THE OIL REVENUE
It is great news that Ghana has been blessed with oil and it is a joy that it was found in the Western Region. The region that has vast area of natural forest for timber, the region that produces the largest cocoa for Ghana, the region that has bauxite, the region that has gold, the region with a whole year rainfall. What is it that Western Region doesn’t have?
In terms of infrastructural development the Western Region is probably the last in Ghana.
I am privileged to know all the ten regional capitals and some major towns and villages in this country but I believe I know the Western Region more than any other region in this country, even my own home region, Upper East. I started school in the Western region in the very early nineties and up to now things have never changed significantly in the western region. One does not understand why a region with all these natural and human resources, Osagyefo, Dr. Kwame Nkrumah’s own region has not been developed fully? Whose fault is it? The past central governments, the regional ministers, the district chief executives, the members of parliament, the local interested individuals and groups have all contributed to the Western Region’s current state. It maybe incomprehensible to know what the root cause is. I believe the political, socio-economical analysts know the causes.
Thank God, the time has come for the western region to experience unimaginable development and be adored. The western region should this time be extraordinarily developed. The past governments except (Nkrumah) have all been celebrating mediocrity and we do not want that in the development of the western region this time round.
Now that the oil has also been found in the same region I want to believe that after ten years, a decade the Western region will never be the same. The people in the Western Region should be the greatest beneficiaries of the oil revenue. They have been deprived of good potable drinking water, good education, good basic healthcare, good road infrastructure, good storage facilities for their farm produce, good price for the farm produce, good electricity and many others for far too long.
The oil revenue should be used for:
MEDICAL TOURISM- (No mediocrity here)
Modern medical facilities should be built in the Western region. Hospitals should be built so that they can be compared to those in South Africa, Europe, Asia, and the U.S.A. where our politicians and business moguls have been going to seek for medical treatment even when they get ‘headache’.
The hospitals and other medical facilities should be used for the health needs of all the workers of the various oil and gas companies to be in the region.
The medical professionals and staff to be working in these hospitals and medical facilities should be professionals who have acquired great exceptional skills, being Ghanaians first before foreigners, if Ghanaians do not have the expertise and refuse to acquire them, then they should be sidelined. No nepotism, no cronyism, no gender favouritism here, professionals and nothing else. Health matters are about lives and no experiments should be entertained.
The services would be provided to all Ghanaians and foreigners, but in categories or classes, hence the need for sought-after medical professionals and I know many Ghanaian medical professionals would perform creditably provided they are paid well.
Money accrued from the medical tourism could be used for the running of the hospitals and with time they will be autonomous and begin to fly without assistance, then the oil revenue could be rechanneled to another area too.
ROAD INSFRASTRUCTURE
Those who know the Western Region very well would bear with me that the road network there is very bad, the Accra Takoradi road should be made a motor way and there is no better time to build this road as such than now. Yes, it will cost some great money today but the future economic benefits out outweigh the present cost of constructing an Accra-Takoradi motorway. The current Accra Cape Coast, Takoradi road is too narrow and has become a dead trap, killing strong Ghanaian workforce, and depriving the country of its strong, intelligent, diligent and honest human resource.
First class roads should be built around the Western Region beginning from where the oil is found, Sekondi-Takoradi, the Nzima land, Fanti and Ahanta land, the Wasa land, the Sefwi land, the Brusa land and all other parts of the region.
A permanent, good road network would harness the great potential of the Western Region and greatly lessen the hardships of the people in that region, who have contributed heavily to the development of this country, so that they can move freely to do trading and attend to other pressing issues.
MODERN RAIL LINE SYSTEM
This is a country where the major means of transportation is by land amidst deadly road accidents. A modern rail line should be built connecting the West, North and East and south of Ghana to augment land transportation and to ease the heavy load on road transportation. A modern rail line would bring:
• Relief to the road being overused
• Competition in the transportation industry and the final consumer could make a choice and save some money for other needs
• The transportation of goods in bulk more than by land, foodstuff and other perishable farm produce would not rot at the farms
• Transportation of crude oil and other valuable goods between the north and south would be made easier
POTABLE DRINKING WATER
Even in Accra, we do not have clean water to drink, what a disgrace that after fifty years of independence, the capital city of a sovereign nation, Ghana, has no clean water for its residents. All past governments (except Nkrumah) should bow down their heads in shame. Why? What is the population of Accra? What is the population of London and other cosmopolitans? Yet, they have water in abundance. Ei, Ghana!
Clean potable drinking water for all communities in this country would:
• Enhance and elongate the life span of the Ghanaian human resource, the most valuable resource, even for God. Remember, we are like Him. ‘Where there is water, there is life’
• Ease the financial hardships on the Ghanaian, who has to spend so much for water year after year. When would things get better?
• Enable schoolchildren to go to school early and be able to concentrate, instead of waking up at dawn to search for some water that is not even clean and hygienic.
• Reduce water-born diseases and other related diseases, lives would be saved and harnessed
• Reduce government spending on importation and manufacturing of medicine to treat the citizens suffering from water-born diseases
• Ease the hospitals and all health centres of overcrowding and give the medical professionals some time to rest and get rejuvenated
EDUCATIONAL INSTITUTION FOR EXCEPTIONAL STUDENTS
Each year students come out of the various tertiary institutions, some with genuine honours, overall best students, first class students, and all that one hears about them is that these exceptional students are left to their fate to fend for themselves in a country where, there is discrimination in employment and giving opportunities to people we know rather than people who are better to do the work.
The government should build a wonderful, exceptional, inviting and motivating and an unimaginable state-of- the-art institution of higher learning in any of the regions where by all students who get first class honours in any discipline would be examined and if passed, admitted to be supported and trained professionally to maximize their talents and brilliance for the development of mother, Ghana. One compulsory requirement would be entrance exams for all applicants because some might have fake first class honours; they would be separated from the genuine ones, who would be admitted into this institution for say two or three years and after completion be assigned some responsibilities in their respective fields. Once, one enters this institution, one is assured of an opportunity of one’s choice, since not every student wants to be an employee. Wow, I believe, more excellence would be exhibited and Ghana would get the best professional Accountants, Doctors, Lawyers, Engineers, Journalists, Surveyors, Politicians, Marketers, Communication Experts, etc who would be at the helm of affairs to spearhead and direct this nation in their knowledgeable fields.
This institution would bring:
Pool of best brains assembled and ready to work together for a common good
• A fine platform for the government to choose best young experts to work for it in various fields, take, for instance, the government of Ghana tax agencies, how many Chartered Accountants, do they have? If the chartered accountants are working for private entities, yes, of course, they would work diligently for their employers to pay less tax by applying intelligent avoidable tax planning mechanisms. They would always outwit the government agencies which have little or no experts at all to counteract them. Eventually, who loses?
• Competition in learning among the youth, if they know that they have to get genuine first class honours to lessen their hustling and struggling to look for non-existent jobs they would learn hard and well without cheating, because if they cheat they would be caught when they apply into this institution, which would be of noble credibility
• Create revenue for the government, because, these students could be hired by some organizations at a higher fee and the government would get the lion’s share
• Institute awards and rewards, especially financial rewards for universities and polytechnics that produce the larger number of best students
All universities and polytechnics would be made to compile the list of first class honours candidates and pass the list to the institution where the candidates would be screened, examined and admitted.
The brilliant students have been neglected in this country for far too long, their exceptional talents and brains should be harnessed for better use. They should not be left to their own fate after the university or polytechnic.
INTERNET NETWORK FOR GHANA
The use of the internet in all homes in Ghana should be considered as part of a public utility that all houses in the urban areas should have access to the internet by 2025. Every government knows the importance of the internet; hence, its use should be encouraged by making it available through government or not government agencies to encourage its use. Mass internet connection of homes in this country cannot be carried out by private companies, the government should do it and when it finishes, it can sell a significant part to a private entity to run it. Let’s move faster as a nation and let’s make Ghana a small decent village to live in. Ghana cannot catch the rest of the world if it does utilize the internet technology fully. The benefits for internet use abound and need no elaboration.
The oil revenue would be generated year after year and remarkable long term projects should be embarked and finished by ruling governments or their successors of the various governments that will be only privileged to run this dear nation for the time allotted to them by Ghanaians.
A luxurious display of mediocrity and lack of vision by leaders of this country has billowed and blown over us for far too long and must be stopped.
God bless the Western Region, God bless Ghana.
©2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Wednesday, July 28, 2010
ROAD ACCIDENTS IN GHANA
ROAD ACCIDENTS IN GHANA
It has become too much a bad incidence to accept and what beats my mind is the lack of interest by all stakeholders to help curb this problem. Why should we have such a very high rate of road accidents and it’s like nobody, no organisation or authority is interested to bring help to this unacceptable incidence in this country to a very low rate?
My heart always bleeds whenever I hear of some road accidents in this country. Very few of very well meaning Ghanaians have tried in their little way to help curb this social canker by contributing in various ways; by writing articles and making very cogent suggestions but it seems the more individuals suggest best ways to curb road accidents in Ghana, the greater the level of road accidents increase.
Tv3 and Metro TV have all done well and are still doing very well by showing fresh road accidents scenes on their screens but I do not know whether the authorities in charge bother at all when they see these gory pictures. For me they are absolutely doing very little to curb road accidents in Ghana. All authorities in checking and controlling road accidents in Ghana, please, do something you never done before to forestall this canker forever. Why, don’t the big men and women in charge of these organisations ever had their relatives involved in road accidents before? Why are you not taking very strict and cogent measures to bring road accidents in Ghana t o a very low level?
Road accidents mostly happen as result of: Recklessness and carelessness by drivers; not respecting road safety regulations, jumping the red light, wrong overtaking especially on the highways, and in even the cities of Accra and Kumasi. Bigger truck drivers mostly do not give a dime whenever other road users need to access their fair share of the road they have also contributed in building. Lack of regular maintenance of the buses and local trotro. Most of these trotro buses, excuse me to say, are not even fit to be used to carry food stuffs, let alone human beings but they are being used each day to convey passengers from one end to another with impunity freely.
Speeding with unworkable speedometers. Most of the vehicles do have workable speedometers but when they get unto the road, they speed and speed without knowing what kilometres per hour the bus or vehicle is being travelled. What will be the result?
OVERLOADING .It has become normal and acceptable that buses that should take say five passengers on a row now takes six passengers instead. These are live at stations like Kumasi, Bolga, Bawku station at Krofroum in Kumasi, Kumasi Race course and many other stations in the country. These unauthorised activities have been going on for so many years. If they do not overload at the station then they will pick up passengers on the way and put the money into their pockets, yet when the vehicles breaks down, it is the bus owner who does the maintenance. Drivers of Kingdom Transport Services who used to travel to the northern part of Ghana used to pick up passengers at Techiman, Kintampo, and other spots. I remember very well that passengers used to quarrel a lot with these drivers. Some were even reported to their station masters. No wonder, they the drivers have collapsed the Kingdom Transport Services. The same drivers had collapsed Omnibus Transport Services, and the Tata Bus services. You see they seek for only their self interest.
POTHOLES. There are lot potholes on our roads that need maintenance but have been left to become death traps. Shoddy works by many contractors are the causes of these potholes, but still these potholes should be patched up professionally when they are noticed. Bad road construction, for instance there are some useless roundabouts on the Accra –Kumasi road just after Ejisu to Kumasi Metropolis. Big trucks and big buses have difficulty in negotiating these roundabouts. Something needs to be done about these roundabouts that were constructed four, five years or fewer years ago.
The Roads in Tema have become bad especially, the main community one road that starts from the Presbyterian Church round to Casino. This portion of the road in Tema needs massive repair works.
