Dalex Finance and Leasing Company Limited (DALEX) declared that 2014 was a banner year for its business. This leading Non-Bank Financial Institution announced this on Thursday 16 July 2015 when it launched this year’s ‘Cash Dash’ Promotion. The campaign offers up to GH₵500.00 free cash to Dalex public worker loan clients.
Mr Ken Thompson, CEO of Dalex Finance said “the ‘Cash Dash’ Promotion is to reward Dalex customers for the tremendous growth it achieved last year. He quoted some of the DALEX Salary Loan statistics for 2014 as follows:
The Dalex Paddy sales workforce doubled in size from 750 to over 1500 agents nationwide
30 Sales offices were established in rural and underserved communities
Salary Loan disbursements grew by 65%
Over 21,000 Public Sector Loan clients were served in 2014
The CEO further indicated that DALEX was proud of its leading role in ethical sales practices in the Salary Loans Sector. He said “We continued our partnership with the International Finance Corporation (IFC) Business Edge program’, to ensure that our nationwide Dalex Paddy sales force continues to follow best practices. Your Dalex Paddy will advise you of the full cost of your loan whiles making sure that you only borrow what you can afford.”
The financial entity in 2014 continued its massive nation-wide training program to transform the Dalex Sales Agents into the friendly and ethical “Dalex Paddy’ force.
The capacity building program was in partnership with the International Finance Corporation (IFC) Business Edge platform.
DALEX which is wholly Ghanaian owned, is licensed and regulated by the Bank of Ghana and has been in operation since 2006.
The Chief Executive Officer of the Dalex Finance and Leasing Company Ltd, Mr Kenneth Kwamina Thompson, has identified over-expenditure by the government as one of the major challenges of the country.
He said over- expenditure, which was not peculiar to the current government alone, had resulted in excessive borrowing by successive governments over the years, quoting the Monetary Policy Committee of the Bank of Ghana that Ghana was broke.
Speaking at a lecture organised by the Chartered Institute of Marketing, Ghana (CIMG) on the topic, "Crystal ball gazing: The Ghanaian Economy in 2015", Mr Thompson said Ghanaians had been living above their means for years now”.
He said for instance that the income during 2013 for the country was GHc13.9 billion and the expenditure was GHc21.2 billion, describing it as "reckless spending" and an indication that “Ghana is broke.”
Touching on the IMF bailout, Mr Thompson was hopeful that by the end of the first quarter of the year, the deal between the fund and the government would be signed.
He warned that the deal would come along with certain painful decisions by the government because of the conditionalities attached.
He said the decision by the government to engage in domestic borrowing was an attempt to crowd out the private sector from borrowing.
Mr Thompson said such a practice was injurious to the private businessman because of its tendency to increase interest on borrowing.
Touching on inflation, Mr Thompson said the recovery of the US dollar was putting pressure on the cedi.
He said there was fiscal indiscipline on the part of government and further predicted that borrowing would continue.
Mr Thompson called for more financial discipline on the part of the government, "if not we are heading for a crash."
He called for a complete change of mind-set and the political will to be able to address the challenges confronting the country.
Mr Thompson said the continuous preference for imported goods and items to the locally-produced ones was collapsing local industries, pointing out that it was more economical importing finished products into the country than producing them locally.
He said it was good for the President to call for the patronage of made-in-Ghana goods, but that making the call alone was not sufficient, and added that "until diet coke becomes more expensive than 'sobolo' we aren't going anywhere"
Aims of CIMG
The President of the CIMG, Dr (Mrs) Shola Safo-Duodu, said the vision of the institute was to promote the theory and practice of world-class marketing in the country hence, the need for world-class marketing professionals.
She said it was CIMG's mission to play an advocacy role so that it would push government and officials in the right direction as far as marketing was concerned, "so, today's programme provides us with an opportunity to meet our aim."
Contributing to the lecture, the participants identified the preference for foreign goods as what was fuelling the economy of those countries to the detriment of the local economy.
They denounced the opulent lifestyle of Ghanaian politicians in the midst of serious economic challenges facing the country.
They believed that it was the responsibility of the government to encourage local industries to grow and ensure that laws were in place to protect local manufacturers.
- See more at: http://graphic.com.gh/business/business-news/38643-reduce-spending-to-save-economy-kenneth-thompson.html#sthash.tG1OKDuC.dpuf
Chief Executive Officer of Dalex Finance and Leasing Company Limited Ken Thompson has criticized Ghana’s current economic situation saying “we are heading for a crush.”
