Government’s decision to sell off 70% of its stake in Ghana Telecom has caused a lot of static in the country recently. Government is anxious to sell off majority of its share in GT because, truth be told, we are in economic dire straits and the proceeds will help ward off an economic crisis.
In an election year, the last thing government wants is an economic meltdown. Secondly, Ghana Telecom is one of the worst-performing companies in the country today. Whiles it’s not making any profits, its debts are piling up by the day. If nothing is done soon, the company will collapse – going the same way as several other state-owned enterprises in the past. And when the company collapses, about 4000 Ghanaians will be left with no jobs. If each of these 4000 people has five dependants the job losses could translate into the loss of livelihood for about 20,000 people. That will be a social catastrophe!
Those who oppose the sale of GT insist that it’s a major national asset, which should not be sold out to foreigners. Even if it is to be sold at all, we should get more than what we are getting from Vodafone. In other words, they are saying that government is selling the company too cheap. What annoys them most is that government – either out of desperation or naivety – has bunched up the national fibre optic system with Ghana Telecom and selling them as a single unit for 900 million dollars. “We have been scammed,” Dr. Nii Moi Thompson of the Convention People’s Party said after reading through the agreement.
Let me confess that, like most Ghanaians, I’m not fully conversant with the details of the agreement. I’ve deliberately refused to read the full text of the agreement for two reasons. The first is that it will give me a headache I can do without. Secondly, I wanted to use information in the media to make a decision as to whether or not I should support the agreement. This is because most Ghanaians will make their minds with information they get from their media.
I’ve read (and heard) from both sides and I think the government’s case makes much more sense to me. Those who oppose the agreement are doing so mainly out of ideological passions. Led by Dr. Nii Moi Thompson (a man I deeply admire and respect for his intelligence) these people insist that they “remain committed to the belief that ‘the Black man is capable of managing his own affairs’”. This, I think is the main thrust of their argument. In their minds bringing a “foreign” company to manage a failing firm like Ghana Telecom smacks of an “abandonment of the independence ideal and a movement toward the re-colonisation of Ghana by global corporate interests.” I’ve also heard the business magnate, Alhaji Asumah Banda say that “it is better for us to mismanage ourselves than to allow foreigners to manage us.”
This is a very typical ‘konongo kaya’ mentality. You know you can’t do the job but you’d rather stay on and create more mess for everyone instead of giving it up for someone with the requisite competence to do it well. I know it’s humbling. It’s a hard pill to swallow but let’s accept the fact that we’ve largely failed to prove to the world that we are capable of running our own affairs. It’s surprising to me that this “abandonment of the independence ideal” is now dawning on Dr. Thompson and his group. Where were they when Telecom Malaysia (a company from a country which gained independence in the same year we did) bought a 30% stake in Ghana Telecom for a mere 38 million dollars? Didn’t Dr. Thompson realise that the “independence ideal” had been abandoned when government went all the way to the cold Scandinavian winter to beg a group of gluttonous Norwegians to come and manage our Ghana Telecom for us? This was a clear admission that we just couldn’t do it. The decision to sell off a majority stake in GT is therefore a more concrete admission of our failure – which to my mind is nothing to be ashamed of. But why are people now complaining because government has finally decided to wash its hands completely off the company? I sense some politics here.
People realise that they can use “nationalistic fervour” to make government unpopular and thereby win some valuable political points. “Look, they are selling the whole of Ghana Telecom for only 900 million dollars,” they say.
Secondly, I also think that the opponents of government know that the administration is desperate for some hard currency to keep the economy afloat. With the elections just a few months away, if the money doesn’t come in on time, most development projects like roads (which government use to woo voters) would be suspended and this could cost the ruling party some votes. Don’t forget that the ruling party stands to gain a lot of money from this deal by way of kickbacks, which will also go a long way to fund its campaign.
As the claims and counter-claims are made over this GT-Vodafone deal, I have not heard anyone ask what Ghanaians want. I base my support for the sale of GT to a strategic investor (like Vodafone) on what I think the citizens need.
