ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
Chairman, there is a sound basis for the prudential regulation and supervision of our local as well as the global financial system.
It is in the fundamental interest of ev ery economy to have a well regulated financial system that ensures its stability an d protects the integrity an d safety of the financial markets.
And, it has become imperative that we adopt intern ational standards of 5 best practice in the regulati on of our financial system along with the necessary best practice and standards of transparency in other areas of financial management.
The oldest multilateral financial institution in the world, the Bank for International Settlements in Basel, Switzerl and, has over the ye ars worked for the adoption of international best practice and standards, in pa yment and settlement systems, banking supervisio n, and prudential regulations.
This work provides guidance to ensure the stab ility of the financial system and reduce the probability t h a t a w e a k l i n k i n a n y p a r t o f a n i n t egrated system becomes a source of major systemic risk that will endanger the stability that is indispensable for growth.
What can bankers do?
Chairman, strong financial institutions operating in a stable macroeconomic en vironment are the bedrock of financial stability.
Strong financial institutions typically have a strong capital base well aligned to their risk profile ; with quality portfolios of assets, high accounting standards, and robust balanc e sheets; and they have a cu lture of timely disclosure of information and submit to the discipline of the market .
They are assets for their managers and shareholders.
This is why banking regulators have to be firm.
But they also have to be forward looking in setting the regulatory framework.
The dynamics of th e market today is su ch that banks and other financial institutions develop a wi de variety of financial products with increasing frequency; and so the regulato ry framework has to be adaptable to meet the changing demands on the banks and the financial system.
For example, a minimum capital requirement that may a ppear to be sufficient today might be woefully inadequate tomorrow and regulators have to consistently prepare to deal with such developments in the financial system.
Chairman, prudential regulation, and banking supervision, specifically the implications of Basel II was the subject of a recent symp osium of the Association of 6 African Central Banks in Accra.
As mentioned earlier, the Bank for International Settlements has been at the forefront of developing the principles and guidelines for application worldwide.
We first had the Basel Accord in the 1980s (Basel 1) which has since proved inadequate to deal with the growing complexities of the financial system.
Basel II provides a more comprehensive framework for addressing risks, providing tailored applications and more ri sk sensitivity and incentives for better risk management by both regulators and financial institutions.
Chairman, Basel II has raised a lot of eyebrows in the banking community.
It has been d escribed as too complex and not entirely relevant for banks in developing countries, such as those in our sub-region.
In a way this is an argument for complacency and doing nothin g .
A t i t s h e a r t , B asel II is about risk management and as regulators and banker s we need to build our capacity and those of our corporate customers in managing risks.
I t i s t r u e t h a t B a s l e I I i s v e r y d e m anding in terms of resources, financial expertise and skills.
For developing count ries, all this raises serious challenges in implementation.
And, we cannot understat e the importance of constraints we face such as lack of adequate technical skills, under-development of the financial markets, structural rigidities and less robu st legal systems that will need to be addressed to move to Basle II standard s. But the cha llenges that these pose should provide the impetus fo r us to examine the way we do business and strive to achieve international standards of best pr actice in prudential regulation and risk management.
We have to overcome these cha llenges so as to be able to reduce the risk rating of our sub-region and lower the cost of borrowin g of our corporate customers.
Banks that have the ambition to become in ternationally active could lead the way.
Chairman, many of the countries in our sub-region have had functioning banking systems over the years, and we ha ve had our share of banking difficulties, 7 with distressed banks weighed down by the burden of non- performing loans.
The root cause of the problem for the most pa rt is macroeconomic instability.
Most of our economies are emerging fr om a historical past wher e the norm was a situation of high and variable inflation and volatile exchange rates, with all the distortions and attendant risks which have affected banks.
We have managed to break away from this past (if not in the process of breaking away).
We are embracing sound financial policies.
We have started addressing most of the structural proble ms and other distorti ng legacies in our economic systems and forging ahead, consolidating ma croeconomic gains.
