Yesterday March 13, 2025, the President of Ghana, John Dramani Mahama appointed a new Inspector General of Police (IGP). The new IGP is Commissioner of Police Christian Tetteh Yohuno. Sworn into office Friday March 14, 2025, he replaces Dr George Akuffo Dampare.

Taking office at 60 years old, Mr Yohuno was born on December 27, 1965. He joined the Ghana Police Service in 1985.

Until his appointment, he has been serving as Deputy Inspector-General of Police in charge of Operations since July 2024.

Education

Mr Yohuno attended the Presbyterian Boys’ Secondary School, where he obtained the GCE Ordinary and Advanced Level certificates. He earned an Intermediate Chartered Accountant certification from the Institute of Professional Studies in Legon (Now UPSA). He later went to the University of Ghana and graduated with a Bachelor of Science degree in Administration (Human Resources Management). He also holds an Executive MBA in Project Management from the UPSA.  

His career in the police service

He joined the Ghana Police Service in 1985 as a recruit. Over the years he rose through the ranks. He became a member of the Police Management Board, where he held responsibility for six critical portfolios at the Director-General level, including Administration, Special Duties, Motor Traffic and Transport, Police Intelligence Directorate, Special Operations, and General Operations.

He was the Accra Central Divisional Commander from 2007 to 2009, and at the same time he served as the Accra Regional Operations Commander. He was later appointed the Deputy Accra Regional Commander before being promoted to Regional Commander in 2013. 

Mr Yohuno also held the position of Regional Finance Officer.

In December 2015, he was appointed the Director-General of the Motor Transport and Traffic Department of the Ghana Police Service before being reassigned as Director-General of Administration in 2016.  

In 2011, he was awarded the Grand Medal for his meritorious service in combating armed robbery and other criminal activities in the country. He received a special promotion to Deputy Commissioner of Police (DCOP) in January 2012 and was later promoted to the position of Commissioner of Police (COP) on January 1, 2016.

He became the first Director-General of the Police Intelligence Directorate.

International engagements

He served on two United Nations peacekeeping missions in Bosnia and Herzegovina and East Timor.

By Emmanuel K Dogbevi

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The beginning of this year 2025, Ghanaians had the opportunity to hear two State of the Nation Addresses (SONA)s, all delivered within a space of two months – in January and in February.

The outgoing President Nana Akufo-Addo after eight years as president was handing over and had to give his last address on January 3. He painted a glorious picture of what he was leaving behind.

Then came the turn of incoming President John Mahama – becoming president for the second time after losing two elections, he had an opportunity to deliver his first address to the nation he was just taking charge of – he painted a gloomy picture.

We bring you below the two addresses.

The post State of the Nation Address – What Akufo-Addo said and what Mahama said appeared first on Ghana Business News.

For years, advocates across Africa have fought tirelessly to ensure that African women are not just impacted by climate policies but are actively shaping them. Despite their critical role in food production, water management, and environmental conservation, women have long been sidelined in major climate negotiations. Today, that reality is shifting. The African Group of Negotiators Experts Support (AGNES) has taken a bold step by placing gender at the center of Africa’s climate strategy, ensuring that women’s voices and leadership inform global climate discussions.

Climate policy strategy

At the Pre-SB62 strategy meeting in Nairobi, climate experts, negotiators, and stakeholders from over 30 African nations gathered to refine Africa’s position ahead of the 62nd sessions of the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI) under the United Nations Framework Convention on Climate Change (UNFCCC). Scheduled for June 16 to 26, 2025, in Bonn, Germany, these negotiations will influence key global climate policies. The meeting also shaped Africa’s priorities for COP30, set for November 10 to 21, 2025, in Belém, Brazil.

This gathering was not just about preparation—it was a strategic effort to ensure Africa’s voice, particularly that of women, is heard at the highest levels. With climate negotiations becoming more technical, the discussions focused on four key areas: Global Goal on Adaptation (GGA), Climate Finance, Agriculture and Food Security, and Gender Negotiations. These working groups tackled pressing issues such as financial access, adaptation strategies, and gender equity, ensuring that Africa’s climate policies reflect the continent’s unique challenges and strengths.

Gender equity advocacy

Women’s participation in climate negotiations is no longer a matter of symbolism—it is a necessity. Across Africa, women bear the brunt of climate change, yet they remain underrepresented in decision-making spaces. The Gender Negotiations stream in Nairobi addressed this imbalance by focusing on the Gender Action Plan (GAP) and identifying ways to integrate women’s leadership into Africa’s climate policies.

At COP29, global leaders extended the Enhanced Lima Work Programme on Gender and its GAP for another decade, a move that reaffirmed gender as a critical component of climate action. However, this commitment means little without real implementation. African women continue to face barriers in accessing climate finance, exclusion from leadership roles, and systemic inequalities that hinder their ability to shape climate solutions. The discussions in Nairobi sought to change this by ensuring that the next phase of the GAP is action-oriented, addressing real challenges faced by African women.

Policy implementation challenges

Dr. George Wamukoya, Team Lead for AGNES Africa, emphasized the importance of strategic preparation in climate negotiations. He noted that Africa’s ability to influence global discussions depends on well-developed submissions on the Global Goal on Adaptation (GGA), agriculture, and gender. Beyond policy formulation, the goal is to create greater awareness around resource mobilization for climate-resilient agriculture and highlight the link between human mobility and climate change.

The Gender Negotiations stream critically examined the existing Gender Action Plan (GAP), identifying gaps and proposing solutions. The outcome of these discussions will be instrumental in strengthening gender-responsive climate policies, ensuring that women are not just participants but key decision-makers in Africa’s climate strategy.

Future negotiation roadmap

The insights from the Nairobi meeting will set the stage for discussions at SB62, where a technical workshop will initiate the development of a revised Gender Action Plan. Informed by the 2024 review, this process presents a critical opportunity for African women to assert their perspectives in climate negotiations. Recommendations from stakeholders are expected by March 31, 2025, marking a decisive moment in refining Africa’s climate agenda ahead of COP30.

As preparations continue, African women are no longer waiting to be invited into climate discussions—they are taking their place as architects of the future. From Nairobi to Bonn and ultimately to Belém, their leadership will shape the global climate agenda. Africa is not just responding to climate change; it is leading the way, with women at the forefront of this transformation.

By Afia Agyapomaa Ofosu

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In a region where educational milestones were once as scarce as raindrops in the dry season, one man who dared to defy the odds and etch his name in the annals of history as the Northern Regions’ pioneering mathematician is Professor Ibrahim Yakubu Seini. 

The journey 

His journey from the dusty streets of Jisonayilli, a suburb of the Greater Tamale Metropolis, is a remarkable testament to the power of hard work, determination, resilience, and the passion for numbers. 

Professor Seini, a royal from the Bomahi Naa Yibram family in the Dagbon Kingdom, was born on July 8, 1975, to Mr and Mrs Baakobilla Seini both of blessed memory. 

Academic journey  

His academic journey began at Kanvilli Roman Catholic Primary school in 1979, where his exceptional mathematical abilities first emerged. 

His early education continued at the 6th Battalion of Infantry Middle School at Kamina Barracks in 1987 before he was transferred to the Ridge Junior Secondary School in 1989, there his mathematical prowess came to the forefront as he represented the school at the zonal mathematics quiz competition. 

His dedication to excellence culminated in him graduating as the top student in 1991, achieving distinction in eight subjects, and proceeded to the prestigious Tamale Secondary School where he continued to excel, particularly in mathematics and the sciences. 

His intellectual capabilities were displayed when he represented Tamale Secondary School at the zonal mathematics quiz competition and the renowned Brilliant Science and Maths Quiz Competition. 

As part of the second cohort of the Senior Secondary School system, he completed his secondary education in 1994 with outstanding results. 

Professor Seini’s pursuit of higher education took an interesting turn when he briefly enrolled at the Bagabaga Teacher Training College in 1995, whilst waiting for the University Entrance Examination, which opened the doors to a more ambitious path. 

