PARLIAMENT MUST PULL THE BREAKS ON GT SALE, PRESS STATEMENT 24TH JULY, 2008 FOR IMMEDIATE RELEASE
It appears that Ghanaians at this
time are all looking up to their members of parliament to do the honourable thing
to either reject the GT sale agreement before it, or reduce the quantum of
shares being offered for sale, or revise the terms of the agreement in a manner
that evenly and fairly spreads risks and benefits of the transaction.
Integrated Social Development Centre (ISODEC), having followed closely and
having analysed the various positions being advanced by government, minority
parties and organized civil society groups alike, wishes to express its support
to demands on government to halt the sale of GT, and is calling on Members of
Parliament to rise up to their oversight responsibility and ensure that Ghana
is not short-changed in this transaction. It is perhaps needless drawing
attention of our honourable MPs to the fact that, the anger that has greeted
government’s decision to
sell 70% of its shares in Ghana Telecom is demonstrative of the people resolve
to hold duty-bearers accountable for their decisions, actions and inactions.
The time indeed, is long gone when citizens passively looked on as major decisions that fundamentally affected the national interest were taken without due regard to the sovereign will of the people on whose behalf those decisions were being taken. In the view of ISODEC, the GT Vodafone saga raises a number of concerns bordering on transparency, accountability, protection of the national interest, among others. But most importantly, it has brought to the fore the need to evaluate the usefulness of such exercises.
Though such study is yet to be conducted in-country the few that have been done at the continental level indicate that, privatization is not always the best option. A study conducted by a Senior Economist of the International Finance Corporation, Thierry D. Buchs in 2003 on the impact of privatization on African economies, concluded among other things that, privatization has had a minimal one-off impact on the budget. It contended that even though turnover and profitability have generally increased immediately following privatization the evidence has been mixed regarding the sustainability of the initial post-privatization upswing.
recounts job losses, and the fact that privatization has created new political
patronage opportunities, leading to numerous corruption scandals, as some of
the negative impacts of privatization in Africa. The trouble with privatisation
as we have known it in Ghana is that, it is often done without a proper
evaluation of how it advances the national interest especially in respect of
our development aspirations. This is the reason the country, has little to show
for all the state enterprises that have been privatized over the years.
governments have often failed to appreciate what constitute the national
interest, and so have not been able to serve this interest very well. They have
often indiscriminately bundled state assets, sometimes including well
performing ones, and sold them just to balance the national budget. It is not
clear what else we will sell when the last national asset has been sold. The
arguments that GT, like many of the previously privatised state enterprises
must be sold to raise urgently needed capital injection, as well as attract new
technology and managerial skills are as lame as they are untenable.
If it is
about raising capital, experience has shown that the Ghana Stock Exchange can
provide the solution in most of the cases. Cocoa Processing Company, Ghana
Commercial Bank, Goil, State Insurance Company, and many other companies that
have sought to raise money from the stock exchange, have all had their shares
over-subscribed. Simple arithmetic reveals that, at an average subscription of
$100 per person, it will take five million of Ghana's 22 million population to raise the needed $500
million new capital for GT, and this is possible not in the five years proposed
by Vodafone but in less than a year.
On the question of management skills, we
cannot doubt the capacity of the Ghanaian manager, especially when we compare
results with their conditions of service. We can say without a shred of doubt
that the so called better managers from the countries of the North cannot
deliver a fraction of the output of Ghanaian managers under the conditions of
service and incentive packages Ghanaians enjoy. The records in fact weigh
heavily in favour of the Ghanaian manager.
Our experience with the so called foreign
management expertise, from Speed Wing Limited of U.K. brought in to salvage
Ghana Airways, through Telekom Malaysia, Telenor of Norway who both failed to
revive the fortunes of GT, to Acqua-Vitens Rand, currently mismanaging Ghana's urban water systems, is
enough testimony that after all, the Ghanaian is not a bad manager. As for
technology, it can be procured by anyone on the open market, and so cannot be
said to be exclusively accessible to the foreign investor. The argument is not
that privatization is inherently bad, but we believe that the time has come to
re-think privatization within the scheme of our development strategy.
We also need a whole new national orientation to recognize the potential of the Ghanaian. We must challenge ourselves, set performance targets with corresponding reward to bring out the best in us. We must also think about the Ghanaian first in any privatization programme. Where all the needed capital cannot be raised on the local stock exchange we can have a mixed financing plan that includes the stock exchange. Secondly, we must begin to view privatization as an opportunity to transform our assets from one state or form to another, such that if a government feels strongly that an asset must be sold for reasons of non-performance, capital crunch or other, the proceeds are used to acquire new, better performing assets. It is important to recognize that, the sustainability of a country’s development financing is contingent on regular, continuous, and reliable flow of revenues, and this is not limited just to taxes, and export revenues but also dividends from government’s own investments. The notion that a government has no business being in business is untenable and totally misplaced.
A lot of the successful Chinese companies doing business the world over, including in Ghana are either state owned or partly-owned by the Chinese Government. Telenor, the Norwegian telecommunication giant is state owned. Countries like South Africa and Botswana are reaping better benefits from the exploitation of their natural resources because the state and local private companies are active players in the sector. The proposition is not for government to establish and run companies indiscriminately, but to position itself in a way such that beyond the taxes, import / export duties and royalties, government receives a share of declared profits, and the way to do this is to buy into, or maintain a strategic stake in strategic sectors of the economy such as the energy, mines, finance, telecommunication, Aviation, Ports & Harbours. Ghana stands at a crossroads over GT, as parliament prepares to ratify or not to ratify the deal. ISODEC wishes to remind the august house to be guided in their deliberations, by nothing but the supreme interest of Ghana.
By Steve Manteaw Coordinator Media & Campaigns
comments powered by Disqus