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Combined Pineapple Glory: Protecting the legacy and keeping Ghana in business

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Pineapple may reduce the risk of various types of cancers

Early Days

For many years, Ghana’s export sector focused on cocoa, gold, timber, bauxite, rubber and oil. However, during the 1980s and 1990s pineapple exports became an important area of activity. This was largely due to the vision of a few people, but it is also a sector that has struggled to adapt.

The story starts in the late 1970s, when Daniel Osei Yaw Safo, the modern ‘Tetteh Quashie’ of the pineapple industry, set off to turn an untapped pineapple resource into a multi-million-dollar industry. Daniel returned to Ghana after serving as a manager for Ghana Commercial Bank in London. He was committed to achieving something new in Ghana.

Coming from a very humble background, Daniel Safo valued hard work and had the drive and initiative to pursue his vision. He founded Combined Farmers Ltd (CFL) to support the large-scale cultivation of pineapple. In the 1980s he then expanded his horizons with exports to Europe.

Due to the landmark revolution he brought into the Agricultural landscape, he was recognized during the maiden edition of the National Farmers’ Day celebration in 1985 as the National Best Farmer. Together with a group of other innovative entrepreneurs, such as Koranco, a significant market share was secured and gave Ghana a strong reputation for producing high quality pineapples.

These were delivered by air, ensuring speedy delivery and high quality. However, back in the 80’s, there were only five flights per week from Accra to Europe, making it difficult to export even 10% of the produce. Seeking to increase production to meet the demand in the European market, Mr Safo established a cargo airline to support airfreight of the commodity.

As the business blossomed, he brought together more exporters to form an association that enabled them to build sufficient volumes of fresh pineapples for air-freighting.

The Ghanaian exporters were able to take advantage of the favourable climatic conditions to build a flourishing industry. The ‘smooth cayenne’ species started to appear on the shelves of many European supermarkets. Back home, the business supported livelihoods and contributed to the improved nutrition of thousands of people.

CFL and the other exporters continued to increase the frequency of their shipments, making pineapple exports one of the most significant growth areas in Ghana. The exports grew 14-fold between 1980 and 1998 from US$1.8 million to US$26.8 million. As a result, Ghana gained a real foothold in the European market.

Challenges

In 2001, the industry was hit with its first major setback following the September 11 tragedy. With resilient titans like Safo involved, 9/11 was not the end of the business. However, there was a shift of focus.

Further expansion involved a transition to sea-freight, but this also created the challenge of managing cool-chain distribution and ensuring quality was not compromised. Mr Safo helped arrange common handling of sea-freight logistics and was instrumental in facilitating market access. Working in close cooperation with the then ‘Ghana Standards Board’, he promoted common export standards.

The exports continued to increase rapidly to the close of 2004, when the commodity reached 71,000 tons and generated about US$22 million. Although exports of fresh pineapples increased significantly in 2004, making Ghana the second largest pineapple exporter after Cote d’Ivoire, it represented a mere 12% percent of the global market.

There was still potential for Ghana to considerably grow the industry. However, new challenges were soon to appear. Contrary to the high expectation of increased market share (after the impressive 2004 export year) Ghana’s smooth cayenne began to face rejection in Europe.

From 2005 onwards, Costa Rica promoted the new MD2 variety (‘Del Monte Gold’), which took over the European pineapple market. This had previously been dominated by Ghana and other African countries.

This sudden shift resulted in a significant decline in Ghanaian export share, while Costa Rica continued to establish itself as the new market leader. As a result of the MD2 initiative, more than 500,000 smallholder farmers lost their jobs. The high cost of investment required to establish the new variety, and also issues of disease among other varieties, made it very difficult for many to get back into profitable business.

The situation deprived Ghana of the millions of dollars it used to get in foreign exchange. In addition, many fruit processing companies ceased trading, while pack houses and cold chains in some pineapple growing areas became redundant. Many farmers either converted their farms to grow other crops or sold them for construction of residential properties. The number of exporters also reduced from 50 in 2004 to around 15 a few years later.

This MD2 invasion and the displacement of Ghana and other African countries from the market, highlights the reality of global markets and the challenges African producers face. Staying competitive requires a strategy to constantly adapt to new market demands and competitors’ innovations.

Del Monte had started researching into the shortcomings of the smooth cayenne back in 1996 and had resolved to come out with a variety that would take over the market. So what lessons can Ghanaians take from this hard lesson?

Perhaps most important is the need to appreciate the fundamental role research and innovation plays in ensuring market sustainability. These issues affect not only production practices but also competition between different supply chains.

