Advisory

The Audacity to Transform the Economy of Ghana forum the role of Governance Felix Addo Country Senior Partner, PwC Ghana.

May 2015 Strictly Private and Confidential

Agenda 1 2 3 4 5 6

Introduction Overview of Governance Establishing the nexus between Governance and economic performance Selected Governance reforms in Ghana Where do we go from here Questions and Answers

Page 1 9 17 23 30 37

Section 1 Introduction

Introduction

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 1

Section 1 – Introduction

The clock is ticking

Time for The audacity transformation to reach and is NOW! sustain our goals

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 2

Section 1 – Introduction

Governance failures - International

Lehman Brothers file for bankruptcy

Banks to Pay $5.6 Billion in Probes

Greece financial crisis

Global financial crisis BP Oil Spill in 2010 The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 3

Section 1 – Introduction

Governance failures - Local

Recruitment Scam hits Ghana Police… an estimated 200 young males and females were each defrauded to the tune of about 2000 to 4000 cedis

Ghana's Bureau of National Investigations (BNI) reveals that the government paid a whopping Ghc7.9 million to 22,612 ghost workers in a year.

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

GYEEDA scandal: Gov’t reclaims GH¢ 14.5 million illegally paid cash

GRA/Subah Scandal: How The GHC 75m Was Spent May 2015 4

Section 1 – Introduction

#61 – Globally #8 – Sub-Saharan Africa SA

NG

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 5

Section 1 – Introduction

Ease of Doing Business Ease of Doing Business Rank (189 Countries globally) 200 180 160

#70 Globally #4 Sub-Sahara Africa

140 120 100 80 60 40 20 0

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 6

Section 1 – Introduction

Afrobarometer - Most Ghanaians mistrust public institutions/officials. Perceived corruption by public officials |2014 All of them

Don't know

Some, most, or all of them

29%

34%

6%

89%

34%

32%

20%

8%

86%

6%

37%

29%

19%

9%

85%

Judges and magistrates

6%

36%

27%

22%

8%

85%

Tax officials of Ghana Revenue Authority

6%

34%

31%

20%

8%

85%

District chief executive

6%

35%

29%

20%

9%

84%

President and officials in his office

8%

35%

25%

23%

9%

83%

Local government representatives

8%

41%

25%

17%

8%

83%

Officials of Electoral Commission

10%

35%

25%

21%

9%

81%

None of them

Some of them

Most of them

The police

5%

25%

National government officials

5%

Members of Parliament

Respondents were asked: How many of the following people do you think are involved in corruption, or haven’t you heard enough about them to say: (a) The president and officials in his office? (b) Members of Parliament? (c) Electoral Commission officials? (d) Government officials? (e) Assembly men and women? (f) District chief executives? (g) Police? (h) Tax officials (i.e. Ghana Revenue Authority officials)? (i) Judges and magistrates? The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 7

Section 1 – Introduction

Afrobarometer – Perceived corruption by informal leaders. More people distrust business executives.

Large majorities believe “some,” “most,” or “all” business executives (82%), traditional leaders (78%), and religious leaders (69%) are involved in corruption. Perceived corruption by informal leaders |2014 None of them

Some of them

Most of them

All of them

Don't know

Some, most or all of them

Business executives

7%

38%

29%

14%

11%

82%

Traditional leaders

14%

41%

22%

15%

8%

78%

Religious leaders

24%

44%

15%

10%

7%

69%

Respondents were asked: How many of the following people do you think are involved in corruption, or haven’t you heard enough about them to say: (a) Traditional leaders? (b) Religious leaders? (c) business executives? The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 8

Section 2 Overview of Governance

Overview of “Governance” The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 9

Section 2 – Overview of Governance

Governance defined… Governance consists of the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them.

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

World Governance Indicators; Measuring the quality of governance..

May 2015 10

Section 2 – Overview of Governance

Governance defined…

Public governance is about the broader governance ecosystem of a society. It is the examination of the role of institutions, citizens, civil society, norms, and processes that affect societal priority setting and service delivery.

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 11

Section 2 – Overview of Governance

Good Governance encompasses the values of transparency, accountability and integrity.

