Vice President of IMANI Africa, Bright Simons, has formally entered an appearance in the GH¢10 million defamation suit filed against him by businessman Ibrahim Mahama at the Accra High Court.

Mr. Simons has filed a motion demanding that Mr. Mahama and his company, Engineers & Planners (E&P), formally admit to 38 distinct facts central to their ongoing legal dispute.

Mr. Mahama’s suit, filed on Wednesday, May 28, stems from an article written by Mr. Simons titled “Ghana Provides a Lesson in How Not to Nationalise a Gold Mine,” published on his website, brightsimons.com, on April 19, 2025.

Mr. Mahama claims the article contains statements that have severely damaged both his personal reputation and that of his company.

The article was later shared on Mr. Simons’ official X (formerly Twitter) handle, @BBSimons, where it garnered over 93,000 views, 250 reactions, 98 reposts, 26 comments, and 109 bookmarks. According to the plaintiff, this wide engagement significantly contributed to the circulation of the allegedly defamatory content.

However, Mr. Simons’ motion seeks to establish key background facts regarding Mr. Mahama’s extensive business dealings, strong political ties, and financial interests—particularly in Ghana’s mining sector.

His legal team has given Mr. Mahama a 14-day deadline to respond to the assertions, which cover a range of topics—from Mr. Mahama’s status as a politically exposed person (PEP) to specific financial and contractual relationships involving E&P.

Among other things, Mr. Simons is seeking confirmation that Mr. Mahama is the sole shareholder of Engineers & Planners (E&P), and draws attention to his familial link to the presidency, identifying him as the brother of President John Dramani Mahama.

The motion further cites a 2013 classification by offshore legal firm Appleby, which identified Mr. Mahama as a “high-risk politically exposed person” during the registration of Red Sky Aviation in the Isle of Man—an element that could influence the court’s assessment of his public profile.

A substantial portion of the motion focuses on E&P’s contracts with Abosso Goldfields Limited. Mr. Simons is urging the court to confirm that these contracts—estimated at $117 million between 2015 and 2019 and rising to $300 million from 2020 to 2025—are among E&P’s most significant revenue streams both locally and internationally.

The motion specifically states that revenue from the Damang Gold Mine alone accounts for at least 25% of E&P’s total mining income over the past decade. It also alleges that E&P has not received payments from Abosso Goldfields since operations at Damang were halted in 2023.

As a result, Mr. Simons contends the company has entered critical negotiations with financial institutions, including Stanbic Bank Ghana, over loan repayment challenges.

The motion further reveals that E&P has secured loans exceeding $50 million from Stanbic and signed a $230 million equipment financing deal with the Mansour Group, primarily for Caterpillar machinery.

Mr. Mahama, founder of Engineers and Planners (E&P), claims that the statements made by Mr. Simons have severely damaged both his personal reputation and that of his company.

The suit, filed on Wednesday, May 28, stems from an article authored by Mr. Simons titled “Ghana Provides a Lesson in How Not to Nationalise a Gold Mine” published on April 19, 2025, on his website, brightsimons.com. The article was later shared on Mr. Simons’ official X (formerly Twitter) handle, @BBSimons, where it amassed over 93,000 views, 250 reactions, 98 reposts, 26 comments, and 109 bookmarks.

According to the plaintiff, this wide engagement contributed significantly to the circulation of the allegedly defamatory content.

In the publication, Simons suggested that E&P was financially distressed due to stalled operations at the Damang gold mine, with creditors “up in arms.” The article also implied that Mr. Mahama, brother of President John Mahama, was benefiting from political connections and receiving undue favours under government mining policies.

Mr. Mahama has flatly denied the allegations, describing them as “entirely false and wholly without factual basis.”

As part of the reliefs sought, he is demanding:

• A declaration that the statements made by Bright Simons are defamatory;

• A public retraction and apology published on the same digital platforms and as a full-page advertisement in the Daily Graphic for six consecutive editions over a three-month period;

• A perpetual injunction restraining Mr. Simons from publishing any further defamatory content about him;

• GH₵10 million in general damages;

• Legal costs and any other relief the court may deem fit.

The case is expected to attract significant public interest, given the personalities involved and its potential implications for free expression and responsible journalism.

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Below is the statement of claim:

Speaking on JoyNews’ Newsfile programme on Saturday, May 10, Mr Simons emphasised the importance of the legal process in uncovering any clandestine operations that may have occurred under the guise of national security.​

Simons criticised a leaked Adu-Boahene memo, claiming that funds under scrutiny were utilised for sensitive intelligence activities.

He described the memo as a “smokescreen” and an attempt to intimidate the state into dropping charges.

“If national security agencies wish to set up a special corporate vehicle for confidential operations, why would they do so in the name of one of the seniormost spy bosses in the country?” he questioned.

Highlighting the implausibility of the former NSB boss’s claims, Mr Simons pointed to investigations revealing that funds were diverted to luxury purchases, including high-end real estate and vehicles.

“What has the buying of a Lamborghini for a high-end car rental service got to do with bribing MPs to pass laws in parliament favourable to the government?” he asked, underscoring the disconnect between the expenditures and legitimate national security operations.

Mr Simons also stressed the need for reforms in auditing national security expenditures, noting that the current systems are ill-equipped to detect or address financial mismanagement involving intelligence operations.

“The Auditor-General is not currently fit for this purpose. In fact, it is not fit for tackling most organised modes of misusing public funds,” he asserted.

He concluded by urging the state to continue providing verifiable information to the public, making it harder for attempts to muddy the picture and ensuring that justice is served without fear or favour.​

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The former head of one of the three main agencies constituting Ghana’s national security system is under trial for stealing public funds designated for intelligence operations.

He has written a letter from detention darkly hinting at two things:

1. The monies that his private companies received from national security accounts and other government agencies were to be used for sensitive intelligence and security operations.

2. Unless his continued trial and detention are halted, he shall be forced to disclose some of these operations, details of which could embarrass senior politicians from both major political parties.

He tried to insinuate that national security agencies bribed members of parliament to facilitate the passage of laws of interest to the government.

He is alleging that even the then opposition party, now ruling party, received funds, vehicles, and other forms of support from the national security agencies ahead of recent elections.

The stated intent of all these murky expenses is the cohesion and stability of the country.

In previous commentary, I have warned how the murky way in which national security operations are funded has led to the some of the few instances of overt embezzlement in Ghana. Ghana is a country where public officials rarely embezzle public funds. They tend, instead, to prefer kickbacks.

At some point, serious conversations must be had about the setup of the national security auditing regime. The auditor general is not currently fit for this purpose. In fact, it is not fit for tackling most organised modes of misusing public funds.

However, as far as the criminal charges against the former spy boss is concerned, this letter is irrelevant.

If national security agencies wish to set up a special corporate vehicle for confidential operations, why would they do so in the name of one of the seniormost spy bosses in the country? Highly implausible. Why are there no actual classified records of any of this?

If the national security establishment wants to efficiently disburse funds for “dirty operations”, why would it do so through illiquid real estate investments and the purchase of luxury items, for instance? How does that facilitate undercover payments for national security objectives?

Most vitally, the theories and allegations being urged on us by the former spy boss are up against the work of one of Ghana’s most formidable investigators, Raymond Archer. Even as a private citizen, his craft was of daunting precision. Now that he has the full apparatus of the security state at his beck and call, I would be very surprised if he will leave any gaps of the kind suggested by the former spy boss.

Even what fragments we know about the investigation so far, if put together, shows that many payments from the bank account of the shady companies set up by the former spy boss have been traced to purely commercial activities and numerous luxury purchases.

What has the buying of a lamborghini for a high-end car rental service, for instance, got to do with bribing MPs to pass laws in parliament favorable to the government?

Hence, while the letter from the former spy boss makes for titillating reading and raises serious concerns about potential rot in national security, I do not see any real impact on the substantive charges laid against him.

Furthermore, the cryptic way he has presented the information, to maximise its sensational value without presenting any actual evidence, means that it is not even usable by the anti-corruption agencies.

If he is alleging actual wrongdoing by the national security agencies, then he can present clearer, actionable, evidence to any of the anti-corruption agencies. Otherwise, this looks like an attempt to blackmail the state to back off under vague and veiled threats of embarrassing some important people.

Obviously, the state would give credence to the insinuations if it relented for even a second. My analysis is that, for that same reason, the letter will only encourage the prosecution to double up their efforts.

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In an interview on Joy News’ PM Express Business Edition on April 24, he described the government’s posture as one of political optics over substance and warned that Ghana may be walking away from the very structure that could have enforced needed reforms.

“IMF will do a victory lap dance. The government will join them. And then we will conclude by 2028 that we have not met those targets.

“But by that time, we’re not in the programme. So the question then becomes: do we need the programme to meet the targets?” he stated.

Bright Simons believes the core problem lies in Ghana’s tendency to treat IMF deals as transactional exercises instead of strategic reform platforms.

“The targets are still relevant,” he stressed, referring to key benchmarks like debt-to-GDP ratios.

“But I think at that time, the targets will not be relevant. They will not be relevant anymore,” he said, implying that political cycles will have diluted accountability.

He accused both the government and the IMF of prioritising messaging over measurable outcomes.

“The IMF itself has said, ‘Look, the signalling is not pretty.’ They’ve elevated the signalling above the facts,” Bright Simons charged.

“And the government will take advantage of it.”

The critique cuts deeper when he compares Ghana’s approach to peer nations.

“Look at Kenya,” Simons pointed out. Kenya decided to terminate their programme early and raised money from the Gulf. They got $1.5 billion. That mindset is going to gain ground in a lot of places.”

Even Nigeria, Simons noted, has avoided an IMF deal entirely—despite internal turbulence.

“Nigeria decided not to go for an IMF programme at all. Obviously, there are consequences. But they made the call,” he said.

Bright Simons questions the IMF’s commitment to ensuring that programme goals are met beyond the duration of the agreement.

“If the IMF really wanted us to get to those targets, it should have encouraged the government when they said they wanted to extend,” he argued.

“That was the only way from 2026 to 2028 that there could have been programme levers to deliver those targets.”

Instead, he suggested the government is betting on regaining market access rather than staying under IMF scrutiny.

“If they don’t do the IMF programme because they think they can get market access, which I think by that time they will—then the IMF targets, the 70%, 55% debt-to-GDP… those things just fade away.”

At the heart of Bright Simons’ concern is the idea that exiting the programme with pomp may be politically expedient but economically premature.

“I sense that this whole discussion about staying or leaving the IMF is increasingly irrelevant,” he said.

