citinewsroom.com |7/17/2018

The Chief Executive Officer (CEO) of Dalex Finance, Kenneth Thompson, says Ghana is broke, and so government must take immediate steps to fix what he calls a “time bomb.”

“Ghana is broke, let’s face up to the reality and deal with it and stop this long English,” he said on The Point of View on Citi TV on Monday.

Mr. Thompson made the remark following reports about government’s intention to increase taxes.

Minister of Finance, Ken Ofori-Atta, is expected in Parliament on Thursday to present government’s supplementary budget review.

Ahead of the review, there have been heated discussions in the country following a hint by a member of the governing New Patriotic Party (NPP) of a possible increase in taxes and National Health Insurance Levy (NHIL).

The New Statesman newspaper reported that government may increase taxes from 17.5 percent to 21.5 percent.

Mr. Thompson, while speaking on The Point of View with Bernard Avle, urged government to broaden the tax base by getting more people to pay taxes instead of increasing the taxes.

“The challenge we have is how do we expand the tax net, it’s not about deepening it. All we keep on doing is trying to deepen it. Expanding tax net is getting more people to pay taxes, while the deepening means increasing it.”

“If you spend nearly 100 percent of your income on three line items you are broke. And when you are broke what do you do? You either increase income, reduce expenditure or you do both. But I’m not sure that the government is not serious at collecting more money. Not long ago I said I will pay property tax if they come to my house. Nobody has come to my house. Ghana is broke and that is the reality that we must all come to and find a way to get ourselves out of it,” the Dalex Finance CEO added.

GhanaWeb.com | 3/29/2018

The only way government can meet its revenue targets in the short-term while maintaining its expenditure level is to increase taxes across the board for a specific period – at least for three years – Ken Thompson, Managing Director of Dalex Finance, has said.

He argued that government’s penchant for borrowing to do everything from paying salaries, financing free SHS, to buying uniforms for the security services is a recipe for disaster and potential economic collapse.

“We are not likely to reduce our expenditure on salaries in the short-term; and even though there has been some capping of statutory obligations, the net effect is negligible. Our only hope is to increase revenue in the short to medium-term in order to fund consumption expenditure.

“We must get the informal sector to start paying individual taxes, enforce evidence of tax payment on property registration – e.g. vehicle registration, company registration, land title registration – and increase taxes across the board, especially property taxes. That is our hope in the short-term,” he said.

The tough-talking accountant, who said he is willing to back government in increasing taxes across the board, added that politicians must also share the pain by stopping the purchase of “numerous Toyota Land Cruisers that cost over GH¢600,000 each”.

Mr. Thompson was speaking at a Chartered Institute of Marketing, Ghana (CIMG) event in Accra dubbed ‘A Conversation with Ken’ – which was a hypothetical conversation with Ken Ofori-Atta, the Finance Minister, on the theme ‘Face up to the realities’…of the Ghanaian economy.

He is of the view that government must stop borrowing to fund recurrent expenditure and only borrow to finance development expenditure. “Since we spend over 100 percent of our revenue on three items, all our other expenditure is done from monies borrowed. We are borrowing to finance consumption and not investment.

“Our debt is piling up – to 70 percent of GDP, and we may not be in a position to repay in future. Even before then, any natural or man-made disaster could send us into a default tailspin of government obligations: causing intolerable hardship, widespread business failures, and mass unemployment,” he said.

The central bank’s latest data on the country’s debt show that public debt reached GH¢142.5billion as at December 2017; representing 69.8 percent of GDP, which has almost hit the dreaded 70 percent of GDP – a point the International Monetary Fund (IMF) has constantly cautioned against.

Despite this being a reduction from the 73.3 percent recorded in December 2016, the actual debt stock has increased by GH¢20billion from December 2016 to December 2017. The domestic component of the debt as at December 2017 stood at GH¢66.7billion, while the foreign debt stock was at GH¢75.8billion.

An analysis by the Institute for Fiscal Studies (IFS), a policy think-tank, has shown that Ghana’s debt situation is such that out of every cedi collected in taxes by the Ghana Revenue Authority (GRA), 42 pesewas – almost half – is used to pay interest on the country’s debt; taking resources away from critical sectors.