In addition, the country’s marketing and promotion programs have to be strengthened with clear brand “identities” and “labels” that convey a message. We can’t rely on traditional “brand loyalty” when there are significant new developments taking place.

Most farmers who survived decided to switch from smooth cayenne (SC) to MD2. But Mr. Safo believed that abandoning the SC completely was not the way to go. There were still opportunities to promote its advantages in order to regain some of the lost market share.

He argued that the smooth cayenne offered better juice, flavour and fibre than MD2, which could enable Ghana to re-enter the market place. Mr Safo stood vindicated as the MD2 was found to be more expensive to grow in Ghana due to the climate and soil conditions.

Those who switched to MD2 faced an uphill task in catch up and significant competition. Costa Rica has ideal growing conditions for MD2, low costs of production and massive economies of scale. Daniel Safo believed that the focus should have still been placed on improving the smooth cayenne (and the delivery logistics) rather than competing head-on with Costa Rica over the MD2.

He saw opportunities to gain competitive advantage in organic pineapple and tap into the “fair trade” movement.

The organic food and drinks sector in Europe had starting growing rapidly at an average rate of 13% from 2002. With the market value of organic food and drinks sector in Europe projected to increase to 67 billion USD by 2012, it made no sense to neglect that niche market opportunity.

This idea worked for Ghana when Waitrose started retailing whole organic pineapples, supplied by Blue Skies in 2005 to the United Kingdom. We should also note that Daniel Safo was one of the original sponsors of the Blue Skies project, started back in 1997.

The cool-chain (air-freighted) export of fresh cut pineapple started in 1998. Mr Safo also tried to diversify the CFL business by venturing into coconut cultivation, which has since developed to become one of the biggest coconut plantations in West Africa.

Future Possibilities

The Ghana Export Promotion Authority, in line with Mr Safo’s suggestions, embarked on a project to revitalize and boost the production of the smooth cayenne pineapple as part of its implementation of the National Export Strategy. With other contributions from the World Bank, USAID and the U.S.

Millennium Challenge Corporation towards the revitalization of the horticulture industry, Ghana began seeing signs of a new resilience and greater competitiveness. In 2016, Ghana recorded export of fresh cut pineapples worth $53 million. In 2018, Ghana had a 1.1% of the global shares with volumes of 661.5k metric tons. The export value was 29.52 million USD.

The few farmers who have survived strive to keep their heads afloat and re-gain market share in Europe, However, in recent years there have been ongoing problems, including land encroachment. It reminds us that successful, sustainable business requires ‘enabling conditions’ backed by effective systems and the rule of law.

Perhaps the lasting legacy of Mr Safo is to remind Ghanaians that the country needs to harness its natural resources and talent. This requires a clear vision, backed by guiding principles on how to conduct business. One of Daniel’s often repeated quotes from the 1990s was “lazy, corrupt people block progress”.

He saw the need for research, development and innovation that supports future success. The country can learn from his example.

Source: thebftonline.com

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Stop imposing unfair charges on customers – BoG to Banks

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Bank of Ghana

The Bank of Ghana has asked all Banks and Specialised Deposit-Taking Institutions (SDIs) to stop imposing unauthorised fees and charges on customers.

A five-page statement issued by the Bank of Ghana said: “The Bank of Ghana has observed with concern, a trend where some Banks and Specialized Deposit-Taking Institutions (SDIs) impose certain fees and charges on customers. These practices are deemed to be unfair, inappropriate and detrimental to the financial inclusion agenda and the protection of customers’ interest.”

”Banks and SDIs are not permitted to retain insurance premiums collected from customers with the intention of implementing an internal insurance policy. This excludes commissions for Bancassurance arrangements,” it said.

Read the full statement below

NOTICE TO BANKS AND SPECIALISED DEPOSIT-TAKING INSTITUTIONS (SDIs)

NOTICE NO. BG/GOV/SEC/2021/12

ABOLITION OF UNFAIR FEES, CHARGES AND OTHER PRACTICES IN THE BANKING SECTOR

The Bank of Ghana has observed with concern, a trend where some Banks and Specialized Deposit-Taking Institutions (SDIs) impose certain fees and charges on customers. These practices are deemed to be unfair, inappropriate and detrimental to the financial inclusion agenda and the protection of customers’ interest. In line with the mandate of the Bank of Ghana to deal with unlawful or improper practices of banks and SDIs under Section 3 of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) and to ensure that the interest of customers of banks and SDIs are adequately protected, the Bank of Ghana hereby notifies banks and Specialised Deposit-Taking Institutions of the abolition of the following practices:

Credit Insurance Premium Overcharges As part of credit underwriting policies, a number of banks and SDIs require borrowers to hold credit insurance against eventualities such as death, permanent disability and termination of employment. While the Bank of Ghana acknowledges the importance of this practice as a loss mitigating norm in credit management, a number of banks and SDIs take advantage, to overprice the premiums charged to customers, resulting in the increased cost of borrowing. Banks and SDIs are directed to desist from premium overcharges and to adhere strictly to the following: Banks and SDIs that opt to use their pre-determined insurance companies to underwrite borrowers’ loans, shall apply the same premium charged by the underwriting company to borrowers. Banks and SDIs are not permitted to retain insurance premiums collected from customers with the intention of implementing an internal insurance policy. This excludes commissions for Bancassurance arrangements. Maintenance Fees on Savings Account The application of “Account Maintenance Fees” by banks and SDIs on savings accounts inhibits deposit mobilisation and discourages the use of banking systems by the general public. Bank of Ghana has noted that the application of such fees has driven a number of savings accounts into debit and in so doing, eroded the deposits of vulnerable depositors who would generally expect their savings accounts to earn interest. This practice is detrimental to financial inclusion and negates the gains of the financial literacy programmes geared towards promoting personal savings. YOU MIGHT ALSO LIKE.. We’ve decided not to increase our fares-Kaneshie…

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Banks and SDIs are directed to desist from charging “Account Maintenance Fees” on savings accounts. This ban however, does not include charges for services provided by banks and SDIs with the explicit prior subscription by customers.

Over the Counter (OTC) Withdrawal Charges Bank of Ghana notes that some banks and SDIs impose penal charges on customers who withdraw their own funds from banking halls of affected banks and SDIs. The reason commonly attributed to this practice is to encourage customers to use digital platforms provided by the banks/SDIs for such withdrawals, in order to decongest banking halls. These digital platforms are however not offered for free. While Bank of Ghana acknowledges the support of banks and SDIs in the digitization agenda, this action deters some customers, especially those who are averse to the use of digital platforms, from opening and operating accounts. The practice also negatively affects the financial inclusion drive of the Bank of Ghana. Banks and SDIs are directed to desist from levying penalties on customers who withdraw own funds below certain thresholds from the banking halls. In addition, banks and SDIs shall not levy penalties against customers who request account balances within banking halls.

Change of Ownership of Collateral Documents Bank of Ghana notes that some banks and SDIs require borrowers who secure credit facilities with movable assets, to transfer ownership of such assets into the joint names of the borrower and the bank or SDI involved. In addition, borrowers are made to bear the cost associated with the transfer prior to loan approval and after settlement of loan. This practice of some banks and SDIs is contrary to section 7 of the Borrowers and Lenders Act, 2020 (Act 1052) which does not permit a security interest to operate as a transfer of title from a borrower to a lender. The practice further denies borrowers the opportunity to secure multiple loans with a single collateral duly registered in the name of the respective borrowers. Banks and SDIs are barred from engaging in the practice of changing ownership of collaterals presented by borrowers to secure credit facilities from the borrower to the bank or SDI. Application of interest on Penal Charges The Bank of Ghana has observed a practice among some banks and SDIs, where penal interest rates levied against defaulting loan customers, are made to accrue interest. In effect, interest is computed on penal charges in addition to interest on the outstanding loan amount. This practice results in high outstanding loan balances which customers are unable to pay, resulting in high non-performing loans. The practice is detrimental to the credit market. Banks and SDIs are directed to desist from the application of interest on penal charges. Additionally, penal charges shall only be applied on the amount of the delayed interest or principal payment and not on the total outstanding loan amount in accordance with section 55(3) of the Borrowers and Lenders Act, 2020 (Act 1052).

Quotation of Monthly Interest Rates on Credit Facilities In accordance with section 55 (2) of the Borrowers and Lenders Act, 2020 (Act 1052), banks and SDIs shall impose on a borrower an interest rate that is calculated on an Annual Basis only in all credit agreements. Consequently, banks and SDIs are directed to desist from the quotation of monthly interest rates on all credit facilities and associated fees. In addition to the interest rate, banks and SDIs are directed to disclose the Annualized Percentage Rate (APR) related to every credit facility in accordance with the Disclosure and Product Transparency Rules for Credit Products and Services. Third Party Deposit/Withdrawal Violations Bank of Ghana has observed with concern, the lack of compliance with the requirement of banks and SDIs to obtain full personal details (name, address, ID and telephone numbers) of a person who makes a deposit into or withdrawal from an account on behalf of another person. Deposit slips of some banks and SDIs do not make provision for depositors’ signatures. This anomaly makes it possible for third parties to deposit into customer’s account under the guise that the

deposit was made by the customer, by simply writing “self” in the column for depositor’s name. Banks and SDIs are therefore directed to desist from this practice. Banks and SDIs shall ensure that depositors sign on deposit slips at all times.