“The real issue is whether we are serious about structural reform or just looking for a good story to tell investors.”

NAPO’s request follows a post by Simons on X, alleging that he was responsible for issuing the directive.

However, the former Manhyia South MP has clarified that he assumed office as Energy Minister on March 7, 2021, while the directive was issued in 2020, during his tenure as Education Minister.

His clarification comes in the wake of Energy Minister John Jinapor’s recent order to withdraw the directive.

According to NAPO, a careful review of the withdrawal letter and historical facts would have prevented Simons from making what he described as an avoidable error.

“The new government of Ghana has decided to save the country from further embarrassment by withdrawing a bizarre order issued by the former Energy Minister & Vice-Presidential Candidate of the former ruling party, NPP,” portions of Simons’ statement on Facebook read.

NAPO emphasized that while differing opinions on government decisions are valid, they must be expressed with accuracy, circumspection, and decorum.

Read the full post below:

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Bright Simons, speaking on Joy News’ Newsfile on Saturday, February 15, stressed the widespread public support for ORAL, cautioning political figures, particularly from the New Patriotic Party (NPP), against underestimating its appeal.

“We have to be very clear that a lot of people in this country are excited about it, and I think those political actors who’ve made it a habit to try and caricature it and make fun of it are not attuned to public sentiment,” he said.

According to him, the NPP’s dismissive stance towards ORAL and other economic concerns reflects a broader issue of political disconnect.

“I think on the NPP side in particular, there is this tendency to be out of touch with public sentiment, and you have to watch it going into the campaign,” he observed.

He recounted hearing senior NPP figures downplay inflation concerns, arguing that such dismissiveness ignores the lived realities of Ghanaians.

“I had occasion to listen to some of their most senior people talk about the fact that, you know, Ghana is not Accra, and all this inflation talk is nonsense. And I’m like, do you know the actual regions that were suffering most from inflation? Savannah was number one,” he noted, highlighting the importance of data-driven governance.

Beyond its popularity, Bright Simons stressed the need to structure ORAL as a concrete policy initiative, complete with well-defined targets and performance metrics.

“If it’s a government policy, then measuring it effectively becomes critical. Because one of the big problems we have in policy-making in this country is that we can’t measure. So everybody throws their arms about, they do some PR, people get excited a little bit, and then we forget about what exactly they promised. And then we come back four-year cycle, same thing all over again: watch, rinse, repeat,” he lamented.

He proposed setting specific goals for ORAL to ensure accountability and effectiveness.

“When I said that if they can prosecute 50% of the cases, if they can secure 50% convictions, if of those 50%, they are willing to pay back, and through that effort, recoveries can be made, then, to my mind, you’ve done well,” Mr. Simons explained.

He clarified that his previous comments about a 12.5% recoverability rate were not predictions but rather a “stretch target” for policymakers to aim for.

Bright Simons also pointed out the need for clarity in assessing the extent of financial damage and recoverable amounts.

He noted discrepancies in figures cited by the government, with estimates ranging from $20.8 billion to $28.9 billion.

“Some people think what he [Mahama] has seen is that he can recover all $21.1 billion or $20.8 billion. What they were saying is that this is the damage they estimate from the cases they’ve examined. The fiscal damage to the country is not necessarily the recoverable target,” he explained.

He illustrated his point with specific cases, including alleged financial losses at the National Service Secretariat, where $4.5 billion in estimated harm does not necessarily translate to recoverable funds.

“If you take all the budgets of the National Service Secretariat since it was founded to date, and you added all that, and it only amounted to $4.5 billion, it would be significantly less,” he noted.

Similarly, he cast doubt on the feasibility of retrieving the full $1.5 billion linked to COVID-19 expenditures, given that much of it was distributed in the form of free water, electricity, and business loans.

“The fact that it was wasted does not otherwise mean, though, that you can use the criminal process to recover it,” he cautioned, stressing the legal complexities of asset recovery.

Bright Simons further stressed that certain cases, such as those involving the National Cathedral project, may offer clearer avenues for recovery due to identifiable contracts and expenditures.

However, he warned against oversimplification, highlighting Ghana’s weak track record in high-profile corruption prosecutions.

“To be able to recover through the criminal process, you must establish crime. Think of the matter in relation to the National Cathedral. Whether or not they will be able to get the money out of them is another matter. But at least you could make the case that the money was ill-spent,” he said.

He concluded by calling for a policy-oriented approach to ORAL, urging politicians and civil society to push for structured, evidence-based mechanisms that ensure accountability.

“If we wanted to spend in that way, the president, the Chief Justice, and the Speaker of Parliament should have agreed. That’s why I say we need proper policy design, not just rhetoric,” Bright Simons stated.

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He says he sees no issue with the new Attorney General, Dr Dominic Ayine dropping the case against him.

Speaking on JoyNews’ Newsfile on Saturday with Samson Lardy Ayenini, Bright Simons said, “To turn all these policy matters into a criminal indictment is, I think abyssal, completely abyssal.”

He explained that Dr Asiama was merely “executing policy that his colleagues at the Bank of Ghana had agreed upon.”

The Attorney-General, Dr Dominic has withdrawn all charges against Dr Asiama, who had been standing trial in two separate cases for his alleged involvement in the collapse of UniBank and UT Bank.

Dr Asiama, along with other accused individuals, faced charges of fraudulent breach of trust, money laundering, conspiracy to commit a crime, and violations of the Bank of Ghana (BoG) Act since 2020.

In the UT Bank case, the former second deputy governor was charged alongside five others, including the bank’s founder, Prince Kofi Amoabeng. Other accused individuals in that case included Raymond Amanfu, UT Holdings Ltd., Catherine Johnson, and Robert Kwesi Armah.

In the UniBank case, former Finance Minister Dr Kwabena Duffuor, his son Dr Kwabena Duffuor II (who was the CEO of UniBank before its collapse), and other executives were also charged with money laundering.

Recently, President Mahama appointed Dr Asiama as the new Governor of the Bank of Ghana. However, members of the opposition New Patriotic Party (NPP) have argued that he is not fit for the role due to the criminal cases against him.

The party, including the former Attorney General, has again raised concerns about the new Attorney General’s decision to drop the case against him, describing it as a political move to free wrongdoers linked to the NDC.

Dr Dominic Ayine has also dropped six additional high-profile cases, including the Saglemi Housing case involving former Works and Housing minister Collins Dauda.

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Speaking on JoyNews’ Newsfile show on Saturday, he noted that the initiative has generated significant public interest, as citizens see it as a step towards ensuring accountability and recovering misappropriated state funds.

“There is a palpable sense of excitement among Ghanaians regarding ORAL,” Simons stated.

“The idea that public funds that may have been looted or misused will be recovered resonates strongly with many people, especially in these challenging economic times.”

He added that the initiative represents an opportunity for the government to demonstrate its commitment to fighting corruption and restoring confidence in public institutions

ORAL, a programme spearheaded by the current administration, is aimed at retrieving state resources that have been unlawfully acquired by individuals and organisations.

While it has been widely welcomed, some analysts have raised concerns about its implementation and the need for due process to be followed in identifying and recovering such assets.

Mr Simons emphasised the importance of transparency and fairness in executing the initiative.

“For ORAL to succeed, it must be seen as a genuine effort to uphold justice rather than a political tool,” he said.

“Ghanaians are watching closely, and the government must ensure that the process is free from bias and conducted with the highest level of integrity.”

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Bright Simons explains that a big part of the ORAL-estimated “loot” relates to fiscally messed-up policies and not funds lodged somewhere that can be “recovered” through prosecutions and plea bargain deals.

The ORAL Committee says it has identified  $21.19 billion in potential recoveries from looted state assets and undervalued land sales.

During the presentation of the committee’s report to the President at the seat of Government in Accra on Monday, February 10, ORAL Chairman Samuel Okudzeto Ablakwa said that if the country is able to recover this amount, there will be no need to go to the International Moneyray Fund for support.

“If we are successful in recoveries, we can retrieve as much as 20.49 billion United States dollars,” he stated. These cases include major corruption scandals involving the National Cathedral project, Power Distribution Services (PDS), and the Saltpond decommissioning project, among others,” Mr Ablakwa said.

President John Mahama also indicated after receiving the report that ” Ghaa I no longer a safe haven for corruption.”

He accordingly forwarded the report to the Attorney-General for further actions.

But Bright Simons in his analysis said “Think about the $4.5bn said to have been ‘illegally printed’ by the Governor of the central bank, for instance. That money has been spent.

“The citizens have suffered the inflation.  Other categories involve hyper-projections across multiple time ranges. Think of the $4.5 billion National Service Scheme ‘fraud’. Note that $4.5bn is about 50% of the entire national budget. That money could not have been spent within the time period in question.

“Think of the presidential jet hires, for instance. The funds were paid through classified channels to overseas jet rental companies. In Ghana, the president’s unaccountable imprest is not penetrable to punitive audits.” he said in a statement on his X page.

He further suggested that Attorney General Dr Dominic Ayine should now be placed under the strictest scrutiny. Else, even million may not come in by end of the President’s term.

“Is the A-G truly committed to ORAL? Second, the ORAL policy itself has to be costed. How much is needed to create the right infrastructure for investigations, prosecutions, and recovery? It this ends up being $26 million. Then, of course, the Attorney General better not recover $2.6 million, else that would mean the country lost more money chasing after phantom loot,” he wrote.

Below is his full …

Some folks, like @efo_edem1 , are not impressed by the stretch target I have set for the Attorney General of Ghana to recover 12.5% of the $21 billion-plus that the ORAL committee says was looted by members/assigns of the former government.

This is why 12.5% is indeed a stretch target. 1. A big part of the ORAL-estimated “loot” relate to fiscally messed-up policies and not funds lodged somewhere that can be “recovered” through prosecutions and plea bargain deals. Think about the $4.5bn said to have been “illegally printed” by the Governor of the central bank, for instance. That money has been spent. The citizens have suffered the inflation. Full stop.

2. Other categories involve hyper-projections across multiple timeranges. Think of the $4.5 billion National Service Scheme “fraud”. Note that $4.5bn is about 50% of the entire national budget. That money could not have been spent within the time period in question.

3. Think of the presidential jet hires, for instance. The funds were paid through classified channels to overseas jet rental companies. In Ghana, the president’s unaccountable imprest is not penetrable to punitive audits.