In a caution for government to quickly arrest the situation, which has gone from bad to worse since 2008, the policy think-tank added that interest costs are now higher than domestic-financed capital expenditure – and are threatening to equal or even overtake wages and salaries.

To Mr. Thompson, Ghana is heading for a disaster and the earlier the situation is arrested the better. “Ghana is broke, because in 2017 we spent almost 100 percent of all our revenue including grants on three-line items as follows: compensation to employees, interest payments, and statutory payments including GETFund, District Assemblies Common Fund, and NHIS,” he said.

thebftonline.com | 3/26/2018

Mr Ken Kwamina Thompson will be at it again at a Chartered Institute of Marketing Institute Ghana (CIMG) event at Alisa Hotel this Tuesday 27 March 2018.

The CEO of Dalex Finance and Leasing Company has since 2014 acquired a reputation of bold and controversial analysis of the state of the economy of Ghana.

In 2014 his prediction “Let the Cedi fall” caused consternation among economists in Ghana.

This was at a time when orthodox thinking was to prop up the value of the cedi. His mantra “Ghana is broke” has been oft repeated after Ken Thompson put that out in 2015.

In 2016, he lambasted the managers of the economy by saying “In the abundance of water, the fool is thirsty”. Ken version of blunt, plain-spoken and common-sense economic analysis is now in high demand in with the media and at corporate events.

The event has the topic “A conversation with Ken – The economy of Ghana”. Captains of industry and the financial sector are expected to be in attendance to hear another ‘blast’ from Ken.

The politicians may be wondering on whose side Ken will be ‘coming down on’ this time. Watch this space.

myjoyonline.com | 5/13/2016

Want your brand to succeed and bring you the desired returns? Then go beyond the traditional ways of marketing your product. That’s the advice coming from the Director of Dalex Finance and Leasing Joe Jackson.

Many good brands, according to him have failed to make the necessary impact because they have not been passionately marketed. Mr. Jackson tells JOY BUSINESS, therefore, charging entrepreneurs, in particular, to be enthusiastic about their brands.

He was speaking yesterday at an evening event organized by the Chartered Institute of Marketing in Partnership with Dalex Finance and Leasing Company under the theme “Creating a Winning Brand Strategy – The Case of Dalex Swift.”

“You must have a true functional product, but not matter how good your product, you’ve got to find that grand emotion to market it. Having a good product doesn’t mean you will succeed. If you have a bad product you will never succeed” Mr. Jackson noted.

Having a good product he stressed is also no surety that the brand will succeed. “If you don’t have the right brand strategy, forget it. You don’t get what you deserve. You get what you shout about. That’s the whole point about marketing. You will not necessarily have a successful brand simply because you have a good product” he added.

For him, employing the brand strategy that causes people to hear, feel, love and be loyal to your product is the panacea to brand success. He expressed worry about the vast number of brands on the market that are although good fundamentally, but have not been driven to success.

Below is the 4-step process towards a successful brand as proffered by Joe Jackson:

1.      Identify the target (the consumer group)

2.      Identify the need of the consumer (the emotional enemy that drives the need)

3.      Define the emotional benefits the consumer expects to derive

4.      Apply your marketing insights

Attaching a grand emotion that would enable the unification of the strategy according to him is the solution.

myjoyonline.com | 2/25/2016

The Chief Executive of Dalex Finance Kenneth Thompson has reiterated the call for government to channel the nation’s resources into developing the agricultural sector to the benefit of the economy.

Ghana, according to him, has a comparative advantage in the Agric sector hence, should take urgent steps to not only modernise cultivation of agro products, but also add value for exportation.

Mr. Thompson spoke with JOY BUSINESS after a public forum organised by the Chartered Institute of Marketing in partnership with Dalex Finance.

For him, it is not conceivable that Ghana can become an exporter of manufactured goods in the short-to-medium term therefore the focus should be on advantage because that is where the country has a comparative advantage.

“I have always said that we all know what to do and if we don’t do it, our children will suffer because the sins of the fathers shall be visited upon their children. Ghana can only go forward if we focus on things that we have a comparative advantage in, and top on that list is agriculture” he emphasized.