Vigilant, firm and even handed su pervision of banks, and well-designed prudential regulations are necessary to reduce the vu lnerability of financial systems in the region to shocks.
This sh ould serve as a healthy en vironment for the financial sector to operate, and as a durable foundation for growth.
And as experience has shown this would only be sustainable in a low inflation environment.
Ladies and Gentlemen, high and variab le inflation creates incentives for misallocation of resources an d uncertainty.
It makes busi ness planning difficult.
It ends up in arbitrary and inequitable distri bution of incomes, an d it serves as tax on incomes, that hits the poor the hardest.
High and vola tile inflation is a powerful force for stifling growth .
And it is bad for the bankin g business, it is bad for trade and an impediment to the regional integration process.
Chairman, it is understandable that as a fundamental pillar of the West African Monetary Zone (WAMZ) single currency project, our countries Nigeria, Ghana, Sierra Leone, The Gambia and Guinea have committed to placing our economies on the path of low and stable inflation as key to securing macroeconomic convergence.
This is for good reason be yond the need to keep inflation under control.
The union that we en vision will be an economic entity that would provide for three freedoms; the free ci rculation of goods, the free movement of capital, and 8 the free movement of labor, with a unique central bank and with complete fiscal autonomy for each of its member countries.
This would mean a complete change in the fiscal and monetary regimes that we now operate.
It has been said that the convergence exercise is a process of reconc iling unpleasant fiscal arithmetic with unpleasant monetary arithmetic and it would be difficult to manage if members were to enter the monetary union with very divergent fiscal positions, and underlying inflation outlook.
In a monetary union, fiscal deficits can no longer be absorbed under a “no bail out” policy by the central bank.
Wi thout adequate conver gence to sustainable fiscal positions, the requir ed adjustment (e.g.
through expenditure cuts or tax increases, if there is room) needed by a member to cope with shoc ks particularly of the asymmetric type might well be implau sibly large and politically difficult and a source of tension, if not conflict, in th e union.
Members will yield sovereignty over monetary policy to a common central bank and lock into a fixed exchange rate for all zonal transactions.
The common centra l bank will necessarily depend for its effectiveness on free capital movement and an integrated and efficient financial market for the transmission of monetary policy.
For a commitment to the price stability goal it will have to be operationally independent of the fiscal authorities of members to be credible and successful.
In sum, fiscal convergence in the sense of bringing public finances under control to the point where budget deficits and debt to GDP ratios are sustainable and consistent with price stability across the board is essential for a robust and resilient monetary integration.
The convergence criteria for monetary union within the WAMZ have been designed to encourage countr ies to pursue disciplined mo netary and fiscal policies.
They are essential to set the stage, not on ly for a single currency but more importantly to build the foundation fo r successful monetary integration.
These criteria not mere targets to be reached at a single point in time as a trigger for the launch of the single currency or as a tick et for entry by members into the zone.
9 Rather, they are intended to serve as summary indicators designed to track progress in implementing disciplined economic poli cies and sustained structural reforms.
This is critical in assessing the potential success of the union in terms of members’ economic competitiveness and resilience to future shoc ks and external payments viability.
Convergence criteria should be based on comparable data and information to provide a true yardstick to evaluate the success in making macroeconomic adjustments.
It is therefore understand able that the WAMZ and all the regional monetary cooperation programs are focu sing on our econom ic statistics and concepts looking to harmonize the design and to give meaning to these criteria.
These questions on statistical measurements aside, the cooperation agenda seeks to harmonize the accounting systems, bankin g regulations, budget nomenclature, the legal framework of public accounting and practices etc.
In this way, we would weave the fabric for efficient functioning of financ ial and other institutions in a competitive regional economic space.
It goes without saying that an effi cient financial market and integrated financial system will be vital for the effects of monetary policy that the common central bank will pursue to be transm itted through the economies of all member countries within the common currency zone .