According to him, inspite of the fact that Ghana is blessed with cocoa, gold, and a lot of natural resources including oil, its people are not enjoying the benefits. He therefore called on government to ensure that its policies and decisions bring about practical benefits to the people. Speaking at an annual CIMG lecture, Mr. Thompson criticised the phenomenon where it defaults in paying its debts hence borrowers are refusing to lend to it. He exclaimed “Ghana is broke!”
This he said is from figures produced by the Monetary Policy Committee. To buttress the point, he stated “If you earn a thousand cedis and you spend a thousand two hundred cedis you are broke. Ghana is broke – so says the government of Ghana.”
Figures issued by the bank of Ghana according to him showed that government revenue was Gh17billion, expenditure 21billion, payroll 43%, so between payroll and interest, it’s consuming 70% of our budget and that is before any deductions are made for NHIS, GETFUND, District Assemblies Common Fund. The Dalex CEO added that 2013, income was 14billion, expenditure 21 billion, saying “I don’t know which other way to put it but Ghana is broke, and our behaviour has not changed. We’re living beyond our means.”
Ken Thompson intimated that Ghana has got to a point where government debt is unsustainable at 60%, and from government’s own figures, “it’s hoping to borrow twice as much between Januany and December this year as it borrowed last year, and that was before the oil price crashed.”
When the oil prices crashed, government was contemplating whether or not to transfer the falling price to consumers. What happened according to him was that the small savings that was made, government rather transferred it to just 10% of the population – civil servants.
On efforts to address the challenges within the public sector including the bloated payroll, he said GHIFMIS will solve the problems. He called on government to disciplined by checking its spending. Government’s borrowing from the local market, he said is unfairly crowding out local businesses from the money market.
On treasury bills, he predicted a rise to 37% because government keeps issuing bonds as the Bank of Ghana fails to control government in its spending patterns. The Central Bank’s support of government in managing its deficit by printing more cash into the system thereby having more money chasing fewer goods. This he said will eventually cause a rise in inflation which he says will rise to as much as 25%.
He added that the government’s decision to go the IMF for a bailout programme is not entirely a bad decisions, but said it is not the panacea to all the problems with the economy – “it is not a silver bullet”. He suggested however, that government disciplines itself on its spending. For him, the programme is most likely to crash since for “over 20 years governments of Ghana have not been able to meet any of its targets.”
He indicated that the cash reliefs from the fund are likely to be back-loaded because “the government of Ghana will not meet these conditionalities – I doubt it. The cash relief will either be delayed or at worst will not come.” He advised Ghanaians not to be excited when the deal is finally signed.
He bemoaned the over-reliance of imports into the country that over a short period of time “Ghanaians have stopped eating the gari, brown rice, yam, etc but rather prefer to eat perfumed rice, quacker oats, indomie, pizza, etc. This will cause the major currencies like the Dollar to appreciate and the Cedi depreciate. This is exacerbated by the impressive performance of the Dollar globally which has been further boosted by the recent fall in the prices of crude oil on the world market.
He pointed out that until foreign products are made more expensive in the country, as compared with local products, a lot of people will continue to patronise foreign products which will not only negatively affect the value of the Cedi but also take jobs away from the country.
He was quick to add however that, competing with foreign products will be most difficult because it is cheaper to produce outside than in Ghana because the Cedi is over-valued. For this to be addressed he called for policies that would allow the Cedi to correct itself and also increase exports. This he said would involve collapsing all firms in the country that are import-based and revive as well as introduce ones that are export-based.
On the local currency – the Cedi, he said it is over-valued, hence gives falls confidence and the wrong signals which eventually leads governments to make wrong decisions. According to him, if the Big-Mac Index, which has proven more reliable than all the other sophisticated models is used to access the value of the Cedi, it will be realized that the Cedi’s value is artificial. He pointed out that per the index, a Dollar is currently equivalent to 6 Cedis. He is however, calling on the Central Bank to allow the local currency to correct itself.
He chided the level of waste in the country and asked that Ghanaians in general, especially the public sector to do enough to cut-back on waste – by turning of air-conditioners, and other electrical gadgets when they’re not in use among others. This he said could save the country and its people a lot of money that would otherwise be spent on paying for electricity.
- See more at: http://www.myjoyonline.com/business/2015/February-12th/ghanas-economy-heading-for-a-crash-dalex-ceo.php#sthash.8gkLoguM.dpuf