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Hello, this is World Business Report here on the BBC World Service with me, Rahul Tandon.
As always, we're going to bring you the stories of different businesses across.
From across the globe, we're going to head to Ghana to hear from a company that bought coal storage. to Ghana.
And we'll take you and talk about India.
I'm going to hear from a US company that was planning to set up a factory there, but because of the increased tariffs, is now putting that plan on hold.
But we're going to start the programme by looking at a case that has implications not just for the US economy, but the global economy.
It's a story that if you've been listening to us here on World Business Report all week you'll know we've been following very closely.
And that is President Trump's attempts to dismiss the Federal Reserve Governor, that's the US central bank, Lisa Cook, claiming she made false statements on her mortgage agreements.
She says she'll not be bullied out of her role.
Let's remind you of some of what President Trump has said.
She seems to have had an infraction and she can't have an infraction, especially that infraction because she's in charge of, if you think about it, mortgages and We need people that are 100% above board and it doesn't seem like she would.
He's already looking at replacements for her.
Well, we have some very good people for that position, and I think we have some very good people we're down to.
I mean, I think I maybe in my own mind have somebody that I like, but I deal with.
Scott, and I deal with Howard, and we're dealing with a lot of people, actually, that are going to be involved in that decision ultimately.
It's a very important decision. As we see, I mean, I got a bad recommendation when I
What with Jerome too late, you know, he's too late.
He is there, of course, referring to Jerome Powell, who is the governor of the US Central Bank.
We're returning to this story on the programme today because a very important... hearing began around 30 minutes ago, bringing us up to date.
As always, when we're covering these stories is our North of America business correspondent, Michelle Fleury.
Michelle, I know you're closely listening to what is happening in that hearing.
So thank you for taking the time out to join us, keeping one ear there and one ear with us.
What have we heard so far? Yeah, so this hearing ultimately is to determine whether or not Lisa Cook's request for her removal be blocked whilst her legal challenge proceeds in court.
The White House, for its part, wants the judge to allow the firing to proceed and so that's really what is at stake here in this hearing.
Now, so far this morning, Judge Jaya Cook has been asking a lot of questions about what is cause, because remember, the way the Federal Reserve is set up.
The president can only fire someone if there is cause.
And so there's a lot of questioning about what does that mean?
What does that look like? Now, the kind of grounds, if you like, under which Lisa Cook's lawyers are challenging all of this is to say, at this point, these are allegations.
She has not been found guilty of anything.
She wasn't given advance notice and she wasn't given a chance to respond.
So they're saying her due process has also been removed.
These obviously will be decided in court.
But in the meantime, it's just what happens whilst that process plays out.
And let's take a step back. And this is extremely important because for some people, they say this is a crucial moment in defining the independence of the Federal Reserve.
Well, and this is something that her lawyers talk about a lot.
They refer to some of the comments Donald Trump has made frequently pushing for lower interest rates, pushing for the ouster of the Fed chair, Jerome Powell, calling him too late.
You know, I've been speaking to people all week about this, including former Fed officials.
And the thing they all say is in the short term, Obviously, if you get lower rates, that's great.
But in the long term, if you don't have an independent Fed, It can lead to higher interest rates and higher inflation.
It can also lead to a loss in consumer value. or faith in the American financial system.
And so the result can be less global stability.
I think that's really kind of what people worry is on the line here with this, that this is much more than just, one person's job and one person's issues with how they filled out a mortgage application.
You have been looking at these issues for some time, haven't you?
US presidents will always... I suppose, be vocal in which way they want monetary policy to go.
Does this feel very different though, the way that President Trump is acting this term?
I mean, the way the Federal Reserve is set up, there is inherently tension between the central bank and... the government of the day.
And it can at times turn quite nasty. For example, you go back to Lyndon B. Johnson back in in the period of the Vietnam War.
And at the time, the Fed chair was someone called Bill Martin.
And apparently, they had a bit of a dust-up when he was very upset that interest rates went up and and sort of took to shoving him at his Texas ranch.