4. Think of the $1.5 billion COVID-19 funds spent on a host of social welfare programs. Much of that money was authorised by appropriation, etc. In short, just the above four categories of questionable spending amount to more than 50% of the ORAL estimate of the loot. See why a 12.5% recovery rate is a stretch target? How does the country retrieve much more than the $2.6 billion target I set, then?

5. First, the Attorney General should now be placed under the strictest scrutiny. Else, even MILLION may not come in by end of the President’s term. Is the AG truly committed to ORAL?

6. Second, the ORAL policy itself has to be costed. How much is needed to create the right infrastructure for investigations, prosecutions, and recovery? It this ends up being $26 million. Then, of course, the Attorney General better not recover $2.6 million, else that would mean the country lost more money chasing after phantom loot.

7. Is that unfair to the Attorney General? Seeing as he doesn’t control the courts? Well, there is no policy situation where every element is controlled by political leaders. Effective ORAL prosecutions and recovery are dependent on top-notch investigations, ability to inspire whistle-blowers and others with information to step up, and solid courtroom work. All those are perfectly within the control of the Attorney General.

8. On the question of how to get more money back, well, folks like@CallmeAlfredo  and myself, have persistently argued that a lot of the “loot” has been woven into permanent programs, many of which are still ongoing.

9. If the President really wants to recover billions of dollars of loot, then he needs to “shine his eye” and stop his appointees from simply ROLLING OVER these “state enchantment” scams and schemes to new cronies and schemers.

10. We spent the last 7 years or so documenting many of these schemes. Not too long ago, we were talking about the e-gates and Immigration360 gigs. Before that, the Common Platform at the Ministry of Comes. These and many other money-wasting programs are all very well known to the people now in charge. The only issue is whether they really want to stop them or simply roll them over to their preferred operators. Maybe, just maybe, citizens can also try to keep the heat on to ensure that the politicians have the incentive to unravel these schemes and stop the national bleeding.

Some folks, like @efo_edem1, are not impressed by the stretch target I have set for the Attorney General of Ghana to recover 12.5% of the $21 billion-plus that the ORAL committee says was looted by members/assigns of the former govt.

This is why 12.5% is indeed a stretch target.… pic.twitter.com/1C91PF2KRr

— Bright Simons (@BBSimons) February 10, 2025

~$360 million of this amount was allocated to the 60 MW hydropower plant itself; $474 million to the network of canals and weirs needed to create an irrigation system for farmers; and $55 million to a 50MW solar plant.

Separate contracts had been signed for these three components.

For example, in May 2019, the government entered into an agreement with PowerChina International, a Chinese state-owned EPC contractor, for the $474 million irrigation system project component.

Following this contract between the Ministry of Agriculture and PowerChina International, the Ministry of Finance insisted on entering into the subsequent contracts covering the two power plants, which it did in December of the same year.

The joint project costs as submitted to the Ghanaian parliament are presented below.

However, due to objections by some parliamentarians, the tax portions were removed from the final tally bringing the cost of the project down from about $965 million to ~$900 million. The Ministry of Finance pledged to fund the entire project through the budget and committed an immediate amount of ~$91 million, nearly 85% of which was to come from the proceeds of a recent Eurobond issuance.

The following disbursement schedule was presented to Parliament.

As we now know, the Finance Ministry, with the obvious acquiescence of the Presidency, decided not to allocate the Eurobond money to the project. Just about $12 million was paid from the government budget to the contractor, and apart from a celebrated worker camp (see VRA PR materials below) and a few rough access roads, nothing much came out of the money spent.

On the issue of SML, one of the most wasteful decisions taken by the previous government, for instance, CSOs and the parliamentary opposition literally sang from the same hymn sheet.

And some of us, especially those on the activist front, backed many of his positions to the hilt, in reverse fashion.

Now that he is in government, the spotlight is on him. He has just endured hours of grilling by the parliamentary vetting committee today.

I want to touch on only one set of the issues that came up: the ruling NDC party’s manifesto pledge to kill the following taxes: a) e-levy b) COVID-19 levy c) betting tax d) emissions levy e) and import duties on industrial and agricultural equipment and vehicles.

1. The e-levy is a distortive tax. It is undermining the digital sector. Worse, by distorting consumer and business behavior, we believe it is starting to cross-cannibalise other taxes in the digital sector, such as communications services taxes, which have been declining in value in real terms over time. It is usually good for political parties to keep their promises to voters. Of course, one can argue that the exception to this is when the promises are patently absurd.

2. Abolishing e-levy is not absurd. Doing so is supported by many rigorous analysts. The most detailed assessment of e-Levy’s impact that I know is the one by the GSMA, described in the hyperlinked reference above, which showed that in 2022, e-Levy LOST the government 1.4 billion GHS. The reader should pay serious attention: e-Levy is already LOSING Ghana money by undermining growth in the digital sector and thus cannibalising other revenue sources as summarised below.

The Finance Minister designate says the e-levy will go within 120 days. No one will miss it. Right from its inception, activists debunked basically every justification made in support of the ungodly e-levy.

3. At any rate, the new government must conduct another review of the public revenue framework for the digital economy as a whole and determine how it makes more money from the sector without undermining productivity in the sector.

4. Removing betting tax divides analysts. Some say that because gambling is harmful, a tax on betting is not only necessary (because the government desperately needs the money) but smart. My sense is that the evidence tilts towards removing it.

5. The most rigorous assessment I have seen of the effect of gambling tax hikes was one conducted in the United Kingdom context, and the conclusions have been that they are counterproductive. Professor Matthew Rockloff of Central Queensland University and Dr. Philip Newall of Bristol University present compelling evidence that gambling taxes simply increase the cost of addiction and do nothing to curb the urge to gamble.

The betting companies just find other inducements to get gamblers to keep gambling but now with harsher financial effects on addicts.

6. There is no reason why removing betting tax, and forgoing the ~$3 million it generates per year, should lead to revenue losses because the government can simply tighten the regime for the betting companies themselves. In the UK, for instance, the government has even gone to the extent of introducing a levy on the companies to pay for anti-addiction therapy.

7. In the case of Ghana, it is important for readers to recognise that there are two tax regimes in this sector, and that the NDC government is only proposing to eliminate the smaller regime: the 10% withholding tax on winnings. Untouched will be the 20% tax on the “gross revenue” (GGR) of the betting companies. There has been no commitment not to increase this 20% tax level to say 25% or even 30%.

In Kenya, where betting tax on the companies is 15% of gross revenue (lower than Ghana’s 20%), monthly tax revenues from the betting industry is said to be close to $12.5 million every month. The nearly $150 million a year from the betting industry in Kenya makes taxes on bettors in Ghana (roughly $3 million a year) pale into insignificance.

Nor has the new government tied its hands when it comes to reviewing current concessions such as the arrangement that allows betting companies to carry forward losses they make when gross winnings exceed gross revenue. Such concessions can enable aggressive marketing by allowing the betting companies to lure new bettors with ridiculously juicy odds and high payout ratios.

In short, there are multiple opportunities within the existing tax regime to extract money from gambling for the government without persisting the 10% withholding tax on winnings. Nobody would miss this tax.

8. The NDC government is completely unclear in its reasons for wanting to remove the emissions levy. Here, the problem is lack of clarity about intent. Some analysts, myself included, questioned the measurement model especially on industrial taxpayers.

In respect of vehicles, opinions vary as to the likely impact of emissions levy. How carbon taxes within a fiscal framework is a globally contested issue. To be frank, the government needs to quickly do the serious work needed to situate the decision within a clear set of policies, including Ghana’s climate-finance objectives.

9. As far as I am concerned, the COVID-19 levy was merely a stealthy move to raise the VAT rate. For that reason, my analysis in respect of VAT reforms below applies to this levy as well.

10. Removing import duties on vehicles and equipment imported for agricultural and industrial purposes could become distortive. Here is how. If I import a Kia truck for my sachet water distribution business and use it every Friday for that purpose but, in the rest of the week, it does some light corporate-trotro duties (minibus transport or rentals), do I deserve a tax waiver? If I bring in a giant articulated truck to transport corn from the North once a month and, the rest of the time, it also carries vehicular spare parts around, is that “agricultural” enough? Is “spare parts” cartage industrial enough? You get the picture.

11. These kinds of tax policies leave too much discretion to the tax authorities who sometimes abuse it. All said, it is not clear whether this is a good or bad tax waiver. That determination belongs to a more comprehensive assessment of the entire tax exemptions logic in Ghana and should thus probably not have been a manifesto pledge.

12. To further buttress the point, it is to be noted that the practice of exempting specified equipment from duties has been a longstanding element of Ghanaian tax policymaking with limited effect.

For example, the below list is a verbatim extract from the schedule to the 1995 customs and excise law regarding items exempt from duties:

Machinery, apparatus, appliances and parts thereof, of the following kinds:
(a) Agricultural and horticultural;
(b) Marine;
(c) Mining and dredging;
(d) Railway and Tramway;
(e) Industrial including timber; and
(f) For use in generating electric current.

Similar exemptions and waivers have consistently been made over the years. Yet, Ghanaian governments rarely conduct any clear impact analysis to understand why previous concessions do not appear to have benefitted industrial and agricultural sector players before proceeding to introduce new variants of the same logic.

13. As for reviewing VAT and removing the COVID-19 levy, which the NDC also promised to do, every government goes through the same motions, often several times during their term. In my modest view, these “reviews” usually end up generating more uncertainty for business.

The constant menu, calculation, and burden changes have become a strain on businesses with high transaction turnover, such as retailers. Until we know exactly what the plans for VAT reform are, we can’t say one way or another if this is a good manifesto policy.

Should the nominee for Finance Minister get approved, a foregone conclusion given the degree of parliamentary control by this government, he has some serious work to do in addressing some of the issues raised above.

The annoying thing about analysing Africa’s international plantain trade is that the customs (HS) code for plantains – 080310 – is very often also used for bananas in many records. This is despite there being another code for bananas that excludes plantains – 080390.

Whilst this conjunction would be shocking to many a person born and bred in Africa, elsewhere there is genuine confusion about the two crops, occasionally warranting explanations by chefs.

An irritating result of this needless confusion is that what should have been as easy as pulling and then sifting data from global trade databases like Comtrade and Eurostat can quickly degenerate into snooping around less established data sources and triangulating to get to the point.

The point is that Africa is super dominant in the world of plantains; yet, it is not a major exporter.

Worldwide, seven of the top plantain producers are in Africa.

Ghana often gets mentioned as the world’s second or third-largest producer of the crop, depending on the year. This is despite plantains having one of the lowest yields among the country’s major crops, right behind peppers, meaning that there is room to produce even far more from the same amount of land.

