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Some foreign companies ignore red flags to sign contracts with Ghanaian governments - IMANI

Bright Simons Bright Simons Bright Simons Bright Simons Bright Simons .jpeg Vice President of IMANI-Africa, Bright Simons

Sat, 18 Jan 2025 Source: www.ghanaweb.com

The Vice President of IMANI-Africa, Bright Simons, has reiterated the think tank's position on the entry of foreign businesses into the Ghanaian market without assessing the risks of the political climate.

Reacting to the pressure by the United States of America in recent times for Ghana to pay debts owed to its companies, he noted that, before one of the contracts was finalised and executed for the operation to begin, IMANI raised red flags about their sustainability.

The said business was Zipline's medical drone services which have been applauded by the previous government to have helped Ghana's medical delivery system, especially, during the COVID-19 pandemic.

On January 16, 2024, he wrote: Some US, and other foreign companies, enter into contracts with the Ghanaian government without due appreciation of the political economy risks.

"Then, when they hit roadblocks they enlist American lobbyists and/or politicians to help them solve the problem from overseas by piling pressure on Ghana.

"Take this case of Ghana owing $251m to American companies, for instance. In due course, IMANI will examine all the specifics for each company and share findings. But the Zipline issue is very familiar to us."

He said "IMANI argued, and was roundly ignored, that the Zipline project was too big and too expensive and should be scaled down. Delivering medicines via drones should be restricted to only a small subset of current contexts. Ghana CAN'T AFFORD the current scope of multiple large drone-ports."

Completely disregarding the concerns raised, Bright noted that the government continued the business, even though debts kept rising.

"In typical state enchantment fashion, the govt continued to use Zipline medical drone delivery for PR even as debts piled up. Hopefully, the new govt will see reason in downscaling," he said.

Again, he argues that the pressure by the US may be rightfully placed but ignoring Ghana's political system may cost them a longer route to retrieve their debts.

"These types of situations are not simple commercial disputes. They are public policy matters. American companies have the right to use what tools are available to them to collect their money but they ignore the local political economy at their own peril.

"Any foreign investor doing deals in Ghana with the govt that ignores the political economy, and focuses only on the commercials, will find that a late switch to political lobbying to get their money may not be as smooth as they think," he concluded.

Meanwhile, the US is asking the International Monetary Fund to allocate some funds for the payments of debts owed to its company swiftly else Ghana loses any form of assistance in the future.

SSD/EK

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Source: www.ghanaweb.com
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