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Rawlings for Dummies: Ghana's Second Biggest Loser (Part 3)

Sat, 20 Jun 2015 Source: Lungu, Prof.

Jerry Rawlings for Dummies: Ghana's Second Biggest Loser (Part 3)

The "...ideological turnabouts from socialism to 'liberal capitalist stabilization policies' from President Kwame Nkrumah to Busia, has had a negative impact on the pace of economic development. This turnabout has been worsened by punctuation by a 'nightmare of military adventurism from 1973 to 1983'...'leadership is cause, everything else is effect'...” (Professor Stephen Adei, Ghanaweb, 11 May, 2013).

In our May 2015 articles on Ghanaweb, ModernGhana, and SpyGhana titled "Mahama's 'Dubious Judgement' Toli is Worthless", we spoke about Mr. Mahama's trip to London, UK, to "keynote-speak" to entrepreneurs at the "Oxford Africa Conference 2015". The "student-led" conference convened "entrepreneurs" and speakers to focus on Africa, "A Continent on the Move". In that essay, we touched on how the Oxford students planned to host a "Gala Dinner" (£55 or GH¢346 per-student, and £80 or GH¢504 per- non-student). However, the students neglected to book a single global transparency organization to share with Mr. Mahama and the "entrepreneurs" how corruption and theft of African resources inside Africa on one hand, and the laundering of those stolen assets through banks in Switzerland, Bermuda, London, Bahamas, Mauritius, US Virgin Islands, Cayman Islands, Singapore, Gibraltar, etc.), on the other, are actually the bane of Africa's under-development, and needed addressing in such a forum.

Among other points, we also said that the problem with Ghana's arrested development quagmire is significantly not "a lack of entrepreneurs or businesses, or even lack of capital...Ghana's development quagmire is primarily due to poor and deceitful performance of government and public institutions, (i.e., clandestine and illegal privatization of public assets and goods, official corruption, lack of transparency, collusion resulting in the plunder of resources by multi-national corporations...(to include)... racially-inspired Western aggression against Pan-Africanists of African origin, among them democratically-elected African leaders..."

Given the rather high level of corruption in Africa and its impact on development and human lives (annually $150 billion in loss compared to $40 billion in Foreign Direct Investment (FDI), we thought several global transparency organizations would have been a great fit for the Oxford-Africa conference, if we were serious about African development. Among the organizations we mentioned were:

• International Aid Transparency Initiative (IATI)

• Open Government Partnership (OGP)

• Transparency International (TI)

• Investigative Reporting Project Italy (IRPI)

• National Endowment for Democracy (NED)

• Global Integrity (GI)

• Open Society Foundations(Soros.org)

• Center for Constitutional Rights (CCR)

• European Center for Constitutional and Human Rights (ECCHR)

To our truly honorable list of global transparency organizations we must now add the following three:

• International Consortium of Investigative Journalists

• Action Aid

• Extractive Industries Transparency Initiative (EITI)

We hope that the Oxford Africa Conference 2016, if one holds, will deeply reflect and ensure several of these organizations are invited to make presentations to allow the Oxford students to obtain a more holistic perspective about the interplay of politics, development policy, and entrepreneurship, and their impacts on the failure of governance in Africa, Ghana included.

But this essay is not about Mr. Mahama and his new friends in Oxford!

No, rather, this essay is about how Mr. Mahama can do a "General Buhari" by showing Ghanaians that his "commitment" to fighting corruption in Ghana is a dead serious one, and totally unbounded.

You see, if we've heard Mr, Mahama right, "stamping out corruption" has always been his primary agenda. So too, we have heard, about Nigeria's new leader, President Buhari. In fact, as we are writing this essay, all the new Nigerian leaders, including their Vice President, have been asked to attend their first meeting with Claire Short, the head of global anti-corruption watchdog, EITI. General Buhari wants his colleagues to understand perfectly how billions of dollars in Nigerian oil revenue leakage can be curbed by implementing EITI recommendations aimed at recovering over $38 billion from Nigeria oil and gas companies.

We believe that the case in Ghana is just as serious since Mr. Jerry "Accountability" Rawlings begun selling off and divesting state enterprises in the 1980s. That, of course, was followed by disinvestments and sales of other state enterprises by Mr. Kuffour and his NPP administration(s).