There are similar ones in the Accra Metropolis, Ako Adjei (Sankara) to Nkrumah circle, Independence Square straight to Teshie Nungua and back and many others. Accra Tema motorway now is crying for major repairs. All the bridges on the motorway are now death traps. Those who use the motorway daily know well what I am talking about here. One P.G.OFORI ANSONG wrote an in-depth analysis of the accidents on the Accra-Tema motorway which was published in the Daily Graphic, 22nd July 2008. I believe his write-up was a class for all who are concerned in fighting road accidents in this country. P.G.ANSONG, Ghana needs more of these analyses from you and other people who are concerned about the frequent road accidents in this country.
UNPROFESSIONAL MECHANICS: The manner and ways of unprofessional activities by mechanics who repair and maintain vehicles in this country leave much to be desired. Are these mechanics being governed by any formal training that is of any world standards anywhere in any country in the world? Who checks and certifies that they can and are allowed to work on people’s vehicles? You would be interested to know that if you take your car to a number of mechanics for a common problem, they are all likely to tell you a different story. It’s try and error, they practice. Others just need money even if they know very well they can’t handle the problem. We know the end result. Accidents!!!
The fixing of artificial seats in cargo cars that have been turned into passenger buses in Ghana is one major contributing factor. We all know the stories of the popular and notorious 207 in Ghana. It has claimed more lives than expected. Is anybody checking the activities of the mechanics or fitters as we call them in Ghana? Do they have the technical skills to fix and disassemble these buses and other vehicles? Do they have the needed tools for identifying and fixing any problem with these buses and other vehicles?
It is true that these mechanics at Suame Magazine in Kumasi, at Abossey Okai in Accra are doing their best, but their activities must be certified by a higher authority before they are allowed to practice fitting in Ghana. I do not know of any professional who does not have a certification but is able to practice without being punished. Accountants, Doctors, Lawyers, Engineers and all others well recognised professionals have must get certification from higher authorities before they can practice. Why not the mechanic whose work is very important and helps builds the nation greatly and whose fixing and fitting of a vehicle could result in the death of other people who also contribute to the development of our dear nation be checked?
The activities of spare drivers and drivers’ mates should also be checked. They contribute greatly to road accidents in Ghana.
BAD POLICE OFFICERS: Yes, the work of the police is very key to the development of every nation and Ghana is no exception.
We have police officers on the roads daily to perform their duties dutifully and many are doing their best, however, there are some police officers who do not care whether, the driver has a valid licence, the vehicle is overloaded, the driver is tipsy, the driver obeys other road safety regulations. Only God becomes both our spiritual and physical police in these circumstances.
The consequences of road accidents are anti-developmental, and many other negative problems.
Orphans are left with nobody to cater for them; there is an increase in number of dependants on families and the government. Heath workers at accidents units at the various hospitals across, the country are over overstretched and exhausted. The biggest of all is the lost of the country’s energetic human resource through reckless road accidents. Funds that could have been channelled through developmental issues are diverted to cater for avoidable accident victims. Pain and grieve endured for ages by people whose relatives, friends or colleague human beings have been lost through road accidents. We know the effects very well. Very bad tastes.
The Driver licensing Authority, DVLA: DVLA should have two different colours of licence for commercial and private drivers. Commercial should be able to use the one used by private drivers but private cannot use the commercial driving licence. Offenders should be fined. We should all make it priority to help reduce road accidents in Ghana to very low level and be able to sustain it.
THE WAY FORWARD: Ghana needs a new organisation that should be legalised solely for road safety.
I would suggest a name like ROAD SAFETY AUTHORITY (RSA) .
This new public organisation will be in charge of the following among other things:
• The certification of activities of mechanics in Ghana.
• Checking the importation of spare parts into Ghana.
• Towing of accident vehicles from the various roads nationwide.
• Make sure no vehicle with passengers on board should buy fuel at a filling station. Drivers travelling long journeys who want to top up their tanks should park somewhere for passengers to get down before they get fuel at the nearby filling station, they can then continue their journey.
• The authority should have the legal backing to arrest recalcitrant drivers and arraign them before court. The police should leave this duty to this authority. It should be the sole responsibility of the authority to arrest ONLY drivers who violate road safety regulations.
• Ensure that big trucks and unlicensed vehicles should not move after 6PM
• Check the importation of every vehicle for road safety conditions.
• The placing of officers on the roads and at lorry stations to check overloading, wrong overtaking and high speed. The law should be made in such a way that officers should be changed every month from the particular station or road he or she was the previous month.
• Erect and maintain clear road signs on the various highways and urban roads in the country.
• Acquire ambulances for accident spots identified nationwide
• Support orphans of road accidents and other road accident victims.
•
• Many others added by colleague Ghanaians.
•
Source of Revenue for RSA (Road Safety Authority)
• Levy of ten Ghana pesewas (GHp10), that is one thousand old cedis only (1000.00) on all employees to be adjusted upwards as deemed fit. Employers should be made to pay this statutory deduction to the Road Safety Authority each month. Defaulters should be dealt with strictly.
• Fines from road traffic offenders
• Government to resource it, by budgeting for it.
• Small charges on all vehicles imported into Ghana.
• Others suggested by you.
Who should work at Road Safety Authority?
• This authority should be headed by a respectable pastor, priest or a Muslim.
• Leaders of this authority to appeal to drivers and other road users from time to time to remind them of the need to maintain road safety orders and to drive accident free.
• Employees should be people who would have volunteered to help curb road accidents in Ghana. This is a sacrificial job and people who want money more than the lives of their colleague human beings cannot work here.
• Many other suggestions by you.
My heart always bleeds whenever I hear of some road accidents anywhere in the country. Let’s make Ghana an accident free country.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
It has become too much a bad incidence to accept and what beats my mind is the lack of interest by all stakeholders to help curb this problem. Why should we have such a very high rate of road accidents and it’s like nobody, no organisation or authority is interested to bring help to this unacceptable incidence in this country to a very low rate?
My heart always bleeds whenever I hear of some road accidents in this country. Very few of very well meaning Ghanaians have tried in their little way to help curb this social canker by contributing in various ways; by writing articles and making very cogent suggestions but it seems the more individuals suggest best ways to curb road accidents in Ghana, the greater the level of road accidents increase.
Tv3 and Metro TV have all done well and are still doing very well by showing fresh road accidents scenes on their screens but I do not know whether the authorities in charge bother at all when they see these gory pictures. For me they are absolutely doing very little to curb road accidents in Ghana. All authorities in checking and controlling road accidents in Ghana, please, do something you never done before to forestall this canker forever. Why, don’t the big men and women in charge of these organisations ever had their relatives involved in road accidents before? Why are you not taking very strict and cogent measures to bring road accidents in Ghana t o a very low level?
Road accidents mostly happen as result of: Recklessness and carelessness by drivers; not respecting road safety regulations, jumping the red light, wrong overtaking especially on the highways, and in even the cities of Accra and Kumasi. Bigger truck drivers mostly do not give a dime whenever other road users need to access their fair share of the road they have also contributed in building. Lack of regular maintenance of the buses and local trotro. Most of these trotro buses, excuse me to say, are not even fit to be used to carry food stuffs, let alone human beings but they are being used each day to convey passengers from one end to another with impunity freely.
Speeding with unworkable speedometers. Most of the vehicles do have workable speedometers but when they get unto the road, they speed and speed without knowing what kilometres per hour the bus or vehicle is being travelled. What will be the result?
OVERLOADING .It has become normal and acceptable that buses that should take say five passengers on a row now takes six passengers instead. These are live at stations like Kumasi, Bolga, Bawku station at Krofroum in Kumasi, Kumasi Race course and many other stations in the country. These unauthorised activities have been going on for so many years. If they do not overload at the station then they will pick up passengers on the way and put the money into their pockets, yet when the vehicles breaks down, it is the bus owner who does the maintenance. Drivers of Kingdom Transport Services who used to travel to the northern part of Ghana used to pick up passengers at Techiman, Kintampo, and other spots. I remember very well that passengers used to quarrel a lot with these drivers. Some were even reported to their station masters. No wonder, they the drivers have collapsed the Kingdom Transport Services. The same drivers had collapsed Omnibus Transport Services, and the Tata Bus services. You see they seek for only their self interest.
POTHOLES. There are lot potholes on our roads that need maintenance but have been left to become death traps. Shoddy works by many contractors are the causes of these potholes, but still these potholes should be patched up professionally when they are noticed. Bad road construction, for instance there are some useless roundabouts on the Accra –Kumasi road just after Ejisu to Kumasi Metropolis. Big trucks and big buses have difficulty in negotiating these roundabouts. Something needs to be done about these roundabouts that were constructed four, five years or fewer years ago.
The Roads in Tema have become bad especially, the main community one road that starts from the Presbyterian Church round to Casino. This portion of the road in Tema needs massive repair works.
There are similar ones in the Accra Metropolis, Ako Adjei (Sankara) to Nkrumah circle, Independence Square straight to Teshie Nungua and back and many others. Accra Tema motorway now is crying for major repairs. All the bridges on the motorway are now death traps. Those who use the motorway daily know well what I am talking about here. One P.G.OFORI ANSONG wrote an in-depth analysis of the accidents on the Accra-Tema motorway which was published in the Daily Graphic, 22nd July 2008. I believe his write-up was a class for all who are concerned in fighting road accidents in this country. P.G.ANSONG, Ghana needs more of these analyses from you and other people who are concerned about the frequent road accidents in this country.
UNPROFESSIONAL MECHANICS: The manner and ways of unprofessional activities by mechanics who repair and maintain vehicles in this country leave much to be desired. Are these mechanics being governed by any formal training that is of any world standards anywhere in any country in the world? Who checks and certifies that they can and are allowed to work on people’s vehicles? You would be interested to know that if you take your car to a number of mechanics for a common problem, they are all likely to tell you a different story. It’s try and error, they practice. Others just need money even if they know very well they can’t handle the problem. We know the end result. Accidents!!!
The fixing of artificial seats in cargo cars that have been turned into passenger buses in Ghana is one major contributing factor. We all know the stories of the popular and notorious 207 in Ghana. It has claimed more lives than expected. Is anybody checking the activities of the mechanics or fitters as we call them in Ghana? Do they have the technical skills to fix and disassemble these buses and other vehicles? Do they have the needed tools for identifying and fixing any problem with these buses and other vehicles?
It is true that these mechanics at Suame Magazine in Kumasi, at Abossey Okai in Accra are doing their best, but their activities must be certified by a higher authority before they are allowed to practice fitting in Ghana. I do not know of any professional who does not have a certification but is able to practice without being punished. Accountants, Doctors, Lawyers, Engineers and all others well recognised professionals have must get certification from higher authorities before they can practice. Why not the mechanic whose work is very important and helps builds the nation greatly and whose fixing and fitting of a vehicle could result in the death of other people who also contribute to the development of our dear nation be checked?
The activities of spare drivers and drivers’ mates should also be checked. They contribute greatly to road accidents in Ghana.
BAD POLICE OFFICERS: Yes, the work of the police is very key to the development of every nation and Ghana is no exception.
We have police officers on the roads daily to perform their duties dutifully and many are doing their best, however, there are some police officers who do not care whether, the driver has a valid licence, the vehicle is overloaded, the driver is tipsy, the driver obeys other road safety regulations. Only God becomes both our spiritual and physical police in these circumstances.
The consequences of road accidents are anti-developmental, and many other negative problems.
