General

How I see it: An “Exchange” is an institution used for the trading. A Stock Exchange trades stock. Ghana Commodities Exchange (abbreviated as GCX) therefore trades commodities. For a predominantly agricultural nation like Ghana, an institution like GCX really tickles my fancy. This is an era where of all thing that John Dumelo could do as his core business, he chose farming, alongside over 50% of our labour force who are engaged in the agriculture. Agriculture contributes to over 50% of Ghana’s GDP. While I can try to get you as excited as I am about the Ghana Commodities Exchange and what it means for all of us, I figured TAFT Group has been tasked with the establishment and fortification of the requisite arms of a highly tentacled GXC capable of competing on the world stage. So why not hear from the son of Ghana himself leading the charge, Alan Assibey, CEO of TAFT Group, pictured in this article. He has set up an all-inclusive Implementation Committee to devise innovative ways of providing GCX with the necessary tools to develop Ghana’s Agribusiness sector, engaging the combined expertise and resources of its members. After Tuesday’s meeting, I engaged Alan to recap (for you) why we are all very enthusiastic about our work with the Ghana Commodities Exchange. I won’t be paraphrasing his words. I asked questions, he answered them, we captured the conversation on a phone and an aide transcribed it later. Here it is. Read it in the slightly British accent he tends to switch on when he’s ideating. I hope you enjoy the read and be motivated! From your viewpoint, what main opportunities does the Ghana Commodities Exchange provide the Ghanaian farmer and entrepreneur now and later? From my point of view, I believe that the main opportunities that GCX provides the Ghanaian Farmer and the Entrepreneur, is basically its ability to be a catalyst for growth in our Agricultural Sector. An institution of such relevance should work without impediment, and that tends to be my greatest fear, that it might not work as well because of political interference. However, should that not be the case and GTX is allowed to evolve in the way that it’s expected to or the way that I see it happening, I see lots of benefits to the farmer. One practical benefit of GCX to the farmers is to have the Exchange play this big over-arching role that buys big enough quantities for the majority of farmers to partake in international trade. So, let’s take the scenario of cashew for example. Every year, various people from other countries depend on our country for cashew. They physically go into the bushes themselves to buy these cashews and they bargain down the prices because they are in control. So, the farmer is at a disadvantage. How much do they want to sell it at? Is that price a fair price? These are the things that we need to be looking at and why we really must encourage GCX to achieve its goal. Because then farmers can then get a fair price for a product without somebody coming into the bush at well below world market prices. The availability of the vast market for their goods on an international level also opens a whole new ray arrays of doors and most importantly, this gives control and value right back to the farmers. What is TAFT Group’s main objective in working with GCX? Our main objective is to contribute and actually be part of that growth. I believe that what we bring to the table is an international dimension to the whole commodities exchange. In that line of thought, I honestly believe that GCX needs to focus on internationally traded commodities, as well as encouraging and facilitating international trade of commodities that are grown locally. The good thing about the structure of the GCX as it stands is that it can be a multiple-jurisdiction establishment across the continent. And again, if structured well and implemented well, it can act as a catalyst not just in Ghana but in all the other African countries, being the pivot and a platform for all these countries to sell their commodities to international markets. This is where I see true value in GCX. Already we have begun work with a Hedge Fund in the UK to provide funding for the Exchange. We also have the South African Commodities Exchange on board, alongside large commodities trading companies in SA. I’ve been in the commodities trading sector for about two decades. Before that, the company that I worked for has traded in commodities for the last 35 years. All the various commodities trading companies that I have dealt with in the past are coming on board to trade through the GCX, same goes for you Maxwell and every other member of the Committee. I would like to see the GCX listed on the London Stock Exchange sometime in the future, for international exposure. International Trade currently seems so complex and dispiriting to locals. I encounter this a lot. How is TAFT Group and GCX going to help change that? I totally agree. It’s does seem complex. International Trade is complex because there’s so many documents you’d usually need letters of credit and bank guarantees and stuff like that which are sophisticated financial instruments that the average farmer is less likely to understand. Plus, even if they do understand, how do they access it? This has usually been some of the complexities. But down of the back of GCX, they can now easily access this umbrella that will allow for various players to plug in directly, no hustle. Ok small hustle [he laughs] because yeah, your farm produce has got to meet the international standard but after that, GCX does most of the heavily lifting for you. And so, you get to the point where local and international traders can come to the GCX and say, “I want x number of tonnes of

