Categories
Thoughts

Uncertainties of a Beacon of Democracy in Africa

BBC Radio is one of my favourite channels. I love the phone-in-sessions especially World Have Your Say and other personal stories about overcoming difficulties. As I write this piece, I cannot but recollect a BBC Sports program about a certain period of the African Cup of Nations. In that session of the BBC Sports program, there were jokes about the African countries. And this was how the joke went: all African countries meet at a pub and they display their manliness by requesting a smorgasbord of strong drinks. When it was Ghana’s turn, in a quiet voice like that of a child, it said, “Can I have a glass of milk?” This of course set off a round of raucous laughter among the panelists.

The juxtaposition of Ghana to a child, in my view is not necessarily a denigration. It portrays Ghana as pure and innocent. Qualities which sum up the stage Ghana finds herself in several decades surrounded by countries of which have fallen into the very pit of hellish civil war. The kind which Dante would have been proud to use in his “Inferno”. Ivory Coast, Burkina Faso, Togo; countries that are the immediate neighbours of Ghana have always experienced one form of altercation or another but not Ghana. The consequences of the Liberian civil war exist in Ghana in the form of the Liberia Camp, occupied by refugees who have went through the psychological and emotional trauma of war, refusing to go back to Liberia after two decades. Just as some Liberians found Ghana to be a haven, the children I teach from Syria, Egypt, Afghanistan, Somalia, Iraq, Lebanon, etc. see Ghana as a haven of peace. Ghana indeed has been the most peaceful place in the African continent.

This is not to say Ghana has never had challenges. Like all Africa countries, Ghana has been marked by the indoctrination of European colonialism but has weathered it quite well. Despite that Ghana has not felt the serrating and the destructive effect of the underbelly of civil war (which have been felt by the Rwandans, or Nigerians with Boko Haram, to name but a few). Thus, the comparison of Ghana to a child is apt, an innocence of the devastating nature of civil war.

My fear however is that this child is gradually losing her innocence, the consequences would not be pleasant, thus the trepidation and uncertainties. In 2016, Ghana elected a new political party, the New Patriotic Party (NPP) with Nana Addo-Dankwa Akufo Addo as its flagbearer. The previous governing party, National Democratic Congress (NDC) led by John Dramani Mahama, was booted out of office because of the reported canker of corruption. Prior to its election, the then opposition party (NPP) which went on to win the 2016 election, fervently promised to drastically deal with corrupt politicians and act of corruptions. Upon its assumption of office, nothing has changed much, except some would say corruption is at its very peak. Perhaps the words of a Special Prosecutor for corruption, Martin Amidu, (appointed to prosecute all involved in corruption in politics and the economy) that his employer is the “mother serpent of corruption” affirms the horrifying state the country faces.

During the rule of Nana Addo-Dankwa Akufo Addo, there were rumours and videos of civilians being trained in military warfare. This was reported by private media. The civilians trained in military tactics were called the Delta Forces. During the 2020 election, it was soon to become apparent why the Delta Forces were recruited and why the government appointed his relatives to the positions of the Electoral Commissioner, the justices, and key functions (who could have put a stop to any fracas the country experiences) in government. Indeed, for four years (2016-2020), the ruling government led by Nana Addo-Dankwa Akufo Addo was playing a game of chess with rules the opposition (NDC) was not aware of. The result leading the opposition (NDC) to having their hands being tied, effectively being handed a checkmate.

The civilian militia, Delta Force, had a role to play in the 7th December 2020 election. It is alleged it stole and burnt ballot boxes at opposition strong-hold and put into force other skirmishers which resulted in the death of nine people of which the media reported. This is unheard of in the history of Ghana’s elections. The justices appointed by the government shows clear nepotism and their necessity in the election is clear. The current opposition (NDC) who have disputed the 2020 election are faced with challenging the result of the election in front of judges appointed by the ruling government. On the 6th of January 2021, the Members of Parliament had to propose and vote for a Speaker of Parliament, when the ballot papers were being countered, a member of the incumbent NPP government, tried to do away with ballot papers cast, to have a person of their (NPP) choice as the Speaker of Parliament. To some this is just a confirmation that that the incumbent government led by Nana Addo-Dankwa Akufo Addo, rigged the 2020 election. And the very public figures who previously, could have expressed their views concerning the errors in the election have their hands tied, because they have been appointed by the government in several positions and therefore one cannot bite the hand that feeds it. Indeed this is almost admirable; it took foresight, effective planning and the ability to believe in one’s own lies to make this possible.

