It has been described by a telecommunication expert, attached to a British Newspaper, whom The Statesman contacted, as ?the worst deal any third world government can enter into with a foreign investor, particularly for a national asset which most multinationals would offer an arm for.?
Today, after five years of providing jobs and businesses to Malaysians to the tune of $500m, the disgraced Telekom Malaysia is demanding $300m as a farewell package. This is 789 per cent more than what they paid Ghana for milking its telecommunication cow dry.
In February 1997, 30 per cent of Ghana Telecom (GT) was sold to G-Com, a consortium led by Telekom Malaysia ? for $38m, a few months after 32 per cent of a relatively smaller concern, Senegal Telecom, was gleefully grabbed by France Telecom for $100m.
To show the extent to which the NDC sold Ghana short, in the desperate months leading to the last general elections, they rushed through a deal to sell a further 15 per cent worth of shares to TM, for which the Malaysians paid $50m upfront. Thankfully, the transaction was scuttled by Kufuor?s administration.
But, this was not before Malaysia, a country with a GDP of 82 per cent bigger than that of Ghana, used her much poorer colleague-nation to help recover after facing massive sagging stock and currency prices in 1997.
According to an international report of October 1998, Telekom Malaysia?s ?exposure to the currency crisis affecting other telecoms in the region has been tempered by the increasing profitability of its overseas investments which contributed M$127.2m. The biggest contributor to its bottom line was Telkom South Africa which posted a profit of M$172m, followed by operations in Ghana.
As if the government of the National Democratic Congress negotiated the deal while sleep-walking, the contract, which saw TM as a ?strategic investor,? gave full management control to the Malaysians, including 51 per cent voting rights. But, as observed by a telecommunication analyst, ?the Malaysians brought no money in as expected of a strategic investor. They gave jobs to scores of Malaysians who were paid by Ghana Telecom.?
Malaysian managers and supervisors received salaries up to $8,000 for the Managing Director. However, his Ghanaian deputy MD received less than $1,000 per month. While GT spent between $600 to $3,000 monthly on accommodation for its Malaysian staff, the highest Ghanaian management staff received less than $200 for accommodation.
Exhibiting blatant patriotism to the apparent detriment of Ghana, the telecom giant owned by the Malaysian government managed to award about 70 per cent of contracts worth about $800m to Malaysian-based companies, either directly or indirectly. Even where Malaysia has no known expertise such as in the manufacturing of telecommunication equipment, the contract was awarded to either TM or another Malaysian company, such as Tralsilco Folec Communications (formerly known as Folec Communications), who, in turn, bought the equipment from Malaysian subsidiaries of multinationals, like Alcatel, BT Engineering Ltd and Motorola.
For example, in the Customer Access network contract, Gamal, Samsung and TCIL were awarded the contract, but on the condition that all installation materials be purchased from Malaysia.
A story planted on BBC Online website, which sought to tarnish the image of Ghana as an investor-friendly destination, also sought to portray the Malaysian managers of GT as victims. It said: ?when President John Kufuor came to power he showed a new hostility to TM.?
What that story failed to add was that the President, even if he did, did so for very good reasons, in salvaging the interest of Ghana because TM had shown total disregard for Ghana, helped not least by the NDC government which sold one of Ghana?s most sought after assets for a pittance.
As a sign of the changes in government?s approach to negotiations, the new management agreement between Telenor and Ghana government requires the Norwegian but not GT to pay a penalty if Telenor fails to honour the agreement, such as, providing 400,000 fixed lines within the three-year contract.
Thus the National Communications Authority (NCA) slapped a multi-million dollar fine on GT when the company?s managers failed to provide the number of telephone lines as contractually promised by TM. In 1996, the NDC government made all the overtures of a government apparently prepared to divest part of GT to the company with the best deal on the table. Two conferences were held. Big multinationals from France, Holland and Britain came to the country.
But according to representatives of France Telecom and Alacatel, this paper spoke to, the government of Ghana was in no mood to play according to its own trumpeted rules. In the words of one international expert in telecommunications, ?they were pretty much fogged off by non-cooperation on the part of the Ghanaian Government. They were basically told ?you are not wanted,? mate.
In fact, when tenders were opened, there was only one offer from TM. According to the expert, who requested anonymity, ?this situation of only one interested company contrasted quite glaringly with the sale of 32 per cent of Senegal Telekom to France Telecom for $100m.?
The Senegalese market is remarkably smaller than that of Ghana where a similar portion was sold for $38m, only for the new owners to demand $300m for their 30 per cent stake barely five years down the line.
Senegal, with a population of 10.6m and a GDP of merely $16bn has, as at the end of last year, 628,000 telephones. Ghana, on the other hand, with her 20.2m people, and a corresponding GDP of $37.4bn has only 435,900 telephone lines, with demand far exceeding supply.
According to a source in the industry, ?the Malaysians were in no rush because the government then didn?t come to them with a whip. Ironically, they started by actively working to achieve the set targets but just couldn?t be bothered later on.?