Orphans are left with nobody to cater for them; there is an increase in number of dependants on families and the government. Heath workers at accidents units at the various hospitals across, the country are over overstretched and exhausted. The biggest of all is the lost of the country’s energetic human resource through reckless road accidents. Funds that could have been channelled through developmental issues are diverted to cater for avoidable accident victims. Pain and grieve endured for ages by people whose relatives, friends or colleague human beings have been lost through road accidents. We know the effects very well. Very bad tastes.
The Driver licensing Authority, DVLA: DVLA should have two different colours of licence for commercial and private drivers. Commercial should be able to use the one used by private drivers but private cannot use the commercial driving licence. Offenders should be fined. We should all make it priority to help reduce road accidents in Ghana to very low level and be able to sustain it.
THE WAY FORWARD: Ghana needs a new organisation that should be legalised solely for road safety.
I would suggest a name like ROAD SAFETY AUTHORITY (RSA) .
This new public organisation will be in charge of the following among other things:
• The certification of activities of mechanics in Ghana.
• Checking the importation of spare parts into Ghana.
• Towing of accident vehicles from the various roads nationwide.
• Make sure no vehicle with passengers on board should buy fuel at a filling station. Drivers travelling long journeys who want to top up their tanks should park somewhere for passengers to get down before they get fuel at the nearby filling station, they can then continue their journey.
• The authority should have the legal backing to arrest recalcitrant drivers and arraign them before court. The police should leave this duty to this authority. It should be the sole responsibility of the authority to arrest ONLY drivers who violate road safety regulations.
• Ensure that big trucks and unlicensed vehicles should not move after 6PM
• Check the importation of every vehicle for road safety conditions.
• The placing of officers on the roads and at lorry stations to check overloading, wrong overtaking and high speed. The law should be made in such a way that officers should be changed every month from the particular station or road he or she was the previous month.
• Erect and maintain clear road signs on the various highways and urban roads in the country.
• Acquire ambulances for accident spots identified nationwide
• Support orphans of road accidents and other road accident victims.
•
• Many others added by colleague Ghanaians.
•
Source of Revenue for RSA (Road Safety Authority)
• Levy of ten Ghana pesewas (GHp10), that is one thousand old cedis only (1000.00) on all employees to be adjusted upwards as deemed fit. Employers should be made to pay this statutory deduction to the Road Safety Authority each month. Defaulters should be dealt with strictly.
• Fines from road traffic offenders
• Government to resource it, by budgeting for it.
• Small charges on all vehicles imported into Ghana.
• Others suggested by you.
Who should work at Road Safety Authority?
• This authority should be headed by a respectable pastor, priest or a Muslim.
• Leaders of this authority to appeal to drivers and other road users from time to time to remind them of the need to maintain road safety orders and to drive accident free.
• Employees should be people who would have volunteered to help curb road accidents in Ghana. This is a sacrificial job and people who want money more than the lives of their colleague human beings cannot work here.
• Many other suggestions by you.
My heart always bleeds whenever I hear of some road accidents anywhere in the country. Let’s make Ghana an accident free country.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
BANKS IN GHANA
BANKS IN GHANA
The banking industry in Ghana today is becoming competitively keener and keener. It is interesting to see the staff of banks move from office to office soliciting for accounts to be opened with their respective banks. The Ghanaian banks are now prepared to give information about their services and products to potential clients than previously. It is refreshing to have many of these banks opening up new branches and improving upon their customer services. The heralding of some foreign banks has actually taught the old Ghanaian banks great lessons. Banks that closed down the accounts of their clients because they couldn’t meet the minimum balances are now chasing these same people to have accounts opened with zero balances. What a funny world?
It is civilizing that, Banks in Ghana now value their clients but there is more to be done. Some of the Banks still have a big problem taking adequate care of their clients. They would go heaven and earth to get an account opened, and after this, they abandon those clients somehow forever. Some banks really know that customer care is an ongoing, everlasting service as far the bank continues to exist.
Many banks in Ghana have really taken their customers for granted for far too long. There are still unnecessary long queues in some banks; some banks still make deductions without explaining to their customers the meaning of these deductions. Banks in Ghana still increase charges without detailing or informing their clients or customers.
Almost all banks complain that there are so many Ghanaians, who do not use the banks or do not have bank accounts, but they normally do not take into consideration the kind of treatment and care that they mete out to the already existing clientele that they have. Ghanaians do not have time for long queues; they need to use their time judiciously for other things that could earn them some money.
Therefore, there is no other time left to be wasted in queues at banking halls. There have been artificial queues in many of branches of Barclays bank, especially in Accra here. Ghanaians do not care about the number of customs a bank has. They care about the service a bank provides them with. I know that some banks like Guaranty Trust Bank, Fidelity Bank are doing well in this direction; they do not have queues. It’s not about customer base, it’s about priority.
Ghana commercial bank ( GCB) does one particular thing, that beats my mind, My elder brother has an account with GCB in Bawku, any time I deposit money into that account and he goes to take it, some commission or whatever charge, it’s would have been deducted by GCB. This does not happen with other banks.
Once a bank is networked, then I believe we are dealing with the bank but not the branch, so why this wrongful deductions, GCB? It’s not a transfer, is it?
Many Ghanaians would wish to have bank accounts, especially savings accounts, but the banks in
Ghana would give very little interest rates that do not attract many people to save with them. Ghanaians know that if they use the money some where else, they would get more than they would get from savings accounts. It is true that some banks have high interest rates for fixed deposits, etc, but these rates are not made known by the banks to the public and these rates also require some minimum amounts, instead of any amount. Where, it is known, one has to negotiate for a good rate. Negotiating for a rate, for me is discriminatory, because, two people with the same amount for fixed deposits could get different rates. Is this not discriminatory? I believe that services to clients should be the same for the same category of clients.
International motivational speaker and writer, Anthony Robbins wrote in his book ‘Awaken the Giant Within’ ‘it all began with savings and loan challenges that came up in the late seventies and early eighties. Banking and S&I institutions had built their business primarily on the corporate and consumer market. For a bank to profit, it has to make loans, and those loans have to be at an interest rate that’s above what it pays out to depositors. In the first stages of the problem, the banks faced difficulties several fronts. First, they were hit hard when corporations entered what had previously been the sole domain of banks: lending. Large companies found that by lending to one another, they saved significantly on interest, developing what’s now known as the “commercial paper market.” This was so successful that it virtually destroyed the profit centers of many banks.
Meanwhile, there were new developments on the American consumer front as well.
Traditionally, consumers did not look forward to meeting with a loan officer at a bank, meekly asking for loans to purchase a car or large appliance. I think we can fairly say that this was a painful experience for most as they subjected themselves to financial scrutiny. They didn’t usually feel like a “valued customer” at many banks. Car companies were smart enough to recognize this and began offering loans to their customers, creating a new source of profit for themselves. They saw that they could make as much money on the financing as they did on the car they sold, and they could give the customer a great deal of convenience and lower interest rates. Their attitude was, of course, quite different from the bankers’ – they had a vested interest in seeing the customer get his loan. Soon, the customers came to prefer the in-house financing over the traditional method, appreciating the convenience, flexibility, and low financing fees. Everything was handled in one place by a courteous person who wanted their business. Consequently, General Motors Acceptance Corporation (GMAC) quickly became one of the largest car-financing companies in the country.
One of the last bastions for bank loans was the real estate market, but interest rates and inflation had soared in one year as high as 18 percent. As a result, no one could afford the monthly payments that servicing loans at this interest rate required. As you can imagine, real estate loans dropped off the map.
By this time, the banks had lost their corporate customers en masse, they had lost the market for a great deal of their car loans, and they had begun to lose the home loans as well. The final slap to the banks was that the depositors, in response to inflation, needed a higher rate of return while the banks were still carrying loans that would yield significantly lower interest rates. Every day, the banks were losing money; they saw their survival at stake and decided to do two things. First, they lowered their standards for qualifying customers for loans. Why? Because they believed that if they didn’t lower their standards, there would be no one to loan money to. And if they didn’t loan money, they couldn’t profit, and they’d clearly have pain. If, however, they were able to loan money to someone who paid them back, they’d have pleasure. Plus, there was very little risk. If they loaned money and the lendee didn’t meet the obligation, then the taxpayers, namely you and I, would bail them out anyway. So in the final analysis, there was very little fear of pain and tremendous incentive to “risk” their (our?) capital.
These banks and S&Ls also pressured Congress to help keep them from going under, and foreign series of changes occurred. Large banks realized that they could loan money to foreign nations that were desperately hungry for capital. The lenders realized that over breakfast they could commit more than $ 50 million to a country. They didn’t have to work with millions of consumers to lend the same amount, and the profits on these larger loans were sizable. The bank managers and loan officers were also often given bonuses in relation to the size and number of loans they could produce. The banks were no longer focusing on the quality of a loan. Their focus was not on whether a country like Brazil could pay the loan back or not, and frankly, many weren’t terribly concerned. Why? They did exactly what we taught them: we encourage them to be gamblers with the Feral Deposit Insurance, promising that if they won, they won big, and if they failed, we would pick up the tab. There was simply too little pain in this scenario for the banker’
Banks in Ghana could do more than they are offering now and if not a time to come the scenario above will be the story. Banks in Ghana should reach out to society generously. They should not just seek to maximize profits for shareholders and forgetting the interests of all other stakeholders, who also have their own different needs.
The Banks have created an environment for themselves in which the ordinary Ghanaian sees them as a place for only affluent people. Many ordinary Ghanaians think that the Banks are meant for the rich in society.
The life styles of some bankers might have generated this perception. An ordinary worker in a bank in Ghana lives a better life than a University professor. The ordinary Ghanaian would ask ‘why, should I give my money to the bankers to enrich themselves?’ There is a perception out here that all bankers are rich. If it is true that all bankers are rich, then, it means the banks uses the account holders’ money to get more money and use that to pay their workers heavily or grant them fat loans without interest or with very low interests.
The account holders, who really deserve to get the lion’s share of the profits that these banks make, are denied of them.
Many ordinary Ghanaians, would say, ‘I would not put my money in a bank for the bank to use it to enrich its staff and if I need a small loan they would not readily give it to me and when it is given to me, it is with very high interest.’ The cut-throat interests charged on loans granted to customers needs a second look. Bank of Ghana decided to maintain the base rate this time round, but some banks have already increased theirs, do they really care about their clients and for business growth?
2.
Banks in Ghana need to:
• Offer free financial advice to clients, by organizing seminars, etc and visiting offices to offer free lectures.
• Put up structures and facilities in parts of the country with their inscriptions on them. I mean notable, indelible corporate social responsibility. They should use some of their profits build to hospitals, clinics; construct bore-holes, etc for society. Society would in turn recognize their good deeds and open accounts with them, they therefore continue to exist.
• Give discounts (trade or cash discounts) to borrowers to encourage them to pay promptly and with ease and convenience.
• Eliminate queues
• Reduce interest rates charged on loan to customers. The interest rates are incredible. The bank of Ghana base rate has always been a determinant, but what the commercial banks add has been frightening.
• Have easy ways of depositing and withdrawing cash for those customers who cannot read and write.
• Increase interest rates on savings accounts.
• Always explain deductions made on an account. (I know a number of people, who have shown me their bank statements, asking for the meaning of a deduction, the bank are the best to explain this).
• Embark on more education to instill the culture and habit of saving in the youth especially.
• The banks should have preferential treatment for the under listed; in terms of interest rates and charges, care and should even service them at their offices and or residences.
• Medical Doctors and other health workers
• Professional accountants, ACCA, ICA, CIMA, CPA, FA etc.
• Professional footballers
• Miners
• Exporters and Importers
• Bishops and pastors
• National best farmers
• Lawyers (The Bar)
• Judges
• Retired chief justices
• Members of the National House of Chiefs and Regional House of Chiefs
• Lectures / Teachers
• Other professional organized groups.