So things can get quite testy. Where this is different, though, is that it is about... trying to kind of win over enough seats on the board to actually change the makeup. in a way that would favour the president's views.
And I think that's why people are sort of raising alarm bells. and expressing concern about sort of what this means for financial stability, for the independence of the central bank.
I mean, the irony, though, in all of this is that in the meantime, if you look at what the markets are doing, how they are responding.
We've seen yields on long-term government bonds actually climb.
And so if Donald Trump says he wants to improve the housing market and lower... the government's debt repayments, actually what's happening at the moment is making it more expensive.
Let's bring somebody in who knows that side. of this story extremely well.
Randip Somal is a fund manager at M&G Investments.
Michelle was talking there about the market.
Have you been surprised, Randy, that the markets haven't moved that much or haven't been moved that much by this story?
Hi, Rahul. That's right. I mean, nothing has happened yet.
And also we'll see how Lisa Cook fares now that it's effectively a court case.
You know, Lisa Cook doesn't directly have any responsibility on setting rates, but it's also nominating then who sits on the FOMC, the Federal Open Market Committee.
So it's a small move in that direction, but there are still some checks and balances in place.
And of course, Jerome Powell still remains the Fed chair. up until May of next year.
So that's probably why we haven't seen an outward reaction just yet.
Do you feel then that when we get to the end of this legal process, and we'll come back to Michelle... and ask her when she expects that to be.
That will be the point when we get a decision one way or the other where we could see some more volatility in the markets.
Potentially, potentially. I mean, Donald Trump's whole term has been beset by volatility, especially when you actively call out for the resignation or the firing of of the Federal Reserve Chair, which we haven't seen before in a very long time from a US president. haven't.
Randeep, stay with us. Michelle has got one ear listening across to what is going on in that hearing.
So we will go back to her in a couple of minutes time.
We wanted to bring into the conversation somebody who knows Lisa Cook.
So we are now going to speak to Anna Gifty.
Apuku Ajiman, who was mentored by Lisa Cook.
So she knows her extremely well. She's a doctoral student at Harvard Kennedy School studying public policy. and economics.
Anna, thanks so much for joining us on World Business Report.
When did you first come into contact with Lisa Cook?
First and foremost, thank you so much for having me on the show.
I'm super excited to be here. Dr. Cook and I, or Governor Cook and I met back in 2017.
So... What people don't know is that she was the first Black woman economist I ever encountered.
And shortly after we met, I asked her... you know, would you be open to being my mentor?
This was after seeing her present her work on patent racism.
And she shared that she would be happy to do that and immediately started giving me advice.
And so since then, She has been a steadfast supporter and encourager along the path that I've taken in economics and policy.
You obviously then have had contact with her.
She has said she is going to defend herself.
That is exactly what is happening as we're speaking to you at the moment with that interview.
But what sort of person is she? How is she going to find going through this?
Because she has, you know, a lot of the world's attention on her at the moment.
You know, I really appreciate you asking this question because I think it is very central to her humanity, right?
Above all else. You know, Governor Cook is a fighter.
This is someone who has desegregated schools and has the scars to prove it.
She is a extremely qualified individual.
When the president talks about her not having what it takes to do this job, That's simply not true.
She was appointed to the Federal Reserve Banking and Securities Regulators Agency Review Transition Team under the Biden and Harris Transition Team.
She has served across four Federal Reserve banks.
That is a third of the Federal Reserve system, not including the Board of Governors.
She has served at the White House. She's served at the Treasury.
She's also served on the Council of Economic Advisors.
This is on top of her being a professor, a tenured professor at Michigan State University.
Not to mention- that she was trained at some of the best institutions in the world, actually, including Oxford, where she was a Marshall Scholar, the first Marshall Scholar to graduate from Spelman College.
That is impressive. Impressive resume, isn't it?
But that's right. These are serious allegations against her when it comes to mortgage fraud of somebody who holds a position of authority like she does.
Absolutely. These are definitely serious allegations against her.
But the key word here is allegations. And one thing that I know about Governor Cook is that she is not sloppy.
This is somebody who dots her I. She crosses her T's.