Financial Technology, often shortened as “fintech”, is the term used to describe the business of utilising innovative technology in improving and automating the use and delivery of financial services like banking services, insurance services, trading, etc. Simply, it combines anything finance with some form of technology. The world went digital a long time ago. What fintech companies realised was that more and more people are becoming tech savvy and more sophisticated, creating a growing need for a growing population to integrate technology in all aspects of their lives, including their finances. Why was PayPal such a hit? Because it seemed so easy to use compared to inputting your credit card details on websites whenever you want to make a purchase. That hassle-free life appeals to the modern man and woman and fintech companies realised that a long time ago. Those that got in early and did it well, like PayPal, made it big. Those that are big, like MTN, invest properly and massively into the tech delivery system, then they make it earlier than most would. One could argue that MTN’s Mobile Money can stand shoulder-to-shoulder with any bank any day. When a fintech has 10 million active users, with over 115,000 active agents as well as over 67,000 merchant points across the country, that’s not just like a bank; it’s more efficient too. Banking regulations and the typical oversight from the Central Bank (or the lack of these) are a distinguishing feature of fintechs from financial institutions. What makes fintechs special. An important characteristic of fintechs is that they all seem to be designed to be a threat to the established order of conventional business in the sector they are in. But that’s only market evolution taking its course. When the masses and even rivals flock to use fintech, it makes the best fintechs look to go toe-to-toe or even seem to hijack traditional financial service providers, by being flashier, more proficient, and also by providing a faster and better service. Mobile Money (affectionately now called “Momo”) is the perfect example I give when I try to explain how I feel fintech companies are outmanoeuvring the banks. Why do you go the bank? To deposit money into your account. To withdraw money from your account. To earn interest on your money you have deposited at the bank. To transfer your money to another person or institution elsewhere. Now Momo does all of these. Momo even pays interest on our Momo accounts. The banks got adaptive and told us to pay our water bills and ECG bills and DSTV bills and school fees and whatever else at the banking hall. Convenient, right? All at one place. Thing is, now I can also do all of that from my couch at home through Momo too. I am merely stating the situation as it is. As it stands now, we all know very well that now even the Mobile Money services offer loans and a very attractive and easily integrable array of other services. Gone are the days when such financial services were exclusive to banks. I say all these only to make apparent the extent of disruption fintech companies can have on any sector in the economy, even the big and powerful banks. Let us stick to the facts. This still remains an opinion piece. Other kinds of fintech aside Payment Systems. Money Payment Systems are just one example of fintech. Cryptocurrency and blockchain are typical examples of fintechs doing what fintechs do best: DISRUPTION. And it’s good (or bad) depending on which side of the evolution you currently are, or if you can change fast enough with the times. We all saw the confusion BitCoin provoked with its entry into the mainstream. The only reason why I didn’t lose my marbles was because Warren Buffet was so adamantly against Bitcoin and when the Oracle of Omaha calls something “an asset that creates nothing… has no value at all”, people tend to listen. Still, he and you and I all know crypto is here and it’s here to stay. There are also Crowdfunding apps like Kickstarter and GoFundMe. Crowdfunding apps are a great illustration of the different kinds of fintechs that dabble in a lot more that the traditional financial services activities. Insurtech. Now there is “insurtech”, as it’s being called. These are fintechs in the insurance sector. And it’s a fast-growing thing too. No industry is safe from Financial Technology disruption, not even the Insurance Industry. Insurtechs now provide easy car insurance to home insurance to anything insurance. This year, Forbes valued the popular personal finance company Credit Karma at $4 billion. And these fintechs are attracting huge funding too. An insurtech company called Oscar Health Insurance, a health insurance startup that is technology-focussed, raised $165 million in funding last year at a $3.2 billion valuation. You need the fin in your tech to be a fintech. All fintech companies are tech companies. But not all tech companies are fintech companies. You need the fin in your tech to be a fintech. Is Uber a fintech company? Ride hailing services are not financial services. So, going by that, Uber is not a fintech. Paying for the rides is a financial act. If I pay with my Visa, the Visa is the fintech that Uber then utilises, but Uber is not the fintech. If Uber handles that financial transaction themselves, then yes Uber becomes a fintech. The last time I took an Uber I paid the driver myself, in cash, not through any app. But last year Uber applied for an e-money licence. If Uber gets this licence then yes, it qualifies as a fintech because then it would be directly handling the financial transaction actions of the business. I hope I explained this clearly enough. Fintech optimises another tech use. Another thing about technology is that I find it being easily integrable with other technologies. Tech thrives on tech. Fintechs are using other technologies like machine learning and even

