STX Deal: President Mills, We Told You So!

On June 6, 2010 Dr. Papa Kwesi Nduom the Presidential Candidate of the Progressive People’s Party (PPP) had the occasion to put out a press release to caution the NDC Administration about the STX Korea Housing deal. We feel it necessary today to play back the words of Dr. Nduom against the backdrop of the decision announced by the Hon. Minister for Employment and Social Welfare, Mr E. T. Mensah to retrieve the state’s assets associated with the STX housing project. In essence, Mr. Mensah declared the STX initiative dead and buried. In the wake of this, Dr. Nduom’s words of advice are still relevant and deserve a second look.

“President John Evans Atta-Mills must take a very close and careful look at the STX Korea housing deal that is before Parliament. The bill should be withdrawn from the legislature and taken back to Cabinet for re-assessment. The President himself must open his eyes wide and scrutinize all aspects of the bill that proposes to provide a long-term Government of Ghana guarantee to the Korean company to build thousands of housing units in our country.

Our security service personnel need housing, agreed. Ghanaians as a whole need access to affordable housing in all regions of the country, agreed. I admire Korea and its people. Their unshakeable belief in self-determination and protection of their nation offers great opportunity for emulation by Ghana. It is also true that housing and construction in general tend to boost the domestic economy throughout the world. So what is wrong with this deal staring at us in Ghana? It just does not add up and looks like mortgaging a lot of our national economic interest for the benefit of a foreign entity that is desperate for a deal to repair its own financial foundation. This housing deal does not pass the Ghanaian national interest test. There is something very “neo-colonial” about this deal.

Ghanaian real estate companies led by its association GREDA together with our local architects, engineers, surveyors etc are in desperate need of opportunity that will create hundreds of thousands of jobs. The financial institutions need financial support to be able to provide long-term capital that the housing construction sector needs. The new Pension Law needs vigorous promotion by the Mills Administration and perhaps some amendments to the law to make it easier for fund managers to invest in housing construction in a big way. The bill before Parliament does not help our people solve any of these problems. Neither does it offer opportunity for the domestic housing construction industry to develop and grow. Indeed, the Ghanaian private sector has tried its best to develop a real estate sector in the country. They need encouragement and direct government assistance. This deal pretends they do not exist.

Which Ghanaian commodities will be mortgaged and for how long as a result of this deal? How will the banking sector in Ghana be improved by this deal? How will local content be mandated to gain priority in this deal? How sound financially is STX to make this deal safe for years to come? Has an independent due diligence been done on this deal? Have we learnt from past mistakes made by previous administrations that meant well but caused problems and embarrassments by not scrutinizing deals well enough? Does this deal avoid the “wanting to score quick political point” temptation?

Nothing will be lost by withdrawing this STX housing deal bill from Parliament for a more careful review. A lot of credibility and forward progress towards self-determination will be gained. Interestingly enough, we would have learnt a useful lesson from the Koreans themselves.

This deal does not pass the “Better Ghana” agenda test.”

The PPP wholeheartedly endorses Dr. Nduom’s views on this matter. We hope that the Mills Administration will now turn its attention to domestic real estate and financial institutions for a partnership that will deliver the housing units we need and also strengthen our local economy.

Signed:

Kofi Asamoah-Siaw National Secretary 12th April, 2012