As a confirmation of the unease the country is experiencing, a movie, “Freedom and Justice” by a Ghanaian actor, dancer, musician, Kobby Rana was banned from its 25th December 2020 debut. A trailer of the movie portrays almost effectively, the corruption that has brought about the snail-pace or even a halt to the progress and development of the country. A country which gained independence at the same period as the likes of Malaysia, to use a comparative measure of development. With all that is occurring, the consequence is an undertone of unrest and uncertainties. Can Ghana continue in the midst of the lies, armed civilian militias (at the detriment of trained and qualified security officers), a disputed election, a government that practices Machiavellian and mafia-like tactics?  Will Ghanaians be willing to unify as the newly sworn in government of the Nana Addo-Dankwa Akufo Addo hopes for in his inauguration speech? Is this beacon of democracy in Africa losing its glow?

by Ali I. M.

Categories
Questions

What is Social Responsibility?

What is social responsibility? It seems that oftentimes there are words thrown up, buzz words, lending attention to schemes or behaviours that are seen as just in the general public, shining favourable light on organisations, particularly businesses. Corporate social responsibility, as defined by Oxford Reference, is “Awareness, acceptance, and management of the implications and effects of all corporate decision‐making, taking particular account of community investment, human rights, and employee relations, environmental practices, and ethical conduct”. But as with many buzz words it feels as though the word is used to white wash, green wash, favourably wash the organisation using it, bending it at its whim invoking a subconscious led understanding and interpretation from the reader, that burst of oxytocin or dopamine triggered by an unbeknownst thought. It seems in fact that the definition above is a tool box of which the organisation picks the most applicable tool, but not realising that in fact to do the job the properly they need the whole box.

It could be argued that recent or continued events such as climate change or the COVID-19 pandemic are upending how society approaches consumerism and capitalism alike in that social responsibility is taking on a new meaning entirely. Yes it is an “Awareness, acceptance, and management of the implications and effects of all corporate decision making…” but also an acceptance of part, an ownership of repercussion or consequence, an acknowledgement of the past and a promise for future reparations. It is also more than what is in many cases a metaphorical pledge of “…community investment, human rights, and employee relations…” with many organisations continuing their rampant profit led destructiveness in one place, whilst “investing” in the local community of their home place; continuing malpractice in workplaces globally in the want of profit; allowing the pay gap amongst their own employees to continue its canyon-like growth. And to top it off, an apparent promise of environmental protections and ethical conduct being loosely adhered to, to meet the target of outdated regulation to satisfy the law, doing very little in the way of attempting to revolutionise and lead by example, advocating instead for the change in regulation themselves.

Social responsibility is Acknowledgement, ownership of and action in response to the implications and effects of all organisational decision making, investment in global and local community, respecting human rights, and the betterment of economic well-being and relations of all employees, innovation in environmental and socially responsible practices, measuring all action against a high standard of ethical conduct.

by Maurizio J Liberante

Categories
Discussions

LIBOR Transition and the Introduction of “Risk-Free” Rates

During the Great Recession starting in 2008, financial products known as collateralised debt obligations (CDOs) are considered to be blame for the worst recession since the Great Depression of the 1930s. These CDOs, specifically a type of derivation (a financial product deriving its value from underlying assets) were increasingly being based on baskets of mortgages. The runaway ever-increasing pricing of property due to the exponential demand for particularly housing coupled with the hunger for CDOs created an endless demand and supply loops: demand of housing, increasing prices, additional requests for mortgages, supply of mortgages, creation of more CDOs, demand for mortgages, dropping of standards to obtain mortgage, thus increasing demand of housing.

Unbeknownst to many, although mentioned here and there by players in the banking and financial industries, including through the media, there was an additional underlying potential aggravation as to the eventual collapse of markets: LIBOR. The London Interbank Offering Rate (LIBOR) was a measure of the interbank cost in terms of interest of lending money to one another usually in a specified period (e.g. overnight, 1 month, 3 months, etc.). Traditionally a panel of banks would self-report this rate to the British Banking Association (BBA), an independent body, of which an average was taken and published every day at 11am. The reported rates were effectively estimates of expectations often loosely and not categorically based on bank’s perceptions of market conditions. Of course, this led to many years of manipulation of said rates by individual banks, attempting to impact the published rate of LIBOR underlying trillions of dollars worth of even consumer based financial products such as variable rate mortgages. Very often, those that were given authority of reporting to the BBA within banks were closely associated or directly involved in trades, providing a great deal of incentive to move LIBOR in their favour even by as little as a basis point (0.01%). This manipulation extended to collusion amongst traders and teams across multiple banks and brokerages with management in many cases knowing of this behaviour, but otherwise ignoring it.