All fair and balanced Ghana nationals want to know the true extent of underpayments, under-reporting, and under-assessments of those government enterprises under Mr. Jerry "Accountability" Rawlings and Kufour's NPP administration. We say that all of those Rawlings-Kufour sales of government assets need looking into, objectively, that several of those global transparency organizations, in conjunction with their Ghanaian partners and other professionals, can assist Ghana trace the performance of those transactions.

Question is, exactly how much were each of the Kwame Nkrumah-founded state enterprises divested/sold for, how were they valued and why, how much was collected for each, when were the proceeds collected, and what happened to the funds collected by the government of Ghana for each , if any. In short, for heritage purposes. how competitive, transparent, and "accountable" were all those sales and what was the performance (honesty!) of each administration, compared to the other. Finally, who were the key officials that engineered and/or participated in those transactions, and what accounts did they possess at that time?

Problem is, per Graphic.com, at independence in 1957, well over 90% of Ghana's import trade was in the hands of foreign firms; two British banks shared about 90% of all banking business; expatriate companies held 96% of total timber concessions; foreign investors owned all functioning gold mines and controlled about 50% of the annual diamond production; general insurance was entirely in the hands of expatriate firms; and foreign companies earned the bulk of total receipts in the small manufacturing sector.

However, just one year before the overthrow of Kwame Nkrumah in 1965, the state importing enterprise handled 35% of the country's total commercial imports; the state insurance corporation transacted about 50% of all insurance business; the government's commercial banks accounted for over 60% of total deposits; the state-owned Black Star Line carried about 17% of Ghana's sea-borne commerce; the Ghana National Construction Corporation (GNCP) had displaced almost all private contractors from the largest subsector of building and construction that was financed by public funds; and the factories owned by the state or partnerships between government and private interests produced 27% of total output in manufacturing. These Ghanaian successes in indigenization, industrial capacity, employment, education and sundry skills were powered by over 325 state-owned enterprises.

But, by the 1980s, following additional coups and counter-coups, the state enterprises were suffering along with most businesses in Ghana. However, the state enterprises were held mostly to blame for the problems in the economy.

So, beginning in 1984, "under pressure" from the World Bank, the Rawlings government, with Paa Kwesi Nduom deep in the thick of his triple-play modus (consultant; executive-without-porfolio; and Non-Tax-Paying Ghanaian expatriate), began to divest/sell the state enterprises to foreign and "private investors" through the Enterprise Reform Program, initially taking off the list "twenty-two sensitive enterprises...including major utilities... transport, cocoa, and mining enterprises". This was followed by the Divestiture Implementation Committee (DIC). The DIC divested or partially privatized even more state enterprises, including the nation's banks all the way to the 1990s.

Between 1998 and 2009, near the time Mr. Jerry "Accountability" Rawlings and his affable side-kick, Paa Kwesi Nduom left the government yard (Ndoum however held-over and did a double-dip with Kufour's NPP government), all those Kwame Nkrumah founded state-owned enterprises had been divested, looted, or utterly destroyed, to wit:

>--- Sold Assets -----------------69%

>--- Sold Shares -----------------14%

>--- Joint Venture --------------- 4%

>--- Lease ------------------------ 2%

>--- Outright Liquidation ------ 11%

(Culled from C. A. Ntiri, N=367, DIC Secretariat, 2010)

Forward to 2015!

Many world observers and Ghana nationals are now a lot more wiser about the record of those divestments on account of information now available about the sale, destruction, and looting of the national assets. For instance, many informed people and organizations are re-visiting the Serious Fraud Office cases and have been wondering still what is at the bottom of all the Nduom wealth. Then, there is the mother-lode case of Jerry "Accountability" Rawlings and his ownership of the same assets he, Mr. "Accountability", was probity-bound to seek and acquire the highest and best value in the name of all Ghanaians, and to do it legally, transparently, and under the strictest of ethical standards. How much income tax has Mr. Jerry "Accountability" Rawlings paid to Ghana, over the years, for all the income/wealth his so-called friend in London has expended over the years to educate his children overseas (while he screwed over the Ghana education system and the education of other peoples' children), and what is the connection with the state divested assets he engineered under darkness, then?

In the words of Theoyibo, "...a good number of the (divested assets) either died out in private hands or are not performing any better than they actually were under State-control....What is true however is that the privatisation did not prevent Ghana from becoming more indebted....(and Ghana is)...currently considering an IMF bailout package, even after the discovery of oil over 5 years ago..."

As we've hinted, the bad news for Mr. Jerry "Accountability" Rawlings, Mr. Nduom, and looters of the state enterprises is that important research and forensic investigations into "the life of the divested SOEs" is being done, and will be done, for all to understand the whys at bottom.

