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The embarrassing episode of the recent development on the AMERI Deal is a clear indication that unfortunately, we have not finished counting the cost to the nation on a single transaction. We have to start counting the cost to the security agencies, the courts, and probably the attention of everybody interested in following how the case evolves in an adventure to find the truth that was not hidden from the beginning.
The lens of the security agencies has recently zoomed in on Dr. Kwabena Donkor, the former Minister of Power under whose tenure the AMERI deal was concluded, and some technocrats who played a role in the negotiation of the deal. I have been grappling with the situation for the past few days and been wondering whether this approach presents the solution we want as a people to stop the bleeding of, at least, “our pockets”.
In reality, the full cost of a transaction such as the AMERI deal, is paid for directly by the public through tariffs. It is no wonder that the then government consistently reminded Ghanaians that the state was not paying for the project. My assumption, upon hearing such a statement in the light of the obvious problems associated with the AMERI deal, was that once the public was the ultimate cost-bearer, the responsibility on the part of the government to be diligent and get a better deal was not a primary consideration.
As a country, we have abundant laws and procedures to ensure that leaders work in the interest of the people. For this reason, a typical agreement such as AMERI should not, under normal circumstances, generate the value-for-money controversy we have seen in the past two years. The AMERI deal survived an established decision chain that involved technical persons, the Minister, Cabinet (the highest decision making body of government) and ultimately those elected to represent the broad geographic space of our country, Parliament.
The key question is, how could all these bodies and people get it so wrong? I have struggled to believe that they did not know how to get value for money, especially when the argument was so choreographed across the decision-making hierarchy. The quality of people in government and technical staff available to guide the decision process give me no illusions that they were simply incompetent. The fact is that no one was willing to consider alternative voices.
When ACEP first hinted at the magnitude of the implication of the decision to pay AMERI $510 million for power plants that cost between $180 million and $220 million, it was clear that the $220 million was the worst case scenario for purchasing the plants on the open market, which no one does. There was no attempt either by Parliament nor the Ministry to look at the full merit of ACEP’s statement. Rather, the Power Ministry jumped at the $220 million (worse case figure) to do an analysis to justify why AMERI provided value for money.
The Ministry neglected the fact that the government could have negotiated the plant at a far cheaper rate on the strengths of the securities provided by parliamentary approval, repayment through tariffs, and standby letters of Credit (LC). In fact, proper due diligence would have pointed the government to examples of other countries where similar turbines were procured for up to 40% cheaper than $220 million.
The democratic governance regime in Ghana is very elaborate such that a Minister cannot decide suo motu to commit the country to bad agreements. International commercial agreements are regulated by the Constitution, 1992 with an express requirement for approval from Parliament. Prior to that, the Cabinet of the Republic would have approved the agreement. The layered approval processes exist to ensure that the decisions of ministers are rigorously tested and checked so that the public interest is served.
In the specific case of AMERI the then Minister of Power did not make a unilateral decision. He satisfied the necessary processes: Cabinet considered the agreement and gave the green light for Parliamentary approval. The agreement survived the scrutiny of the Parliamentary Select Committee on Mines and Energy, was debated on the floor of Parliament, and ultimately earned unanimous approval of Parliament.
In the oddest assumption that the then Minister made mistakes in his judgement about the deal, could both Cabinet and Parliament not have played critical oversight roles to check potential losses to the State? Assuming also that both Cabinet and Parliament did not have the capacity to understand or analyze the AMERI deal, the same cannot be said about their hearing capacity. Civic voices on value-for-money concerns surrounding the deal were loud and clear. However, these were rejected by both Parliament and Cabinet.
In light of the nature of institutionalized checks in decision-making processes in the country, we may have to extend liability beyond Ministers to cover those who have a duty of care to incorporate due diligence in the approval of international agreements.
The truth, however, is that the determination of causing financial loss to the state is highly politicized: the NPP knows that NDC government would never have charged Dr. Kwabena Donkor with any wrong doing. The opposite is true. In the context of extreme politicization, the national interest is thrown into the “wheel of Fortune” (lottery machine).
Value for money has become a rhetoric with no bearing on the principle itself. If we cannot get Parliament and Cabinet under the current governance arrangement to protect the public interest, then we have to think about tying liability for bad deals to how Parliament and Cabinet evaluate agreements presented by Ministers. Otherwise, we will be assuming that Ministers should be super humans to get it right all of the time.
There is now an intriguing dimension introduced by the Member of Parliament for Adansi Asokwa, Kwabena Tahiru Hammond. He is seeking for Parliament to reverse its decision to approve the AMERI deal. I cannot discuss the legality or otherwise of this approach but I think this is belated as it could have been avoided in his capacity as the Ranking Member of the Energy Committee of Parliament when the agreement was sent to Parliament, if proper independent due diligence was done on the deal.
The conclusion I want to draw on this subject is not to understate the importance of charging ministers for causing financial loss to the State. It is to highlight that there is greater value in getting things done right, for which reason Parliament and Cabinet exist. The postmortem effort of chasing past officials around provide less value to the ordinary person who bears the penalty of poor decisions. The practice of limiting liability to Ministers whiles neglecting other players in the decision chain is an incentive for Parliament and Cabinet to continue to sit aloof because, at the end, specific people will pay for the consequences of what looks like shared responsibility for negligence.
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