Voice and Accountability

Political Stability & Absence of Violence

Government Effectiveness

Regulatory Quality

Rule of Law

Control of Corruption

Worldwide Governance Indicators (WGI) The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 12

Section 2 – Overview of Governance

3

1

4

2

The Audacity to Transform the Economy of Ghana forum - Worldwide Governance Indicators (WGI) the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 13

Section 2 – Overview of Governance

5

6

The Audacity to Transform the Economy of Ghana forum - Worldwide Governance Indicators (WGI) the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 14

Section 2 – Overview of Governance

Corporate governance defined.. The Cadbury Committee defines corporate governance as system by which companies are directed and controlled. Good corporate governance…



Makes companies operate more efficiently



Improve access to capital



Mitigate risk and safeguard against mismanagement

• Makes companies more accountable and transparent to investors and give them the tools to respond to respond to stakeholder concerns

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 15

Section 2 – Overview of Governance

King’s selected principles of corporate governance • Full disclosure – report on both positive and negative impacts on community and environment; • Simplified business reporting

• Develop responsible investor code • Adopt integrated reporting

• Stop mindless compliance Professor Mervyn King

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 16

Section 3 Establishing the nexus between Governance and economic performance

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 17

Section 3 – Establishing the nexus between Governance and economic performance

Establishing the nexus between governance and economic performance… • The exercise of authority in any country matters much to economic development. Executive authority through institutions are critical to providing the enabling environment for economic growth – World Bank

• Several empirical studies show a positive relationship between the quality of institutions & governance structures and economic growth. Weaker governance structures invariably result in misallocation of resources, waste, fraud and abuse which undermine development efforts… - Knack and Keefer (1995)

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 18

Section 3 – Establishing the nexus between Governance and economic performance

Establishing the nexus between governance and economic performance…

• Good governance is a pre-requisite to sustained increases in living standards. A broad consensus among growth economists, development experts and international policy-makers has begun - (Kaufmann et al. 2000; Knack 2003)

• Institutional quality, as measured by bureaucratic efficiency, absence of corruption, protection of property rights, and the rule of law, is important for economic growth – Alesina (1998)

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 19

Section 3 – Establishing the nexus between Governance and economic performance

Governance in Ghana – Selected legal/institutional framework

The Constitution of the Republic of Ghana 1992

Financial Administration Act, 2003, Act 654

Financial Regulation 2004

Public Procurement Act (2003),

Audit Service Act (2000),

Internal Audit Agency Act (2003),

Internal Revenue Act (2000) and its successor the Ghana Revenue Authority Act (2009).

Various enactments establishing Sub-vented Agencies

The Companies Act 1963, Act 179

Local Government Act (1993), the Local Government Service Act (2003),

District Assemblies Common Fund Act (1993), and the Chieftaincy Act (2008)

Bodies Corporate and Insolvency Act 1963, Act 180

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 20

Section 3 – Establishing the nexus between Governance and economic performance

Public sector governance; some observations…. Medium-term National Development Policy Framework: Ghana Shared Growth And Development Agenda (GSGDA), I & II

GSGDA I – Highlights of governance focus areas

GSGDA II – 4 anchors 1.

Investing in people

2. Building a strong and resilient economy 3. Expanding infrastructure 4. Ensuring transparent and accountable governance

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 21

Section 3 – Establishing the nexus between Governance and economic performance

Corporate governance; some observations • Good corporate governance is making companies more resilient to sustain extra-ordinary economic development; •

Regulations and Initiatives/Reforms across the globe – Sarbanes Oxley (SOX), King’s Report, Global Reporting Initiative (GRI), United Nations Global Compact (UNGC), Sophisticated Codes of Conduct, Ghana Business Code, Business Integrity Forums…



Corporate governance principles are calling for strong disclosure regimes for companies making them more transparent and accountable – key elements of effective corporate governance

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 22

Section 4 Selected Governance reforms in Ghana

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 23

Section 4 – Selected Governance reforms in Ghana

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

Revenue Administration and Tax Policy Public Financial Management Public Service Reform Debt Management Monetary Policy Financial Sector Reforms

Other On-going Reforms

Implementation of National AntiCorruption Action Plan (NACAP)

IMF Economic and Financial Reforms

Ghana Integrated Financial Management and Information Systems (GIFMIS) Adoption of International Public Sector Accounting Standards (IPSAS)

Public and Corruption management

Public Financial Management

Selected on-going governance reforms

Revision of the Companies Act Revision of the Corporate Insolvency Act Deposit Insurance Bill

May 2015 24

Section 4 – Selected Governance reforms in Ghana

Implementing institutions and key areas of reforms

Ghana Integrated Financial and Information Systems (GIFMIS) – as an enabler towards PFM

Financial management and control

Controller and Accountant General

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

+

+

Budget reforms using Performance Based Budgeting

Ministry of Finance

+

+

Human Resource Information Management System (HRMIS)