In 1996, he embarked on a Bachelor of Science degree programme in Mechanical Engineering at the Kwame Nkrumah University of Science and Technology, graduating with second-Class (honors) upper division in 2000. 

Professor Seini’s academic journey continued to flourish when he received a Government of Ghana Scholarship in 2004 to pursue a Master of Science Degree programme in Control Systems Engineering at the University of Sheffield, United Kingdom. 

First doctoral student? 

In a pioneering move, he became the first doctoral student of the Department of Mathematics at the University for Development Studies, making history as the first northern scholar to earn a doctorate degree in mathematics, following his graduation in 2011. 

Early career and volunteerism

Even before his formal career began, Professor Seini demonstrated a remarkable commitment to education and community service, during the secondary school vacations (1993 – 1994), he dedicated his time to teaching mathematics and science at the 1st November 1954 Junior Secondary School in Tamale, his commitment to education continued through his University years (1998 – 2000), when he taught Elective Mathematics and Physics at the Tamale Islamic Secondary School. 

Professor Seini’s passion for teaching extended beyond formal settings, as he provided additional tutoring to students in his community, as well as children and spouses of prominent community members, his mandatory National Service at Bawku Secondary/Technical School in the Upper East Region of Ghana, further exposed him to the challenging realities of conflict zones, an experience that would forever shape his perspective on education in difficult circumstances. 

Career and leadership

Professor Seini’s formal academic career began in 2001 at the then Tamale Polytechnic, when he accepted an offer to be an instructor in the Department of Mechanical Engineering and later re-designated a lecturer in 2005 after his master’s degree programme. 

His trajectory took a significant turn in 2011 when he joined the University for Development Studies as a lecturer in the Department of Mathematics, Navrongo Campus, his leadership capabilities and vision for education led to his transfer to the Nyankpala Campus in 2016, where he played a pivotal role in the establishment of the School of Engineering. 

His rapid accent in academia saw him achieve several milestone appointments including Foundation Head of the Department of Mechanical and Industrial Engineering (2016), First Professor of Mathematics at the University for Development Studies and by extension Northern Ghana (January 2022) and Foundation Dean of the Faculty of Physical Sciences (2022). 

Academic contributions and research 

Professor Seini has made substantial contributions to both engineering and mathematics education, his expertise spans a diverse range of subject areas including advanced mathematics, control systems engineering, computational fluid dynamics, engineering mechanics and materials, fluid mechanics, robotics and automation, vibrations, heat, and mass transfer. 

He has mentored over 100 undergraduate students across engineering and mathematics disciplines, guided 12 postgraduate students comprising 7 doctoral and 5 master’s degree candidates. 

He has authored more than 70 publications in peer- reviewed journals and contributed three book chapters to academic literature. 

Professional leadership and service 

Beyond his academic roles, Professor Seini has held numerous leadership positions, including multiple department headships in engineering and mathematics, Dean positions at both the Polytechnic and the University, key roles in academic governance and planning committees. 

Professor Ibrahim Yakubu Seini’s personal and professional life reflects his commitment to family and faith. As a practising Muslim, he attributes his success to divine guidance. 

He is married with six children. 

By Solomon Gumah 

Source: GNA 

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On a bright morning in the heart of Ghana’s Ahafo region, Manu Anto stood proudly beside a newly planted sapling, one of thousands dotting the landscape. As part of a reforestation project funded by an international corporation to offset its carbon emissions, felt a sense of purpose.

This initiative promised not just a greener environment, but also economic opportunities for his village. Yet, a lingering question haunted him: would these trees survive long enough to make a difference, or was this merely a temporary fix for a much larger global problem?

Manu’s story mirrors the global debate surrounding carbon offsetting—a practice that has gained momentum as countries and companies race to reduce their carbon footprints. But as the world faces an urgent climate crisis, many wonder if carbon offsetting is a genuine solution or merely a convenient plaster covering a deep wound.

Understanding carbon offsetting

The concept behind carbon offsetting is relatively simple: individuals and organisations can compensate for their own carbon emissions by investing in projects that reduce emissions elsewhere. These projects can range from reforestation and forest conservation to renewable energy initiatives, such as wind and solar farms, as well as technologies that capture and store carbon.

The goal is to create a “net-zero” effect, balancing out emissions produced with equivalent reductions achieved elsewhere.

This approach has gained considerable traction in recent years. Tech giants, such as Amazon and Microsoft, have made significant investments in carbon offsetting, often portraying it as a moral obligation and a vital step towards achieving global carbon neutrality. Several countries have also embraced offsetting as part of their climate strategies, presenting it as a means to meet international climate targets, while continuing to develop economically.

The allure of carbon offsetting

Carbon offsetting offers a seemingly straightforward path for businesses to mitigate their environmental impact without making immediate changes to their operations. For industries where reducing emissions is, particularly, challenging due to technological constraints or regulatory standards, offsetting provides a financially viable alternative. Companies can continue their operations, while supporting external projects that claim to reduce an equivalent amount of carbon emissions. This flexibility is particularly appealing, allowing businesses time to innovate and gradually transition to more sustainable practices.

In theory, carbon offsetting enables companies to bridge the gap between their current carbon footprint and future sustainability goals. It provides a cushion, giving them time to develop and adopt cleaner technologies without facing immediate operational disruptions or financial burdens. For many businesses, especially those in sectors like manufacturing, aviation, and energy, this is an attractive proposition.

The dark side of offsetting

However, the practice of carbon offsetting is not without its critics. Environmentalists and climate scientists have raised concerns about its potential to foster complacency. By allowing businesses to buy their way out of direct emission reductions, carbon offsetting risks becoming a “get-out-of-jail-free card.” This mechanism, while well-intentioned, may inadvertently encourage polluters to continue business as usual, delaying the critical systemic changes needed to tackle climate change effectively.

One of the most significant criticisms of carbon offsetting is that it often serves as a distraction from the real issue—reducing emissions at the source. While investing in reforestation or renewable energy projects is undoubtedly beneficial, it does not address the underlying problem of continued carbon emissions from industrial activities, transportation, and energy production. Critics argue that offsetting should not be a substitute for genuine emission reduction efforts but rather a complementary measure.

There are also concerns about the quality and integrity of some offsetting projects. High-profile cases have revealed poorly managed initiatives that either overstate their impact or provide only short-term benefits. In some instances, projects have failed to deliver the promised emission reductions, casting doubt on the reliability of offsetting as a climate solution. Additionally, many offset projects are located in developing countries, where regulatory oversight may be insufficient. This raises questions about accountability and whether the promised benefits of these projects are genuinely realised.

The challenge of additionality

A particularly contentious issue within the realm of carbon offsetting is the concept of “additionality.” This principle asserts that for an offset project to be genuinely effective, it must result in emission reductions that would not have occurred without the offset funding. In other words, the project should provide additional benefits beyond what would have happened anyway. This is easier said than done.

Determining additionality is complex and fraught with challenges. For instance, if a reforestation project would have taken place regardless of offset funding, can it truly be considered an additional benefit? Similarly, renewable energy projects that were already in the pipeline may not provide the extra emission reductions needed to justify offsetting credits. This uncertainty undermines the credibility of carbon offsetting and raises concerns about its effectiveness as a climate change mitigation tool.

A double-edged sword

Carbon offsetting is undoubtedly a double-edged sword. On one hand, it offers a valuable mechanism for reducing global emissions, particularly when integrated into comprehensive climate strategies. On the other hand, its potential to delay critical systemic changes and the challenges associated with ensuring project integrity cannot be ignored.

The financial appeal of offsetting is undeniable. For businesses, especially those operating under stringent industry standards, offsetting provides a cost-effective means to meet emission targets without immediate operational upheaval. This financial viability is crucial in sectors where the transition to low-carbon technologies is either technologically challenging or economically burdensome. Offsetting allows these businesses to remain competitive while working towards sustainability goals.

