Wednesday, June 13, 2012
Monday, June 11, 2012
Public vs Private - Songor Salt Project Meeting
In an effort to increase pension scheme returns, the Ghanaian government has recently created a 3 tier pension system. In this system tier 1 is still managed by the government, but tiers 2 and 3 are now privately managed in the hope that this will increase returns for the pensioners. FSL has managed to secure many of these funds and control them with the benchmark of earning 1% above the 91-day T-Bill at the time of purchase.
Songor Salt Project (SSP) is a salt mining company based in Ada, 2 hours outside of Accra owned and controlled by the government. Fidelity Securities Limited (FSL) manages the pension fund of SSP.
I was very curious to see this plant and was not entirely prepared for what I found. On arrival, we were handed off to many different people and lead to multiple locations before settling in to what I'm assuming was the boardroom. The boardroom was an interesting affair with pealing paint covered in the red dust that permeates throughout much of rural Ghana. The long wooden table in the center of the room was in a sorry state, covered in graffiti and half finished sums. It was very reminiscent of a high school common room, perhaps accentuated by the worn-out blackboard at one end of the room. The chairs around the table were even worse with many of the backs missing.
Although having been requested to be on time, Nii, Comfort and I must have waited close to an hour for the relevant members of the company to be present. The company does not have internet access so seemed to rely on word of mouth and the occasional telephone conversation for organization.
The meeting started off with a prayer. Then, began in an almost hyper formal manner which contrasted greatly with the sweaty, disorganized band that had taken so long to gather for our presentation. We went through an agenda slowly since there were many people not very familiar with finance present. The points that were raised by the companies representatives all seemed to focus around each person at that table receiving as much money as possible from the pension scheme. They did not seem to grasp fully how risk-adverse pension funds are supposed to be. They clamored for a performance based model not understanding that if pension fund managers are motivated by a slice of the profits, they will be more likely to take risks thus reducing the security of the pension fund as a whole.
Therefore, having answered the same question in multiple forms multiple times, the time began approaching 1:30pm and with it, the most obvious give-away that these men were government workers. Although we were in the middle of the meeting, many of the men said simply that "it's friday, time to go home." There was no concept of working to finish the task and then return home. Therefore, we were unable to finish our presentation and have been asked to return next week.
In recompense though, we were given a very interesting tour of the saltworks. Pictures will soon follow.
Some interesting facts/turns of phrase from the meeting:
Due to having no internet connection, salary data must be given to Fidelity Bank using a pen-drive every month.
(to be updated this afternoon with full list.)
Article on SSP: http://www.dailyguideghana.com/?p=890
Songor Salt Project (SSP) is a salt mining company based in Ada, 2 hours outside of Accra owned and controlled by the government. Fidelity Securities Limited (FSL) manages the pension fund of SSP.
I was very curious to see this plant and was not entirely prepared for what I found. On arrival, we were handed off to many different people and lead to multiple locations before settling in to what I'm assuming was the boardroom. The boardroom was an interesting affair with pealing paint covered in the red dust that permeates throughout much of rural Ghana. The long wooden table in the center of the room was in a sorry state, covered in graffiti and half finished sums. It was very reminiscent of a high school common room, perhaps accentuated by the worn-out blackboard at one end of the room. The chairs around the table were even worse with many of the backs missing.
Although having been requested to be on time, Nii, Comfort and I must have waited close to an hour for the relevant members of the company to be present. The company does not have internet access so seemed to rely on word of mouth and the occasional telephone conversation for organization.
The meeting started off with a prayer. Then, began in an almost hyper formal manner which contrasted greatly with the sweaty, disorganized band that had taken so long to gather for our presentation. We went through an agenda slowly since there were many people not very familiar with finance present. The points that were raised by the companies representatives all seemed to focus around each person at that table receiving as much money as possible from the pension scheme. They did not seem to grasp fully how risk-adverse pension funds are supposed to be. They clamored for a performance based model not understanding that if pension fund managers are motivated by a slice of the profits, they will be more likely to take risks thus reducing the security of the pension fund as a whole.
Therefore, having answered the same question in multiple forms multiple times, the time began approaching 1:30pm and with it, the most obvious give-away that these men were government workers. Although we were in the middle of the meeting, many of the men said simply that "it's friday, time to go home." There was no concept of working to finish the task and then return home. Therefore, we were unable to finish our presentation and have been asked to return next week.
