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Thursday, November 19, 2020Crypto currency: Bitcoin hits three-year high as investors jump inBitcoin, the world's best-knowncrypto currency, has jumpedabove $17,000 (£12,800) to hita three-year high.The digital currency hassuffered plenty of wild priceswings since it was launched in2009.But investors have beenflocking to crypto currenciesduring the pandemic-drivenvolatility on global stockmarkets.HOWEVER, expertshave cautionedabout viewing themas a "safe haven".On Wednesday, Bitcoin hadclimbed more than 7% to US$17,891,its highest level since December2017.Some analysts said the Covid-19pandemic has encouraged investorsto reassess the long-term outlookfor Bitcoin and other cryptocurrencies.But there are still concernsabout the fraudulent trading incrypto currencies following asuccession of high-profile hacks.'Bouncing like a yo-yo'During times of volatility,investors tend to move their moneyout of shares and into what areconsidered safer havens, like cashand gold.Some feel crypto currencies arenow being viewed as a shelter fromstock market volatility."Covid-19 has disrupted thetraditional safehaventrade andgold's inability tooutperform. Periodsof extreme riskaversion have forcedmany traders todiversify intoBitcoin," saidEdward Moya, attrading firm Oanda.One attractionof Bitcoin is itslimited supply,which is capped at21 million.Some feel thisscarcity provides aninnate value andshields Bitcoin frominflation, which isbecoming a worry.But ShaneOliver, head ofinvestment strategyand chief economist at AMP Capital,warned about jumping into Bitcoin."Its huge volatility hardlymakes it a safe haven as a store ofvalue. I have far more confidence inthe US$50 note in my walletretaining its value over time thanBitcoin, which seems to bouncearound like a yo-yo."Going mainstreamLast month, PayPal announcedthat its customers will be able tobuy and sell Bitcoin and cryptocurrencies using their PayPalaccounts, allowing customers to buythings from the 26 million sellerswhich accept PayPal, it said.PayPal plans to roll out buyingoptions in the US over the next fewweeks, with the full rollout due earlynext year.But Oanda's Mr Moya warnedtraders to prepare for morevolatility."The amount of hedge fundsand high-frequency tradingsystems driving Bitcoin higher willlikely deliver exaggerated movesonce its price nears the US$20,000level," he added. "Traders need toexpect US$1,000 swings in a matterof minutes."Some believe therecent rise in Bitcoin ispartly driven by the "fear ofmissing out"."Its rebound is creatingmore interest fromspeculators and so they arejumping in which thenpushes it even higher,"added Mr Oliver."I think most peoplewould put more faith in adigital currency run bytheir government ratherthan one like Bitcoin thatthey have troubleunderstanding orexplaining."One trader, Jon Son,told the BBC: "I think morepeople are beginning tobuy Bitcoin first not tomiss the rise and thenresearch into what exactlyBitcoin is."NLA Sues Multimedia for contemptTHE Director-General of the NationalLottery Authority (NLA) has sued JoyNews/Joy FM/Multimedia Group Limitedfollowing what the former describes as thelatter’s unprofessional conduct over itsreports on the Authority’s procurement ofNEXGO Android Point of Sale Terminals.“It is instructive to state that, Hon KofiOsei-Ameyaw, the Director-General of theNLA, has sued Multimedia Group Limited inthis particular subject matter and the case isstill pending at the court,” the NLA said in astatement issued by its Public RelationsUnit.“If not for purposes of propaganda andmischief, Joy News/Joy FM/MultimediaGroup Limited has every right under the lawto submit their evidence to the court forfinal determination of the case but no, theychose to throw dust into the eyes ofGhanaians and the general public,” it said.The statement described as“unprofessional and unethical conduct” byJoy News/Joy FM and Multimedia GroupLimited in its reports on the Authority’sprocurement of NEXGO Android Point ofSale Terminals.It added that the reports by theMultimedia Group, were “unfair, untrue andbiased.”• Over ‘Bogus’ Documentary“First and foremost, the whole contentof the documentary is baseless and withoutany iota of truth,” NLA stated in its responseto the Multimedia Group Limited, it said.The NLA indicated that it was alsountrue that the cost of the Android Point ofSale Terminals was inflated by the Director-General of the National Lottery Authority,Mr Kofi Osei-Ameyaw, as alleged by the JoyNews/Joy FM/Multimedia Group Limited.