However, this very convenience is also its biggest drawback. The risk of complacency is real. If businesses rely too heavily on offsetting, they may neglect the necessary investments in cleaner technologies and more sustainable practices. This reliance could slow down the global transition to a low-carbon economy, undermining the very purpose of offsetting.

Ensuring responsible offsetting

For carbon offsetting to be an effective tool in the fight against climate change, it must be used responsibly. This means that offsetting should not be the first line of defence but rather a supplementary measure after substantial internal emission reductions have been made. Businesses must prioritise reducing their own emissions through operational changes, technological innovations, and sustainable practices before turning to offsetting as a final step.

Transparency and accountability are also crucial. Offsetting projects must be rigorously validated, with clear evidence of their impact on emission reductions. Companies should provide transparent reporting on their offsetting activities, ensuring that stakeholders are aware of their efforts and the outcomes achieved. This transparency is essential to build trust and demonstrate a genuine commitment to sustainability.

Moreover, offsetting initiatives should align with broader climate targets and be part of a comprehensive sustainability strategy. They should not be treated as a mere balancing act but as an integral component of a company’s long-term commitment to reducing its environmental footprint.

A path forward

The debate over carbon offsetting is unlikely to be resolved anytime soon. However, what is clear is that offsetting alone is not enough. It is a valuable tool, but not a cure-all. The path to a sustainable future requires a multifaceted approach that includes direct emission reductions, technological innovation, regulatory frameworks, and yes, responsible offsetting.

If carbon offsetting is to evolve from a mere plaster to a legitimate contributor to global climate efforts, it must be embraced as part of a larger commitment to sustainability. Businesses must go beyond the minimum requirements, investing in cleaner technologies, and adopting sustainable practices across their operations. Only then can offsetting fulfil its potential as a meaningful contributor to a more sustainable and environmentally friendly future.

The stakes are high, and time is running out. Carbon offsetting can play a significant role in the fight against climate change, but only if used wisely and responsibly. It is not the destination but a step along the journey to a low-carbon world.

By Kweku Yeboah Ansomaning

Source: GNA

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The borrowed car my father was driving skidded over the center line and into the path of a car with a snow plough on its front.  Mom’s seatbelt saved her life, but she broke a collarbone, multiple ribs and lost lots of blood.  Already out on the road due to other accidents, paramedics heard the collision and drove immediately to the site. Even with their speedy arrival, she was given a 1 percent chance of living. 

Then a junior at Stanford University, I flew home to Boston from California several days later.  I walked down the white tiled hallways in the hospital where I had worked the previous two summers, absorbing the building’s antiseptic smell.  After entering the intensive care unit and shuddering involuntarily as I approached her bed, I braced myself and looked at Mom.

Her eyelids looked like purple eggplants covering her closed eyes.  Tubes snaked in and out of her body.  A respiratory machine pushed air into her lungs though a diamond-shaped hole that had been cut in her throat.  The machine hissed inexorably, each push up and down illustrating her dependence on it for her tenuous hold on life.  I wanted to rip the tubes out of Mom’s body, to take her home and go to Chef Chow’s, our favorite Chinese restaurant. I talked and talked, uttering desperate words of encouragement to her that I did not believe, yet felt compelled to say because the alternative was too terrifying.

More hissing. The same hospital smell. No movement from the bed.

Although visiting Mom for the first time was one of the most difficult things I ever did,  it was harder still to come back for the second, third and 40th times during her three-month stay in intensive care and a nearby rehabilitation facility. But my brothers Mike, Jon and I did just that. Dad did not come home for close to three weeks, so we developed routines of visiting our parents at the hospital before eating the turkeys, lasagnas, and chickens deposited magically by our neighbors on our front porch and watching the Larry Bird-led Celtics steamroll toward their sixteen championship.

Mom came out of the coma within two days and began making an achingly slow, gradually forward-moving recovery.  Then 48 years old, she was thrust back to the beginning of life, having to relearn how to stand, walk and control her bladder. The massive closed head injury she sustained meant she also had to learn how to talk and behave appropriately in social situations again. When she first started speaking, for example, her aphasia led her to call G-d “Brillo” and describe pain as “in the negative.”

Due to her tenacious will, extensive medical treatment and willingness to try alternative therapies, Mom regained strength and language as she moved through developmental stages and resumed life as a functioning adult.  She reached out to others who had endured trauma, too, traveling to Washington, DC, to testify before Congress. She started a non-profit organisation, Vital Active Life After Trauma, to help build a world where those who had suffered similar injuries could live dignified and fulfilled lives.  An accomplished poet before the accident, she resumed writing, using more plain and soulful language than before the crash. 

Mom lived fully and well for more than three decades, encountering more physical challenges as she became a mother-in-law and grandmother of four and meeting them with her customary grit. After contracting adult-onset diabetes in the 1990s, she shed close to 100 pounds and maintained a healthier diet and lifestyle in the years afterward. Her failing heart led to the installation of a pacemaker in 2010, the same year she had her right hip replaced. She kept moving, even as she used a walker more and more regularly each year.  When she turned 80 years old in 2017, our families gave her a book we had assembled and I edited of her poetry and writing. My brother Jon’s picture of a grave rubbing adorned the cover. We divided her work into the time before and after the accident to illustrate its seismic change.

Three years ago, after recognizing her social isolation imposed by COVID, Mom made another brave decision to leave the city where she had lived her entire adult life and move to San Francisco to be near family.  It has worked out well.  Mike and his family have provided unstinting support. Their weekly visits for Saturday or Sunday lunch have become highlights of the entire dining room which doesn’t often see young children.  Mom’s made friends and sits with the same group of women for meals, even if she doesn’t always remember what they discussed

Not everything has been smooth.  A second hip replacement shortly led to another arduous and incomplete recovery. She had a recent 10-day stint in the hospital to remove excess fluid that had accumulated in her lungs and around her heart due to congestive heart failure.  

Once again in a familiar place of caring for our ailing mother, we are no longer young men, but middle-aged husbands and fathers. The corners of our eyes, hair color and posture bear the imprint of our decades of life.  While talking about the Celtics potentially defending their eighteenth crown still brings us comfort, watching Mom struggle to recall her words and formulate thoughts hurts. So, too, does watching her physical ailments. Like many people in their late 80s, she is at a place where her body’s woes have compounded to make formerly routine actions like standing up from her chair and walking around her two-room apartment a slow and painful affair.

So on this day that our nation honors the births of one president we consider our father and another who guided us through our most searing conflict, I feel deep down grateful for the gift of nearly 40 years of life Mom very nearly did not have. Yet my gratitude is mingled with sadness at her decline and the steadily approaching end of her remarkable, miraculously extended life.

By Jeff Kelly Lowenstein

The author is the founder and executive director of the Center for Collaborative Investigative Journalism (CCIJ) and an associate professor in the Journalism, Broadcasting and Digital Media program at Grand Valley State University.  Parts of this essay have been previously published by the Daily Maverick. 

The post My mother nearly died in a car accident on President’s Day 1986 appeared first on Ghana Business News.

Across Africa’s vibrant landscapes, from the teeming marketplaces to the serene rural farmlands, women stand as the unwavering pillars of their communities. They dedicate their lives to nurturing the land, crafting essential goods, and building sustainable businesses under the relentless African sun. However, with each passing day, the intensifying heat poses a significant threat to their health, their livelihoods, and the well-being of their families. For these resilient women, climate change transcends the realm of environmental concern and becomes a deeply personal struggle.

A beacon of hope

Amid these challenges, the PALM-TREEs Project, an innovative initiative spearheaded by Sustainable Solutions for Africa (SSA), emerges as a beacon of hope. Recognizing the urgent need to understand the human impact of extreme weather events, the project collaborates closely with women and marginalized communities. This collaborative approach ensures the development of climate-resilient solutions that prioritize the unique needs of these populations and amplify their often-unheard voices. A pivotal moment for the project occurred in January 2025, with a comprehensive training programme held at Accra’s Airport View Hotel.