In recompense though, we were given a very interesting tour of the saltworks. Pictures will soon follow.
Some interesting facts/turns of phrase from the meeting:
Due to having no internet connection, salary data must be given to Fidelity Bank using a pen-drive every month.
(to be updated this afternoon with full list.)
Article on SSP: http://www.dailyguideghana.com/?p=890
Friday, June 8, 2012
Ghana 2012!
I'm Back in Ghana! Me Do Ghana! (Translation from Twi I think: I love Ghana!)
After last year's successful adventure, I have returned to Ghana to complete a 10 week internship at Fidelity Bank. When I first arrived at the office, the initial reaction was surprisingly, surprise. The flailing of arms accompanied cries of innocence. "Welcome back my brother!" "We did not know when you would come!" "Have you said hello to ... ?" "Where did you say you wanted to work again?" Shocking after the multitude of emails I sent, yet in hindsight, I was home. This was typical Ghanaian efficiency.
After the initial shock of my arrival, I was quickly introduced to the team of "Fidelity Securities Limited" which is the investment banking and wholly owned subsidiary of Fidelity Bank and a member of the Fidelity Group. The team consisted of Nana, Nii, Nii, Salase, Liana, Alfred, Comfort, John, Sara, Akwasi, and Tom T. I have grown to be part of the FSL family in no time.
Rather than discuss the workings and basic structure of FSL which can be found on the website being launched soon that I had a small part in helping along. I thought I would showcase the bizarre and wonderful aspects of Finance in Ghana which distinguishes Ghana from the western cultures we are so used to and makes my time here a very unique experience.
On my first day in the office among many other introductions and pep talks, Nii Okai, the client relationship manager, took time out to try and prepare me for what was to come. "Alex, if a company gets rid of its entire board, what do you think will happen to the stock price?" without hesitating I replied, "It will plummet". (Obviously thinking that this indicates risk thus resulting in decreased investor confidence resulting in a drop in price.) "In the west, I would agree, in Ghana, the stock price goes up." Nii then proceeded to tell me how textbooks have been produced through the observations on developed markets and how smaller markets such as Ghana have very specific quirks that can seem very illogical to students of finance. In Ghana, there can be a large deviation between theory and reality as I would come to learn.
Therefore, although the systems in place may look simple from afar. (for example there is almost no derivatives market) The culture in Ghana is what makes this market and my experience so exciting.
Picture of me diligently looking over
the financial statements of Pro Credit
After last year's successful adventure, I have returned to Ghana to complete a 10 week internship at Fidelity Bank. When I first arrived at the office, the initial reaction was surprisingly, surprise. The flailing of arms accompanied cries of innocence. "Welcome back my brother!" "We did not know when you would come!" "Have you said hello to ... ?" "Where did you say you wanted to work again?" Shocking after the multitude of emails I sent, yet in hindsight, I was home. This was typical Ghanaian efficiency.
After the initial shock of my arrival, I was quickly introduced to the team of "Fidelity Securities Limited" which is the investment banking and wholly owned subsidiary of Fidelity Bank and a member of the Fidelity Group. The team consisted of Nana, Nii, Nii, Salase, Liana, Alfred, Comfort, John, Sara, Akwasi, and Tom T. I have grown to be part of the FSL family in no time.
Rather than discuss the workings and basic structure of FSL which can be found on the website being launched soon that I had a small part in helping along. I thought I would showcase the bizarre and wonderful aspects of Finance in Ghana which distinguishes Ghana from the western cultures we are so used to and makes my time here a very unique experience.
On my first day in the office among many other introductions and pep talks, Nii Okai, the client relationship manager, took time out to try and prepare me for what was to come. "Alex, if a company gets rid of its entire board, what do you think will happen to the stock price?" without hesitating I replied, "It will plummet". (Obviously thinking that this indicates risk thus resulting in decreased investor confidence resulting in a drop in price.) "In the west, I would agree, in Ghana, the stock price goes up." Nii then proceeded to tell me how textbooks have been produced through the observations on developed markets and how smaller markets such as Ghana have very specific quirks that can seem very illogical to students of finance. In Ghana, there can be a large deviation between theory and reality as I would come to learn.
Therefore, although the systems in place may look simple from afar. (for example there is almost no derivatives market) The culture in Ghana is what makes this market and my experience so exciting.
Picture of me diligently looking over
the financial statements of Pro Credit
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