There is a need for the establishment and harmonization of payments system infrastructure fo r the efficient settlement of transactions and the transmission of mone tary policy decisions.
Commercial banks have to be forward-looking in this rega rd as they develop their payments and settlements infrastructure.
Chairman, Di stinguished Ladies and Gentlemen, monetary integration, in particular the single currency project, was placed on a fast- track as a vehicle for econom ic integration in the ECOWAS sub-region.
To date, the barriers to the movement of goods across the sub-region remain formidable and 10 need to be lowered if not removed, and tariffs harmonized within a multilateral framework to give real meaning to the ECOWAS Trade Libera lization Scheme and other protocols.
I should note that this also features prominently in the design of the WAMZ reform agenda going fo rward.
Otherwise the benefits of integration will be elusive.
Indeed, the ECOWAS Trade Liberalization protocol offers a vehicle for and a test of commitment to integr ation in the sub-region.
Bank s have a major facilitation role to play in enhancing trade within the sub-region.
Chairman, there are many potential benefits of monetary integration in terms of the reduction in transaction cost s, the increased size of the market for firms’, increased trade within the sub-region, greater currency stability.
However, the benefits will only come if we do our home work properly, including implementing the necessary macroeconomic policies and the structural and other policy reforms, and strengthening trade an d sectoral linkages that are essential for economic growth in the sub-region.
Chairman, Distin guished Ladies and Gentlemen, this is why in the next phase of the WAMZ project emphasis is being placed on the harmonization of payments systems, bankin g laws, statistics, and the liberalization of trade and capital account transactions between member countries and has established distinct time lin es for the attainment of clea rly specified objectives.
The banking system, and the corporate client s that you manage and serve would be instrumental in the realization of these objectives, and in achieving the ultimate goal of integration of the sub-region in a single financial and economic space.
Your Excellency, Vice President, Mr .
Chairman, Distinguished Ladies and Gentlemen, let me once again express my sincere appreciation for the honour done me to participate in this maiden lecture.
1 ASSOCIATION OF AFRICAN CENTRAL BANKS SEMINAR ON PAYMENT SYSTEMS OPENING REMARKS BY DR PAUL A. ACQUAH GOVERNOR, BANK OF GHANA ACCRA, JULY 26, 2005 Mr.
Chairman, Distinguished Invited Guests, Fellow Central Bank Governors, Seminar Participants, Ladies and Gentlemen.
It is my pleasure to welcome you all to this one -day seminar on payment systems in Accra.
This seminar is one of the major activities of the 29 th Ordinary Meeting of the Assembly of Governors of the Association of African central banks, whic h the Bank of Ghana is privileged to host this year.
Mr Chairman, payment systems are critical for the core function of central banks the world over, hence the importance and relevance of this seminar.
But in another way, the seminar is important because it provides the forum for networking among central bank payment system 2 experts to exchange ideas with a focus on Africa but in a global context.
 Firstly, there will be discussions and collation of views on a Consultative Report issued by the Bank for Inte rnational Settlements (BIS) titled "General Guidance for Payment System Development".
 Secondly, the seminar will examine issues involved in "reforming the institutional framework and coordinating the development of the core infrastructures” for payment systems.
 Finally, the seminar will consider relevant issues with respect to the formation of an African Experts Group on Payment Systems.
Chairman, all these are very important issues which go to the heart of the ability of African central banks to contribute more meaningfully to the development of payment system principles, policies, standards, and practices not only at the national but at the international level.
It is timely to be able to consider in this seminar the growing sophistication of payme nt systems and the key role central banks are expected to play to ensure safety and efficiency.
Chairman, a comparison of payment systems in Africa with those in the developed countries reveals clearly the underdeveloped nature of payment systems i n Africa.
Most of our African countries continue to rely heavily on cash, which is an inefficient and costly payment instrument for transactions involving large amounts.