The Ntiri MBA thesis study (2010), investigated the financial and operating performance of three large privatized firms (Cocoa Processing Company Limited, Ghana Commercial Bank Limited, Ashanti Goldfields Company Limited ). Ntiri compared their performance (profitability, efficiency, output, capital investment, employment, leverage and dividend), before and after privatization. For the sample, though not necessarily representative of the 367-odd state enterprises,

Ntiri found no convincing evidence that suggested significant change in financial and operating performance of the three entities, five years after privatization.

But, seriously, what could a reasonable person expect of disinvestment and privatization of state enterprises, of governance, accomplished entirely through "deals negotiated in private discussions with individuals and groups of investors"?

So, for Mr. Mahama, there is nothing simplistic here - just a public-mission, Ghana-centered, so to speak.

Mr. Mahama must now compel himself to truly responsible action to move Ghana beyond the current smoking mirrors being conducted by Mr. Jerry "Accountability" Rawlings and those who paid next to nothing for the state enterprises, but possessed those enterprises still.

Mr. Mahama must do better for all Ghana, if he understands perfectly well that his "Better Ghana" mantra can never get him anywhere fast and bright without sunshine into the Rawling's era divestments.

Mr. Mahama and his assistants must know that there are organizations and individuals all over the world, from Ghana, to Switzerland, to Bermuda, to Stockholm, to Bahamas, to Mauritius, to the US Virgin Islands, to Cayman Islands, to Singapore, to Gibraltar, to the United Kingdom, etc., ready to assist Ghana get to the bottom of the Rawlings/NPP divestment record.

But to do that, Mr. Mahama and his assistants must move beyond student conferences, Oxford "Gala Dinners", and "Silent Corruption" of the little people.

No!

The Mahama Team must join the big league of global, professional, open government and transparency organizations now ready to assist Ghana, with support from dedicated Ghanaian professionals ready and willing to do their best for Ghana.

We say that it is about time Mr. Mahama and his assistants move over from their "Silent Corruption" verse and do a "General Buhari" by showing Ghanaians that Mr. Mahama's "commitment" to fighting corruption in Ghana is a dead serious one, totally unbounded, beyond doubt, not just a hot-lip-service of a "big mouth".

Mr. Mahama can do better by Ghana!

Let's give Mr. Jerry "Accountability" Rawlings and the state enterprise liquidators the accountability they ask for, give, and deserve!

So it goes, Ghana!

Sources:

1. Araba Dawson - NDUOM and the Serious Fraud albatross Part (1)

www.modernghana.com/news/365104/1/nduom-and-the-serious-fraud-albatross-part-1.html.

2. Charles Arthur Ntiri - Can the Performance of State-Owned Enterprises improve when privatized?, MBA Thesis, Blekinge Institute of Technology School of Management , December, 2010.

3. Julia Payne - New Nigerian leaders to meet anti-corruption watchdog head, Trust.org, 15 June, 2015, http://www.trust.org/item/20150615171643-9neba/

4. Prof Lungu - Mahama's "Dubious Judgment" Toli Is Worthless (Part 2.0), ModernGhana, 30 May, 2015, www.modernghana.com/news/620557/1/mahamas-dubious-judgment-toli-is-worthless-part-20.html.

5. Prof Lungu - Jerry Rawlings for Dummies: Ghana's 2nd Biggest Loser, 31 May, 2015, www.ghanaweb.com/GhanaHomePage/features/Jerry-Rawlings-for-Dummies-Ghana-s-2nd-Biggest-Loser-360227.

6. Prof Lungu - Nduom can bring progress to Ghana – Except!, 6 May, 2008, Ghanaweb, www.ghanaweb.com/GhanaHomePage/features/artikel.php?ID=143413.

7. Prof Lungu, Ghana Sheds Light on Oil Contracts - Rejoinder, 17 March, 2009, www.ghanaweb.com/GhanaHomePage/features/artikel.php?ID=159034.

8. Theoyibo - The Return of State-Owned Enterprises and Ghana's Emerging Anti-State Movement (Part 2), May 23, 2014), www.theoyibo.wordpress.com/author/theoyibo/.

©Prof Lungu is Ghana-centered, Ghana-Proud. Prof Lungu is based in Washington DC, USA. Prof Lungu is brought to you courtesy, www.GhanaHero.com,

19 June, 2015.

Columnist: Lungu, Prof.