The people of Ghana need a viable, profitable company. As at the end of last May GT was in the red to the tune of about 34 million dollars. With each passing day, the company’s bottom line gets redder and that means it’s heading for collapse. What the company needs is money to invest in technology that will guarantee its viability and enable it withstand fierce competition. Those who want to hide from reality can follow their “independence ideal”. But those who choose to face reality must know that for a company as distressed as Ghana Telecom, it shouldn’t matter whether the money it needs to get back on the path of profitability is being provided by a company from Britain or Lesotho.
Secondly, the people of Ghana need a Ghana Telecom that is efficient and provides quality service. We want to make calls and use modern information technology to improve our lives. We shouldn’t care if this service is being provided by a Briton or a bunch of chimpanzees from the Kalahari Desert. I applied for a landline from GT in 2005. I’m still to hear from them officially – even though a few technicians told me that if I paid “something” they will get me a line within a few days. I want a company that will give me a line within three days. I don’t care whether the company is being run by monkeys. It should just be efficient.
Thirdly, we have to accept the hard, cold fact “nationalism” is really not a very popular (or useful) word in world of business today. That’s why we have people in Accra working for companies in Los Angeles. Those screaming “national interest” are behaving like the proverbial ‘konongo kaya’. If you can’t run it, there is no shame in handing it over to someone else with better knowledge and skills (not to mention more cash) to do so. We first decided that we didn’t have what it takes to run GT when we sold 30% of it to the Malaysians. They messed up. So did the Norwegians who came after them. And each time, our government had to clean up their mess. Now government wants to act decisively and let go of the company completely. I see nothing wrong with that. After all, a viable Ghana Telecom will continue to employ Ghanaians and it will continue to pay taxes to the Ghanaian government. We can choose to keep our small Ghana Telecom and run it down. But why should we do that when we can bring in a bigger (and more purposeful, profit-oriented) player to help the company grow. It is, indeed, an “abandonment” of the independence ideal but if that’s what puts bread on people’s tables and helps us to keep in touch with our friends, loved ones and business associates, so be it. Nothing serves the national interest better than having a profitable company.
Finally, people argue that GT can be sold for more than 900 million dollars. Really? Where? On this planet? The company is so rundown that nobody wants to buy it. Some companies put in bids and later changed their minds. Singapore Telecom, for example, pulled out at the last minute citing “many legacy and outstanding issues” they could not “comprehend”.
Some of those “legacy issues” include undue political interference in the running of the company. When politicians appoint nincompoops to run a technologically-driven company like GT that’s what you get: incomprehensible legacy issues which drives the company deeper into debt and make prospective buyers shudder. Many say that to deal with this problem, we should pass laws that will prohibit politicians from rewarding their buddies with top management positions in our state-owned enterprises. That’s a thought. But with GT on the verge of collapse, when are we going to pass these laws? When are we going to implement them? We can talk all we want about laws. But if we are honest with ourselves, we will realise that in this country we take great delight in hurrying to pass laws we have no intention of enforcing. The only way to eliminate political interference in the management of state-owned enterprises like Ghana Telecom is to privatise them.
I am therefore in complete support of the decision to sell off government’s majority stake in Ghana Telecom. Government will use its majority in parliament to approve the agreement. That’s for sure. From what I’ve read in the newspapers and heard on radio, there are some knotty points in the current agreement that need to be attended to. First I hope that the agreement that will be approved by parliament was written by Ghanaians and not by Vodafone officials for our parliament to ratify.
Secondly, the provision that seems to grant Vodafone and its officials immunity from prosecution should be removed. Thirdly, parliament needs to set clear performance targets for the new company and its managers as well as spell out the penalties they will suffer if they fail to meet these targets. This is a point raised by Dr. Thompson and his group and I agree with them that this must be done.
Finally, parliament should institute a probe into the activities of GT’s management and prosecute all those who over the years contributed to the company’s current sorry state. I’m sure this will send a clear signal to managers of other SOEs that they cannot run these corporations like a certain man we all know run(down) his brick factory.