Paper and paperless (electronic) modes of payment, which have been proved to be most efficient and less costly, are yet to make a significant impact in most African countries.
This is unacceptable and we need to develop safe and efficient payment systems that foster economic growth.
I hope that this seminar will go a long way to help in that direction.
Chairman, concern for payment systems development, is a recent phenomenon even at the international level.
Efforts by the G -8 and the BIS to study international payment arrangements, risks and practices only date back to 1989.
Many r eports have since been published on various aspects of domestic and cross border payments of which the document entitled Core Principles for Systemically Important Payment Systems (CPSIPS) is the best known and the most comprehensive.
The CPSIPS was issued in 2000 for comment and the final version was published in 2001.
Though African Central Banks were 4 invited to comment on the consultative document, they did not have the forum then to submit a coordinated African Central Banks response, which would have received better attention than the submissions by individual central banks.
Today, the core principles and central bank responsibilities, which were eventually published, constitute the basis for establishing and developing systematically important, safe and efficient payment systems all over the world.
The principles prescribe clearly what central banks must do to ensure the proper functioning of payment systems.
In the circumstances, Africa can no longer afford to be a passive participant.
This s eminar has the opportunity to contribute as well as lay the foundations for Africa to actively participate in global payment systems from henceforth.
Chairman, the consultative report entitled "General Guidance for Payment System Development" should be of major concern to Africa where we have the least developed payment systems.
Africa’s contribution to the 5 document must balance technical standards and policy issues with the special conditions in African countries and it should make practical proposals for adoption by the international community.
Similarly, discussions on the reform of the institutional framework and coordination of core infrastructure development must focus on the business needs first, before considering the infrastructure, standards , procedures and legal environment.
Chairman, I should like to advise participants to approach the formation of the Experts Group on Payment Systems with open minds and with much patience for one another.
A good work done will serve Africa well for many years to come and this should be the goal.
I wish you all fruitful discussions and a happy and enjoyable stay in Accra.
I encourage those here for the first time to find time during and after the meetings to visit tourist spots in and around the city and also taste and experience the renowned Ghanaian cuisine and legendary hospitality.
1 Republic of Ghana STATEMENT BY THE MINISTER FOR ENERGY, HON.
JOHN -PETER AMEWU AT A PRESS CONFERENCE ORGANIZED BY THE MINISTRY OF ENERGY 20TH SEPTEMBER 2018 2 Colleague Ministers Directors of the Ministry of Energy Friends from the media Ladies and gentlemen A pleasant good morning to you all Thank you ladies and gentlemen of the press for honouring our invitation to participate in t oday’s press conference.
Your consistent contributions and continual dissemination of information on our energy sector to the good people of Ghana is commendable.
I urge you to keep up the good work.
Today’s press conference has been convened to inform you and the good people of Ghana about happenings in the Energy Sector, particularly, issues relating to stable power supply, power purchase agreements, electricity tariff reduction, emergency power plants, natural gas, petroleum product prices, Bul k Oil Storage and Transportation Company Ltd (BOST), just to mention a few.
POWER SECTOR Financial and legal burdens arising from over contracting of Excess Capacity Ladies and gentlemen, as at the end of 2016, ECG had signed 14 Power Purchase Agreements (PPA) which were operational wit h combined capacity of 1104MW.
Another 18 PPAs signed by ECG with a combined capacity of about 6,000MW and 8 PPAs were under discussions w ith total capacity of 2116MW.
This in addition to existing generation capacity from h ydro, the VRA plants at Aboadzi and Tema; and the 3 TICO plant will result in a total ins talled capacity of about 11 ,000MW if the committed capacity are all deployed.
This will by far be more than the current peak demand of 2 400MW.
Even at an annual growth i n demand of 10%, our country will not be able to utilize this capacity in two decades.
The over-contracting of capacity has imposed serious financial and legal obligations on government and power consumers.
To address these, the Ministry of Energy tasked a Committee led by the Energy Commission to review all PPAs signed by the Electricity Company of Ghana (ECG) for conventional thermal power projects.