Public Service Commission

May 2015 25

Section 4 – Selected Governance reforms in Ghana

Adoption of International Public Sector Accounting Standards (IPSAS) – a catalyst for high-quality PFM Adoption of International Public Sector Accounting Standards IPSAS is a catalyst to providing high-quality financial information and, even more importantly, improving public finance management

Cash Accounting

Cash Accounting + Cost + Budget Analysis

Accrual Accounting

Integrated Budget + Accrual

Performance, Reliability and Comparability

Moving towards a greater degree of maturity in public financial management and reporting

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

IPSAS



Catalyst for performance improvement Sound public finance management Highly quality accounting standards May 2015 26

Section 4 – Selected Governance reforms in Ghana

National Anti-Corruption Action Plan

Key Elements of the NACAP

Macro level issues – National, economic develoment and poverty redution Public sector reform – Implementation of a number of reforms including constitution, civil service, etc Strengthening key anti-corruption and law enforcement agencies – need for institutional integrity, inter-agency relations, organisation support etc.. Public awareness and education – Education and awareness of both public officer and the general public. Prevention of corruption – reduce opportunities for, the occurrence of corruption and rent-seeking behaviour. Improving investigation and prosecution – Capacity building, appropriate case management systems, adoption of prosecution led investigations. Creating an enabling environment – Political will, enactment of legislation, continuous demand for transparency and accountability.. Coherent stakeholder engagements and role – complementary roles by CHRAJ, Parliament, the Executive, Judiciary, private sector, etc..

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 27

Section 4 – Selected Governance reforms in Ghana

IMF economic and financial reforms (April 2015) – validating on-going home-grown solutions

Revenue Administration and Tax Policy Public Financial Management Public Service Reform Debt Management Monetary Policy

Financial Sector Reforms

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 28

Section 4 – Selected Governance reforms in Ghana

Other on-going reforms

Revision of the Companies Act

Revision of the Corporate Insolvency Act

Deposit Insurance Bill

etc, etc The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 29

Section 5 Where do we go from here

The way forward

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 30

Section 5 – Where do we go from here

Education and Character transformation of Ghanaians

Continuous education and awareness of general public

Changing mind-sets/Tone in the organisation Strengthening our value system

Inculcating moral and ethics training in our formal education system

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 31

Section 5 – Where do we go from here

A. Strengthening public sector management •

Enforcement, enforcement, enforcement – laws, regulations and the relevant policies and frameworks including (in some cases) the structures exist. What is needed is the political will to ACT.



Curtail motivations, opportunities and possibilities of corruption;



o

Motivation – Disincentivise corruption

o

Opportunity – ensure openness and transparency of transactions; comprehensive vigilance on transaction involving public-private actors

o

Possibility – curtail the ability to undermine control mechanism Strengthen the institutions implementing NACAP

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 32

Section 5 – Where do we go from here

B. Ensuring sound, effective and efficient public financial management (PFM) •

Develop/Finalise a comprehensive PFM strategy document with inputs from all stakeholders such as development partners, civil society, regulators ,private sector among others;



The office of the Auditor General, Public Accounts Committee, Audit Report Implementation Committee should be further strengthened and supported to discharge their mandate under the Constitution of the Republic of Ghana.



Fast-track the roll-out of GIFMIS to all MDAs and include the Donor, IGF and other statutory funds in the system to facilitate the reporting of consolidated financial statements of Government.

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 33

Section 5 – Where do we go from here

B (cont’d). Ensuring sound, effective and efficient public financial management (PFM) •

Enforcement and strict compliance with Budget and commitment module in GIFMIS as a means of budget control budget and spending.



Speed up the finalisation of the IPSAS adoption road-map as announced by Government and the Institute of Chartered Accountant Ghana with the support of all key stakeholders.



Ensure the revision of regulatory and legal financial documents such as the FAA,FAR, PPA to conform to current trends and developments in the Public Financial Management system.

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 34

Section 5 – Where do we go from here

C. Ensuring Sound Corporate Governance:

• Promote ethical standards in the private sector with clearly outlined and enforced organisation codes of conducts. • Share best practices – professional and regulatory bodies • Adopt best practice codes of conduct/frameworks for sound corporate governance – King’s Report, Global Reporting Initiatives (GRI), etc.

• Incentivise best players in corporate governance practices • Hold SOEs to strict accountability in terms of financial and other mandates…(State Enterprise Commission?) The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 35

Section 5 – Where do we go from here

Allow the institutions and the laws of the land to work!!!!!