Ghanaians would love to use the banking system efficiently but the banks do not get endeared to the public and do not make themselves easily accessible.
© 2009- Godwin-Xavier Ayeebo.
Email: gayeebo@gmail.com
The banking industry in Ghana today is becoming competitively keener and keener. It is interesting to see the staff of banks move from office to office soliciting for accounts to be opened with their respective banks. The Ghanaian banks are now prepared to give information about their services and products to potential clients than previously. It is refreshing to have many of these banks opening up new branches and improving upon their customer services. The heralding of some foreign banks has actually taught the old Ghanaian banks great lessons. Banks that closed down the accounts of their clients because they couldn’t meet the minimum balances are now chasing these same people to have accounts opened with zero balances. What a funny world?
It is civilizing that, Banks in Ghana now value their clients but there is more to be done. Some of the Banks still have a big problem taking adequate care of their clients. They would go heaven and earth to get an account opened, and after this, they abandon those clients somehow forever. Some banks really know that customer care is an ongoing, everlasting service as far the bank continues to exist.
Many banks in Ghana have really taken their customers for granted for far too long. There are still unnecessary long queues in some banks; some banks still make deductions without explaining to their customers the meaning of these deductions. Banks in Ghana still increase charges without detailing or informing their clients or customers.
Almost all banks complain that there are so many Ghanaians, who do not use the banks or do not have bank accounts, but they normally do not take into consideration the kind of treatment and care that they mete out to the already existing clientele that they have. Ghanaians do not have time for long queues; they need to use their time judiciously for other things that could earn them some money.
Therefore, there is no other time left to be wasted in queues at banking halls. There have been artificial queues in many of branches of Barclays bank, especially in Accra here. Ghanaians do not care about the number of customs a bank has. They care about the service a bank provides them with. I know that some banks like Guaranty Trust Bank, Fidelity Bank are doing well in this direction; they do not have queues. It’s not about customer base, it’s about priority.
Ghana commercial bank ( GCB) does one particular thing, that beats my mind, My elder brother has an account with GCB in Bawku, any time I deposit money into that account and he goes to take it, some commission or whatever charge, it’s would have been deducted by GCB. This does not happen with other banks.
Once a bank is networked, then I believe we are dealing with the bank but not the branch, so why this wrongful deductions, GCB? It’s not a transfer, is it?
Many Ghanaians would wish to have bank accounts, especially savings accounts, but the banks in
Ghana would give very little interest rates that do not attract many people to save with them. Ghanaians know that if they use the money some where else, they would get more than they would get from savings accounts. It is true that some banks have high interest rates for fixed deposits, etc, but these rates are not made known by the banks to the public and these rates also require some minimum amounts, instead of any amount. Where, it is known, one has to negotiate for a good rate. Negotiating for a rate, for me is discriminatory, because, two people with the same amount for fixed deposits could get different rates. Is this not discriminatory? I believe that services to clients should be the same for the same category of clients.
International motivational speaker and writer, Anthony Robbins wrote in his book ‘Awaken the Giant Within’ ‘it all began with savings and loan challenges that came up in the late seventies and early eighties. Banking and S&I institutions had built their business primarily on the corporate and consumer market. For a bank to profit, it has to make loans, and those loans have to be at an interest rate that’s above what it pays out to depositors. In the first stages of the problem, the banks faced difficulties several fronts. First, they were hit hard when corporations entered what had previously been the sole domain of banks: lending. Large companies found that by lending to one another, they saved significantly on interest, developing what’s now known as the “commercial paper market.” This was so successful that it virtually destroyed the profit centers of many banks.
Meanwhile, there were new developments on the American consumer front as well.
Traditionally, consumers did not look forward to meeting with a loan officer at a bank, meekly asking for loans to purchase a car or large appliance. I think we can fairly say that this was a painful experience for most as they subjected themselves to financial scrutiny. They didn’t usually feel like a “valued customer” at many banks. Car companies were smart enough to recognize this and began offering loans to their customers, creating a new source of profit for themselves. They saw that they could make as much money on the financing as they did on the car they sold, and they could give the customer a great deal of convenience and lower interest rates. Their attitude was, of course, quite different from the bankers’ – they had a vested interest in seeing the customer get his loan. Soon, the customers came to prefer the in-house financing over the traditional method, appreciating the convenience, flexibility, and low financing fees. Everything was handled in one place by a courteous person who wanted their business. Consequently, General Motors Acceptance Corporation (GMAC) quickly became one of the largest car-financing companies in the country.
One of the last bastions for bank loans was the real estate market, but interest rates and inflation had soared in one year as high as 18 percent. As a result, no one could afford the monthly payments that servicing loans at this interest rate required. As you can imagine, real estate loans dropped off the map.
By this time, the banks had lost their corporate customers en masse, they had lost the market for a great deal of their car loans, and they had begun to lose the home loans as well. The final slap to the banks was that the depositors, in response to inflation, needed a higher rate of return while the banks were still carrying loans that would yield significantly lower interest rates. Every day, the banks were losing money; they saw their survival at stake and decided to do two things. First, they lowered their standards for qualifying customers for loans. Why? Because they believed that if they didn’t lower their standards, there would be no one to loan money to. And if they didn’t loan money, they couldn’t profit, and they’d clearly have pain. If, however, they were able to loan money to someone who paid them back, they’d have pleasure. Plus, there was very little risk. If they loaned money and the lendee didn’t meet the obligation, then the taxpayers, namely you and I, would bail them out anyway. So in the final analysis, there was very little fear of pain and tremendous incentive to “risk” their (our?) capital.
These banks and S&Ls also pressured Congress to help keep them from going under, and foreign series of changes occurred. Large banks realized that they could loan money to foreign nations that were desperately hungry for capital. The lenders realized that over breakfast they could commit more than $ 50 million to a country. They didn’t have to work with millions of consumers to lend the same amount, and the profits on these larger loans were sizable. The bank managers and loan officers were also often given bonuses in relation to the size and number of loans they could produce. The banks were no longer focusing on the quality of a loan. Their focus was not on whether a country like Brazil could pay the loan back or not, and frankly, many weren’t terribly concerned. Why? They did exactly what we taught them: we encourage them to be gamblers with the Feral Deposit Insurance, promising that if they won, they won big, and if they failed, we would pick up the tab. There was simply too little pain in this scenario for the banker’
Banks in Ghana could do more than they are offering now and if not a time to come the scenario above will be the story. Banks in Ghana should reach out to society generously. They should not just seek to maximize profits for shareholders and forgetting the interests of all other stakeholders, who also have their own different needs.
The Banks have created an environment for themselves in which the ordinary Ghanaian sees them as a place for only affluent people. Many ordinary Ghanaians think that the Banks are meant for the rich in society.
The life styles of some bankers might have generated this perception. An ordinary worker in a bank in Ghana lives a better life than a University professor. The ordinary Ghanaian would ask ‘why, should I give my money to the bankers to enrich themselves?’ There is a perception out here that all bankers are rich. If it is true that all bankers are rich, then, it means the banks uses the account holders’ money to get more money and use that to pay their workers heavily or grant them fat loans without interest or with very low interests.
The account holders, who really deserve to get the lion’s share of the profits that these banks make, are denied of them.
Many ordinary Ghanaians, would say, ‘I would not put my money in a bank for the bank to use it to enrich its staff and if I need a small loan they would not readily give it to me and when it is given to me, it is with very high interest.’ The cut-throat interests charged on loans granted to customers needs a second look. Bank of Ghana decided to maintain the base rate this time round, but some banks have already increased theirs, do they really care about their clients and for business growth?
2.
Banks in Ghana need to:
• Offer free financial advice to clients, by organizing seminars, etc and visiting offices to offer free lectures.
• Put up structures and facilities in parts of the country with their inscriptions on them. I mean notable, indelible corporate social responsibility. They should use some of their profits build to hospitals, clinics; construct bore-holes, etc for society. Society would in turn recognize their good deeds and open accounts with them, they therefore continue to exist.
• Give discounts (trade or cash discounts) to borrowers to encourage them to pay promptly and with ease and convenience.
• Eliminate queues
• Reduce interest rates charged on loan to customers. The interest rates are incredible. The bank of Ghana base rate has always been a determinant, but what the commercial banks add has been frightening.
• Have easy ways of depositing and withdrawing cash for those customers who cannot read and write.
• Increase interest rates on savings accounts.
• Always explain deductions made on an account. (I know a number of people, who have shown me their bank statements, asking for the meaning of a deduction, the bank are the best to explain this).
• Embark on more education to instill the culture and habit of saving in the youth especially.
• The banks should have preferential treatment for the under listed; in terms of interest rates and charges, care and should even service them at their offices and or residences.
• Medical Doctors and other health workers
• Professional accountants, ACCA, ICA, CIMA, CPA, FA etc.
• Professional footballers
• Miners
• Exporters and Importers
• Bishops and pastors
• National best farmers
• Lawyers (The Bar)
• Judges
• Retired chief justices
• Members of the National House of Chiefs and Regional House of Chiefs
• Lectures / Teachers
• Other professional organized groups.
Ghanaians would love to use the banking system efficiently but the banks do not get endeared to the public and do not make themselves easily accessible.
© 2009- Godwin-Xavier Ayeebo.
Email: gayeebo@gmail.com
CANALISE ODAWNA RIVER
CANALISE ODAWNA RIVER
Nature has been very kind to us, Ghanaians, but we have been very wicked to nature. God has given Ghana, all that it needs. We should make good use of these natural gifts to us.
In Accra, the nation’s capital, we have some very strategically located rivers in the city, which, we could turn them into revenue generating ventures, but we have left them idle and they have been depleting the little revenue the city earns.
Instead turning these rivers into canals or other water bodies and get money out of them, we have left them to create filth to breed mosquitoes to give us malaria, and many other diseases. The long-term fight against malaria and other health hazards rage on without any knowledge of when such diseases will be eradicated from Ghana. Why, should we in the 21st century leave these and important God’s gifts to us, to engulf lives and property, while we could get millions of cedis from these rivers.
The Odawna River in Accra, in one, that is in a strategic centre of Accra, stretches from south to the north of Accra, it should be canalised, and all the big gutters that follow into it with bad water diverted or to another deeper channel into the sea.
The benefits of canalising Odawna River:
• Water transportation within Accra
• Beautifying the city of Accra
• Getting rid of the filth in Accra
• Reducing the spreading and breeding of mosquitoes
• It will help ease reduce traffic in Accra
• Reducing floods in Accra, it can now flow easily
• Water sports could be encouraged; i.e. water skiing, and scubas swimming
and other water games could be practised and enjoyed
• Whenever, there are floods there is likely some people, who live by the river
could get drowned but if it’s turned unto a canal these death rates would
reduce because, people would be in the canal 24 hours and lives will be
saved easily and faster.
• It would be a source of revenue for the government.
• It would create employment opportunities for the youth.
2.
How to do it
• Lease the river to private investors.
• Go into alliance with other interested bodies or individuals
• Should be a long term concerned project for government
• Sell the river to private investors (local or foreign)
• AMA to construct the canal, by involving other stakeholders and in bits, it could be done even if it will take them fifty years, I want to see the river canalised one day and generation after us will enjoy the canal.
How to manage it
• Enlarge the river and have the gutters that flow into the river diverted and flowed into the sea by another means.
• Only unauthorized users should be on the canal to operate
• One company to run it as a revenue generation unit
• Life guards to be stained at vantage point at the canal
• Only modern means of sea transport should be allowed to be used to carry people from one to another.