I smiled, on the outside, and proceeded to courteously steer the conversation elsewhere. On the inside, my jaw dropped, because his call for me to be “careful” is exactly what I have been before our semi-formal meeting, crossing my t’s and dotting my i’s. A few years ago, and he would have been thanking me for bringing him an opportunity to collaborate like this. The serial businessman had turned chicken to his textbook business opportunity that’s taken me many months to craft to his unique palate. That rattled me, a bit, for this had started to be a pattern with a significant number of others. Are they seeing something I am not seeing? Is there another shocking wave coming to the financial and business sector? Maybe people are just holding out on me. Maybe he was doing some lucrative, capital-intensive business I don’t know about. It couldn’t solely be the case. Besides, he happened to mention he had a lot of money just coming out of a fixed deposit. So, what was the problem? What IS the problem? That’s the thing; I don’t think there is a problem. There is no problem with him or his actions. Financial vigilance and conservatism should be a good thing. It is now a viral bug that has even the average Ghanaian clenching every cedi note as tightly as he can. The general public suddenly is very smart with better economic management because hope of easy money dwindled with the most recent upheaval of the finance and banking sectors. The shutting down of Menzgold and the other financial institutions was a wakeup call for the general populace and now everybody is just heavily hesitant and distrustful. It is not easy getting a 120% ROI on your money while toeing the lines of the law with minimum to no effort in the current financial climate. To not fully discredit Menzgold, NAM1 did deliver on dividend payments up until his shutdown, but this is not about Menzgold. I wouldn’t be that unsympathetic to kick him while he’s down. I actually happen to think if he escapes his legal shackles, he shall rise and capitalise on the very apparent equity of his massive public goodwill. He’s been once bitten, and I imagine he is 18 times shy now. I expect he will be bigger and better (and smarter) whenever his next attempt might be. But this is not about NAM1 or his business. This is an opinion piece. Let’s stick to the facts as usual. All facts on the ground may point to a good macroeconomic structure, validated by the international community as I so many times remember to add. Yet if people are afraid to dip their hands into their pockets, market growth becomes slow and stunted. More importantly, when the people lose hope, and their faith in the markets and economic sectors drops, it can be very disrupting. So, while many complained about how they are not “feeling” the good economy, from celebrities to political pundits, I personally had to experience a number of situations before making my own assumptions on it, my very, non-specialist, opinion-based assumptions. My conclusion: This is about Hope. This is about hope, and the very lucrative sale of hope that shoddy financial institutions sold to the unsuspecting public, against the repeated warnings of institutions like BoG. But that hope kept the public smiling. That hope kept the public spending, believing that whatever money that leaves will be replenished. The moment BoG and SEC and EOCO started finger waging, after countless warnings, a resounding ripple effect of uh-oh’s commenced, followed by a full-blown, literally hands-on-heads “ewurade medi nkwasiasem!” by both the institutions and their clientele. While institution heads face an array of punitive measures that may even include legal prosecution, the people of Ghana still want their money, and it hurt me, and I am sure you as well to bear witness to or partake in their lamentations. We all saw the news and the accounts of many people with monies stuck at many places. Livelihoods are at stake. If you’d like to fully comprehend the haunting reality of the situation, conduct the simple exercise of just imagining you losing a lot of your money, or all of your money. We are still at that phase, post the financial sector “cleanup” by the guys at the top. That’s why the air is still stuffy and unclear. That’s why the average Joe doesn’t like what’s happening in the financial sector. Because ignorance was bliss. Faith in what was not fully understood but warmly embraced brought restful slumber, for money was always on its way in dreamland. But seeing, and in many cases, feeling the effects of fiscal thoughtlessness will wake you up and make you a believer in facts, not emotions. It will shake you up. It will open your eyes to what’s real and what might not be. And at present not many like what they see or feel. Have you not noticed that virtually nobody wants to spend? Somehow everyone is suddenly so protective of every cedi. Personally, I get it. Nonetheless, though the financial surgeons of the motherland cauterise the wound for our supposed good, I feel it would only be practical to expect the accompanying ouch or adjei or however you say yours. Ɛyɛ ya. So, to the supporters of the overhaul in the financial sector, the cries of the public shouldn’t be dismissed. It is he who feels the pain that feels the pain. Now that’s a horrible pseudo-proverb but it’s true. Offence is taken by the receiver; who are you to tell an offended man he is not offended (imagine that). Also, to those that feel the pain, I say, there was a wound, it needed to be treated, and though it hurts, many argue that it was necessary to avert a much bigger crisis. Many people were unable to retrieve their monies from institutions, which was evidence of the proverbial wound that had riddled