
  • endangerment of individual and community health and safety; and
  • Waste, appropriation or mismanagement of public resources.

Brief Background of the Act

The Freedom of Information and the Whistleblowers Act protects whistleblowers against victimization in any form including: dismissal, suspension, redundancy, denial of promotion, unfair transfer, harassment, intimidation, threats and discrimination.

The Act has made provision to reward whistleblowers whose disclosures would lead to the arrest and conviction of a person or the discovery of misappropriated money.

The Act forms part of the need to reduce corruption in order to achieve the necessary poverty reduction, meet the Millennium Development Goals and move Ghana into the middle income country.

The act is also enacted to provide for the manner in which individuals may in the public interest disclose information that relates to unlawful, corrupt or other illegal conduct or practices in the country.

It further ensured that persons who make the disclosures are not subjected to victimization, recognizes that corrupt and other illegal conduct in the organs of State, the private sector and other institutions in society undermines efficiency, accountability and transparency in governance and good corporate practice. The Whistleblower's bill was passed by Parliament and given assent on 20th October 2006.

The act is the culmination of stakeholder consultations and lobbying by civil society groups to enhance probity and accountability in the use of government resources. It outlines the instances and processes through which employees can disclose information on the illegal conduct or corrupt actions of their employers or fellow employees without fear of retribution.

The law allows the whistleblower to disclose the misuse of public funds to various groups. Consequently, the whistleblower is presented with several options on whom to disclose the information to. These include:

  • the whistleblower’s employer;
  • a police officer;
  • the attorney general;
  • the auditor general;
  • a staff member of the intelligence agencies;
  • a member of Parliament;
  • the Serious Fraud Office;
  • the Commission on Human Rights and Administrative Justice;
  • the National Media Commission;
  • the Narcotics Control Board;
  • a traditional chief;
  • a minister of state; or
  • the Office of the President.

Where a disclosure is made to any of these persons or institutions, the recipient of the information must investigate the matter or refer it to the attorney general or other body as directed by the attorney general, who will initiate an investigation into the disclosure.

Protection and Immunity

A whistleblower is not liable to civil or criminal proceedings in respect of the disclosure unless it is proven that the whistleblower knew that the disclosure was false or that it was made with malicious intent. Additionally, a provision in an employment contract or other agreement between an employer and an employee is void if it seeks to preclude or discourage an employee from making a disclosure, instituting a court action or claiming a remedy for victimization.

Relevance to Corporate Governance

The whistleblower’s role in strengthening public sector corporate governance cannot be overemphasized. It provides a check on the actions of persons charged with the management of institutions that use public funds. Recent financial scandals - including the infamous Enron disaster - speak volumes about the importance of whistle blowing in ensuring accountability and good governance.

In Ghana, the review of the auditor general’s report on public institutions for the year ended December 2004/2005 by the parliamentary Public Accounts Committee established that billions of cedis in revenue losses were attributable to fraud.

Comment

The law makes significant inroads into corporate governance but in a culture where telling tales on others is highly frowned upon, the law can have its desired effect only if the public conscience is alerted to the need for vigilance and public sector accountability and, ultimately, if people are prepared to blow the whistle on wrongdoing.


Contact: +233243226596

E-mail: felixklutse@yahoo.com