Ghana needs other means of transport and we also need to keep our cities clean. Such eyesores should be turned unto eye appealing sights.
©2009, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Nature has been very kind to us, Ghanaians, but we have been very wicked to nature. God has given Ghana, all that it needs. We should make good use of these natural gifts to us.
In Accra, the nation’s capital, we have some very strategically located rivers in the city, which, we could turn them into revenue generating ventures, but we have left them idle and they have been depleting the little revenue the city earns.
Instead turning these rivers into canals or other water bodies and get money out of them, we have left them to create filth to breed mosquitoes to give us malaria, and many other diseases. The long-term fight against malaria and other health hazards rage on without any knowledge of when such diseases will be eradicated from Ghana. Why, should we in the 21st century leave these and important God’s gifts to us, to engulf lives and property, while we could get millions of cedis from these rivers.
The Odawna River in Accra, in one, that is in a strategic centre of Accra, stretches from south to the north of Accra, it should be canalised, and all the big gutters that follow into it with bad water diverted or to another deeper channel into the sea.
The benefits of canalising Odawna River:
• Water transportation within Accra
• Beautifying the city of Accra
• Getting rid of the filth in Accra
• Reducing the spreading and breeding of mosquitoes
• It will help ease reduce traffic in Accra
• Reducing floods in Accra, it can now flow easily
• Water sports could be encouraged; i.e. water skiing, and scubas swimming
and other water games could be practised and enjoyed
• Whenever, there are floods there is likely some people, who live by the river
could get drowned but if it’s turned unto a canal these death rates would
reduce because, people would be in the canal 24 hours and lives will be
saved easily and faster.
• It would be a source of revenue for the government.
• It would create employment opportunities for the youth.
2.
How to do it
• Lease the river to private investors.
• Go into alliance with other interested bodies or individuals
• Should be a long term concerned project for government
• Sell the river to private investors (local or foreign)
• AMA to construct the canal, by involving other stakeholders and in bits, it could be done even if it will take them fifty years, I want to see the river canalised one day and generation after us will enjoy the canal.
How to manage it
• Enlarge the river and have the gutters that flow into the river diverted and flowed into the sea by another means.
• Only unauthorized users should be on the canal to operate
• One company to run it as a revenue generation unit
• Life guards to be stained at vantage point at the canal
• Only modern means of sea transport should be allowed to be used to carry people from one to another.
Ghana needs other means of transport and we also need to keep our cities clean. Such eyesores should be turned unto eye appealing sights.
©2009, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL- BAD AND GOOD EXPENSES
FINANCIAL LITERACY FOR ALL- BAD AND GOOD EXPENSES
Each day, we spend or waste some money and whether we like it not we will continue to spend some money.
In accountancy, we have bad and good expenses. The good expenses are the ones; the organization can deduct from the revenue and if something is left as profit, then tax can be applied on it. On the other hand, bad expenses are not allowed to be deducted from the revenue at all. The tax laws would not allow such bad expenses to be deducted from the revenue, the organization has to bear them by itself.
We have the tax allowable expenses and non-tax allowable expenses and we also have the accounting profit and the tax profit for each organization’s financial statements filed with the Internal or Inland Revenue Service.
When the financial statements are prepared by organizations and filed with the internal or Inland Revenue Service as law requires, the financial statements are studied and reviewed by the Tax Authorities and all non-tax allowable expenses are added back to the profit, so that the profit figure will be inflated, hence more tax for the government.
I believe that, each individual and every organization does not want to part away with money without getting its corresponding worth of return.
Organizations and individuals, that want to achieve financial freedom should know the differences between bad and good expenses and spend only on good expenses or spend greatly on good expenses and very less on bad expenses, where the expenses are inevitable.
Smaller owner-managed organizations should know the differences between these and begin to spend on tax allowable expenses that could be borne by their organizations to enhance the growth of their organizations and their family at large.
The commonest and basic rule for organizations is that the expense should be whole, exclusive and necessary to the course of business of the organization. Those expenses described as such would be good expenses; the rest could be bad expenses.
For individuals, who do not have an organization that would bear their expenses for them, they should know how to spend. Spend on assets that would give more money in future rather on liabilities that would exhaust you financially now and in the future.
Some bad expenses are:
• Donations and gifts by married men to their girl friends and other non-customers
• Expending without corresponding receipts as evidence
• Expenses in the financial statements that are general and not specific
• Buying items not meant for direct contribution to the course of business.
• Giving huge loans to directors and employees when you are not a loan giving organization.
• Buying unwanted items at home, that take away more of your money in the form of repairs and maintenance, security, etc.
• Spending so much every day after 5pm on alcohol and night clubs.
• Buying too many electrical gadgets at home, just inviting armed robbers.
• Buying many different earrings, lip shines, hand-bags,necklaces,etc
• Spend money on cigarettes and tobacco and hard drugs
Some Good Expenses are:
• Paying children’s school fees, it’s investment
• Buying a taxi or a bus to do business for you
• Buying land and selling it later for more cash
• Building hospitals, churches, schools, hotels, hostels, houses office complexes and renting them out for cash.
• Good healthcare for family members and employees
• Sending money to your parents at the village, they would eat good food and not go to the hospital, so no medical bills to pay.
• Spend on all tax allowable expenses.
There are as many good expenses, bad expenses; we should always try to spend on the good expenses.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Each day, we spend or waste some money and whether we like it not we will continue to spend some money.
In accountancy, we have bad and good expenses. The good expenses are the ones; the organization can deduct from the revenue and if something is left as profit, then tax can be applied on it. On the other hand, bad expenses are not allowed to be deducted from the revenue at all. The tax laws would not allow such bad expenses to be deducted from the revenue, the organization has to bear them by itself.
We have the tax allowable expenses and non-tax allowable expenses and we also have the accounting profit and the tax profit for each organization’s financial statements filed with the Internal or Inland Revenue Service.
When the financial statements are prepared by organizations and filed with the internal or Inland Revenue Service as law requires, the financial statements are studied and reviewed by the Tax Authorities and all non-tax allowable expenses are added back to the profit, so that the profit figure will be inflated, hence more tax for the government.
I believe that, each individual and every organization does not want to part away with money without getting its corresponding worth of return.
Organizations and individuals, that want to achieve financial freedom should know the differences between bad and good expenses and spend only on good expenses or spend greatly on good expenses and very less on bad expenses, where the expenses are inevitable.
Smaller owner-managed organizations should know the differences between these and begin to spend on tax allowable expenses that could be borne by their organizations to enhance the growth of their organizations and their family at large.
The commonest and basic rule for organizations is that the expense should be whole, exclusive and necessary to the course of business of the organization. Those expenses described as such would be good expenses; the rest could be bad expenses.
For individuals, who do not have an organization that would bear their expenses for them, they should know how to spend. Spend on assets that would give more money in future rather on liabilities that would exhaust you financially now and in the future.
Some bad expenses are:
• Donations and gifts by married men to their girl friends and other non-customers
• Expending without corresponding receipts as evidence
• Expenses in the financial statements that are general and not specific
• Buying items not meant for direct contribution to the course of business.
• Giving huge loans to directors and employees when you are not a loan giving organization.
• Buying unwanted items at home, that take away more of your money in the form of repairs and maintenance, security, etc.
• Spending so much every day after 5pm on alcohol and night clubs.
• Buying too many electrical gadgets at home, just inviting armed robbers.
• Buying many different earrings, lip shines, hand-bags,necklaces,etc
• Spend money on cigarettes and tobacco and hard drugs
Some Good Expenses are:
• Paying children’s school fees, it’s investment
• Buying a taxi or a bus to do business for you
• Buying land and selling it later for more cash
• Building hospitals, churches, schools, hotels, hostels, houses office complexes and renting them out for cash.
• Good healthcare for family members and employees
• Sending money to your parents at the village, they would eat good food and not go to the hospital, so no medical bills to pay.
• Spend on all tax allowable expenses.
There are as many good expenses, bad expenses; we should always try to spend on the good expenses.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL-ASSETS & LIABILITIES
FINANCIAL LITERACY FOR ALL-ASSETS & LIABILITIES
In Accountancy an asset is defined as ‘‘a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.’’
A liability also defined as a’’ present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits’’.
These are the classroom definitions and technical for those in the Accountancy field and these definitions are mostly related to assets owned and liabilities owed by corporate entities.
Human beings, as we are, we also have personal assets and liabilities and we can define them in our personal ways that would give us better understanding. This would help us take proper personal financial decisions.
Now let’s look the definitions given by one renown American Entrepreneur, Writer and Teacher, Robert Kiyosaki. Roberts defines an asset ‘‘as anything that puts money into your put and a liability as anything that takes away money from your pocket’’. Robert’s definitions are great and relate to our daily lives, because as human beings we make, spend or waste money every day and we need to know the differences between assets and liabilities are. When we spend money, we should spend it more greatly on assets and very less on liabilities. Whether it is personal or corporate expenditure, the quest should be to spend more on buying assets rather than wasting the little funds on liabilities that drain us and our organizations financially.
Some assets to buy are:
• Hotels, hostels, hospitals, guest houses, office complexes, schools, colleges, churches, universities that bring money home
• Pieces of land to sell later for more cash
• Building houses and rent them out or sell them for more cash
• Pharmaceutical shops for sale of drugs, shopping malls, sheds, stores, warehouses, that bring money home
• Taxes, buses, trailers, articulated trucks, aero planes, ships, trains, that bring money home
• Build companies in any industry that will bring more money home
• Treasury bills, fixed deposits, call accounts, mutual funds, unit trusts, real estate investment trusts (REIT) these can bring more money home
• Specific assets that will defer tax payment for your organization
• Diamond, gold, and other available minerals whose value will appreciate depending on the world market price to bring more money home
• Farming-cocoa, cotton, coffee, onions, carrots, cabbage, lettuce, spinach, cassava, plantain, banana yam, potatoes, millet, sorghum, beans, maize, wheat, mangoes, guava, oranges, peas and avocadoes, pawpaw, watermelon, palm nut, coconut, shea-butter nut, all edible berries to sell for cash
• Constructions of dams, boreholes, wells, canals, lakes, swimming pools and others to rent out or even sell them for more cash.
Liabilities by Robert’s definition: they don’t put money into your pocket
• Personal effects, TV set, home theatre, personal car that does not get maintenance and fuel allowance from the work side.
• All the things that would take away money from your pocket are liabilities.
Any time, you have some money to spend, ask yourself whether you are going to spend on buying an asset or acquire a liability.
To be financially free now and in the future, we should buy more assets than liabilities.
© 2010,Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
In Accountancy an asset is defined as ‘‘a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.’’
A liability also defined as a’’ present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits’’.
These are the classroom definitions and technical for those in the Accountancy field and these definitions are mostly related to assets owned and liabilities owed by corporate entities.
Human beings, as we are, we also have personal assets and liabilities and we can define them in our personal ways that would give us better understanding. This would help us take proper personal financial decisions.
Now let’s look the definitions given by one renown American Entrepreneur, Writer and Teacher, Robert Kiyosaki. Roberts defines an asset ‘‘as anything that puts money into your put and a liability as anything that takes away money from your pocket’’. Robert’s definitions are great and relate to our daily lives, because as human beings we make, spend or waste money every day and we need to know the differences between assets and liabilities are. When we spend money, we should spend it more greatly on assets and very less on liabilities. Whether it is personal or corporate expenditure, the quest should be to spend more on buying assets rather than wasting the little funds on liabilities that drain us and our organizations financially.