Mr. Thompson noted that focusing on producing processed and semi-processed goods for exports would rapidly put the country on the road to recovery. We could even include services like tourism. That is the only way through which we could generate foreign exchange for ourselves and future generations.

Ghana’s economic woes according to him, defy solutions mainly due to a “Rat Race” defined as “a fiercely competitive struggle for wealth by corrupt means.”

Ghanaian political elite (both sides of the political divide) and their complicit technocrats he said are the ones engaged in this “Rat Race.”

“In 2011, Ghana was the fastest growing economy in the world. Why is it that in a scant 5 years since then, the economy of Ghana has gone into steep decline and now is in dire straits?” he asked. A “failure to face up to the fact that the country was broke hence cut back on expenditure, foolhardy borrowing, inequitable taxation and appalling lack of investment in agriculture” in his view were some of the reasons why Ghana has slipped back economically. He wants government to support agriculture by providing seedlings and fertilizer to rapidly turn the sector around.
The CIMG Evening with Kenneth Kwamina Thompson was under the theme “In the Abundance of Water, Ghanaians are thirsty.”

myjoyonline.com | 2/25/2016

Financial exclusion has been cited as one of the key reasons for the poor standard of living among Ghanaians. This according to Dalex Finance is because over 65 percent of Ghanaians do not have access to any financial services.

Director of Business Operations at Dalex Finance Joe Jackson tells Joy Business the lack of easy access to financial services has not only limited the potential of financial institutions in the country to expand, but has also affected the quality of life of people.

Financial inclusion, Mr. Jackson explained, involves the number of a country’s population engaged in some form of financial transactions or having some account of some sort, or having some account with a savings and loans company, or a micro finance company, a bank, credit union, some welfare society or with a mobile money account.

He added that, the more financially inclusive a society is, the better its standard of living and the higher the rate at which that society develops or grows.

“When people are poor and are not financially included, they only rely on their periodic earnings to achieve anything. They in that regard are not able to secure a loan, can’t properly save, can’t take insurance, or even transfer money. So what then happens is that all the things that they are supposed to do because they can’t save, sometimes they can’t take their children to school and can’t even invest in any business and can’t even do anything that would help improve their standard of living,” he stated.

According to Mr. Jackson, when there is financial inclusion, the citizenry are able to access a full range of financial services for investments, insurance, credit, everything. These services he stressed are provided by institutions that are regulated by a central body that treats each of them fairly and with respect. The institutions are also sustainable and are able to deliver on a long-term promise to their customers. Also, there’s competition among these financial institutions so each person can choose where to engage in that financial transaction.

The lack of financial inclusion does not only make the citizens of a country poor, but widens the gap between the rich and poor.

The financial inclusion map of Africa indicates Ghana is quite low on the statistics. The financial inclusion rate for Ghana is about 34.61%.

Mr Jackson said “cross the border to Nigeria and it is as high as 44%. It’s 49% in Botswana and 50.47% in Algeria. Kenya has 55% rate of inclusion and this is attributable to the success of MPesa. This is because MPesa has roped everyone with a mobile phone into its system thereby giving financial access to even the poor. South Africa enjoys an inclusion as high as 68% and this strongly corresponds to the per capita GDP of all these countries”.

Ghana has traditionally had its financial services provided by commercial banks relocate branches to areas where they make the most profits.

So you would find that even though the number of banks have increased dramatically over the last two decades, the corresponding number of branches have not really gone up, and that the old commercial banks have actually closed branches.

“In addition, even though we’ve had an explosion of micro finance companies in the last few years, these banks have not achieved the level of inclusion that we would have expected simply because the amount of fraud they have perpetuated have stood as a barrier to adoption by the population that they are supposed to serve and a lot of these micro finance companies are also acting as ‘commercial banks light’. They are not actually going to the rural areas to address the under-served”, he indicated.

 Although there have been some improvement between 2011 and 2014 where the rate of financial inclusion jump from 28 to 34 percent which is a significant increase, that increase has been driven by the advent and success of mobile money. In 2014, over 11billion transactions were conducted via mobile money accounts. A lot more could be done to improve financial inclusion in the country. Mr. Jackson however says, if the trend is reversed to financially include a lot more Ghanaians, it could go a long way to positively impact the economy as a whole.