“It is also never true that the NationalLottery Authority has procured 30, 000Android Point of Sale Terminals,” it said.Setting the records straight, the NLAsaid approval was given by the PublicProcurement Authority (PPA) to procure30,000 Point of Sale Terminals butaccording to the financial strength ofthe Authority, only 5,000 out of the30,000 Point of Sale Terminals couldbe purchased.The cost and negotiations for theaward of contract to themanufacturer, Shenzhen XinguoduTechnology Limited, the statementstressed, was equally approved by the PPA.The PPA, the NLA continued, directed it[NLA] to negotiate for a 5% discount on thecontract sum prior to the award of thecontract to Shenzhen Xinguodu TechnologyLimited.“However, due to the inability of thelocal partner of Shenzhen XinguoduTechnology Limited to offer the 5% discountas requested by Public ProcurementAuthority, the PPA therefore directed theNational Lottery Authority to go for a 3%reduction instead,” it further explained."The Public Procurement Authoritytasked the manufacturer, ShenzhenXinguoduTechnology Limited, and its local partner todeliver the POSTs to the NLA throughDELIVERY DUTY PAID (DDP). If JoyNews/Joy FM/Multimedia Group Limitedunderstands what isDDP, with the greatestof respect, they would not have come upwith this bogus documentary of CostInflation. However their ignorance cannotbe forgiven,” it angrily stated.Again the Android Point of SaleTerminals, the statement clarified, were notjust ordinary POST Machines.“The Android Point of Sale Terminalshave special technological features aimed atsupporting NLA to offer VALUE ADDEDSERVICES unlike the usual Analogue POSTsMachines which lack the capacity toperform the functions of Value AddedServices.…Therefore, it is very naive and ignorantfor Joy News/Joy FM/Multimedia GroupLimited to conclude that the Authority hasprocured 30,000 Android Point of SaleTerminals at an inflated cost of over $10million dollars.”Against this backdrop, the NLAentreated Ghanaians to totallyignore the “bogus documentary ofJoy News/Joy FM/Multimedia GroupLimited” stating that the matter wasbefore a competent court of jurisdictionfor determination.
Thursday, November 19, 2020Govt bails out litigatingfund managers• Continued fromfront PageThis, the Commission said, follows theoutcome of its deliberations withGovernment regarding an agreed socialand humanitarian intervention for allremaining customers of the failed FundManagement Companies.A statement from SEC said : “Thedecision to make this partialpayment is predicated onthe Government’scommitment toprotecting itscitizenry and itssensitivity to theplight of affectedclientscompounded bythe disruptiveimpact of theCovid-19 pandemic.“Furthermore,this intervention hasbecome necessary at thisstage because liquidationpetitions for the remaining affectedFund Management Companies arecurrently at different stages.“In addition, some affected FundManagement Companies like Gold CoastFund Management Limited (nowBlackshield Fund Management CompanyLimited) are contesting the liquidationpetition and as a result, have filed a Stayof Proceedings until its application forjudicial review of the decision of theAdministrative Hearings Committee hasbeen heard.“There is the possibility for theselegal processes to take some time and,therefore, extend the pain and sufferingof the affected investors hence thisdecision by the Government.”The statement continues that “thiscompassionate move by the Governmentof a partial bailout would cover all clientsof the failed Fund ManagementCompanies whose licenseswere revoked but are yetto come under officialliquidationincludingcustomers ofBlackshield FundManagementCompanyLimited.”The wordingof the statementclearly indicatesthe motivation ofgovernment ahead ofthe December 7 elections.However financial analystsand public commentators agree that therefunds would still have been madeeventually anyway; government hassimply accelerated the payments aheadof the elections rather than after to winmore voter support.This partial bailout would cover atotal of 92,460 claims filed against theremaining 27 Fund ManagementCompanies, out of which BlackshieldFund Management Company Limited,the erstwhile fund manager with themost complex web of legal issues to beresolved by the courts accounts for a totalof 84,656 (92%) claims.Claims filed by individuals (includingpensioners) is 86,506 with Gold CoastFund Management Limited (nowBlackshield Fund Management CompanyLimited) accounting for 80,018 (92.5 percent) of these claims.Based on the validated claims, thepartial bailout being offered would resultin 89% and 82 of affected individuals andpensioners being fully settledrespectively.Validated claims in excess of thispartial payout amount shall be coveredafter the liquidation proceedings inCourt, in line with the terms beingapplied under the bailout package for theclients of the Fund ManagementCompanies currently under officialliquidation.The partial bailout shall bechanneled through the AmalgamatedFund Ghana Limited, the same SpecialPurpose Vehicle (SPV) being used to paythe clients of the Fund ManagementCompanies currently under officialliquidation.Amalgamated Fund Ghana Limited ismanaged by GCB Capital Limited, asubsidiary of GCB Bank Limited. TheSEC’s