Laying the groundwork for change

During the intensive training program, enumerators underwent rigorous preparation, mastering the installation of i-buttons and the administration of household questionnaires. These meticulous steps were crucial in laying a solid foundation for the upcoming data collection phase, underscoring the project’s commitment to accuracy and comprehensive understanding.

Addressing the assembled researchers, Namo Lawson, a representative of Sustainable Solutions for Africa (SSA), emphasized the critical importance of precise terminology in their investigative work. She articulated that the core aim of the research is to reveal the nuanced ways in which climate impacts vary across individuals, influenced by a complex interplay of factors such as socioeconomic status, geographical location, personal identity, and the strength of community connections. “This focus on intersectionality ensures a more accurate and relevant understanding of the challenges faced,” Ms. Lawson said.

Unveiling the impact of heat stress on women

Building upon the project’s overarching goal, Rachel Yeboah Nketiah, a doctoral candidate at the University of Energy and Natural Resources (UENR), presented a compelling study focusing on the impact of heat stress on women in Accra and their adaptive coping mechanisms.

Her research, informed by a detailed heat risk map of Accra, gathered critical data from nine vulnerable communities identified as the most affected by extreme heat: James Town, Mallam Atta, Darkuman, Nima, Kanda, Chorkor, Mamobi, Accra New Town, and Kotobabi. “These communities are anticipated to provide invaluable insights into the specific impact of heat stress on women and highlight the diverse adaptation strategies they employ,” she said.

Methodology and deployment strategies

Further elaborating on the project’s rigorous approach, Mr. Francis Balo, representing Sustainable Solutions for Africa (SSA), provided detailed information regarding the sample size allocation for each community. He then presented a comprehensive overview of the questionnaire’s framework, outlining the specific tools and techniques employed for field data collection.

Prior to the actual deployment, the team conducted thorough simulation exercises, testing the installation of i-button sensors across 27 small business centers and households to ensure accuracy and efficiency in the data collection process.

Striving for an equitable and sustainable future

The PALM-TREEs Project, through its meticulous research and community-centered approach, is dedicated to investigating the multifaceted impact of climate change on women in Accra, Ghana. By highlighting the disproportionate effects of heat stress on women’s health, livelihoods, and overall well-being, the project aligns its goals with the UN’s Sustainable Development Goals (SDGs 3, 5, and 13).

Ultimately, the project aspires to inform the development of effective climate-resilient solutions and amplify the voices of women, fostering a more equitable and sustainable future for all. In recognizing that climate change magnifies existing gender inequalities, particularly impacting women in roles such as water collection and smallholder farming, the project aims to address the core issues at hand. By empowering women to adapt to the changing climate, the PALM-TREEs Project contributes to a future where women can thrive despite the increasing environmental challenges.

By Afia Agyapomaa Ofosu

The post Accra’s heat crisis: How climate change threatens women’s lives appeared first on Ghana Business News.

The 2024 withdrawal of Burkina Faso, Mali, and Niger from ECOWAS represents a significant challenge to regional integration in West Africa.

This research by The GITFiC analyzes the multifaceted drivers behind this unprecedented event, exploring the role of disagreements over democratic transitions, concerns about regional security mechanisms, and economic grievances.

The study examines the potential consequences of the withdrawals, focusing on disruptions to trade flows, foreign direct investment, and regional security cooperation, as well as the broader political and diplomatic ramifications for both the withdrawing states and the remaining ECOWAS members.

The emergence of the Alliance of Sahel States (AES) is also considered. The research concludes with practical policy recommendations for ECOWAS, the withdrawing states, and the international community to mitigate negative impacts and promote future regional stability and cooperation.

Introduction

The pursuit of regional integration has become a defining characteristic of contemporary international relations, driven by the understanding that collective action can yield significant economic, political, and security benefits.

In West Africa, the Economic Community of West African States (ECOWAS), established in 1975, has served as the primary instrument for regional integration.

Founded in the aftermath of decolonization, amidst the challenges of nation-building and the aspiration for greater economic self-sufficiency, ECOWAS aimed to foster economic cooperation and development among its member states.

Over the ensuing decades, the organization’s mandate has broadened considerably, expanding beyond purely economic objectives to encompass crucial dimensions of peace and security, conflict resolution, democratic governance, and human development.

ECOWAS has played a critical role in mediating conflicts in Liberia, Sierra Leone, Côte d’Ivoire, and other regional hotspots, demonstrating its commitment to maintaining stability and promoting peace.

The Regional Bloc has also made significant strides in facilitating the free movement of people, goods, and services, fostering intra-regional trade and cultivating a sense of shared regional identity.

Despite these notable achievements, ECOWAS has consistently faced a range of challenges, including economic disparities among member states, the slow pace of economic convergence, persistent security threats such as terrorism and cross-border crime, and recurring instances of political instability.

However, perhaps the most significant challenge to the bloc’s integrity in recent times has been the announced withdrawal of Burkina Faso, Mali, and Niger in January 2024.

This event marks a critical juncture in ECOWAS’s history and raises profound questions about the future of regional integration in West Africa.

While the ECOWAS treaty stipulates a one-year notice period for withdrawal, the joint declaration by the three military-led states signals a decisive shift in the regional landscape and presents a significant test for the bloc’s resilience.

This withdrawal, driven by a complex interplay of factors including disagreements with ECOWAS over democratic transitions, perceived interference in internal affairs, and a growing sense of regional realignment, represents a significant departure from the organization’s founding principles of unity and cooperation.

Implications

The implications of the withdrawals are far-reaching and multifaceted, extending beyond the immediate economic, security, and political consequences for the departing states and the remaining ECOWAS members.

This unprecedented situation not only disrupts established trade and investment patterns, but also undermines regional security cooperation, weakens existing conflict resolution mechanisms, and potentially damages the bloc’s credibility and influence on the international stage. For Burkina Faso, Mali, and Niger, the consequences could include economic isolation, reduced access to regional markets and financing, and diminished political leverage within the region and beyond. For the remaining ECOWAS members, the withdrawals could lead to trade disruptions, increased security risks, weakening of the bloc’s collective bargaining power in international forums, and a potential erosion of investor confidence.

Furthermore, this coordinated withdrawal raises concerns about the potential for a domino effect, potentially encouraging other dissatisfied member states to reconsider their membership and unraveling decades of progress in regional integration in West Africa.

The formation of the Alliance of Sahel States (AES) by the three withdrawing nations further complicates the regional dynamics.

Consequences of withdrawals

What are the specific economic, security, and political consequences of Burkina Faso, Mali, and Niger’s withdrawal from ECOWAS? By examining the potential disruptions to trade and investment flows, the implications for regional security cooperation and conflict resolution mechanisms, the broader political and diplomatic ramifications for both the withdrawing states and the remaining ECOWAS members, and the impact of the newly formed AES, our study aims to provide a comprehensive and nuanced analysis of the costs of this fragmentation. Our research is crucial for several reasons.

First, it fills a significant gap in the existing literature by providing a timely and detailed examination of the consequences of this unprecedented event in ECOWAS history.

Second, it offers valuable insights for policymakers, regional organizations, and international actors involved in promoting peace, security, and development in West Africa.

By understanding the potential costs and consequences of these withdrawals, policymakers can develop more effective strategies for mitigating the negative impacts, strengthening regional cohesion, and preventing further fragmentation within ECOWAS.

Thirdly the research contributes to broader academic debates on regional integration, providing a critical case study of the challenges and complexities of maintaining unity within a regional bloc in a dynamic and often turbulent global environment.

A comprehensive analysis of the motivations behind ECOWAS withdrawals

The withdrawal of Burkina Faso, Mali, and Niger from ECOWAS in 2024 represents a significant development in West African regionalism.

Understanding this decision requires a nuanced examination of the complex interplay of political, security, and economic factors, recognizing that these motivations are intertwined and mutually reinforcing.

