Economy
Ghana Could Save $230m Via Digital Payments—Report
By Modupe Gbadeyanka
A report jointly released by Ghana’s Ministry of Finance and the UN-based Better Than Cash Alliance has revealed that the West African nation can save GHS 250 million (nearly $60 million) each year, which may result in more than GHS 1 billion ($230 million) by 2020 if it continues with progress made by embracing digital payments.
The report documented Ghana’s progress in creating an economy where everyone can pay and get paid digitally, instead of cash.
The results show the country has made significant gains, including almost 100 percent of government payments to people and payments within the government now processed digitally. The findings also reveal there are opportunities for providing more choice to customers.
This move is already translating into direct benefits to people, particularly women, support for small businesses and cost savings for the government.
“The future really is digitization and how we can leverage on it for the benefit of our citizens. This is why digitizing initiatives such as our flagship conditional cash transfer program Livelihood Empowerment Against Poverty (LEAP) is a key milestone,” said Hon. Ken Ofori-Atta, Minister for Finance of the Republic of Ghana.
“We recognize that there is still more work to do to transition most of the country away from cash. Yet with great potential for cost savings and opportunities to increase transparency and accountability, we cannot afford not to,” the Minister added.
The report provides key insights on the status of digital payments in Ghana and tangible recommendations on how to successfully move forward.
In particular, three priorities emerged to help the government and citizens achieve the most benefits.
The first is investing in infrastructure for digital public utility payments: 80 percent of the population uses public essential services such as water and electricity, but only 20 percent of the population has access to digital technology such as smart meters.
By investing in smart distribution infrastructure that digitize end-to-end delivery and payment, it will increase efficiencies and ease of use for citizens – ultimately increasing adoption.
The second is digitizing payment of government fees and fines: With 97 percent of fees and fines currently paid in cash, the Ghanaian government could gain enormous cost savings if they commit to using digital payments exclusively and mandate all government agencies to use a central payment system.
The final point is encouraging digital payments in the Fast Moving Consumer Goods (FMCG) value chain to support digitization of small retailers and customers: For FMCG companies operating in Ghana, 96 percent of distributor payments and 59 percent of vendor and employee payments in volume are made in checks.
However, 99.9 percent of individual payments for consumption goods by volume are still completed in cash, as individuals continue to purchase essential consumer goods, including food, in the informal economy with small retailers. This indicates the tremendous potential impact any shift to digital payments in this value chain can have on the overall ecosystem.
By transitioning away from cash, small business owners can avoid storing large amounts of cash, drive customers’ adoption and boost access to formal saving and loan products which can expand their economic potential. This will especially improve the lives of women, who represent many of the small retailers in the FMCG sector.
“We want to congratulate the Government of Ghana for its leadership in building the foundation for an economy less dependent on cash. Under this leadership, the country is making considerable strides to improve transparency, accelerate opportunities for economic growth and empower women by bringing them into the formal financial system,” said Dr Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance. “Ghana is at a tipping point in its shift to digital payments.
“We at the Better Than Cash Alliance look forward to continued work with our colleagues across the digital ecosystem in government, companies and international organizations to continue this great progress.”
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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