(SGD) SANDRA THOMPSON (MS) THE SECRETARY

Source: rainbownradioonline.com

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GRA to tax E-commerce businesses

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The Ghana Revenue Authority (GRA)

The Ghana Revenue Authority (GRA) is in the process of developing mechanisms and modalities to tax e-commerce businesses by the end of the year.

The move, which formed part of measures to widen and increase the tax net, had become necessary because of the emerging e-commerce business as a result of the COVID-19 pandemic.

Nana Egyirba Aggrey, Head of Taxpayer Services at Cape Coast made this known in an interview with the Ghana News Agency on the sidelines of a multi-stakeholder business integrity forum organized by the Ghana Integrity Initiative in Cape Coast.

The forum would promote accountability, transparency and integrity in businesses, brought together 50 SMEs who were enlightened on Ghana’s tax regimes and the service charter of the Registrar Generals Department.

‘There is a project to tax e-commerce businesses before the end of the year and a unit at the head office is working on the modalities’, she said, adding that it was GRA’s expectation to generate more revenue when the tax was enforced.

She noted that the COVID-19 pandemic, had brought a lot of e-commerce business opportunities which was generating a lot of profits that needed to be taxed.

Nana Egyirba Aggrey hinted that there was a five-year tax holiday for young entrepreneurs below 35 years who were into manufacturing, agro-processing and Information Technology.

The aim, she said was for them to grow their businesses and therefore encouraged eligible young entrepreneurs to apply for the tax incentive.

Mr Michael Okai, a Coordinator for GII explained that the forum sought to strengthen the integrity of doing business in Ghana by creating a quarterly platform for the private sector, selected public sector institutions and media to meet and discuss emerging challenges faced by the private sector in doing business in Ghana.

He underscored the need to provide the needed support for SMEs to thrive, saying SMEs were the engine of growth of the country contributing between 85 and 95 percent of private sector businesses.

Corruption, he said increased the cost of doing business and thereby reduced the profitability of SMEs, negatively affected business growth due to low profitability and ultimately affected national development.

He mentioned incident of corruption in the business setting to include; demand for facilitation or unapproved fees during business registration, unwarranted payments in order to circumvent customs, licenses, taxation, court cases and public procurement, bribery during the clearing of goods from the port among others.

To deal with corruption in SMEs, Mr Okai encouraged businesses to instill the culture of integrity in their workers, report corrupt officials to the appropriate authorities, reward or motivate outstanding workers and punish offenders.

Mrs Stella Ackwerh, Registrar General for Cape Coast and Takoradi who took participants through the changes in the new company’s Act, said the new changes were to ensure that the Registrar of companies became efficient in the performance of its duties of registering and supervising companies.
She advised businesses to duly inform and update the Registrar of Companies on the various changes that had transpired in their businesses within 28 days including; changes made to the beneficial ownership.

She encouraged them to file their annual returns with financial statement after the first eighteen months of incorporation.

Source: GNA

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New system launched to curb Mobile Money fraud

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Linda Otoo

In response to the growing menace of mistrust and scams within the online commerce space, a new Mobile Money escrow service called Move Secure by Nsano has been launched to facilitate safe and secure transactions on Mobile Money.

The service operates by “holding money in trust till both vendor and buyer” confirm their satisfaction with a transaction, says Ms. Linda Otoo, Country Manager for Nsano.

According to her, this is a much-needed solution to “restore the declining levels of trust between online buyers and vendors” resulting from increased cases of scam.

For buyers, Move Secure ensures that even though you have initiated payment for a service, “you can get your money back seamlessly” in the event of an attempted scam or if the wrong/inferior order is delivered.

She adds, it also shows a commitment to your vendor to prioritize your order.

For vendors, the service shows a payment has been made before you make a delivery, eliminating the potential of wasting time or money to transport orders to customers who don’t show up.

Both parties can raise disputes within the Move App or via the USSD code (7188#) in an event where one party is dissatisfied with the exchange.

“We believe in using technology to solve everyday problems. With the increasing rate of mistrust in online payments and trade, we came up with this escrow service on Mobile Money to give both buyers and sellers comfort in the exchange process. This we believe will also eliminate fraud and scams in online commerce for our Move Secure users.” Ms. Linda Otoo, Country Manager for Nsano commented about the service.

 

Source: 3news.com

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