Some assets to buy are:
• Hotels, hostels, hospitals, guest houses, office complexes, schools, colleges, churches, universities that bring money home
• Pieces of land to sell later for more cash
• Building houses and rent them out or sell them for more cash
• Pharmaceutical shops for sale of drugs, shopping malls, sheds, stores, warehouses, that bring money home
• Taxes, buses, trailers, articulated trucks, aero planes, ships, trains, that bring money home
• Build companies in any industry that will bring more money home
• Treasury bills, fixed deposits, call accounts, mutual funds, unit trusts, real estate investment trusts (REIT) these can bring more money home
• Specific assets that will defer tax payment for your organization
• Diamond, gold, and other available minerals whose value will appreciate depending on the world market price to bring more money home
• Farming-cocoa, cotton, coffee, onions, carrots, cabbage, lettuce, spinach, cassava, plantain, banana yam, potatoes, millet, sorghum, beans, maize, wheat, mangoes, guava, oranges, peas and avocadoes, pawpaw, watermelon, palm nut, coconut, shea-butter nut, all edible berries to sell for cash
• Constructions of dams, boreholes, wells, canals, lakes, swimming pools and others to rent out or even sell them for more cash.
Liabilities by Robert’s definition: they don’t put money into your pocket
• Personal effects, TV set, home theatre, personal car that does not get maintenance and fuel allowance from the work side.
• All the things that would take away money from your pocket are liabilities.
Any time, you have some money to spend, ask yourself whether you are going to spend on buying an asset or acquire a liability.
To be financially free now and in the future, we should buy more assets than liabilities.
© 2010,Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL- INVESTMENT.
FINANCIAL LITERACY FOR ALL- INVESTMENT.
Investment involves expenditure on an asset which is intended to provide a return by way of interest, profit, income, dividends, value for money or capital appreciation.
Investment can only be undertaken if there is some money or there are resources that we want to channel through other means to earn us some income, then we should invest in assets that would give us high returns on our money now or in the future.
In all investment ventures, there are many factors to consider before one takes the final decision to invest in a particular asset. Factors such as:
• Risk and Security- the upward and downward movements of the particular investment, the volatility of the asset, industry, economy and world economic, environmental, inflationary trends and societal factors. How secured will be the investment in a week’s, month’s or a year’s time?
• Profitability-all investments are expected to bring in some great returns or value for money. This should be determined before taking up the investment. The stability of cash inflows and earnings would make a particular investment a tantalizing one for all investors.
• Liquidity- how soon can one get back one’s money if one is in dire need of it? The quickest ability to turn the investment into liquid cash is paramount for many investors. If funds invested would be needed at a short notice for an alternative purpose then the investment could be capable of being liquidated or turn into cash quickly. There could be a spring-up of other higher interest earning ventures which one could re-channel one’s funds to enjoy those higher interests. Investment that does not provide quick access to one’s investment whether matured or before maturity is a hindrance by itself and might not be worth investing in.
• Taxation-investment should be chosen to help minimize tax liability of the investor. Investors can opt for investments that have low tax on capital appreciation, or low tax on interest and or dividend earned. All investments attract tax unless they are tax exempt or granted some holidays; the tax could be imposed on the interest and or dividend earned and or could also be imposed on the capital appreciated, if there is. The investment opted for should be the one that has low tax on both the interest and or dividend earned now and low tax on the capital appreciated where they could all be enjoyed. There could be tax incentives for investors to encourage more investment in particular sectors. A higher tax rate payer may opt for the investments that offer high growth and low income.
• Purpose-investment could be made with a variety of motives and intentions.
It is a great idea to invest. It is the investment we make today that create wealth for us tomorrow, so we should invest in profitable ventures but first by analyzing the factors above among other things.
© 2010,Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Investment involves expenditure on an asset which is intended to provide a return by way of interest, profit, income, dividends, value for money or capital appreciation.
Investment can only be undertaken if there is some money or there are resources that we want to channel through other means to earn us some income, then we should invest in assets that would give us high returns on our money now or in the future.
In all investment ventures, there are many factors to consider before one takes the final decision to invest in a particular asset. Factors such as:
• Risk and Security- the upward and downward movements of the particular investment, the volatility of the asset, industry, economy and world economic, environmental, inflationary trends and societal factors. How secured will be the investment in a week’s, month’s or a year’s time?
• Profitability-all investments are expected to bring in some great returns or value for money. This should be determined before taking up the investment. The stability of cash inflows and earnings would make a particular investment a tantalizing one for all investors.
• Liquidity- how soon can one get back one’s money if one is in dire need of it? The quickest ability to turn the investment into liquid cash is paramount for many investors. If funds invested would be needed at a short notice for an alternative purpose then the investment could be capable of being liquidated or turn into cash quickly. There could be a spring-up of other higher interest earning ventures which one could re-channel one’s funds to enjoy those higher interests. Investment that does not provide quick access to one’s investment whether matured or before maturity is a hindrance by itself and might not be worth investing in.
• Taxation-investment should be chosen to help minimize tax liability of the investor. Investors can opt for investments that have low tax on capital appreciation, or low tax on interest and or dividend earned. All investments attract tax unless they are tax exempt or granted some holidays; the tax could be imposed on the interest and or dividend earned and or could also be imposed on the capital appreciated, if there is. The investment opted for should be the one that has low tax on both the interest and or dividend earned now and low tax on the capital appreciated where they could all be enjoyed. There could be tax incentives for investors to encourage more investment in particular sectors. A higher tax rate payer may opt for the investments that offer high growth and low income.
• Purpose-investment could be made with a variety of motives and intentions.
It is a great idea to invest. It is the investment we make today that create wealth for us tomorrow, so we should invest in profitable ventures but first by analyzing the factors above among other things.
© 2010,Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL-TAXATION
FINANCIAL LITERACY FOR ALL-TAXATION
Every individual or organization pays tax to the central government for development and other lawful uses.
Even the unemployed pay indirect taxes and all non-profit making organizations pay tax on their employee salaries, that is pay as you earn “PAYE” to the state.
Taxes could be direct, that are imposed on income accrued to an individual or a corporate entity. Indirect taxes are implicitly imposed on goods and services, which we pay every time we buy some good or service.
Tax is therefore inevitable. Every living human being or corporate entity pays tax. Once tax cannot be evaded by individuals or corporate entities, it is prudent that they prepare for it.
Tax liability should be thought ahead of and planned for, so that its payment will be convenient to you the tax payer.
Taxation is a complex subject. I want to keep you reminded that as you intend to establish your organization or has already established it, whether small or big, you need to consider how you would be able to pay your taxes efficiently, without any cash flow problems.
Organizations face tax liabilities on incomes, dividend, capital gains, employee salaries, withholding tax and so forth. Such taxes could be huge and should be budgeted for, so they payment becomes easier. All other tax liabilities should be thought of ahead of time before payment is due.
Taxation is therefore very important in personal and business decision making.
Some basic knowledge in taxation is needed by every entrepreneur. One can use the services of tax consultants to enrich one’s knowledge in the subject or attend tax seminars and other related conferences on tax. All the same, your organization needs to employ the services of a competent professional accountant to handle the tax issues.
Taxes must be paid but they could be avoided by legal, sophisticated, intelligent tax planning measures. The tax experts can help you with this and charge you for a small fee. Corporate entities and individuals need to spend on tax allowable expenses, that is, spend funds on assets that qualify for capital allowances, industrial building allowances so that these could be deducted from the revenue before tax is charged. The tax payable would then be reduced. Cash flow problems could be solved.
Obey the tax authorities. Plan to pay your tax timely and wisely.
©2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Every individual or organization pays tax to the central government for development and other lawful uses.
Even the unemployed pay indirect taxes and all non-profit making organizations pay tax on their employee salaries, that is pay as you earn “PAYE” to the state.
Taxes could be direct, that are imposed on income accrued to an individual or a corporate entity. Indirect taxes are implicitly imposed on goods and services, which we pay every time we buy some good or service.
Tax is therefore inevitable. Every living human being or corporate entity pays tax. Once tax cannot be evaded by individuals or corporate entities, it is prudent that they prepare for it.
Tax liability should be thought ahead of and planned for, so that its payment will be convenient to you the tax payer.
Taxation is a complex subject. I want to keep you reminded that as you intend to establish your organization or has already established it, whether small or big, you need to consider how you would be able to pay your taxes efficiently, without any cash flow problems.
Organizations face tax liabilities on incomes, dividend, capital gains, employee salaries, withholding tax and so forth. Such taxes could be huge and should be budgeted for, so they payment becomes easier. All other tax liabilities should be thought of ahead of time before payment is due.
Taxation is therefore very important in personal and business decision making.
Some basic knowledge in taxation is needed by every entrepreneur. One can use the services of tax consultants to enrich one’s knowledge in the subject or attend tax seminars and other related conferences on tax. All the same, your organization needs to employ the services of a competent professional accountant to handle the tax issues.
Taxes must be paid but they could be avoided by legal, sophisticated, intelligent tax planning measures. The tax experts can help you with this and charge you for a small fee. Corporate entities and individuals need to spend on tax allowable expenses, that is, spend funds on assets that qualify for capital allowances, industrial building allowances so that these could be deducted from the revenue before tax is charged. The tax payable would then be reduced. Cash flow problems could be solved.
Obey the tax authorities. Plan to pay your tax timely and wisely.
©2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL-SOURCES OF FINANCE
1.
FINANCIAL LITERACY FOR ALL-SOURCES OF FINANCE
Many individuals who want to or have already established their small organizations mostly do have problems with funding even though they might have a bright future; they are not getting the necessary funding to grow and expand.
Some of these entrepreneurs might not know that there are various ways to raise the needed funds to help drive their organizations to their destinations.
Funding come from various sources, mostly depending on the size and category of the organization.
People and investors for that matter do look for some vital information from the organization before they give their money to it to do business. Investors expect returns on their capital invested and they have to be sure that organization can do that now or in the future. Nobody wants to lose money.
It is on this backdrop that even smaller organizations should keep their financial records in good shape to facilitate easier and faster funding when the need arises. Investors would only invest after they have got the appropriate information they are looking for and if the organization does not keep such pieces of information, then nobody would invest in it. Proper records keeping, leading to audited financial statements for the organization is what will invite and bring investors.
All organizations, irrespective of their size can and should have its financial statements audited by a credible, registered audit firm. They are many audit firms, especially, the smaller audit firms in Ghana and so they are in almost every country on earth. The auditors would charge just a small fee and do their work for your organization so that your organization can use that audited report to support itself strongly in getting big time funding. The auditors can also give some financial advice free of charge or for a fee. Investors look for some accounting and investment ratios to determine if the organization has a future and if it’s worth investing in. some of these ratios are: Price /earnings ratio, earnings per share, net profit ratio, dividend cover in cash terms, interest cover, net free cash flow, current ratio, equity/debt ratio, debts collection period, credits repayment period, wages & salaries of managers, directors’ fees, ( huge wages & salaries to owners and managers mean owners are into business to enrich themselves to the detriment of the organization, this drives away potential investors). There are accounting formulas used to arrive at these ratios but the necessary information must be readily available before these ratios could be calculated. The accountants would do the calculations for your organization as part of their routine work or for a fee. So you can employ one accountant or consult one if your organization does not have the capacity to employ one.
Various sources of funding come from:
• Sale of idle assets for cash
• Family members
• Friends
• Business angels ( rich individuals who look for potential organizations to invest)
• Venture capital trusts
• Non-bank financial institutions and many micro-finance organizations
• Banks
• Leasing and or sale and leaseback
• Plough back profits ( internal funding)
• Credit finance and hire purchase
• Shares at Alternative Investment Market (AIM, is the stock exchange market for smaller companies in the UK where they can also get listed to raise funds). Ghana needs one.