The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 36

Section 6 Questions and Answers

The Audacity to Transform the Economy of Ghana forum the PwCrole of Governance • Felix Addo Country Senior Partner, PwC Ghana.

May 2015 37

Section 6 – Questions and Answers

Q&A © 2015 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. The Audacity to Transform the Economy of Ghana forum the role of Governance • Felix Addo PwC Country Senior Partner, PwC Ghana.

May 2015 38

Role of Governance in Transforming Ghana's Economy Presentation ...

Role of Governance in Transforming Ghana's Economy Presentation Final 250515.pdf. Role of Governance in Transforming Ghana's Economy Presentation ...

2MB Sizes 3 Downloads 249 Views

Recommend Documents

The Role of Monetary Policy in Transforming the Economy of Ghana ...
Sowa - The Role of Monetary Policy in Transforming the Economy of Ghana.pdf. Sowa - The Role of Monetary Policy in Transforming the Economy of Ghana.pdf.

Kumah - Role of Fiscal Policy in Transforming the Economy.pdf ...
balance (ceteris paribus, notably private sector savings/investment). • Current account balance is difference between income/current. output and absorption.

The Role of Presentation Timing and Retrieval Dynamics in ...
Sep 5, 2011 - children to recall the name of the object (e.g., “What is this called?”). ..... moment generalization, it may also come at a cost at later points in time. 252 .... suggesting that many aspects of word learning rely on domain- genera

The Role of Governance in Determining Foreign Aid ...
Sep 21, 2014 - Donors reward changes in Freedom House category (e.g., from “not .... and the money may be provided without explicit monitoring and evaluation ... systems to implement development projects funded with programmatic aid ...

Current State of Indian Economy - Governance in India
Jun 8, 2011 - Amongst the use based industrial groups, a similar streak of weakness is seen with growth in the capital goods segment, intermediate ...... 16 Sea transport. 290.46. 275.21. 5.54. 1.58. 1.1. 17 Consultancy services. 237.87. 340.65. -30.

Current State of Indian Economy - Governance in India
Jun 8, 2011 - In the fourth quarter of fiscal 2010-11, corporate India turned out a good performance both in terms of sales ... quarter of 2010-11, companies from the services (other than financial) sector saw sales going up by 27.46 percent. ......

How Does Hybrid Governance Emerge? Role of ... -
actors and saw the crisis as an opportunity to promote environmental compliance and boost local agribusiness. Both in Brazil and abroad, Paragominas gained ...

Kingdom East Governance Presentation 8.11.16 (1).pdf
Try one of the apps below to open or edit this item. Kingdom East Governance Presentation 8.11.16 (1).pdf. Kingdom East Governance Presentation 8.11.16 (1).

Model of CSO Participation in Research Governance
Cross-analysis existing network of cooperation / Reliability of partners . ...... improvement, CSO benefits, Social interests/gaining legitimacy, policy outcomes, ...

What role can ICT enabled Governance Reforms play ...
Best results require strong political will and continuous learning ..... Web 2.0 and broadband technologies are also leading to fast convergence of audio/video ...... purposes, using software packages. Even new ... Services may be extended further to

Model of CSO Participation in Research Governance
Main contributors. Quality assurance. Name. Review Chair. Stephen Barnett ... This analytical model illustrates the interrelation between all ... With regards to the social impact of research, the timing of CSO participation and the CSOs' influence .

In Search of Best Practices in Christian School Governance CPE.pdf ...
There was a problem previewing this document. Retrying... Download. Connect more apps... Try one of the apps below to open or edit this item. In Search of ...

ALL IN PRESENTATION TITLE CAPS
Turning to how we are supporting businesses across Devon & Cornwall - we have over 16,000 customers, supported by 180 colleagues across the Region.

Presentation
A fast, cheap and simple analytical method. .... limited data from Jordan ... data. • Some of those: Mishor Yamin,. Revivim – Mashabim, Sde-. Boker, Shivta ...

The Role of the EU in Changing the Role of the Military ...
of democracy promotion pursued by other countries have included such forms as control (e.g. building democracies in Iraq and Afghanistan by the United States ...

The Role of the Syllable in Lexical Segmentation in ... - CiteSeerX
Dec 27, 2001 - Third, recent data indicate that the syllable effect may be linked to specific acous- .... classification units and the lexical entries in order to recover the intended parse. ... 1990), similar costs should be obtained for onset and o