And she's someone who cares deeply about the job that she is doing, which is serving the American people by serving the best. view of the economy and ensuring that she is using all the information that she has provided to make recommendations alongside our colleagues to ensure that the economy, excuse me, is stable.
And so with that in mind, you know, One thing I want to note here is that these types of allegations haven't only been lodged at her, they've been lodged at other women of color.
And so it's also something worth noting, given that the way that homeownership and wealth plays out in the United States specifically actually, you know, turns out that women of color on the sort of the worser end of that, right?
So for every $1 of wealth that white men have, for example, black women only have 8 cents and black women are the least likely group to actually own homes.
And so these allegations aren't just about targeting Governor Cook, I would imagine, but also about sowing doubt in who can build wealth in the country.
That may well be the case. But on this issue, you know, Donald Trump has not gone down that line, has he?
He has been talking about mortgage. Would you ever listen to this? for us, please.
And I want to get your reaction to this.
This is Stephen Moore, who was a former Trump economic advisor talking about this case.
This is an unresolved issue, whether the president of the United States has the authority. to fire the Federal Reserve Chairman and or other members of the Federal Reserve Board.
I believe that the president should be able to have this power because the Fed has to be accountable to someone.
And if the president can't fire... Federal Reserve officer, then who can't?
And so I think, but the courts will decide this.
Well, you are studying, Anna, public policy and economics.
It's an important point that Stephen Moore raises, and it's a point that some people agree with.
It's interesting that he says that, right?
Because as your correspondent just mentioned, what is the goal of the firing, right?
I think that is actually the number one question that needs an answer.
And I would argue that The answer has actually already been provided, which is we want to tip the scales in favor of what the president deems to be good economic policy.
The Federal Reserve has been an independent entity for its entire existence.
And that is because you do not want interest rates to be set by the political whims of a particular party.
It's not in anyone's best interest for that to be the case Because political parties have different priorities of what they care about when it comes to the economy.
And you want folks to be able to make decisions about what is best for the economy based on objective measures such as the data.
And so I hear what he's saying. I think that It's interesting.
But at the end of the day, this is an unprecedented, illegal attempt at firing someone who is serving a very important role in economic policy.
That hearing will decide on that. Michelle is listening across to that.
What are we hearing? And I suppose the other point that President Trump might make here is, you know, people say it's because he wants to change up the makeup of the...
There is Federal Reserve governors to have people more in his favor.
But he might say, look, this is an important point.
This is an important accusation. And that's why he's doing it.
If you look at what the U.S. Treasury Secretary Scott Besant said earlier this week on...
Fox Business. It was this idea that the Fed was completely unaccountable.
And I think that is a view you hear a lot from Donald Trump, but also from those around him. that when they look at federal agencies, they have this concern and this is about trying to sort of regain control.
So that is a case no doubt we'll hear more about as this proceeds.
But in terms of what's going on in the hearing right now.
Um, we're still hearing from Abby Lowell.
He is the lawyer for Lisa Cook, uh, as well as talking about what is cause, um, He was also asking the court to consider the context in which this is all happening.
In other words, Trump's postings on social media. pushing for lower interest rates and noting that even since this legal case has been brought, there have been dozens more posts on social media from the president.
And of course we heard earlier from him this week when he was asked by a reporter about sort of what his cause was.
He didn't say, well, cause is behaving a certain way.
He said cause is, you know, not doing what he wants, which is lower interest rates.
And Michelle, briefly, if you don't mind, how long could all this take before we get a final decision from the courts?
I have to say, not a lawyer. I can't – I don't know the answer to that.
But what we are expecting to hear today is whether or not –
There will be this temporary block on kind of her removal as the legal case proceeds.
OK. And Anna, final thoughts from you. I was intrigued by one thing that you said there.
For you, is this more about this individual case?
Because Lisa Cook is the first black woman who served as a governor on the Federal Reserve, bigger implications for you.
Sorry, briefly again, if you don't mind.
I think ultimately what this boils down to is that this individual cost this woman of color is facing because of these attacks that are being lodged at her there are societal costs that everybody potentially might bear very soon.