• Shares at the main stock exchange market
• Mortgage facilities
Get your records in good shape. Get the necessary funding easily.
© 2010,Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL-SOURCES OF FINANCE
Many individuals who want to or have already established their small organizations mostly do have problems with funding even though they might have a bright future; they are not getting the necessary funding to grow and expand.
Some of these entrepreneurs might not know that there are various ways to raise the needed funds to help drive their organizations to their destinations.
Funding come from various sources, mostly depending on the size and category of the organization.
People and investors for that matter do look for some vital information from the organization before they give their money to it to do business. Investors expect returns on their capital invested and they have to be sure that organization can do that now or in the future. Nobody wants to lose money.
It is on this backdrop that even smaller organizations should keep their financial records in good shape to facilitate easier and faster funding when the need arises. Investors would only invest after they have got the appropriate information they are looking for and if the organization does not keep such pieces of information, then nobody would invest in it. Proper records keeping, leading to audited financial statements for the organization is what will invite and bring investors.
All organizations, irrespective of their size can and should have its financial statements audited by a credible, registered audit firm. They are many audit firms, especially, the smaller audit firms in Ghana and so they are in almost every country on earth. The auditors would charge just a small fee and do their work for your organization so that your organization can use that audited report to support itself strongly in getting big time funding. The auditors can also give some financial advice free of charge or for a fee. Investors look for some accounting and investment ratios to determine if the organization has a future and if it’s worth investing in. some of these ratios are: Price /earnings ratio, earnings per share, net profit ratio, dividend cover in cash terms, interest cover, net free cash flow, current ratio, equity/debt ratio, debts collection period, credits repayment period, wages & salaries of managers, directors’ fees, ( huge wages & salaries to owners and managers mean owners are into business to enrich themselves to the detriment of the organization, this drives away potential investors). There are accounting formulas used to arrive at these ratios but the necessary information must be readily available before these ratios could be calculated. The accountants would do the calculations for your organization as part of their routine work or for a fee. So you can employ one accountant or consult one if your organization does not have the capacity to employ one.
Various sources of funding come from:
• Sale of idle assets for cash
• Family members
• Friends
• Business angels ( rich individuals who look for potential organizations to invest)
• Venture capital trusts
• Non-bank financial institutions and many micro-finance organizations
• Banks
• Leasing and or sale and leaseback
• Plough back profits ( internal funding)
• Credit finance and hire purchase
• Shares at Alternative Investment Market (AIM, is the stock exchange market for smaller companies in the UK where they can also get listed to raise funds). Ghana needs one.
• Shares at the main stock exchange market
• Mortgage facilities
Get your records in good shape. Get the necessary funding easily.
© 2010,Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL - CASH MANAGEMENT
FINANCIAL LITERACY FOR ALL - CASH MANAGEMENT
Cash ‘consists of cash in hand and deposits repayable upon demand less overdrafts.’ ‘This includes cash held in foreign currency.’
Cash equivalents are ‘short-term highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value.’
Cash flows are ‘inflows and outflows of cash and cash equivalents’
As individuals and corporate entities, cash which is needed daily, should be managed in such a way that there shall not be cash problems or impending cash problems could be foreseen and remedied.
Individuals just like well planned corporate entities, should prepare and use personal cash budgets.
Cash management involves a lot of techniques and every individual and organization should always institute measures to manage its scarce cash and cash equivalents.
Organizations that do not manage their cash might end up overtrading, i.e. carry on too many activities more than it can bear financially or they might end up overcapitalizing, i.e. their cash is excessive for their business requirements.
As individuals, sometimes, we have some cash that we do not really know immediately what to do with. That means, we did not plan for it, and that would be overcapitalization for the individual.
Sometimes, we can also buy more than we can pay. These should not normally happen if we institute cash management measures in place.
Cash should be managed taking into consideration the interrelationship among profit, taxation, dividend payment, (if any), recurrent and capital expenditure and working capital levels.
Individuals and corporate entities could have many types of income such as earned, portfolio or passive income and all these come into play when managing cash, because the various incomes constitute part or all the cash one has available for management.
Cash could be managed by:
• Preparing and using cash budgets
• Disposing of idle assets
• Having an investment plan for cash available on hand to maximize its earning potential
• Having a credit facility arrangement with your bank before you need it.
• Managing loans and overdrafts
• Managing cash short term investment
• Controlling credit efficiently
• Invoice customers quickly when goods or services are delivered and have convenient collection arrangement with them
• Asking for advance payment before credit facility agreement is established
• Not granting till all credit rating requirements are fully met
• Buying things only when you really need them, keep expense at a minimum
• Evaluating whether to use a centralized treasury for your organization
• Utilizing credit finance facilities but repay in good time
• Reducing stocks and increase stock turnover
• Minimizing production lead times, possibly using sub-contractor
The following cash monitoring and management models could also be used
BAUMOL MODEL.
“The Baumol Model is similar to the Economic Order Quantity (EOQ) Model. Mathematically it is:
where C = the optimal amount of cash to be acquired when reaching a threshold balance,
F = the fixed cost of acquiring the cash C amount,
S = the amount of cash spent during a time interval,
i = the interest rate expressed in the same time interval as S
One shortcoming of this model is that it accommodates only a net cash outflow situation as opposed to both inflows and outflows. Also, the cash outflow is at a constant rate, with no variation.
MILLER-ORR MODEL.
The Miller-Orr Model rectifies some of the deficiencies of the Baumol Model by accommodating a fluctuating cash flow stream that can be either inflow or outflow. The Miller-Orr Model has an upper limit U and lower limit L
When there is too much cash and U is reached, cash is taken out (to buy short-term securities to earn interest) such that the cash balance goes to a return (R) point. Otherwise, if there is too little cash and L is reached, cash is deposited (from the short-term investments) to replenish the balance to R. The equations of the Miller-Orr Model are:
where R = the return point,
f = the fixed cost for each transaction to withdraw or deposit cash,
s 2 = the variance of the cash flows,
i = the interest rate per same time period as s 2 ,
U = the upper limit
L is determined by other means, for example, compensating balance requirement, minimum balance to avoid bank service charges on checking account, or zero.
STONE MODEL.
The Stone Model is somewhat similar to the Miller-Orr Model insofar as it uses control limits. It incorporates, however, a look-ahead forecast of cash flows when an upper or lower limit is hit to take into account the possibility that the surplus or deficit of cash may naturally correct itself. If the upper control limit is reached, but is to be followed by cash outflow days that would bring the cash balance down to an acceptable level, then nothing is done. If instead the surplus cash would substantially remain that way, then cash is withdrawn to get the cash balance to a predetermined return point. Of course, if cash were in short supply and the lower control limit was reached, the opposite would apply. In this way the Stone Model takes into consideration the cash flow forecast.
The goals of these models are to ensure adequate amounts of cash on hand for bill payments, to minimize transaction costs in acquiring cash when deficiencies exist, and to dispose of cash when a surplus arises. These models assume some cash flow pattern as a given, leaving the task of cash collection, concentration, and disbursement to other methods”
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Cash ‘consists of cash in hand and deposits repayable upon demand less overdrafts.’ ‘This includes cash held in foreign currency.’
Cash equivalents are ‘short-term highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value.’
Cash flows are ‘inflows and outflows of cash and cash equivalents’
As individuals and corporate entities, cash which is needed daily, should be managed in such a way that there shall not be cash problems or impending cash problems could be foreseen and remedied.
Individuals just like well planned corporate entities, should prepare and use personal cash budgets.
Cash management involves a lot of techniques and every individual and organization should always institute measures to manage its scarce cash and cash equivalents.
Organizations that do not manage their cash might end up overtrading, i.e. carry on too many activities more than it can bear financially or they might end up overcapitalizing, i.e. their cash is excessive for their business requirements.
As individuals, sometimes, we have some cash that we do not really know immediately what to do with. That means, we did not plan for it, and that would be overcapitalization for the individual.
Sometimes, we can also buy more than we can pay. These should not normally happen if we institute cash management measures in place.
Cash should be managed taking into consideration the interrelationship among profit, taxation, dividend payment, (if any), recurrent and capital expenditure and working capital levels.
Individuals and corporate entities could have many types of income such as earned, portfolio or passive income and all these come into play when managing cash, because the various incomes constitute part or all the cash one has available for management.
Cash could be managed by:
• Preparing and using cash budgets
• Disposing of idle assets
• Having an investment plan for cash available on hand to maximize its earning potential
• Having a credit facility arrangement with your bank before you need it.
• Managing loans and overdrafts
• Managing cash short term investment
• Controlling credit efficiently
• Invoice customers quickly when goods or services are delivered and have convenient collection arrangement with them
• Asking for advance payment before credit facility agreement is established
• Not granting till all credit rating requirements are fully met
• Buying things only when you really need them, keep expense at a minimum
• Evaluating whether to use a centralized treasury for your organization
• Utilizing credit finance facilities but repay in good time
• Reducing stocks and increase stock turnover
• Minimizing production lead times, possibly using sub-contractor
The following cash monitoring and management models could also be used
BAUMOL MODEL.
“The Baumol Model is similar to the Economic Order Quantity (EOQ) Model. Mathematically it is:
where C = the optimal amount of cash to be acquired when reaching a threshold balance,
F = the fixed cost of acquiring the cash C amount,
S = the amount of cash spent during a time interval,
i = the interest rate expressed in the same time interval as S
One shortcoming of this model is that it accommodates only a net cash outflow situation as opposed to both inflows and outflows. Also, the cash outflow is at a constant rate, with no variation.
MILLER-ORR MODEL.
The Miller-Orr Model rectifies some of the deficiencies of the Baumol Model by accommodating a fluctuating cash flow stream that can be either inflow or outflow. The Miller-Orr Model has an upper limit U and lower limit L
When there is too much cash and U is reached, cash is taken out (to buy short-term securities to earn interest) such that the cash balance goes to a return (R) point. Otherwise, if there is too little cash and L is reached, cash is deposited (from the short-term investments) to replenish the balance to R. The equations of the Miller-Orr Model are:
where R = the return point,
f = the fixed cost for each transaction to withdraw or deposit cash,
s 2 = the variance of the cash flows,
i = the interest rate per same time period as s 2 ,
U = the upper limit
L is determined by other means, for example, compensating balance requirement, minimum balance to avoid bank service charges on checking account, or zero.
STONE MODEL.
The Stone Model is somewhat similar to the Miller-Orr Model insofar as it uses control limits. It incorporates, however, a look-ahead forecast of cash flows when an upper or lower limit is hit to take into account the possibility that the surplus or deficit of cash may naturally correct itself. If the upper control limit is reached, but is to be followed by cash outflow days that would bring the cash balance down to an acceptable level, then nothing is done. If instead the surplus cash would substantially remain that way, then cash is withdrawn to get the cash balance to a predetermined return point. Of course, if cash were in short supply and the lower control limit was reached, the opposite would apply. In this way the Stone Model takes into consideration the cash flow forecast.
The goals of these models are to ensure adequate amounts of cash on hand for bill payments, to minimize transaction costs in acquiring cash when deficiencies exist, and to dispose of cash when a surplus arises. These models assume some cash flow pattern as a given, leaving the task of cash collection, concentration, and disbursement to other methods”
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
FINANCIAL LITERACY FOR ALL- PORTFOLIO INCOME
FINANCIAL LITERACY FOR ALL- PORTFOLIO INCOME
We have learnt that there are different types of income for individuals as well as for corporate entities. One of these different types of income is portfolio income.
Portfolio income is received from shares, mutual funds, unit trusts, balanced funds, treasury bills, etc. Portfolio income is simply gotten form commercial papers.