Political drivers: Asserting sovereignty in the face of perceived interference

At the forefront of the justifications provided by the juntas in Burkina Faso, Mali, and Niger is the assertion of national sovereignty and a rejection of what they perceive as undue interference by ECOWAS in their internal affairs. This narrative has several key dimensions:

Rejection of ECOWAS’s democratic conditionality

Following the military coups in each country, ECOWAS imposed sanctions and demanded a swift return to civilian rule within specified timeframes.

The juntas viewed these demands as unrealistic, insensitive to their specific contexts, and an infringement on their right to manage their own transitions.

They argued that ECOWAS’s approach failed to acknowledge the complex security challenges they faced, which they cited as justification for the military interventions.

Narrative of external manipulation

The military regimes have consistently portrayed ECOWAS as being influenced by external actors, particularly France and other Western powers.

This narrative has resonated with segments of the population who harbour resentment towards former colonial powers and perceive Western involvement as neocolonialism. By framing their withdrawal as a rejection of external manipulation, the juntas have sought to bolster their domestic legitimacy and garner public support.

Distrust of ECOWAS institutions and leadership

The juntas have expressed distrust in ECOWAS institutions and leadership, accusing them of bias and a lack of understanding of the realities on the ground.

This distrust has been further fueled by ECOWAS’s imposition of sanctions and its refusal to recognize the legitimacy of the military regimes.

Consolidation of power and domestic legitimacy

By rejecting ECOWAS’s demands and asserting their sovereignty, the juntas have sought to consolidate their power and establish their legitimacy within their respective countries.

This strategy has been particularly effective in mobilizing nationalist sentiments and portraying the military regimes as defenders of national interests.

The critical role of security concerns

Security concerns have played a significant role in shaping the decision to withdraw from ECOWAS. The three countries have argued that ECOWAS has been ineffective in addressing the growing security threats in the Sahel region, particularly the spread of terrorism and violent extremism.

Perceived inadequacy of ECOWAS security responses

The juntas have argued that ECOWAS’s responses to the security crisis in the Sahel have been slow, inadequate, and poorly coordinated.

They contend that the organization has not provided sufficient support to their national security efforts and has failed to effectively address the cross-border nature of the threats they face.

Focus on counterterrorism and military solutions

The military regimes have prioritized counterterrorism efforts and military solutions to the security crisis.

This approach may diverge from ECOWAS’s broader focus on regional security, which includes conflict prevention, mediation, peacekeeping, and addressing other transnational crimes.

This difference in approach has created friction between the juntas and ECOWAS.

Search for alternative security partnerships

The withdrawal from ECOWAS has coincided with the strengthening of security ties with other actors, such as Russia (particularly through the Wagner Group).

This suggests a desire to pursue alternative security partnerships that are perceived as more effective in addressing their specific security concerns. The formation of the AES further solidifies this point.

 The Contributing factor of economic grievances, unequal Benefits and the Impact of Sanctions

While less prominent in the official justifications for withdrawal, economic grievances have also played a contributing role.

Perception of unequal distribution of benefits

There is a perception in some quarters within these countries that they have not benefited proportionally from ECOWAS membership compared to other member states, particularly coastal nations. This perception is fueled by factors such as their landlocked status, limited economic diversification, and the impact of regional policies on their economies.

Exacerbation of economic hardship by sanctions

The economic sanctions imposed by ECOWAS following the coups have had a significant impact on these countries’ economies, further fueling resentment towards the organization.

While the sanctions were intended to pressure the juntas to return to civilian rule, they have also had unintended consequences, exacerbated economic hardship and potentially contributing to the decision to withdraw. This has created a sense of being punished by ECOWAS rather than supported.The Formation of the Alliance of Sahel States (AES): A New Regional Paradigm?

The creation of the AES by Burkina Faso, Mali, and Niger is a crucial element in understanding their withdrawal from ECOWAS. The AES suggests a desire to create a new regional security and cooperation framework that better addresses their specific needs and priorities.

Regional realignment and new alliances

The AES represents a significant realignment of regional power dynamics and the formation of new alliances. It suggests a desire to create a new regional bloc that is less influenced by external actors and more focused on addressing the specific challenges facing the Sahel region.

Emphasis on security cooperation

The AES places a strong emphasis on security cooperation, particularly in the fight against terrorism and violent extremism. This reflects the shared security concerns of the three countries and their desire to pursue more effective joint security strategies.

Potential for broader cooperation

While initially focused on security, the AES could potentially expand its scope to include other areas of cooperation, such as economic development, trade, and infrastructure. This could lead to the emergence of a rival regional bloc to ECOWAS, further fragmenting West African regionalism.

Economic implications of member state withdrawal

The economic impact of member state withdrawals from ECOWAS is a multifaceted issue that affects various aspects of the regional economy. One of the primary concerns is the disruption of intra-regional trade, which can have far-reaching consequences for economic stability.

When a member state withdraws from ECOWAS, it can lead to a decline in trade between the withdrawing state and other member states, resulting in reduced economic activity and potential losses for businesses and industries that rely on regional trade (Olorunsola, 2017).

Another significant economic impact of withdrawals is the decline in Foreign Direct Investment (FDI). Reduced economic integration can deter foreign investors who are attracted to the region’s large market and economic potential.

This can lead to a decline in investment flows, which can hinder economic growth and development. Furthermore, the loss of FDI can also lead to a decline in technology transfer, knowledge sharing, and managerial expertise, which are essential for economic development.

Withdrawals from ECOWAS can also hinder economic growth, affecting living standards and poverty reduction efforts.

Economic integration is a key driver of economic growth, as it allows countries to specialize in areas where they have a comparative advantage, leading to increased productivity and competitiveness.

When a member state withdraws, it can lead to a decline in economic growth, as the country may no longer have access to the regional market and may struggle to compete with other countries that are part of the regional economic community.

In addition to these economic impacts, withdrawals from ECOWAS can also lead to a loss of economic benefits that member states derive from regional integration. These benefits include increased trade, investment, and economic cooperation, which can lead to improved economic performance and development.

When a member state withdraws, it forfeits these benefits, which can have long-term consequences for its economic development.

The economic impacts of withdrawals are not limited to the withdrawing state; they can also affect other member states and the region as a whole.

For instance, a withdrawal can disrupt regional supply chains, leading to increased transaction costs and reduced economic efficiency. This can affect the competitiveness of businesses and industries in the region, leading to reduced economic growth and development.

In terms of sectoral impacts, withdrawals from ECOWAS can affect various sectors, including agriculture, manufacturing, and services.

Disrupted trade can affect agricultural exports and food security, while reduced regional market access can hinder manufacturing growth. The services sector, including financial and transportation services, can also be impacted by reduced regional integration.

To mitigate the economic impacts, ECOWAS can adopt various strategies. One approach is to diversify its trade partners, strengthening trade relationships with other regions to reduce dependence on a single market.

Investing in transportation networks and border infrastructure can also help to reduce transaction costs and improve regional trade.

Fostering regional production networks can promote regional value chains, while strengthening ECOWAS institutions can help to address withdrawal challenges (Cisse, 2018).

In conclusion, the economic impact of member state withdrawals from ECOWAS is a complex issue that affects various aspects of the regional economy.

It is essential for ECOWAS to adopt strategies to mitigate these impacts, including diversifying trade partners, investing in infrastructure, promoting regional value chains, and strengthening institutions. By doing so, ECOWAS can reduce the economic costs of withdrawals and promote economic growth and development in the region.

Political and security impact

The withdrawal of a member state from ECOWAS can have significant political implications for the regional organization and its member states.

One of the primary concerns is the potential loss of regional influence that the withdrawing state may experience. As a member of ECOWAS, a state has the opportunity to shape regional policies and decisions through its participation in the organization’s decision-making processes.

However, upon withdrawal, the state may no longer have a seat at the table, and its ability to influence regional decisions may be significantly diminished.

The withdrawal of a member state can also weaken regional governance, leading to a decline in the effectiveness of ECOWAS institutions. This can be particularly problematic if the withdrawing state has significant economic or political power, as its departure may create a power vacuum that can be difficult to fill.

Additionally, the withdrawal can create political instability, particularly if the withdrawing state has significant economic or political ties with other member states.