And so with that in mind, yes, I would say that it means a lot that he is going for the person who is clearly different from everyone else.
But I also would say that him going for her is actually undermining the larger institution itself.
And overall, how the economy might respond as a result.
Anna, it's been a real pleasure having you here on the programme.
We will, of course, continue across the era.
And as a new booklet is coming out, The Double Tax, How Women of Colour Are Overcharged and Underpaid, which is out.
Soon you're listening to World Business Report here on the BBC World Service.
Throughout August, we've been looking at the economic issues, challenges and opportunities that are prevalent across Africa.
This week, we've been looking at some of the individuals and organisations who are providing solutions. to some of the continent's greatest challenges.
Today we bring our series to a close by hearing from someone who's grappling with one of Africa's biggest issues, how to keep things like food and medicines cold.
FreezeLink is a Ghanaian-based startup revolutionizing cold chain logistics across West Africa.
They were established in 2019 by Owusu Okoto.
I'm the son of a farmer. I'm the grandson of a farmer, cocoa farmer.
So I've seen waste firsthand from a young age. on the farm.
And I happened to pursue a career in supply chain after leaving Ghana, studying and then working in the West.
And I happened to work in food supply chain.
So I saw the opposite of the results I had seen as a child in terms of these phenomenally efficient products. food supply chains for multinational companies.
And it made me understand that there was an opportunity to really change the story.
And the catalyst was a company I was advising in Ghana that did distribution of meat.
They would buy meat from the rural areas, supply them to hotels and restaurants.
And the aha moment was that there was no third party cold chain sector for us to plug and play.
And so this made me realize that our cold chain was worthy of the rest of my career. it's one thing to have an idea isn't it it's another thing to put it in place how difficult was that Oh, it's been immensely difficult to go into a capital intensive field in the context where It's also energy intensive in the context where there was not continuity of supply in the national grid.
It's really taken every ounce of ingenuity from myself and the amazing team that we have at FreezeLink. to really try and figure out how do we devise a solution that is scalable and commercially sustainable.
So there's been lots of twists and turns in the plot.
When you're setting up a business in Ghana...
For any business, one of the big challenges is raising enough capital to begin with and then keep going because it takes time, doesn't it, for revenue to come in.
How difficult was that then? Do you think it's easier for businesses now?
The topic of capital for startups in Ghana is, and indeed across Africa, um is is not a great story but there is hope and by that i mean this that A, there is a domination of our entrepreneurial ecosystems by foreign capital.
But B, a lot of the time they're bringing on board a template which is not always finely matched to the local circumstances.
So for example, there is a need for patient capital.
And if you look at FreezeLink, we not only store and transport, there are many companies around the world in logistics that do storing in transportation as a third priority service provider.
But we also built and there was a need for us to build because there wasn't enough cold chain really across the country for us to build. make a dent in the problem of food and medicine waste.
So there's not enough patient capital, but at the same time, guess what?
We have huge amounts of institutional capital in Africa.
And by that, I mean things like pension funds, sovereign wealth funds.
Estimates put them to, I think, is between three and four trillion US dollars.
And most of these institutions, when they do invest, they invest in government securities, things like treasury bills.
They're not really investors. in the world economy.
So the challenge and the solution, I think, are clear.
Let's go back in time a little bit. COVID, that was a difficult time, but also important in your growth.
Yes. In 2020, we began to distribute life-saving vaccines for things like child immunization programs, you know, cancer medication, even blood.
And so when COVID came about, I received a call in February, 2021, and was asked to meet the plane on the tarmac that would bring not only Ghana's first COVID-19 vaccines, but also the first COVAX vaccines in the world.
And so we met the plane on the top time that we began to do the distribution and became part of a regional distribution network for the vaccines.
It happened to be two weeks after I had lost a cousin of mine to COVID.
He was 45. He had four kids. And, you know, you can imagine that it was a very bittersweet moment to after he had passed to then meet and distribute. the COVID vaccines, but it was an amazing moment to be so helpful at such a critical time.
Fascinating story there from Owusu Okutu bringing to an end our focus on Africa. during this month, but of course we will continue coverage across our business programmes.