agent for receiving and validatingclaims is PwC.SEC;s action is pursuant to section208(c) of the Securities Industry Act, 2016(Act 929).Presidency refutesallegations of interferingin Agyapa probeTHE office of PresidentNana Addo DankwaAkufo-Addo has deniedinterfering with the riskassessment report on thenewly established AgyapaGold Royalties initiativeprepared by MartinAmidu, the firstIndependent SpecialProsecutor.Mr Amidu resignedon Monday saying he didso partly in protestagainst efforts byPresident Akufo Addo toinfluence the report andangst by the governmentchieftains over thereport’s contents.The risk assessmentreport has generatedintense controversypersuading the Presidentto issue a directive thatthe entire process for itsestablishment and itsstructure should bereviewed.Special ProsecutorMartin Amidu resignedon November 16, citinginterference followingthe conclusion of acorruption-riskassessment into thestate’s new fund,designed tomonetize itsshare of incoming goldmining royalties derivingfrom 12 operating minesin the country.. Hisoffice’s report challengedthe government’s choiceof advisers and the modeof valuation for the fund,which had its $500-million initial publicoffering suspended lastmonth.“Neither thePresident nor anymember of hisgovernment hasinterfered or sought tointerfere” with the workof the special prosecutor,the office of PresidentNana Akufo-Addo said ina statement late Tuesday.The statement alsoproduced quantitativefacts to disprove MrAmidu’s allegations thathe has not been properlyresourced with offices,permanent staff and evenhis own salary since hetook up office in late 2017.The gold-royalty fundhas become an electionissue as the countryprepares for theDecember 7 polls. While• Continued on Page 8Ghana prepares for launch of new development bankTHE World Bank has now approved afunding package for a newdevelopment bank in Ghana, as part ofthe Ghana development financeproject, aimed at boosting access tolong-term finance in the country.This has been expected since theWorld Bank declared its intent toprovide support for the new bank andannounced that it was commencingan approval process, which was indeedcompleted at the start of this week.The International DevelopmentAssociation (IDA), a member of theWorld Bank Group, which offers grantsand low-interest loans to developingnations, will provide US$250 million incredit to the Ghanaian government tohelp launch the project.Government is now expected tolaunch the project immediately, infulfillment of a 2016 election promiseto establish a dedicated development bank,which it can present as a fulfilled promiseahead of the general election slated forDecember 7.However real work on setting the bankup is not expected to start until after theelection. But the project will go ahead asplanned no matter who wins the electionOnce established, the World Bank saysthat the Development Bank of Ghana (DBG)will work to increase support for “keysectors” such as agribusiness andmanufacturing.According to the World Bank’s countrydirector for Ghana, Pierre Laporte, the DBGwill offer support through long-termwholesale financing, creditguarantees and otherservices.The DBG will also aimto attract private sectorfinancing for creditconstrainedGhanaianmicro, small and mediumenterprises (MSMEs)through multipleinterventions.“These interventionswill include theestablishment of a partialcredit guarantee facilityand a digital financingplatform to leverageprivate sector financing bymaking it more efficientand less risky for privatefinanciers to lend toMSMEs,” says CarlosVicente, senior financial sector economist atthe World Bank.The World Bank adds that the Ghanadevelopment finance project will providefinancial services to around 10,000businesses, including 2,000 women-ledMSMEs, while also strengthening theoversight of development financeinstitutions and the adoption ofenvironmental and social standards byfinancial institutions.Ghana’s long-term finance problemLong-term finance is hard to come by forfirms of all sizes in Ghana, especially SMEs,the World Bank notes in a project appraisaldocument for the DBG, released in earlyOctober.“In 2018, only 33 per cent of the volumeof banks’ loans and advances had a maturityof more than three years, of which loanswith maturities of more than five years wasonly 15 per cent,” the bank states.It adds that the problem is felt acutely inagriculture and manufacturing, which“receive a much smaller share of credit fromthe financial sector compared to their sharein GDP and employment”.“For instance, in December 2019, theshare of bank loans for agriculture(including forest and fishing) was just fiveper cent, much smaller than the sector’scontribution to Ghana’s GDP (19 per cent) in2019,” the bank says.The World Bank notes that such scarcityof long-term financing in part reflects the• Continued from Page 5
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