If the UN’s FAO is to be believed, Ghana already topped the global production charts in 2019 by exceeding 4.9 million tonnes in output that year.

Africans may eat a lot of plantains (Cameroon and Ghana have been topping per capita consumption charts worldwide for a while now) but when it comes to exports, however, Africa doesn’t make a good showing.

Historically, only a few African countries, like Cote D’Ivoire, long a bastion of commercial and plantation agriculture, have been major exporters of plantain.

Latin American and Asian countries that produce significantly fewer plantains routinely out-export giant African producers like Cameroon, Ghana, Nigeria, and the Democratic Republic of Congo (DRC). In the United States (US) especially, literally no African country has been able to break through into what is the world’s largest import market.

Major Latin American and Asian exporting countries seem to ride on the same value chains for bananas, whereas Africa has generally not been very significant. In 2023, Africa accounted for just 2% of the ~19 million tonnes of global banana imports.

Most African banana exports (from the likes of Cameroon and Cote D’Ivoire), same as for plantains, go to the European Union, rather than the US. In the banana domain, the EU is the undisputed consumption king.

For plantains, on the other hand, the US is champs.

Since bananas and plantains appear to have a very strong value chain correlation, it is not surprising that Africa’s lack of presence in the US for bananas has tempered its capacity to break into plantain exports generally.

This essay is about plantain “chips”, right?

But why are we talking about raw plantain exports when the endgame of economic transformation in every African country has been defined as value addition through industrialisation, which in the case of agro-commodities implies processing?

Well, it turns out that strong commodity value chain development generally is a useful, if also highly incomplete, precursor to building capacity to process for export.

The other homes of plantain

If you grew up in West Africa, the revelation that plantain chips are not the exclusive province of your home country would be shocking. They feel so native! Like fried bean cakes and jollof rice. Every corner you turn, there they are, in large pans balanced stolidly on elegant feminine heads.

Of course, like all nativisms, this one too is limited in truth and imagination.

Plantains themselves do not appear to have even originated in Africa. The current expert consensus is that they were first cultivated somewhere in India in the 6th Century BC and that they made their meandering way from Southeast Asia to Africa through the enterprise of Arab traders.

And, yes, many Latin American countries also have a “plantain chips as a light snack” culture. On top of that, plantain chips even have cute nicknames like chifles and platanitos!

(This is the point where a few initially horrified Ghanaians, Togolese, and Nigerians finally stop shaking their heads, become curious, and start contemplating treachery against their own native chips).

For plantain chips, Latinos are on top

These background facts may or may not ease the blow from the reality that the global plantain chips export market is now heavily dominated by Latin America.

Though only estimated at ~$500 million today, a small piece of the broader ~$32 billion plantains market, it is growing rather rapidly. Market-scanning experts believe that plantain chips and similar “ethnic snacks” are now the fastest-growing segment of the roughly $150 billion US snacks market, the largest in the world.

The thing is that in Latin America, food processors have long moved to industrialise production and over many decades refined their branding, marketing, and distribution strategies.

Even large industrial conglomerates, like Mexican Coca-Cola bottler, Arca Continental, have got into the game, churning out heavily branded plantain chips by the ship-load.

The trade channel creativity and marketing sophistication of Latin American plantain chip makers knows no bounds. In 2022, after shifting chips production from the US to Latin America, Chifles, a fast-growing Miami-based snacks company, signed a deal with Jetblue, one of America’s most dynamic airlines, to serve plantain chips to its millions of passengers.

Jetblue was quick to assert the Hispanic heritage of its new line of snacks, while still bigging it up as an experience to be enjoyed by all, thus showing off its cultural savviness.

PepsiCo, another corporate behemoth, takes a more sustainability-focused approach to its marketing of Latin America-sourced plantain chips, and places the emphasis on ethical and dignified sourcing of the plantains, linkages with other social programs, and environmentally sound production.

Its emphasis on managing plantain peels to avoid environmental waste, for instance, dovetails neatly into an emerging trend to shift packaging towards biodegradable options like plantain leaves.

And it shows on the shopfloor…but the Asians, too, exist

Given the depth of value chain and consumer brand development of plantain chips in Latin America, I was not too surprised by what I found when I scanned the 252 types of plantain chips stocked in America’s largest retail network, Walmart, and then carefully investigated the twenty brands under which they are sold.

My excursions into the backgrounds of the founders and/or visionaries behind each brand, from Chifles’ Tony Rivas (Cuban-born) to the Unanue family that controls Goya (Spanish-origin), reinforced what I knew already: the US plantain chips industry is a Latino-dominated one.

A careful look through supermarket inventories in the US and parts of Europe does, nonetheless, show that Southeast Asian countries like Thailand, the Philippines, and Malaysia are actually growing quite strong in the packaged plantain chips game.

Only that the product is often called “banana chips” rather than “plantain chips”. Yes, I know, the confusion that keeps giving. The so-called “saba banana chips” one sees in the region and overseas, for instance, are really just plantain chips.

For example, the popular “Banana Joe” brand of crispy chips one might find on the shelves of many Walmart outlets are not classified under plantain chips, but they really are. And they come from Thailand.

Asian plantain chips producers targeting the US and European markets are equally big on creative brand positioning and trade channel development. Pim Pritsangkul, co-founder of Banana Joe, for instance, has leveraged positive gender-entrepreneurial narratives, health-consciousness, and digital technology to massively drive uptake.

Still missing from the game, strangely, are African plantain chips producers.

This is surprising as there is no shortage of awareness on the continent, certainly in West African countries like Ghana and Nigeria, about the prospects of these delicious snacks. Study upon study has shown that plantain chips are a potentially massive winner. With net margins upwards of 50%.

On the export side the math is even easier to follow. One kilogram of plantains cost about $1.3 in the US wholesale market. On the Walmart shopfloor, one kilogram of plantain chips could fetch $35.

Even the popular press has caught on and has been extolling plantain chips’ poverty-redeeming features.

To the point where hub-like operators are emerging, like Accra’s Koko D’Luv, which is now trying to extend its tentacles into neighbouring countries to support plantain chip entrepreneurs up their game. Agricultural institutes in Nigeria are offering bespoke courses in frying them into golden-crisp form. Value-chain accelerators are pushing to develop farming cooperatives and ensure tight coordination with fryers.

What’s more, charismatic preachers are being enlisted to add a dash of inspiration to a rapid stream of ads on TikTok offering quick guruship in the craft. To confirm the authenticity of the trend, nice rags-to-riches memes spread occasionally, such as this one about a Nigerian entrepreneur who started out with less than $100 but now owns three houses.

African governments seem well aware that there is something here

Nor have African governments been found wanting in recognising the potential of turning a primarily domestic food item into an internationally tradable hot foreign exchange (forex) earner. Nigerian states, like Delta, are putting some tax money behind some of the training programs.

Ghana’s principal industrialisation initiative, 1D1F, is doing something similar and offering equipment to boot. I count at least 30 different district governments in Ghana offering one training program or the other in plantain chip frying.

Some readers may find these efforts somewhat meagre, but there have been more ambitious plans.

In 2015, entrepreneur Maxwell Agyeman launched a $73 million dollar plantain chips production effort on 60 hectares of land in Ghana’s Ashanti Region (Ejisu). The strategy was to export tons of plantain chips to the US and EU under the brand name, TANO, and reap tens of millions of dollars over a couple of years. Maxwell promised to directly employ a thousand people in the community at his processing factory.

The dream to take his Juaboso Agro Processing Company to these dizzy heights had taken more than a decade to get to that point. The trial production run happened as far back as 2007.

Ghana’s Ministry of Trade was fully on board as a supporting financier, ecosystem facilitator, and policy enabler. The government’s “district industrialisation program” and “public-private partnership” policies were all invoked to drive expected outcomes.

Long story short, the project failed because of the simple inability to line up all the components effectively, especially on the export offtake and trade financing side.

As of 2019, the plantain chips for export initiative was still firmly on the district development plan of Juaboso, the original site, albeit uncompleted.

It is safe to say that Maxwell Agyeman’s 20-year dream to turn his beloved Juaboso and adopted Ejisu hubs into plantain chips export powerhouses have been dashed. When a due diligence team visited the Ejisu area in 2020 to locate remnants of the infrastructure, everything had dissolved into the mists. Local folks had no knowledge of any active production.

Regarding vanishing plantain chips factories in Ghana, another curious example is the Agogo plant, which was meant to start production in December 2021 with imported equipment from Brazil.

Plantain nirvana hopes have been so high in the area that a plantain festival has been instituted. Exporting fine chips was meant to be the jewel in the crown. Once again, a recent due diligence visit failed to confirm production.

Sometimes, government-backed projects do go far. Delta State for instance has been able to back local processors of non-traditional commodities like yams and plantains all the way through. Unfortunately, in that instance, strict phytosanitary standards in Europe blocked further progress on the export front.

Which raises the issue of technological and regulatory capacity.

There is no doubt that enabling local processors to attain technological and regulatory sophistication, once commercial feasibility has been established, could help address some of the continent’s export challenges.

African governments, such as the ones in Ghana and Nigeria, and other stakeholders in these markets, do know this and have made some efforts in the general direction of capacity building.

Ghana’s GRATIS and Nigeria’s FIIRO all have government-supported projects and programs to boost the assimilation of technology to support shelf-life, preservation, packaging, taste control, hygiene, and other quality and presentation functions.

In my analysis of the situation in these countries, the problem appears to be one of fragmented thinking and an inability to design and execute policies and strategies based on strong, continuous, feedback from the intermediate user and consumer side of the spectrum.

Export-driven industrial policy in places like Ghana and Nigeria is disproportionately supply-side focused and driven by people with narrow technical abilities in specific domains. Generalists able to connect dots, spot trends, and effect step-changes in approach are completely missing.

There is, furthermore, an absence of what I call transmediation capacity. Industrial engineers knock up devices with a situation-centric specification and government bureaucrats look at the world from a country lens. A woeful inability to translate across different opportunity mindsets leads to much-wasted effort as policy-need fits at the local level fail completely to scale into international opportunity gaps.

Ghana’s GRATIS’ processing equipment for plantain and non-traditional commodities, for instance, focuses entirely on incremental expansion of output volumes.

Nigeria’s FIIRO is a few steps ahead of GRATIS in that it is strong in complementary services. It even has a functioning e-commerce site, as compared to GRATIS which is still struggling to host an online catalog.