The Committee reviewed 26 out of 30 PPAs ECG had initiated.
The other 4 were not reviewed because they were already operational.
The combined generation capacity of the 26 PPAs reviewed amounted to 7,838MW.
The r eview noted that the projected capacity additions from the PPAs were far in excess o f the required additions inclusive o f a 20% system reserve margin from 2018 to 2030 and would result in the pay ment of capacity charges for the dispatched plants.
The review recommended that: I.
8 PPAs with combined capacity of 2070 are to proceed without modification; II.
4 PPAs with a combined capacity of 1,810MW be deferred to 2018-2025; III.
3 PPAs with a combined capacity o f 1,150MW be deferred beyond 2025; and 4 IV.
11 PPAs with a combined capacity of 2,808MW be terminated.
Pursuant to the review exercise, Government stands to make significant savings from the deferment and/or termination of the reviewed PPAs.
The estimated cost for the termination is $402.39 million, compared to an average annual capacity cost of USD 586 million each year or a cumulative cost of $ 7.217 billion from 2018 to 2030.
This y ields an estimated saving of $6.8 billion over the 13 year period.
Electricity Tariff Reduction Ladies and gentlemen, u pon assuming office in 2017, t he Government was confronted with an unfriendly investment climate arising from high cost of energy to industry and residential consumers.
The high cost of power, particularly for industrial customers, had serious implications leading to the shutdown of businesses and laying off of workers .
Many electricity customers also resorted to self -generation, which resulted in artificial reduction in demand for electricity and therefore reducing ECG sales volume and its financial sustainability.
This was due to the fact that after 600kWh, the tariffs were over 40 US Cent/ kWh.
In fulfilment of our Manifesto promise to reduce electricity tariffs drastically, government made submissions to the PURC for tariff review based on the various interventions made in the energy sector.
The objectives of the tariff reductions were therefor e to provide relief to electricity customers, stimulate demand and spur economic growth and create jobs.
5 Consequently, the PURC announced significant reductions in electricity tariffs effective March 15, 2018 as follows: - Industrial Customers - 30% - Residential Customers - 17.5% - Mining Sector - 10% - Special Load Tariff Customers - 25% Ladies and gentlemen, the reduction in tariffs were influenced by a number of interventions by government in the energy sector including: - Renegotiation of PPAs on cost of generation; - Recalibration of domestic gas prices; and - Revenue requirement of utilities based on updated customer population.
I am glad to announce that, reduction in electricity tariffs has brought enormous relief to electricity customers particularly industry and commercial customers such as manufacturers, tailors, hair dressers, and traders.
This is expected also to spur economic growth and create jobs which would have otherwise been lost.
Emergency Power Plants Ladies and gentlemen, during the power crisis of 2013 to 2016, the then Mahama led government, signed a number of emergency power plants including the Karpower plant, AMERI and AKSA plants.
Government is reviewing the status of these emergency plants with a view t o determining the implications of their continuous operations.
6 For Karpower, government has taken a decision to continue the use of the plant for a s trategic reason.
Following the signing of the commercial agreements to develop the OCTP field in 2015, the then government failed to put adequate measures to create demand for the domestic gas to be produced from the field.
At the same time, the government agreed to a take -or-pay arrangement up to 154 mmscfd.
In the absence of the infrastructure to evacuate gas to the power enclave in Tema and inadequate demand for gas in Takoradi, GNPC will be confronted with a huge bill of $40 million every month for gas not consumed.
Faced with this challenge, government has decided to relocate the Karpower barge to Takoradi and to convert it to a gas plant, to create demand for up to 90 mmscfd whilst the balance is evacuated to the Tema Power Enclave through the limite d capacity provided by the West African Gas Pipeline.
This arrangement ensures that $40 million every month will not go to waste.
Government is reviewing the other emergency power plants and will announce its outcomes shortly.