The withdrawal can also alter regional power dynamics, potentially leading to a shift in the balance of power among member states.

This can be particularly significant in a region like West Africa, where there are already significant power imbalances between states. The withdrawal of a powerful state can create opportunities for other states to fill the power vacuum, but it can also lead to increased competition and conflict.

Moreover, the withdrawal of a member state can undermine regional integration efforts, making it more challenging for ECOWAS to achieve its goals.

Regional integration is a complex and challenging process, requiring the cooperation and commitment of all member states. When a state withdraws, it can create significant challenges for the organization, particularly if the withdrawing state has significant economic or political power.

In terms of security, the withdrawal of a member state from ECOWAS can have significant implications for regional security cooperation.

One of the primary concerns is the potential disruption of regional security cooperation, making it more challenging for ECOWAS to respond to security threats.

This can be particularly problematic in a region like West Africa, where there are already significant security challenges, including terrorism, piracy, and organized crime.

Furthermore, the withdrawal of a member state can lead to a loss of intelligence sharing, which can undermine regional security efforts.

Intelligence sharing is a critical component of regional security cooperation, allowing states to share information and coordinate efforts to address security threats. When a state withdraws, it may no longer share intelligence with ECOWAS, potentially creating significant security risks.

The withdrawal of a member state can increase the risk of terrorism, particularly if the withdrawing state has significant terrorist threats.

Terrorism is a significant security challenge in West Africa, and the withdrawal of a state can create opportunities for terrorist organizations to exploit.

Moreover, the withdrawal can undermine regional peacekeeping efforts, making it more challenging for ECOWAS to maintain peace and stability.

The GITFiC’s findings

Our study found that member state withdrawals from ECOWAS have significant economic impacts, including disruptions to intra-regional trade, declines in foreign direct investment, and hindered economic growth.

Additionally, withdrawals weaken regional governance, disrupt regional security cooperation, and increase security risks.

It also revealed that withdrawals undermine regional integration efforts, leading to reduced economic benefits and increased transaction costs and identified a lack of strong institutions, inadequate infrastructure, and insufficient regional cooperation as key challenges facing ECOWAS.

Economic impacts

Disruptions to intra-regional trade: Withdrawals disrupt trade flows, reducing economic activity and revenue, declines in foreign direct investment as withdrawals deter investors, reducing capital inflows and hindering economic growth hindered economic growth with limited economic opportunities and slowing growth and development.

Political and security impacts

Weakened regional governance and undermine ECOWAS’s authority and effectiveness, disrupted regional security cooperation and compromise security collaboration with increasing risks.

Impacts on regional integration

Undermined regional integration efforts as it hinders progress towards economic union, reduced economic benefits, with limited access to regional markets and resources, with increased transaction costs.

Key challenges identified by The GITFiC

Lack of strong institutions, ECOWAS needs robust institutions to enforce policies and decisions, inadequate infrastructure: Poor infrastructure hinders trade, investment, and regional connectivity, Insufficient regional cooperation: ECOWAS member states must enhance collaboration to achieve regional goals.

Recommendations

To address these challenges, ECOWAS should strengthen its governance standards by enhancing institutional capacity, transparency, and accountability. ECOWAS should also enhance regional cooperation by promoting dialogue, consultation, and collaboration among member states.

Moreover, ECOWAS should foster economic integration through trade liberalization, investment promotion, and infrastructure development. Developing strategies to mitigate security risks, such as establishing robust security frameworks, intelligence sharing, and counter-terrorism measures, is also crucial. Effective implementation of these measures requires strong political will, commitment, and coordination among ECOWAS member states.

The GITFiCs recommendations for ECOWAS:

Establish a High-Level Contact Group: Immediately establish a dedicated contact group composed of respected elder statesmen, diplomats, and technical experts to engage directly with representatives from Burkina Faso, Mali, and Niger.

This group should focus on building trust, exploring areas of common interest, and identifying potential pathways for future cooperation, even outside of formal membership. Practical Action: Appoint specific individuals with proven track records in mediation and diplomacy within immediately.

They should also conduct a Comprehensive Sanctions Impact Assessment: Commission an independent assessment of the economic and social impact of sanctions on the withdrawing states.

This assessment should inform a revised sanctions policy that minimizes harm to civilian populations and prioritizes targeted measures against individuals or entities directly responsible for undemocratic actions. Practical Action: Launch the assessment within three months, with findings published within six months.

They should develop a Joint Security Action Plan with Sahelian States (Including AES): Recognizing the shared security threats, ECOWAS should propose a joint security action plan with all Sahelian states, including those in the AES.

This plan should focus on enhanced intelligence sharing, joint border patrols, and coordinated counterterrorism operations. Practical Action: Initiate technical-level meetings with security experts from all relevant countries within four months to develop the framework for the action plan.

Create a Regional Stabilization Fund: Establish a dedicated fund to support economic development and address the root causes of instability in vulnerable regions.

This fund should prioritize investments in education, job creation, and infrastructure development, with a focus on border regions and areas affected by conflict.

Practical Action: Secure initial funding commitments from member states and international partners within six months and establish clear criteria for accessing the fund.

Enhance Transparency and Accountability of ECOWAS Institutions: Implement measures to enhance the transparency and accountability of ECOWAS institutions, including clearer communication of decisions, greater involvement of civil society in regional processes, and independent oversight mechanisms. Practical Action: Conduct an internal review of existing governance structures within six months and implement agreed-upon reforms within one year.

The GITFiC’s recommendation for the withdrawing States

Establish Technical Working Groups with ECOWAS on Specific Issues: Create technical working groups with ECOWAS counterparts to address specific issues of mutual concern, such as cross-border crime, humanitarian assistance, and trade facilitation. This allows for practical cooperation even without formal membership. Practical Action: Propose the formation of these working groups within two months, identifying specific areas of cooperation.

Develop National Transition Plans with Clear Timelines and Benchmarks: Develop and publicly commit to clear national transition plans with specific timelines and measurable benchmarks for returning to constitutional order.

This demonstrates a commitment to democratic principles and can help rebuild trust with ECOWAS and the international community.

Practical Action: Publish detailed transition plans within three months and establish independent monitoring mechanisms to track progress.

The GITFiC’s recommendation for the international community:

Provide Financial and Technical Support for ECOWAS Mediation Efforts: Provide direct financial and technical support to ECOWAS’s mediation efforts, including funding for logistical support, expert consultants, and communication initiatives. Practical Action: Establish a dedicated funding mechanism for ECOWAS mediation activities within three months.

Coordinate Development and Security Assistance with Regional Actors: Ensure that all development and security assistance to the Sahel region is coordinated with both ECOWAS and the AES to avoid duplication of efforts and maximize impact.

This requires establishing clear communication channels and coordination mechanisms between international partners and regional actors.

Practical Action: Hold regular coordination meetings between international partners, ECOWAS, and AES representatives to align strategies and ensure effective use of resources.

 Towards a new era of pragmatic regionalism

The current situation calls for a shift towards a more pragmatic and flexible approach to regionalism in West Africa. This requires recognizing the diverse needs and priorities of all states, prioritizing dialogue and cooperation on shared challenges, and adapting regional institutions to meet the evolving needs of the region.

Conclusion

The study underscores the profound economic, political, and security implications of member state withdrawals on the Economic Community of West African States (ECOWAS). The findings highlight the imperative for ECOWAS to adopt proactive measures to mitigate these challenges, ensuring the region’s stability, security, and sustainable development.

By strengthening governance standards, enhancing regional cooperation, fostering economic integration, and developing strategies to mitigate security risks, ECOWAS can promote regional prosperity, address complex challenges, and enhance the lives of West African citizens.

Effective implementation of these measures requires strong political will, commitment, and coordination among ECOWAS member states.

This involves fostering a culture of transparency, accountability, and good governance, as well as investing in institutional capacity building and infrastructure development.

Moreover, ECOWAS must prioritize regional cooperation, dialogue, and consultation to address shared challenges and leverage collective strengths.