The lack of end-user testing and iterative feedback loops, however, means that the FIIRO e-commerce portal has no dynamic interface, and so orders must be placed by manually entering product descriptions and pricing (it is not clear from where).

FIIRO’s plantain chips machine (one of 82 devices it fabricates in its labs) costs about $1600, not cheap but not outrageous either. Still, precious little effort has been made to explain how it adds value to the savvy end-consumer.

The only value proposition FIIRO markets is old-school industrial: it can fry 200 kilograms of plantain chips an hour.

When you compare where Latin American producers are in similar areas of endeavour, the scale of the effort needed in Africa to catch up becomes more apparent.

Take Inka Crops, the maker of the Inka line of plantain chips and other ethnic snacks in Peru, for instance.

Quite apart from the advanced trade channel development that Latin American producers tend to invest in (it has a dedicated marketing vehicle in the US, Inka Foods), Inka has invested in a relationship with Elea Technologies to introduce the Pulsed Electrical Field (PEF) range of production systems to its production plants, becoming one of the first plantain chips companies to adopt the approach.

PEF standardises a broad range of production functions, from peeling to drying; and minimises production errors and quality defects.

From its start in the lab, it is now taking on a new sheen of importance in the food business based on the charisma of the technologists commercialising it in Europe and America.

What is even more remarkable is that Stephen Toepfl, the founder-inventor of Elea, does not present PEF as an efficiency play, despite all the process-enhancement elements listed in its manuals.

Instead, Stephen talks about food safety, energy reduction, crop integrity, and of course the quality of new-age diets and its impact on human health. He insists, for instance, that using PEF automatically assures 15% less oil use.

Consumer obsession

An obsessive focus on the trends shaping the lifestyles of end-consumers thus pervades the entire value chain logic of sophisticated plantain chips producers, percolating into even their equipment suppliers. It really helps that some of the top producers, like Chifles, started off initially working as distributors and thus built an intimate awareness of subtle market shifts.

Latin American and Asian producers market their chips as gluten-free, paleo, cholesterol-free, etc., feeding into powerful trends that resonate with key export markets like Europe and the United States. Banana Joe has even added the whole “prebiotic” and “probiotic” shill. Some influential health writers have bought into the narrative and declared plantains a “superfood”.

No wonder the “healthy snacks” segment is projected to grow into a $150 billion market by 2030 on account of this whole push. Increasingly, plantain chips buyers in the Middle East and Near East also expect similar promises.

Cultural intangibles

Peruvian producers even go further to blend a healthy dose of cultural heritage into the mix. Inka’s brands, for instance, drip with ancient Mesoamerican chic.

Where there is heritage, tourism cannot be far off. Peruvian country-brand marketers have thus doubled down on interweaving gastronomical tourism with national branding in ways that extend to individual exports. For example, rare crops found in corners of the Andes and native recipes fuse into exotic snack brands like the increasingly popular Andina crisps.

The degree to which mainstream African producers have been lagging this trend is evident in perennial concerns about polythene being mixed with frying oil and the need for regulators to issue periodic reassurances about locally produced plantain chips.

It is also evident in studies that find excessive trans-fats due to repeated use of the same oil volume to fry multiple batches of chips. Trans-fats are some of the most demonised food substances in modern food discourse.

Latin American producers, like Chiffles, on the other hand, go to great lengths to present themselves as trans-fats free and generally superior, health-wise, to mainstream chip brands.

And, now, for the shining stars

Luckily, there are important trend-buckers whose work stops this story from ending on one note: a pure lamentation about the lost cause of Africa’s plantain chips prospects, and the ambitious hearts the failure to capture export markets has broken.

Thelma Oviasu, the Nigerian-American founder of Tehiti Foods, producers of the Tehiti brand of plantain chips, is one such trend-bucker who has long understood the game.

She is promoting the concept of “formed” chips as a way to boost the nutritional profile of Tehiti chips since forming allows the addition of more healthy ingredients.

Jamie Saleeby may complain about the excruciatingly challenging supply chain issues interfering with scaling (he has tried to source all Sankofa’s plantains from Ghana), but he and his crew are determined to make Sankofa Chips a household name in the US.

His most darling pitch is that Sankofa Chips are “heart food”. The marketing language radiates with antioxidant joys about transcending the aches and sorrows of digestive problems and blocked arteries. And, of course, there is enough flavour to overwhelm an oriental feast.

Even on the technological front, Asian modular suppliers are coming to the rescue. For example, Sherry Liu of Henan Gelgoog Machinery spends quite a bit of her waking hours trying to capture the attention of African plantain manufacturers.

To keep things simple, Henan Gelgoog has created dedicated marketing portals and service channels for specific value chains, such as plantain chips. Each archetypal setup can be purchased piecemeal or in integrated form, providing immense flexibility to capital-constrained African entrepreneurs.

So, even if the likes of GRATIS and FIIRO fail to step up, there is ample opportunity for serious producers to turn to Asia for more responsive tools and technical support. It is definitely not all doom and gloom.

A few parting notes on value addition

For me, it goes without saying that industrial policy premised on export competitiveness is an essential step on the African transformation ladder. The evidence in support of this view is now quite compelling.

It also seems trite to me that the bulk of the value in any value addition matrix these days has shifted towards demand-side transformations. Production efficiencies centred primarily on fixing country-level capacity issues that do not proceed in close contact with iterative feedback from the main export markets would simply fail to support commercial feasibility at the operational scale.

At the heart of many a value-transformation effort in Africa’s industrial policy landscape is the positioning of commodities, especially agro- and mineral commodities. Far too often, policymakers and their development advisors obsess about things like yield and marginal efficiency. These are important but not sufficient criteria for success.

When you take cocoa for instance, what was a quirky bitter drink in pre-colonial South America was first made tradable due to entrepreneurial beverage vendors in Europe determined to create a category to compete with coffee and tea.

The subsequent turn to chocolate that made cocoa a mass commodity was entirely mediated by a series of technological inventions that created a whole new world of value to consumers, very little of which could have been contemplated in origin countries.

On the path to chocolate, cocoa was branded in a thousand value-conferring guises. As an aphrodisiac (as well as genital disease dispeller), hair growth stimulant, breastmilk enhancer, dental cleanser, and fertility promoter.

But, as chocolate, the ante needed to be upped. Chocolate demand was stimulated by having hospitals stock them for compounding purposes to create bespoke medical prescriptions. As one commentator has noted, the brown stuff eventually came to be prescribed and dispensed like aspirin.

After a while, it became clear that too much emphasis on the morbidity of diseases and their cures was limiting, so new story flavours of the narrative had to be found. Chocolate became a romantic charm. A veritable Cupid’s arrow. Even the Church was eventually seduced.

Thus, while it is true that improvements in agronomic techniques, marketing boards, one mysterious beans smuggler, and innovations in commodity derivatives have all had a role to play in boosting cocoa production in origin countries, the demand shifts in consuming countries were perhaps just as critical and more scale-determining, which is probably why most of the value still stay there.

Cocoa did not become a mega-commodity due to inherent attributes alone, or only because production was stimulated. Nor has value differentiation into chocolate merely emerged as a consequence of processing improvements. It would seem, then, that “creating” a mega commodity export is a matter of conscious, long-term, demand-transformational exercises.

In particular, the chocolate technological curve, starting with 19th-century industrial interventions by the likes of Conrad Van Houten and Henri Nestle, appears to have been shaped predominantly on the demand side, thereby reinforcing the distribution in favour of importing countries. This is obviously not exactly the case in, say, semiconductors, where close-coupled innovation between exporters and importers has allowed a reasonable balance.

Especially critical in these demand-side shifts are the role of “transmediation” systems that allow innovation, entrepreneurship, and technical invention, to meet with marketing, distribution, and narrative-formation. The Quakers, a small Christian community driven by a passion to supplant alcohol, for instance, were absolutely vital for providing the medium for the chocolate confectionary industry to blossom.

It should be clear to my dear reader by now that “plantain chips” was merely the canvas we chose to have a more wide-ranging conversation about what it takes to truly drive export-driven value-addition in the current consumer-centric environment.

Whether our focus is on cashews, chocolate, or, indeed, plantain chips, the key lesson we must take away is the need to pay as much attention to the intangibles as we do to the material tangibles in the value chain. In these times, the intangibles are stacked on the demand side where most of the true value addition becomes clearer and ripe for crystallisation.

Plantain chips need not break any more African entrepreneurial hearts. The world still awaits their daring.

Just weeks to the presidential elections in Ghana, middle-class concerns about illegal, irresponsible, and environmentally catastrophic gold mining have reached fever-pitch, completely derailing the campaign messaging themes of the leading political parties.

There are protests, strikes, threats of strikes, and hints of protests.

I have chronicled the journey of how Ghana got here in a previous essay.

Ghana made a Faustian pact to get to the top of Africa’s gold leagues

One way to look at the whole situation is that Ghana’s race to the top of the gold-production charts in Africa was fueled by the steroids of irresponsible mining.

When the country overtook South Africa in 2018 as Africa’s largest gold producer, both countries were bogged down in domestic fights over illegal mining.

Avoiding the costs and inconveniences of building strong institutional foundations for gold production helped accelerate Ghana’s massive gold rush, and ensuing gold boom.

Though one could also argue that the Ghanaian authorities were more mindful than their South African counterparts of the potential violence that could be unleashed if they pushed too far, the incontrovertible fact is that the country’s accommodating approach has boosted output.

The laxity in regulating small-scale mining in Ghana led to this sector accounting for over 40% of total production in 2018 even though Ghana purported at that time to have banned the practice, beginning in February 2017, and didn’t officially lift the “ban” until in December 2018.

Facts are always debatable in Ghana

The process by which “banned” miners somehow propelled Ghana into becoming Africa’s number one gold producer reflects a general situation where the “facts” of official policy and practice often diverge heavily from the reality on the ground. Elsewhere, I have described this “adhocracy” in detail.

Whether or not one can trust any of the official facts, data, and statistics, on the strength of which Ghanaian authorities are purporting (or is it, “pretending”?) to manage the mining industry is a question that has seen some dramatic responses in recent weeks.

After a high-profile opposition party figure accused the government of dishing out mining licenses like candy, it was natural to expect pushback from ruling party types.

The more important issue of whether the nature of recent licenses, in terms of their environmental impact, have changed (most experts say, “yes”), took a backseat as the political party fanatics battled it out.

My own interest in analysing whether sudden upticks in license issuance can be matched with corresponding increases in the capacity at the Minerals Commission, the primary regulator, to properly scrutinise the applications and monitor mining activities at the approved concessions (answer: “no”) also got no traction.