Randy Somer, still with us. It's an interesting point there in terms of capital for Africa.
You know, if you want to grow businesses, you need capital.
How easy is it for... Africans to get hold of that capital do you think, Randip?
Is there growing interest in the continent?
Of course there is. I mean, we've got a period now where there's a lot more capital in the world, especially over a period where we've seen lower interest rates. you also now have impact-related funds that actually seek out to put capital into place where they can have the maximum impact. on individuals and lives.
So I think we're starting to see that more and more.
We're going to move now from the fastest growing continent demographically in the world to the country with the largest population, that is India.
Its economy performed unexpectedly well in the April to June quarter. providing some economic cheer in the face of steeply increased US tariffs on its good.
It grew by 7.8%. Yeah, but those tariffs could drive some foreign investors away from India.
I've been speaking to one of them. Jacob Rothman is president and CEO at the Shanghai-headquartered Velong Enterprises.
Our factory is developed. We've been working on it for two years.
We have over 100 tons of of stainless steel that just arrived.
We have molds, we have equipment, we have machinery, we have workers and staff. and we were just about ready to launch production for the US, and we have to put it on pause.
Pause means it's not happening now. And that is because of the tariffs.
It's not viable at the moment with that level of tariffs to continue.
Yeah, 25%. We went through this before in China.
At 25%, it's almost viable, and you're left with sort of a decision to keep the factory running and workers employed or either break even or potentially lose money.
But An additional 25 means that it's completely impossible to make production without losing a tremendous amount of money.
You have I think around 300 workers in that factory.
What does it mean for their future? Well, hopefully, because the JV that we forged with a local company in Marataba, which is in U.P., They have three or four other factories in town where hopefully we can move those workers to those factories temporarily.
But for the factory that we produce together, it could be devastating for anybody.
I know that we've spoken to you in the past and you've been really excited about India, the potential now for India to develop its manufacturing.
Base, you've just come back from the US speaking to people there.
Is there a danger that in this moment may pass India by now?
Yeah, I think that I've mentioned or spoken before, I went to China in my 20s and part of the reason I stayed in China I've been in China for over 20 years, was because you could almost feel at that time China on the rise.
Everywhere around you was excited. We felt like it was their opportunity. be important in the world stage, and it was and is.
I feel the same way, I felt the same way when I first started going to India five years ago.
The amount of energy excitement and hope that this would be India's time in the world, as now they've just had the rug pulled out from under them.
And I say they, it's really me too, because we were betting that this would be a great place for manufacturing.
I still think it is. I think this is a temporary thing that hopefully will pass and India can get back to the feelings and excitement that I just mentioned, but for now it's devastating.
Jacob Rothman there, president and CEO at the Shanghai-headquartered Velong Enterprises.
He was shifting some of his manufacturing to India.
That's now gone on hold. Randy, if someone's still...
With us, I spent a lot of time in India, talked to a lot of businesses there.
They were full of hope. Now they're looking for new markets.
The problem is it's not easy to replace that U.S. market.
It's the biggest economy in the world. It is about 86 billion a year in exports go from India to the US, so it will remain very important.
The Indian government is trying to offset this with domestic tax cuts to try and cushion the blow, but they need to try and improve the relationship at a 50%. tax rate on what is the world's largest economy versus the world's fastest growing economy is not good for either side.
Briefly, if you don't mind, 30 seconds. Have the markets been surprised because President Modi, Prime Minister Modi, President Trump, they had a great relationship.
People didn't expect this. They had a wonderful relationship, including President Trump's first term.
But since President Trump has gone cold on the Russian president, Vladimir Putin...
He's now trying to cripple the Russian economy much the same way the EU is as much as he can.
But he's choosing a different route to that.
And one of those routes is targeting India, which is importing and refining a lot of of Russian crude oil.
It certainly is, Randy. As always, real pleasure having you on the programme.
Thank you for joining us and providing us with those insights.
That hearing is still taking place. Michelle Fleury got an ear across it.
She'll be back on later editions of World Business Report to bring us up to date.