Ultimately, a resilient and effective ECOWAS is crucial for promoting regional prosperity, ensuring peace and stability, and addressing the complex challenges facing West Africa.

By adopting a proactive and collaborative approach, ECOWAS can overcome the challenges posed by member state withdrawals and emerge stronger, more united, and more determined to achieve its regional integration goals

Regional integration is not a destination, but a journey. It requires constant effort, commitment, and cooperation among nations to achieve sustainable development and prosperity

“The future of Africa is not in fragmentation, but in unity.” – Osagyefo Kwame Nkrumah PhD

By Isaac Osei Owusu

Source: GNA

The post The cost and implications of Member State withdrawals from ECOWAS appeared first on Ghana Business News.

The term “interest rate derivatives” often elicits uncertainty, even among seasoned corporate finance teams. Similar to other risk management instruments, many perceive these tools as complex.

However, because interest rates remain volatile, impacting borrowing costs, businesses managing variable-rate loans or planning major capital expenditures must now prioritise these tools more than ever.

This article seeks to clarify Interest Rate Swaps and Options (Caps, Floors, and Collars) and emphasise their practical applications for businesses.

Rather than serving as a technical manual, it urges action, highlighting that fluctuations in interest rates can cause unforeseen cost increases, whereas hedging instruments offer a measure of certainty and financial stability.

The global economic landscape has seen significant shifts in interest rates in recent years, often catching businesses unprepared.

For instance, in 2022, central banks rapidly raised rates to counter inflation, leaving companies with floating-rate loans facing unexpectedly higher interest payments.

These sudden cost surges can strain profitability, especially for businesses reliant on debt financing.

This article will also highlight the potential risks of unhedged interest rate exposures and discuss how Interest Rate Swaps and Options can act as essential insurance against rate fluctuations, allowing businesses to focus on their growth objectives without fearing unpredictable borrowing costs.

How Does Interest Rate Risk Affect Corporates?

Consider a company that has taken a floating-rate loan tied to the Secured Overnight Financing Rate (SOFR) plus a margin of 3 percent.

Paying at a floating rate means the future SOFR rate is unknown, which could be higher or lower than current levels, potentially burdening the client if SOFR rises. To illustrate, assume SOFR stands at 5 percent, the effective borrowing rate is thus 8 percent.

If SOFR increases by just 2 percent to 7 percent, the borrowing cost rises to 10 percent, potentially impacting profit margins significantly. For a loan of $10 million, this translates to an additional annual cost of $200,000 in interest alone.

Without a hedging strategy, the business absorbs this increased cost, which they could have mitigated with the right risk management tools.

Similarly, businesses planning to issue fixed-rate bonds might find themselves disadvantaged if rates decrease after issuance, leaving them locked into higher costs.

What Precautions Can Businesses Take to Manage Interest Rate Risk?

Certainty is the key to mitigating interest rate risk. By employing hedging tools like swaps, caps, floors, and collars, businesses can stabilise their borrowing costs, ensuring predictable cash flows. Let’s explore these tools:

(I) Interest Rate Swaps (IRS)

An Interest Rate Swap allows a business to exchange its floating interest payments for fixed payments (or vice versa). This tool is ideal for corporates with floating-rate loans who seek protection against rising interest rates.

Let us look at an example: Imagine the same company with a $10 million floating-rate loan at SOFR + 3 percent. To hedge against potential rate increases, the company enters into an IRS agreement with the bank, locking in a fixed rate of 7 percent for the next three years.

If SOFR rises to 8 percent, the company’s effective floating rate would have been 11 percent. However, under the IRS, the business continues paying the fixed rate of 7 percent, saving 4 percent annually on the loan.

Conversely, if SOFR drops to 3 percent, the company still pays 7 percent. This creates a dilemma: paying more with fixed cash flows versus potentially paying less if the floating rate remains unchanged. This “cost” is, however, the trade-off for stability and predictability in financial planning.

Recommendation: Interest Rate Swaps are best suited for businesses with long-term floating-rate exposures. While they eliminate increasing interest rate risk, the trade-off is forfeiting potential savings if rates decline.

The predominant impetus behind entering into such a swap arrangement is to therefore to enhance cash flow management or to pre-emptively mitigate the adverse effects expected from fluctuations in interest rates.

(II) Interest Rate Caps

A Cap provides the right to limit the maximum interest rate on a floating-rate loan. Businesses can benefit from lower rates while avoiding excessive increases.

Let us look at an example: Assume the company buys a Cap at 9 percent for its $10 million loan. If SOFR rises to 10 percent, the Cap activates, and the company pays a maximum of 9 percent. If rates remain below 9 percent, the business benefits from the lower floating rates.

There is, however, a cost to these structures given their immense benefit. They require an upfront premium, typically a percentage of the notional amount, which varies based on market volatility.

Recommendation: Caps are ideal for businesses expecting moderate rate increases but wanting to retain flexibility in case rates decrease.

(III) Interest Rate Floors (For Businesses that have investments)

A Floor sets a minimum interest rate level, ensuring a business earns a guaranteed return on interest-bearing assets like fixed deposits or bonds.

If a company has invested in floating-rate instruments, a Floor ensures returns do not fall below a specified level, say 4 percent, even if SOFR drops to 2 percent.

This is ideal for businesses or investment firms that want to protect their investment returns from declining and adversely impacting commitments made with the expectation of higher floating rates.

Recommendation: Floors are suitable for corporates with substantial interest-bearing assets exposed to declining rate environments.

(IV) Interest Rate Collars

A Collar combines a Cap and a Floor, creating a range within which the interest rate fluctuates. While it limits upside and downside risks, it usually comes with zero upfront premium.

We can look at an example of the same loan where the company enters into a Collar with a Cap of 9 percent and a Floor of 5 percent. If rates rise above 9 percent, the Cap ensures payments are capped at 9 percent.

If rates drop below 5 percent, the Floor ensures payments remain at 5 percent essentially allowing the loan repayments to float in between the Cap and the Floor that is convenient for the business.

Recommendation: Collars work well for businesses looking to balance cost-effectiveness with risk protection, as they eliminate premium costs associated with standalone Caps or Floors.

Advantages of Hedging with Interest Rate Derivatives

There are many advantages of risk management products referencing interest rates:

Predictability: Ability to stabilise cash flows and enhance financial planning.

Flexibility: Options (Caps, Floors, and Collars) allow businesses to benefit from favourable market conditions.

Cost Savings: Swaps and zero-premium structures like Collars minimise hedging costs.

Competitive Edge: Protecting against rate volatility ensures businesses remain focused on operations without surprises from rate movements.

In an unpredictable interest rate environment, businesses must not leave their borrowing costs to chance. Utilising financial instruments such as Interest Rate Swaps, Caps, Floors, and Collars allows companies to mitigate the financial impact of rate fluctuations, ensuring stability in their operations.

We recommend discussing tailored solutions with your bank that align with your specific risk-reward profile. While the article primarily discussed SOFR hedging, it is important to note that Ghana Reference Rate (GRR) hedging is also feasible.

This involves hedging where the local currency is utilized as either an asset or a liability.

At Absa Bank, we are committed to guiding you in developing a comprehensive risk management strategy that supports your growth objectives while protecting your financial bottom line.

By Gerald Nana Kusi

Source: GNA

The post Demystifying derivatives — clarifying interest rate risk management appeared first on Ghana Business News.

For the past decades, Nyaaba Dittoh, a 62-year-old smallholder farmer in the Nabdam District in the Upper East Region has engaged in subsistence farming to take care of his household. Farming has been his lifetime job on his four-acre land and the only source of livelihood for his family where he cultivates millet, guinea corn, maize and other local vegetables including okra and kenaf that feeds the family and serves as source of income for fees of his children. 

“This land is my inheritance, it’s not just a land, it’s my father’s sweat, my children’s future, and my identity,” Nyaaba said with his voice tinged with both pride and sorrow. 