After the Minister in charge sacked the 9 district mining inspectors in 2017, it took three years for the authorities to attempt reconstituting the inspectorate regime.

Even now, insiders say that there are less than 40 qualified inspectors for the whole country.

The mysterious Minerals Commission license list

None of these policy matters received much attention. Instead, ruling party affiliates circulated a “fact sheet”, ostensibly containing data supplied by the Minerals Commission, in the name of one of Ghana’s fact-checking organisations purporting to show that the opposition party, when it was in government, issued more licenses than the current, ruling, party.

Fact-checking organisations dismissed the “fact sheet” as fake.

Partisan hacks tossing data about to upstage rivals is a tolerable feature of competitive democracies. And when you have been in the trenches of policy activism for nearly two decades as I have, you learn to triangulate data sources to arrive at the most accurate picture of any policy matter, anyway.

I myself miscommunicated on social media by not distinguishing among the eight different mining authorisations issued in Ghana in my bid to explain concerns that aggressive ramping up of licensing not matched by increase in the number of application reviewers and inspectors is one of the ways in which Ghana lost control of small-scale mining regulation.

We can all live with some data confusion in view of the well-known capacity issues at various levels of key institutions. Misspecification, definitional inconsistencies, and sheer sloppiness in transcription, are all known to occur.

The Minerals Commission joins the fray

What is harder to live with is government institutions themselves appearing to manipulate data and, even worse, hide and distort it to deflect attention from mismanagement or even malfeasance.

Two days ago, the Minerals Commission itself seemed to have joined the fray of pushing the discredited fact-sheet designed to push a single partisan and deceptive agenda around the number of licenses issued under the two successive governments. Devoid of any analytical context.

When public servants hired to serve in strictly non-partisan institutions, particularly regulatory agencies, start to do that, I always wonder whether they are, perhaps, in cahoots with some shadowy politicians in some underhand schemes. So, I decided to take an even closer look.

Why natural resource data manipulation is dangerous in Africa

It is important, first and foremost, to appreciate the political economy of mining data in Africa. For many, many, years, poor transparency and data manipulation enabled weak accountability and, through that, corruption and mismanagement of natural resources.

In some countries, such as Angola, poor data practices and lack of transparency have been linked to missing revenues assessed in billions of dollars.

To tackle this challenge, a new global standard called EITI was launched at the World Summit on Sustainable Development in 2002. In 2023, the standard was augmented to better serve stakeholders.

In Ghana, EITI (GHEITI) is managed by a local secretariat hosted at the Ministry of Finance but overseen by a steering committee with representatives from diverse institutions, including civil society organisations.

One general goal of the GHEITI process is to ensure that data is collected, analysed, and disseminated in an open and transparent manner, involving multiple stakeholders, in order to ensure checks and balances.

It goes without saying that the potential abuse of data for partisan purposes or to deflect attention from serious policy challenges would go contrary to the GHEITI standard. GHEITI would seek to audit and validate data received for dissemination to avoid any such risks.

Why the conflicting data from GHEITI and the Minerals Commission?

How, then, can the data purportedly shared by the Minerals Commission be in conflict with data being disseminated by GHEITI? A count of licenses issued is a pretty straightforward statistical exercise, no?

Look, for instance, at the data on the number of small-scale licenses issued in Ghana in 2020, the last year for which audited GHEITI data on the subject is available. Data that according to GHEITI came from the Minerals Commission. Now, compare the figures with what is in the Minerals Commission table above.

You would notice that the recently circulated Minerals Commission data on small scale mining licenses is nearly 20% lower than what the same Commission disclosed to GHEITI last year.

Minerals Commission keeps giving conflicting data to international organisations

In probing the issue, I discovered that the government of Ghana also gave different sets of data, coming from the same Minerals Commission, to the Global Environment Facility (GEF), UNDP, and other international bodies in its application for grants to implement the Minamata Convention, a global effort to reduce mercury pollution.

Study the data in the table below carefully. It comes from the baseline assessment of the country’s current exposure to mercury pollution in 2018.

It shows that between 2013 and 2016, about 930 licenses were issued to cover about 19,000 acres of mining concessions (average of ~20 acres per license). Every single data point, however, differs materially from what is currently in circulation as official Minerals Commission data.

For example, whilst the data presented to the international organisations suggest that 256 licenses were issued in 2016, the presently circulating data says that the number of licenses issued that year to small-scale miners were 361, a whopping 40% variance.

But the real scary part is yet to come.

Baffled by the data discrepancies, I decided to mine official gazette data. By law, certain formal public acts must be gazetted, including certain actions of the Minerals Commission.

As I trudged through reams of official gazettes, nestling among information on marriage licenses and changes in matrimonial names, I began to see a strange pattern emerge.

First, very large tracts of land, of a far greater expanse than anything before, have been designated for small-scale mining since 2017.

For instance, the extent of land designated by the relevant Minister in June 2019 for small-scale mining in a single gazette notification was about 107 square kilometers or 26,500 acres.

If you have been paying attention, you would recall that, by comparison, only 19,000 acres were designated for small-scale mining in the four years from 2013 to 2016.

The situation in 2018 was even crazier.

In March 2018 alone, roughly 670 square kilometers, or 165,500 acres, of concessions were designated by the Minister in charge for small-scale mining.

Now, here is the real problem. Small-scale mining leases are not published individually in the gazette. The Minerals Commission merely publishes the designated blocks. To infer how many leases are involved, you need to do some arithmetic.

The law caps the acreage assignable to a small-scale mining licensee at 25 acres. Hence, the inferred number of leases from the land designated for small-scale mining in March 2018 would be at least 6600!

The Dunkwa block alone should be able to accommodate 1200 small-scale mining licenses.

If the reader has been paying attention, the befuddlement must be overwhelming by now.

How come in a year when small-scale mining was supposedly banned, more implied small-scale licenses were anticipated for issuance in a single gazette notification than have ever been issued for small scale mining since 1988, just before small-scale mining was legalised? That actually doesn’t do the issue justice.

Look at the chart below by Martin Guenther, formerly a researcher at the University of London.

Simple inspection should tell the reader that the amount of land designated in March 2018 for small-scale mining was equivalent to all the land allocated between 2010 and 2017. The reader would also notice the significant variance between what the government reported to the international organisations and what this researcher found by tallying the actual concession acreage.

Yes, that’s right, nothing adds up

And, yet, as I have mentioned several times already, small-scale mining was banned between February 2017 and December 2018.

In fact, according to the Minerals Commission data making the rounds, only 7 small-scale mining licenses were issued in 2017 and NONE in 2018.

And, yet, 2018 was also the year that saw the highest small-scale gold production in Ghana’s history – ~2 million ounces! Miracles are real!

The next government should take this seriously

It clearly would not be hyperbole to suggest that the new government would need to thoroughly examine the stock of small-scale licenses in the country by, if practical, requiring re-registration and validation.

There is already huge concern about the “beneficial ownership” of natural resource concessions in Ghana that GHEITI and others are trying to get a handle on. That is to say that there have been persistent claims of politically exposed persons amassing concessions and using fronts to disguise their ownership and/or control.

The head of an interministerial body set up to fight the illegal mining canker in 2017 accused some board members of the Minerals Commission of selling concessions to illegal miners. The allegations were never properly investigated, nor were the results of any inquiries shared with the public.

It bears emphasising that the practice has been to pack the board of the Minerals Commission with politicians even though it is meant to be an independent, scientific, organisation.

From the short discussion above, it should be absolutely clear to all readers that the problems of transparency, accountability, anti-corruption, and sound governance, in the mining sector must start with a serious sanitisation of the Minerals Commission.

However, that cannot happen if the country can’t even agree on the basic data of what really is happening on the ground.

In a tweet on X, Mr. Simons highlighted the unusual financial situation at GIPC, which is now struggling to sustain its operations and is turning to public funds as a solution.

Historically, GIPC has maintained a steady income by offering various services to businesses interested in investing in Ghana.

These services included issuing registration certificates, validating technology transfers, processing work permits, and providing investment data.

Mr Simons noted that the fees for these services were considerable. For instance, classifying a project as a “strategic investment” could cost an investor $10,000, while a technology transfer approval for a $5 million project might carry a fee of $55,000 annually.

These fees enabled GIPC to operate independently, generating nearly 11 million GHS from service fees in the second quarter of 2022, along with an additional 1 million GHS from Ghana’s development partners.

However, by the second quarter of 2024, GIPC reported no income from these sources. The agency has since relied entirely on about $35,000 from the central government to cover salaries and fund its programs.

Mr Simons suggested that this sudden revenue shortfall has forced GIPC to reconsider its self-financing model, leading the agency to advocate for a shift towards becoming primarily tax-funded.

The agency now argues that its operations provide substantial value to the nation, and therefore, the cost should be borne by taxpayers.

“The question is: what happened?” Simons asked, pointing to the confusion surrounding GIPC’s current financial predicament.

While Ghana’s fiscal challenges may have discouraged some investors, Simons implied that this alone does not fully account for the drastic decline in GIPC’s revenue.

Despite a reported 50% drop in investments between 2022 and 2023, the agency noted a 16% increase in inbound investment during the first quarter of 2024 compared to the same period in 2023.

Mr Simons hinted that investors might have become more cautious, choosing not to pay for services that do not significantly enhance their business prospects in Ghana.

Read the full article below:

There is something very strange happening to the Ghana Investment Promotion Center (GIPC), the body set up to drive foreign investment into Ghana.

For many years, it derived most of its money from providing services to investors. Businesses hoping to set up in Ghana would pay for registration certificates, technology transfer validation, work permit processing, and data services, etc.

For example, if as an investor you wanted your project classified as a “strategic investment”, GIPC would take a cool $10,000. If you want them to give you some stats on investment trends, it would cost you ~$250. If you have a foreign partner that wants to transfer their technology to you for use in Ghana and GIPC estimates that the technology would be worth $5m, they will charge you $55,000 year. All these fees have allowed the agency a pretty nice existence for a while. But now something strange is happening.

In the second quarter of 2022, GIPC generated nearly 11 million GHS from these service fees and an additional ~1 million GHS from Ghana’s “development partners”. This year, care to know how much they generated from services or from donors in the second quarter?

The agency relied entirely on about $35,000 provided by the central government to pay salaries and run programs. GIPC is now trying to convince the government to forget about the whole concept of a self-financing investment promotion agency. It wants to be predominantly tax-funded. It says that citizens get a lot of value from its existence and should pay for the full privilege.