After a significant investigation was conducted on both sides of the Atlantic by numerous US and UK government agencies, arrests were eventually made. Oversight of LIBOR was handed to UK financial regulators to ensure integrity and reliability moving forward. It was recommended that from 2012 that the panel of banks reporting rates should do so based on sets of recorded transactions, and with the publication of individual bank’s rates submissions every three months. More recently it has been decided that LIBOR should be replaced altogether with what the Bank of England has termed risk free rates (RFRs). One of these is the Sterling Overnight Interbank Average Rate (SONIA). This currently exists and is the effective interest rate charged overnight on unsecured transactions in Sterling (the equivalent being SOFR in the US overseen by the NY Federal Reserve).

SONIA is a weighted average of a previous day’s overnight Sterling transactions and is published daily. The other rates likely to be picked up in the EU and the US follow similar calculations. However, after all the realisation, scrutiny and subsequent criminal conviction surrounding LIBOR it seems somewhat ironic that a replacement rate categorised as being “risk free” are being used. Intrinsically it could be argued that no rate is without risk, especially when again like LIBOR, in effect, these “risk free” rates, speaking particularly of SONIA, are subject to the rates the banks themselves set on their own transactions with one another. In saying this, there is of course an inherent reduction in potential risk of blatant making up of rates entirely due to those being set and therefore fed into SONIA being used in the past to affect real transactions. But to imply then that banks or financial institutions could not on a subtle level (e.g. a basis point of movement) affect overall averages of SONIA through their own decisiveness of transactional interest rates seems far fetched. Continued trust of these behemoths of complex, profit driven, financial networks may be detrimental to much more than these networks themselves which was seen in the Great Recession. This is not to say that outright distrust is warranted, or there is an existing or otherwise interest rate calculation that does more to drive home or enforce integrity. However, using one that fundamentally appears vulnerable to similar nefarious activity seems counter productive.

by Maurizio J Liberante

Categories
Thoughts

Post-Pandemic Economics

What we are currently experiencing is unprecedented. A major economic catastrophe of which is mostly welcomed and intentional. We have locked down all function of our economies, restricting the movement of people, shutting many away from their normal lives of working through the forced closure of many businesses or what could be deemed the “free market”.

The free market is shut, but life continues. The UK government after many years of some of the most severe austerity in the advanced economies has made available spending that is astronomical including and not limited to the paying of 80% of the wages of many private sector workers. The rescue packages being dealt out by governments globally equates to trillions of dollars in value.

How are free markets suddenly disregarded with centrally planned state flotation of the economy being allowed by many of these private corporations that herald deregulation and outsourcing. Many may try to argue that this economic downturn is artificial due to its transparent causation. But should the free market not factor in all risks? Should it not be sustainable through any contingency?

That is what is usually argued, that the free market can provide all that the market demands and sustain economic activity efficiently. What if, as in this case, the market is no longer needed? What if all that is required is the bare necessities and the majority of activity is actually detrimental to many individuals’ lives? This is what we have now seen, the necessity of government, including in its existence in the economy. Our governments have increasingly pulled away from involvement in our economies with consecutive bodies being elected “reflecting” the wants of the public.

Things need to change. No longer can this form of capitalism function. We as societies already faced problems in the form of climate change and foreign ideological regimes with state surveillance systems that would keep the majority of our citizens awake at night. A new system of economics needs to be born from this. One that is inclusive, morally and socially responsible, and accountable both with risk and impact with safety being paramount. Safety is a fundamental component of the new system. No one wants a repeat of this, even those in the free market. The uncertainty, self-inflicted wounds, and chaos that this pandemic and subsequent lock downs has rout has brought oil to its knees, whole industries facing collapse, to name only a couple of the historic firsts. Now is the time to use this to our advantage and make the change needed to save this world. Life cannot go back to “normal”, we need a new normal and it needs to start now.

by Maurizio J Liberante