However, for the past four years, the 62-year-old smallholder farmer and his household have been compelled to abandon the four-acre farmland due to activities of illegal mining. 

Illegal mining, known locally as galamsey, crept into his community. It began subtly, with strangers and some indigenes offering quick cash to the local people in exchange for their lands.  

So far, Nyaaba’s pristine farmland, has been turned into a muddy wasteland, its rich, fertile soil and vegetative cover stripped away in search of gold by both locals and strangers. 

“I tried to fight it, I begged the miners to stop, and I even built a room on the land to stay there and watch over the land, but they will usually come at midnight to work”, he cried. 

Scenarios 

According to him, due to his persistence against the perpetrators having their way, the illegal miners managed and changed his room padlocks and locked him up in his room and went about their activities, destroying his crops and investment. 

Now, Nyaaba struggles to make ends meet, currently relying on occasional menial jobs, while his children’s education hangs by a thread, and the hope of rebuilding his farm feels like a distant dream. 

Similarly, Sagbila Yinbil a 52-year-old smallholder farmer from the Talensi District has lost his three and half acre soyabean farmland and where he used to grow maize, groundnut, bambara beans, beans and guinea corn as the only source of livelihood for him and his household to activities of illegal mining. 

 “When they (illegal miners) came, they told me that if they dig the land for the gold and turn the soil, it will become fertile and indeed for the first year, I had a lot of harvest but for the past three years I have been struggling to get half of what I used to get”, he lamented. 

The once fertile soil that fed his family and neighbours became a lifeless expanse of gravel and toxic pits while the miners moved on, leaving behind devastation and despair on the faces of the farmer. 

“This year, I borrowed money from a friend to buy fertilizer for the farm, but it did not yield anything, and I don’t know how I’m going to pay him back and feed my family till the rainy season”, he wept while sharing his ordeal. 

The plights of Nyaaba and Sagbila are among thousands of Ghanaian smallholder farmers across the country who have lost their farmlands and sources of livelihoods to activities of illegal mining and unregulated small-scale mining. 

According to the General Agriculture Workers Union (GAWU) of the Trade Union Congress (TUC), Ghana has lost 2.5 million hectares of its forest reserve to illegal and uncontrolled mining. 

Again, the Ghana Cocoa Board also reported in 2022 that, the country lost 19,000 hectares of cocoa farmlands to illegal mining, throwing a lot of farmers out of business. 

According to World Vision Ghana, the country lost about 40 per cent of its forest reserves to degradation and was the third fastest forest depletion nation globally. 

Additionally, it said, about 80 per cent of total land area in the Upper East Region had suffered from moderate to severe land degradation, and about 16 hectares of tree cover in the region had been lost due to human activities such as lumbering and illegal mining between 2001 to 2020. 

Dire situation

Currently, Northern Ghana is becoming the hub of mineral deposits particularly gold and illegal mining is also spreading like wildfire across the five regions of the north especially in the Upper East, Upper West and Savannah Regions. 

For instance, almost every district in the Upper East Region has gold deposits and despite the presence of two large scale mining companies in the region, illegal mining continues to be widespread across many communities. 

Checks by the GNA indicates that activities of illegal mining were rampant in several communities in the Yameriga, Gbane, Sheaga in the Talensi District, Zanlerigu, Dagliga, Nangodi in the Nabdam District and Sapeliga, Zongoyire in the Bawku West Districts. 

However, the GNA uncovered similar activities in Sherigu in the Bolgatanga Municipality, Soe in the Bongo District, and Sandema in the Builsa North District. 

A visit to some of the places found several hectares of farmlands have been destroyed by these illegal miners, deep pits dotted around, and farmers forced to abandon farmlands they had depended on for many years. 

Engagement 

Most people in the communities engaged in the activities say some landowners have given their farmlands out for illegal mining. 

Ganizoya, an illegal miner who was busy in search for gold under the scorching sun told the GNA that although he knew the practice was destroying the farmland and making it unproductive, he was getting money from it as compared to the farming. 

“It is because of money that we are doing this. We know it is destroying our lands, but we don’t have anything to do during the dry season”, he said. 

Mba, another illegal miner, says if the government could provide alternative livelihood interventions for him, he would stop illegal mining. 

Food security threats

Many families in northern Ghana depend on agriculture, and many are vulnerable smallholder farmers who are losing their farmlands, potentially leading to food insecurity and increasing poverty levels.  

Alhaji Zakaria Fuseini, the Upper East Regional Director of the Department of Agriculture noted that issues of illegal mining on farmlands were dire and the menace affecting farmers in the region, already impacted by climate change and therefore losing farmlands could only worsen people’s ability to get fertile lands to cultivate crops. 

“If there is struggle for food, it can cause chaos and so we will carry out sensitisation especially among the youth and the chiefs who are considered to be involved in these activities”, he said. 

Mr Wepia Awal Adugwala, National President of the Peasant Farmers Association of Ghana (PFAG) who spoke to the GNA underscored the critical role of smallholder farmers to the country’s food security. 

“About 80 per cent of the food we eat in Ghana are produced by the smallholder farmers. During the COVID-19 era, it was the smallholder farmers who kept this country alive because we could not import food due to the closure of the borders”, he said. 

Mr Adugwala indicated that apart from pollution and destruction of forest reserves and water bodies, which was rampant in southern Ghana, illegal mining had rendered several hectares of farmlands unproductive, displacing the already poor farmers, making them food insecure and deepening their poverty levels. 

“If nothing is done to stop illegal mining immediately, there will be no future for agriculture in Ghana and that is why we have been calling on the new government to ban mining in water bodies, forest reserves and farmlands. 

“The 24-hour economy is a good policy, and we support it, but we need to protect the land and the environment to be able to produce the raw materials that we want for the industries”, he stressed. 

Environmental protection and climate change

Dr Asher Nkegbe, an environmental protection expert and National Focal Point of the United Nations Convention to Combat Desertification told the GNA that illegal mining was gaining notoriety in many communities in Ghana especially in rural areas. 

According to Dr Nkegbe, who is also the Upper East Regional Director of the Environmental Protection Agency (EPA), the destruction of vegetative cover was contributing significantly to the climate change crisis that was currently being faced, threatening efforts at achieving the Sustainable Development Goals (SDGs). 

He noted that goal 15.3 of the SDGs called for sustained actions to be taken to ensure sustainable water and land management and there was the need to end irresponsible mining to protect the environment, to protect lives and enhance productivity. 

“No one is against mining”, he noted, adding, “but it must be done in an environmentally friendly manner. 

“To varying degrees, land degradation affects 20 to 40 per cent of the world’s land area, deteriorating the welfare of 3.2 billion people,” he said. 

He therefore, called for collective efforts, emphasizing intensified education for people to understand the adverse effects of illegal mining and strengthen and enforce regulations to curb the menace. 

SDGs and way forward

While acknowledging the devastating impact of illegal mining on water bodies and the ecosystem, its catastrophic consequences on farmlands for food and nutrition production and subsequent threat to food security could not be overemphasised. 

The menace is currently causing havoc especially to smallholder farmers in northern Ghana and the Upper East Region in particular, which calls for urgent action to address.  

The many households that are handicapped with several hectares of arable lands lost, exposing them to food insecurity, malnutrition, hunger and poverty, which threatened their contribution to achieving the SDGs particularly goal one, two, three and 15 which talk about ending poverty, hunger and ensuring sustainable land management. 

The situation needs urgent action and would require increased public awareness on the devastating impact of illegal mining and the need to promote and adopt more environmentally friendly and sustainable practices especially on farmlands. 

Government, through its decentralised agencies and security needs to strengthen law enforcement measures and surveillance, especially beyond southern Ghana to help curb the menace and save the country’s food security system. 

The government must also consider banning mining activities on farmlands, in water bodies and forest reserves to allow for properly regulations and enforcement to promote responsible mining.  

By Anthony Adongo Apubeo

Source: GNA 

The post Illegal mining is threatening food security in Upper East Region appeared first on Ghana Business News.