The question is: what happened? The reader’s first suspicion might be that Ghana’s fiscal crisis has scared away investors who are thus no longer paying GIPC because, well, they are not coming in the first place. But that is true only up to a point. GIPC says there was a drop by 50% in investments coming into Ghana between 2022 and 2023. That is a big drop but it is, obviously, not a drop to zero.

In fact, GIPC says that the first quarter of 2024 saw a 16% increase in inbound investment inflow compared to the same period in 2023. The tone of the agency aligns with the Finance Ministry: the economic recovery is strong and steady. So, where is the service fee income, then?

We could all hazard a guess. Investors may still be trickling in, but they are wising up. GIPC has been collecting fees and doing precious little to enhance the business environment. So, if you can avoid paying somehow, why bother?

Or, perhaps, they – the investors, I mean – make pledges, GIPC captures those as inbound investment, but they actually don’t step up? That could also account for the yawning gap between the record of hundreds of millions of dollars of inbound foreign investment and the searing fact of zero fee income at the country’s main investment agency.

One cue is to be found in a flurry of agreements GIPC signed with UAE/Dubai entities to boost investment into Ghana in 2021/22. The UAE is now Africa’s largest source of investment. Yet, in spite of GIPC’s wooing and frantic agreement signing, including full blown courtship with an obscure entity called X-Fusion, UAE investors have snubbed Ghana for virtually the whole of 2023 and 2024.

Instead of pushing to become a fully tax-funded agency, GIPC needs to review its bouquet of services carefully and ask itself: if we were savvy investors, would we pay for any of this?

The Vice President of IMANI Africa, Bright Simons, has in a critical opinion piece expressed deep disappointment in Ghana’s High Commissioner in London.

He accused him of downplaying the severity of the Regina House issue and failing to adequately advise government.

Mr Simons argues that government’s mishandling of a legal dispute with Oil conglomerate Trafigura, which resulted in Regina House being placed under receivership, puts Ghana’s assets at significant risk.

He provides a detailed account of the situation, beginning with the history of Regina House, a property acquired by Ghana’s first president, Osagyefo Dr Kwame Nkrumah, in 1961 for the Ghana Commercial Bank.

Oil conglomerate Trafigura’s Ghana Power Generation Company has taken over one of the country’s most important commercial properties in London, following the failure of the government to pay up a $134 million judgment debt.

For four years Trafiguara has been unsuccessful in getting the government to pay up the judgement debt awarded to the energy firm after the abrupt termination of a power purchase agreement.

This situation forced Trafigura to secure another judgement in the United States courts which awarded a mandatory interest on the default of $111.4 million which remains the arrears to be paid by Ghana.

Attorney General Godfred Yeboah Dame has told Joy News it is up to the Finance Ministry to expedite action on the payment.

The foregoing has left Bright Simons disappointed.

He said over the years, the building has served various state affiliates and has become a symbol of Ghana’s international presence.

However, the situation took a turn for the worse after Ghana lost an arbitration dispute with Trafigura in 2021, which Mr Simons believes should never have been entered into in the first place.

Despite securing a deed of release from the City of London in 2015, the government has since struggled to manage the fallout from the arbitration loss.

“The government failed to show up in court to negotiate payment terms or delay the enforcement of the judgment. Instead, it waited until after a charging order was issued against Regina House before taking any action,” Bright Simons wrote.

He pointed out that nearly $2 million in rent has already been paid to Trafigura as a result of the receivership.

Simons also criticised the Attorney General for failing to defend against other enforcement suits in the Netherlands and the United States, leading to a situation where Ghana has paid nearly $90 million without reducing the original debt significantly.

“The original debt amount of approximately $138 million has barely reduced, and Ghana’s assets remain vulnerable to further seizures,” he warned.

Simons concluded by urging government officials to stop spinning the situation and to take the necessary steps to protect Ghana’s assets.

“This is not the time for spin and points scoring. Senior government officials need to be serious,” he stated.

He also stated that, the trial is an attempt to undermine democratic accountability.

In an article titled “Ghana’s Ambulance Saga is Crazier Than You Think,” Simons suggested that Dr. Forson was unjustly singled out.

“Coming in the wake of the government’s biggest second-term crisis in the newly split parliament, the prosecution was immediately condemned by some independent analysts, myself included, as pure political persecution and an attempt to undermine democratic accountability,” he stated.

He further stated, “It was apparent then, as it is now, that the MP had been unfairly targeted, and some of us said so.”

On Tuesday, July 30, the Court of Appeal acquitted and discharged Dr Forson, thereby overturning the trial Court’s order for him to present his defence in the case.

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On 16th August 2021, two investors in Ghana’s petroleum sector, Eni (an Italian multinational) and Vitol (a Swiss multinational) filed notice under the UNCITRAL rules of its intention to pursue international arbitration in response to directives issued to it by the government of Ghana that it felt breached its petroleum agreement with the country.

Eni-Vitol had come to the conclusion that the political context in which these directives were issued made it impossible for it to obtain fair hearing and justice in the domestic jurisdiction.

The origin of the controversy

The government of Ghana had ordered it to merge its oil field, which had been successfully producing oil for a number of years, after investments exceeding $6 billion, with an oil block next door that has never produced oil and seen in total roughly $100 million of investments.

Furthermore, the government wanted Eni-Vitol to also hand over roughly 55% of the combined entity to the owner of the said oil block next door.

Ghana’s domestic laws allow the government to do this. However, petroleum exploration and production constitute an international domain in which certain global business and technical logics operate and have operated for many decades.

Whilst the Ghanaian courts have been focused purely on what the law allowed the government to do, and were inclined to rely on the curious technical testimony of the country’s national oil company (GNPC), the truth of the matter is that there are international standards in these matters and any investor coming into any country to invest billions of dollars will ensure that they also have the protection of international law and technical regimes.

Given the sheer amount of money they stood to lose (reckoned in billions of dollars), it came as no surprise when Eni-Vitol decided to take their case internationally.

We have discussed the issues at length elsewhere

In a previous essay on this site, I have chronicled carefully the history of the controversy in significant detail. In another essay I laid out the basis of my argument that GNPC’s technical testimony in this instance was procured by political pressure as it simply didn’t hold water.

As the reader would no doubt notice from these essays, civil society organisations (CSOs) in Ghana engaged in the petroleum sector, especially IMANI and ACEP, have exhaustively examined the matters in the controversy and, with deep patriotic concern, warned the government that its actions in the attempted forced “unitisation” of the two offshore petroleum sites are completely against the national interest.

In this short essay, we shall show why the tribunal’s final decision given this week, and the consequences of the unjustified “forced unitisation” directives, are all highly embarrassing for Ghana and completely detrimental to the country’s reputation and economic position.

The case against the government of Ghana

When Eni-Vitol filed its arbitration notice, the government of Ghana initially didn’t even bother to submit a detailed response.

Eni-Vitol nonetheless proceeded to present their joint statement of claim. At the heart of their case is the simple fact that Ghana is trying to force them to merge a highly valuable, and proven, oil field with another one that has not yet been properly assessed, to international standards, in order to determine if there is even any oil in place.

In the circumstances, such an attempt amounts to a pure ruse to seize a large part of a highly lucrative asset and hand it over to another business without any sensible foundation. International law frowns on unjust expropriation of foreign-owned assets under different guises.

If the government was genuinely interested in merging the fields purely because it wishes to improve efficiency, it would first focus on ensuring that the other business owning the “greenfield” block undertakes the proper technical investigations to confirm if indeed there is oil on that block, and what quantity exactly. This is at the heart of the whole matter.

In fact, carefully analysed from that perspective, Ghana itself STOOD TO LOSE if a merger was forced between a lucrative and fertile oil block and a potentially infertile and valueless one since the merger will affect Ghana’s own holdings in both blocks, which were not uniform at the time of the proposed merger.

In my earlier essay, referenced above, I lay out the various scenarios in which both Eni-Vitol and Ghana would lose massive amounts of money if the unitisation proceeded.

The only beneficiary would have been the owner of the block next door, the optimistically named “Afina field”.

The question that has never been properly addressed is why the government of Ghana was willing to go to such lengths to benefit the Afina owners, even to the detriment of its own economic position and international reputation.

In light of its position on the matter, what specifically did Eni-Vitol want the international tribunal to do for them? Below are the reliefs they were seeking, produced in full.

A careful reading of the reliefs should show that the bulk of Eni-Vitol’s expectations are in the nature of a declaration that the government’s directives for forced unitisation are unlawful and unjustifiable and should not proceed in the manner the government had sought to bring them about. That really is it.

The tribunal, even per the Attorney General’s own atrociously uncandid summary, has declared the government of Ghana’s attempt and approach at forced unitisation to be in breach of its petroleum agreement with Eni-Vitol and therefore unlawful and unjustified. Simple!

The government’s attempt at defending its actions

What was the government’s principal defense at the tribunal and how does it square with how the Attorney General is attempting to spin the outcomes of the proceedings?

The government’s super-expensive international lawyers summed up its case in the paragraph below found in the opening of its statement of defense. (“Claimants” in the text extract refers to Eni-Vitol.)

Government of Ghana’s primary aim in paying for these expensive lawyers to fight its baseless cause at arbitration was to get the tribunal to agree with its approach to the forced unitisation.

The government knew that its case was not in the national interest

The Ghanaian government did not only want the tribunal to agree with its inherently disordered and self-detrimental approach to the merger, which would have damaged the interests of its own citizens, they also wanted the tribunal to find the investors guilty of breaching their agreement with Ghana by not lying down and rolling over immediately they were asked to hand over a juicy chunk of their asset to another business.

The true mindset of the government’s agents in this matter, especially the Attorney General who instructed these lawyers, is exposed by paragraph 49 of the government’s statement of defense.

What that paragraph simply says is that in the end even if the merger leads to losses, Ghana is the ultimate bearer of those losses and so why is Eni-Vitol sweating? Such a deeply unpatriotic and reckless argument to make!

The government, egged on by the Attorney General, believes that it can proceed with technically reckless actions in Ghana’s petroleum sector, actions that will impose losses on the citizens of the country, with no consequence at all. What it is essentially saying here to investors is that, “why are you crying more than the bereaved? We are willing to bear the losses.”

