The Government of Ghana (GoG) is ambidextrous, with deliberate focused retroactive effect, when it so chooses.  It does, again. 

The Vice President, Dr Mahamadu Bawumia launched last week, the first third-party electronic processing payment system in Accra. Dr Bawumia, a former Deputy Governor of the Central Bank, said the government intends to pursue financial inclusion with mobile telephony interoperability, at a cost of $4.5 million, equivalent to ¢18.5 million.

MoMo

When the system, known locally as MoMo, spearheaded by PaySwitch Company Limited is fully operational, he said it would put Ghana ahead of Kenya and Tanzania, the current continental leaders in mobile financial transactions. Dr Bawumia said that with MoMo, the GoG will cease cash payments, in principle, electronic payments should make it easier, to up our sordid track record on financial accountability.

In an exclusive interview for this column, Yofi Grant, Chief Executive Officer (CEO) of the Ghana Investment Promotion Center said:

 ” this will ease and lower the cost of transactions with faster processing and clearance of financial transactions meaning efficiency for businesses. Government also has a good opportunity to collect taxes as using fintech platforms as done in Georgia and Hungary.  The use of mobile technologies and PoSs means that almost all retail transactions are captured on a network and data is available.”

Aye ka

So to voice and with his ubiquitous smile, the Vice President levelled another broadside. He stated that the MoMo comes in neatly within budget, 0.4 percent in value as compared to a contract arranged by the previous administration.   

In blazing subtext, the GoG has abrogated a contract signed between the former administration (now in the Minority) and Sitbon Switch Systems Limited, for their version of interoperability. Dr Bawumia posits that the Sitbon transaction would have cost us Ghc4.6 billion, equivalent to $1.1 billion, compared to the MoMo of S4.6 million.

I recommend a paper written by Bright Simmons, President of mPedigree Network, his analysis of the Sitbon contract makes for excoriating reading. Former administrators of the Central Bank responsible for signing off on the Sitbon transaction, beg to differ.  Significantly, Occupy Ghana, a civil society group with formidable legislative and political wins under its belt, has formally requested of this government, further and better particulars, within 14 days of the Sitbon contract. Aye Ka, in Twi means literally, we have created a devastating debt. Again.

Trade Winds  

Even with the ravages of global warming, the harmattan – fine dust blowing across the Sahel turning everything under the grey skies a dusty brown – in Ghana is seasonal. Come December 2018, when the dust rises and settles again, it will, the banking and financial sector in Ghana will emerge in a different space.  So could our capital markets.

For the first time since 2013, inflation in Ghana has dropped, finally, to single digits – from 10.4 percent in March to 9.6 percent in April 2018. Welcome news and with commercial lending rates ranging between 22 and 35 percent, access to and the cost of finance remains a challenge for a country where savings are short term. We have not as yet mastered how to leverage long-term institutional and pension funds, local or otherwise, to power projects for small and medium-sized enterprises, they dominate our market.

The Souk

The Kingdom of Morocco, situated in North Africa, has influence in the Middle East and coveted trade status with the EU, it is the epitome of interoperability. They seek another exchange – directly with Ghana and specifically access to ECOWAS, a community of up to 400 million potential consumers in 15 countries in West Africa with a common external tariff.

The 15 countries are tied by common contiguous borders, not so for Morocco and by varying degrees, historical and cultural links.  Since the formation of the sub-regional grouping in 1975, there have been significant gains. Also, after declaring and publicly affirming, severally, the concept of a single currency, ECOWAS continues to kick that ball up the road. Is it geography, history, politics, leadership or the mix of personalities that keeps ECOWAS in perpetual limbo?

In principle, ECOWAS has signalled assent, that Morocco, the continent’s largest investor in the continent, can join ECOWAS.  The ‘How’ and the ‘When’ is unchartered territory.

Why Not Morocco?

We trade, warily, with China, why not Morocco? Between 2015 and 2017, total imports from the continent to Morocco were up to $5 billion, exports were recorded at $6.7 billion.

While the modern relationship between Ghana and Morocco dates back to the 1950’s, the political charge to decolonise and form the Organisation of African Unity, now the African Union, things remain dicey. Morocco withdrew from the continental union, turned its face towards Europe and has now, seemingly returned, to the African field, with intent in our sub-region and in Ghana.

In truth, the value of Ghana’s trade relations with Morocco is to date, negligible –  in 2016, less than 1% of our total exports of $7.4 million while imports from Morocco over the same period was $87.9 million. We are ranked 9th as consumers of Moroccan products and 14th behind the likes of Burkina and Togo in successfully exporting to Rabat.  Why not Morocco?

As of May 17, 2018, the total market capitalisation of the Ghana Stock Exchange was Ghc 69.93 billion, or with an exchange rate of Ghc 4.5 to $1, $15 billion. Across the desert, the total market capitalisation of the Casablanca Stock Exchange (CSE), the second largest on the continent behind South Africa, is $65 billion.  Why not Morocco? 

Multiple Listing and Faces

In Morocco’s regional courtship of the subregion, the Kingdom may find that cementing bilateral relations may work faster and in tandem. Here in Ghana, we would not be inventing the wheel if the GSE and the CSE actually progressed to a dual listing.

In Ghana, Ecobank Transnational Incorporated is listed on Nigeria’s exchange as well as in francophone countries such as Cote d’Ivoire.  Similarly, Tullow Oil Plc, is listed in Ghana and on the Irish and London stock exchanges.  AngloGold Ashanti is listed in Ghana and on multiple markets, South Africa, New York, Australia. Trust Bank Gambia Limited, anchored in Banjul is listed as cross-border on the GSE.

Mr. Karim Haji, CEO of the Casablanca Bourse explained exclusively to this column, “dual listings could help improve liquidity on both the GSE and CSE while affording companies access to a larger pool of capital and investors, as well as geographical and sectoral diversification.”

Mr. Haji referred to an Elite cohort, already launched in Abidjan, that he said can enable SMEs to build capacity to access funds from capital markets. Why not Morocco?

Four Identities

I hold no brief for Morocco, any more than I do for China, the US, the UK, even Belarus, all current or potential investors in the new Ghana Beyond Aid.  I am immensely curious about what, if anything,  we can learn, gain and share, as partners.

Nabila Freidji, President, Commission of International Institutions, an entrepreneur and a delegate at the recently held Institut Amadeus and Imani Ghana workshop held in Accra, on Morocco’s ascension to Morocco, said of the new entente cordiale, like Morocco she has 4 identities.  European descent, Moroccan nationality, an African and a businesswoman.

In Ghana, my understanding beyond the headlines is that we also have 4 priorities/identities.  Leverage technology, skills and knowledge transfer to deliver sustainable, equitable and commercially profitable impact in these areas:  Agribusiness; Industrialisation requiring renewable energy and infrastructure development; Access to innovative finance and the targeted development of Local Content with compliance and governance deeply embedded. 

Like the throes of our banking and financial sector, Morocco, like Ghana, will have to prove themselves a fluent, flexible and meaningful polyglot partner.  In more than one language and sphere.

Interoperability between the 2 countries, let alone ECOWAS, will come at a price.  With the likes of Simmons and Occupy Ghana watching and calibrating every move.  Will the trade winds blow, this time from Ghana to and from the Sahel and perhaps across the sub-region?