We have been advised to look for other means of getting income for ourselves and for our corporate entities, thus we should invest for short-term, medium-term and the long-term purposes and one important way of getting rich without necessarily working physically is to invest in commercial papers. Getting rich is not using physical strength or working hard physically but being intellectually or mentally hardworking to get what you want. Mere physical strength without being financially intelligent will not get you the money but will only exhaust and wear you out no sooner than you could imagine. Financial literacy teaches us that we should not work for money and worship it but rather we should let money work for us.
Money can only work for you when you are financially literate and financially intelligent; in that case you see money with your mind not with your physical eyes. Opportunities foreseen bring the money, and those who prepare for the opportunities embrace them when they arrive.
To get very high portfolio income, one needs to be financially literate to understand the dynamic movements of the prices of these commercial papers, to know when to buy more and when to sell more. If you go the brokers, who are the middlemen, they would advise you and charge you high fees, but sometimes they the brokers don’t even know the future trends of the commodities that they have you advised you on even under the strong efficient market situations where past, present and future information about the market is made known to all stakeholders. If they knew everything that well about the market, then why not they brokers become the richest in terms of portfolio income. They don’t know the future; they only do some predictions which could be true or false. Robert Kiyosaki says ‘’the broker is more broke than you’’
This is why we are creating the awareness that you learn financial literacy yourself, understand and when you are given some professional advice you could discern whether it is right or wrong.
In the current educational system, we are not taught financial literacy. We are taught literacy, but in real life it is full of financial literacy education, because we cannot this live without money or money equivalents. Financial literacy education teaches us all we need to know about money.
In almost every country, there is at least one form of commercial paper that one can find to invest in to get some income. In Ghana, we have more than necessary that one can invest one’s money in and get some good returns because they are all doing pretty well.
Some of them are:
• Shares – traded on the Ghana Stock Exchange Market, located at the Cedi House, near National Theatre and opposite the British Council, Accra.
When one invests in shares one can get two forms of returns; dividends and or capital appreciation of the share price, depending on the welfare of the share among other factors on the market.
Some Mutual funds and unit trusts to invest in:
• EPACK-this is a long term mutual fund operated by Databank, located near Tigo headoffice, or near TUC, or Accra Polytechnic, Accra.
• M-Fund- this is a short-term mutual fund operated by the same Databank
• The Balanced fund- operated by the same Databank
• Ark Fund- invested in environmentally friendly companies- operated by the same Databank.
• SAS FORTUNE FUND-operated by Strategic African Securities, located around Accra High School and Atlantics Radio
• GOLD FUND- operated by Gold Coast Securities- located around SAS area
• NTHC HORIZON FUND-operated NTHC located at Adabraka
• SDC CAMPUS FUND-operated by SDC Finance & Leasing Company Ltd
• HFC UNIT TRUST-operated by HFC Bank
• HFC REIT ( Real Estate Investment trust) operated by HFC Bank
• HFC EQUITY FUND-operated by HFC Bank
• 1st FUND- operated by 1st BANC ( The mutual fund that preserves your capital)
Fixed Deposits can be made with:
• National Investment Bank( NIB)
• The Trust Bank- Savings Plus Savings Account
• UT Bank
• Cal Bank
• First Capital Plus Savings and Loans Ltd
• Fidelity Bank
• Guaranty Trust Bank
• Zenith Bank
These banks have just been listed by me not in order of priority or importance and I would advise anybody, who wants to make a fixed deposit to shop around all the banks in Ghana to get a better deal because at some places and some times one has to negotiate for a better rate.
To invest in any of these, one can just call them or look for them on the internet and get better information on a commodity before buying it. I have listed the above by own volition and not in any way connected to any of the above funds or their companies. All omissions and commissions are mine.
• Treasury Bills can be bought from any commercial bank operating in Ghana. The commercial banks and other commercial houses sell the Treasury Bills to you on behalf of Bank of Ghana, which also does it on behalf the government of Ghana. Treasury bills are called Risk free investments, risk free because, you get back your capital invested plus interest and the government will continue to be functioning as far as well the world continues to exist so there is no problem of permanent defaultment
Turn your monthly earned income into portfolio income where your money would work for you, whilst you sleep. You would then have two types of income to fall on. Earned and portfolio income.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
We have learnt that there are different types of income for individuals as well as for corporate entities. One of these different types of income is portfolio income.
Portfolio income is received from shares, mutual funds, unit trusts, balanced funds, treasury bills, etc. Portfolio income is simply gotten form commercial papers.
We have been advised to look for other means of getting income for ourselves and for our corporate entities, thus we should invest for short-term, medium-term and the long-term purposes and one important way of getting rich without necessarily working physically is to invest in commercial papers. Getting rich is not using physical strength or working hard physically but being intellectually or mentally hardworking to get what you want. Mere physical strength without being financially intelligent will not get you the money but will only exhaust and wear you out no sooner than you could imagine. Financial literacy teaches us that we should not work for money and worship it but rather we should let money work for us.
Money can only work for you when you are financially literate and financially intelligent; in that case you see money with your mind not with your physical eyes. Opportunities foreseen bring the money, and those who prepare for the opportunities embrace them when they arrive.
To get very high portfolio income, one needs to be financially literate to understand the dynamic movements of the prices of these commercial papers, to know when to buy more and when to sell more. If you go the brokers, who are the middlemen, they would advise you and charge you high fees, but sometimes they the brokers don’t even know the future trends of the commodities that they have you advised you on even under the strong efficient market situations where past, present and future information about the market is made known to all stakeholders. If they knew everything that well about the market, then why not they brokers become the richest in terms of portfolio income. They don’t know the future; they only do some predictions which could be true or false. Robert Kiyosaki says ‘’the broker is more broke than you’’
This is why we are creating the awareness that you learn financial literacy yourself, understand and when you are given some professional advice you could discern whether it is right or wrong.
In the current educational system, we are not taught financial literacy. We are taught literacy, but in real life it is full of financial literacy education, because we cannot this live without money or money equivalents. Financial literacy education teaches us all we need to know about money.
In almost every country, there is at least one form of commercial paper that one can find to invest in to get some income. In Ghana, we have more than necessary that one can invest one’s money in and get some good returns because they are all doing pretty well.
Some of them are:
• Shares – traded on the Ghana Stock Exchange Market, located at the Cedi House, near National Theatre and opposite the British Council, Accra.
When one invests in shares one can get two forms of returns; dividends and or capital appreciation of the share price, depending on the welfare of the share among other factors on the market.
Some Mutual funds and unit trusts to invest in:
• EPACK-this is a long term mutual fund operated by Databank, located near Tigo headoffice, or near TUC, or Accra Polytechnic, Accra.
• M-Fund- this is a short-term mutual fund operated by the same Databank
• The Balanced fund- operated by the same Databank
• Ark Fund- invested in environmentally friendly companies- operated by the same Databank.
• SAS FORTUNE FUND-operated by Strategic African Securities, located around Accra High School and Atlantics Radio
• GOLD FUND- operated by Gold Coast Securities- located around SAS area
• NTHC HORIZON FUND-operated NTHC located at Adabraka
• SDC CAMPUS FUND-operated by SDC Finance & Leasing Company Ltd
• HFC UNIT TRUST-operated by HFC Bank
• HFC REIT ( Real Estate Investment trust) operated by HFC Bank
• HFC EQUITY FUND-operated by HFC Bank
• 1st FUND- operated by 1st BANC ( The mutual fund that preserves your capital)
Fixed Deposits can be made with:
• National Investment Bank( NIB)
• The Trust Bank- Savings Plus Savings Account
• UT Bank
• Cal Bank
• First Capital Plus Savings and Loans Ltd
• Fidelity Bank
• Guaranty Trust Bank
• Zenith Bank
These banks have just been listed by me not in order of priority or importance and I would advise anybody, who wants to make a fixed deposit to shop around all the banks in Ghana to get a better deal because at some places and some times one has to negotiate for a better rate.
To invest in any of these, one can just call them or look for them on the internet and get better information on a commodity before buying it. I have listed the above by own volition and not in any way connected to any of the above funds or their companies. All omissions and commissions are mine.
• Treasury Bills can be bought from any commercial bank operating in Ghana. The commercial banks and other commercial houses sell the Treasury Bills to you on behalf of Bank of Ghana, which also does it on behalf the government of Ghana. Treasury bills are called Risk free investments, risk free because, you get back your capital invested plus interest and the government will continue to be functioning as far as well the world continues to exist so there is no problem of permanent defaultment
Turn your monthly earned income into portfolio income where your money would work for you, whilst you sleep. You would then have two types of income to fall on. Earned and portfolio income.
© 2010, Godwin-Xavier Ayeebo
Email: gayeebo@gmail.com
Wednesday, July 21, 2010
FINANCIAL LITERACY FOR ALL-RETIREMENT PLAN
FINANCIAL LITERACY FOR ALL-RETIREMENT PLAN
As mortal human beings, one day we will get energetically worn out and cannot perform our duties as when we were young. When we are strong and working hard we should know very well that one day whether we like it or not we would get retired to go home and rest, because our productivity would have been reducing and our employers or we would be punishing ourselves if we continue to work under such old-age situations.
Retirement is a must, so we must plan for it. It is heralding and we should not retire like we never worked or work like we would never retire.
There are various retirement plans and many of them can only be achieved when there is discipline and strict adherence to the plan that one has chosen. There are different ways to retire, some retire secured, some retire comfortable and some retire free. Each of these is different from the other so their rewards are also different. If you are working in Ghana, you and your employer would be contributing 5.5% and 13% respectively. 13.5% would be paid to the Social Security and National Insurance Trust, SSNIT and the remaining 5% invested in a private company for better management. This is defined contribution but you the employee could also make your personal, individual, voluntary contributions to any recognized investment management company towards your retirement.
Now, do you think your meager monthly contributions would be enough for you when you go on retirement? Find out how much the pensioners have been taking at the end of the month, you would be marvelled, it is insulting and insufficient.
You retire secured when you rely solely on your 18.5% monthly contributions that you contributed when you were in active service. When you retire secured it is only good but not better.
You retire comfortable when you make additional personal, individual contributions monthly. Here you already have your 18.5% plus your personal contributions. So you retire comfortably. Retiring comfortable is only better but it is not the best.
You retire free when you turned your earned income and your personal monthly contributions into portfolio income and or passive income. Do not just contribute and let the money be sitting with the investment managers, take it and invest in a better venture to earn you more money. Explore the investment market. You need to become financially literate.
Portfolio income is income got from commercial papers and passive income is income got from real estate. So when you are working and get paid at the end of every month, you devote a percentage (%) to invest in commercial papers, say, mutual funds, treasury bills, shares, etc and or in buying of pieces of land, houses, hotels, hospitals, etc. These would be businesses that would generate higher income for you whether you are still working or on retirement.
To retire free means to have a business that generates income for you all the time. A business is anything that gives you income without you presence. For instance you buy a Databank M-fund or Ark Fund or EPACK or HFC Equity Fund, Gold Fund from Gold Coast Securities, shares from the Stock Exchange Market or Treasury bills from Bank of Ghana, your money would be working for you and it does not need you where it is before it can give you the income.
To retire free means you already have your statutory 18.5% monthly contributions, you have your personal monthly contributions and now you have your business or investment all waiting for you. You can now retire free. This is the best retirement plan and you retire freely and financially independent. You would have known you would retire and you would have retired knowing you were working.
Let’s all crave to retire free. Freedom has no equals.
© 2010, Godwin-Xavier Ayeebo
gayeebo@gmail.com
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