In fact, the government spends the overwhelming proportion of its defense arguing against “commerciality” as an important logic in any regulatory directive that affects the economic structure of a petroleum transaction in which Ghana is involved. It attempts, in breathtaking elaborateness, to make the case that even if the Afina block does not have any oil, it is fine to merge it with the oil producing Sankofa – Gye Nyame field (the one in which Eni-Vitol have majority interest) even though the inevitable result will be the dilution of economic returns for both Ghana and Eni-Vitol, and even if the only one who stands to benefit is the third-party private business next door.

The disorganised logic of the government’s case

Perhaps, in a belated recognition that their longwinded arguments making the case that commercial logic is irrelevant and all that matters is the discretion of government ministers, the government’s expensive lawyers began to moderate their tone somewhat when it came to defending the decision of the government to award 54.5% of the merged field to the private owner of the next-door Afina block.

What they are saying here, in essence, is that the precise allocation of acreage in the combined block is still in the works. The illogicality of that argument is inherent in fact that any such decision has to be based on knowledge of how much oil is in the separate blocks. Without knowing how much oil each party is in essence “bringing to the combined table”, there is no technically sound way to divvy up the combined block. Since determining “commerciality” is how you confirm that the owner of the non-producing oil block is bringing anything to the table at all, the hollowness of this belated concession about the exact split of the combined field becomes crystal clear, laid side by side with the claim that commerciality is an irrelevant factor.

After all this turning and twisting, how did the government want the tribunal to rule? Ghana’s counter-claims offer a good view.

Ghana wanted the tribunal to punish Eni-Vitol

The government also wanted damages. Yes, it wanted to be paid by the investors for the pleasure of being robbed of their petroleum assets.

After these brazen demands, the government proceeded to list its requested reliefs.

The government failed to secure any of its principal reliefs

The judges at the tribunal must have had a good laugh. But deep down they were not amused. The government’s punitive claims against Eni-Vitol were totally dismissed. By even the twisted accounts of the Attorney General, it is clear that the tribunal did not so much look at them twice.

Whilst the Attorney General is celebrating the decision of the tribunal not to award large damages against Ghana, and its instructions for Ghana to only pay half of the arbitration costs, the truth is that the government’s attempt to get the tribunal to sympathise with its positions was wholly unsuccessful. Eni-Vitol on the other hand got what they mostly set out to achieve: a ruling by an international tribunal that the government’s conduct is unlawful, on the basis of international standards and a more expansive reading of the country’s own laws.

The tribunal ruled in Ghana’s interest

In the end, though, especially for us in civil society, what matters is that the citizens understand clearly that the international tribunal was on their side and their government was acting in ways that would have considerably damaged their interests.

Ghana had to issue sovereign guarantees and tap the World Bank’s guarantee facility in order to get the Eni-Vitol field operational.

The Eni-Vitol field is now the major supplier of gas for the country’s power plants. Ghana obtains significant revenues from its equity stake in the field. Forcing this lucrative project into a poorly thought through merger with an unproven, greenfield, block would have caused massive disruption, undermined the commercial viability of the whole enterprise, and therefore ultimately eroded the benefits of the producing and proven asset to the people of Ghana. It is very likely that the Eni-Vitol would have stopped gas production and plunged Ghana into dumsor should the situation had persisted down the path it was on.

Ghana has already suffered because of the government’s actions

Already, the needless controversy over the forced unitisation has cost Ghana dearly. The development of major oil discoveries such as Eban and Akoma have stalled. There is evidence that some major international oil companies have been looking askance at the country since the government began this ill-fated expropriation agenda. Ghana hasn’t brought a new oil field onstream for years (Jubilee South-East doesn’t really count as it is merely the extension of an existing field). Oil output and state revenues from petroleum have been declining steadily and steeply.

Someone must be held accountable

The Attorney General’s conduct in failing to properly advise the country, in promoting a baseless position in an international forum, in opting to engage hyper-expensive lawyers costing this country millions of dollars, and in the end failing to secure any of the principal reliefs sought by Ghana is atrociously bad on its own. Seeking to spin such a disastrous outcome as a victory is simply disreputable and ought not to pass without strong words from civil society and the citizenry.

As a starting point, citizens and civil society activists should demand complete transparency in respect of all monies paid to the likes of Foley Hoag.

We are also hearing that White & Case, which partners a politically exposed local law firm, had a role to play at some point. If true, how much did they earn?

Were these expensive legal fees to luxury law firms a factor in the government’s doggedness to pursue a matter completely in conflict with the public and national interest? In addition to the strong and inexplicable urge to divert public and paid-up investor stakes in Sankofa – Gye Nyame to a private business?

What a shame!

The purpose-built facility was a gleaming sprawl of stalls, exhibition stands, majestic emporiums, and lush tree-lined avenues.

Over a three week period, the magnificent African Pavilion became the center of gravity in an affair that had drawn 2000 commercial and industrial exhibitors from 33 countries to this breezy corner of Accra.

The international Ghanaian-Polish design team responsible for the Trade Fair’s design spared no effort in imbuing the structures with architectural significance.

Trade Fair was to serve as a pulsing artery connecting the redevelopment of old coastal towns like Labadi with the modernisation of the capital’s waterfront and the broader urbanography of commerce and industry in what was even then a serious contest between planning, on one hand, and overpopulation and poverty, on the other hand.

None of those strategic objectives have been met in nearly 60 years. In today’s policy language, they are recognisable in some contemporary projects such as the following: Accra Marine Drive, the Accra Urban Transport Project, Airport City Phase 2, and, of course, the Ghana Trade Fair Redevelopment Project.

Sadly, every one of these projects is plagued with confusion, rampant insider dealing, perennial delay, and disconnection from its original urban-transformation and light-industrial objectives.

But in this short piece, we intend to only talk about the Ghana Trade Fair Center (“Trade Fair”) redevelopment affairs.

From the plans based on which Trade Fair was constructed by the Ghana National Construction Company over a five-year period, it is clear that the Osagyefo (Kwame Nkrumah) government saw the project as strongly linked to Ghana’s export promotion goals and Pan-African trade hub/gateway ambitions.

Long before the now famous AfCFTA would be birthed, the blueprint for the eventual fair that opened in 1967 underscored the need to highlight both “made in Ghana” products and trade across African countries in equal measure. In a kind of early version of today’s “single African market” dream.

The Trade Fair center in the years after its launch served the purpose of showcasing innovations in production, especially of manufactures, across the country that would otherwise not have come to the limelight.

Small businesses, maverick inventors, industrial startups in suburbia, and cooperatives in the hinterland were particularly keen to secure stands during fairs to catch the eyes of potential customers and investors.

But they were equally keen to attract press attention and, directly or indirectly, the focus of officialdom. In the first decade or so, Trade Fair management would produce meticulous catalogs listing the exhibitors and their contact details to facilitate such discoveries.

For example, Ghanaian scientist, Narh Naatey, was one of the early researchers who honed in on the issue of malaria parasites developing resistance to chloroquine. So, he invented a herbal formula called Nasra tablets to circumvent the parasite’s learning behaviour. But how to commercialise and distribute? In 1988, he showed up at the Trade Fair exhibition of that year and displayed his wares.

The Ministry of Science & Technology saw his display and committed resources to develop and promote the product. Difficulties navigating the bureaucracy of the Health Ministry ultimately prevented this early product from becoming Ghana’s own Coartem well before Coartem was invented in 1992.

But at least Dr. Naatey got a fighting chance because the Trade Fair brought him into contact with supporters. Such was its influence.

As with all state-owned/run facilities in Ghana, the facilities of the Trade Fair soon started to suffer neglect. Poor maintenance practices crept in steadily, and some of its world-class architecture began to fade.

Nevertheless, the emphasis on export-promotion, foreign investment (FDI) into local manufacturing, and light industry (especially by small businesses) never wavered, as one can easily glean from a centerspread in the Daily Graphic edition of 13th February, 1976.

In those days, the Trade Fair and its periodic exhibitions were clearly seen as a major fulcrum around which small businesses could accrete visibility, support, and growth. And through business growth, the country’s industrial ambitions, FDI attraction hopes and export promotion plans would all, hopefully, come together coherently and cohesively.

As the country’s economy went through the ups and downs of the 70s and 80s, Trade Fair’s maintenance issues continued to mount. Successive governments tried to hold things together, but by the early 90s, it was clear that something drastic needed to be done.

The decision was taken to redesign the business model by transforming the Trade Fair grounds into a permanent hub for business promotion, thus ending the overreliance on the annual fairs and occasional large exhibitions (such as the quadrennial ECOWAS fair). Businesses were invited to do more at and with the Trade Fair, as the ad below in 1992.

Thus began the practice of more and more businesses situating various facilities permanently on the Trade Fair grounds. Some small businesses obtained favourable locations in easy reach of Accra’s bustling center to produce and sell their various wares.

Trade associations acquired offices there. Rent became a major source of non-state income for the operators of the Trade Fair, now reincorporated as a limited liability company and placed on a path to full commercial sustainability.

Management issues, however, continued to dog the Trade Fair. Political appointments at the helm, as it always does, blunted competitive edge and encouraged poor planning and execution. After a particularly disastrous ECOWAS Fair in 1999, the Chief Executive was suspended and committees set up to probe general management failures. But little by way of radical change occurred. Trade Fair continued to fall short of the lofty heights set by the original vision.

Nevertheless, despite the struggle to fulfil its bigger vision, Trade Fair still strove to advance the goal of showcasing entrepreneurial efforts towards local industrialisation. In 2006, for instance, a major focus of the international fair held that year was on promoting joint ventures to strengthen the ability of local companies to harness Ghana’s natural endowments.

By 2015, weak management had ensured that the new business model had been so poorly executed that resources were simply not available to properly maintain the facilities.

Pictures started to circulate in the press of rotting buildings and leaking roofs. The hub of the 1967 African Pavilion (nicknamed “the round pavilion”), an architectural jewel of great historical significance, was slowly decaying.

The government was jolted into action. A comprehensive plan for redevelopment that had been in the works for eons was expedited to completion. A competitive tendering process then followed, overseen by PricewaterhouseCoopers (PWC).

The Reroy Group emerged as the winners, and efforts began to develop a roadmap and strategy for implementation. Before any of this could come to fruition, the government of the day lost power in the 2016 general elections.

The new government, as is the custom, sacked all the senior officials (about three-dozen in one go). It then installed an optometrist at the helm of the company. And appointed a shipping cargo millionaire as Chair of the Board. The new Chief Executive wasn’t exactly known for previous work turning around complex industrial and commercial real estate facilities, but she had something far more important going for her: she had been an executive of the ruling party in one of the party’s overseas branches in Georgia, United States.

Efforts began to systematically dismantle every single block in the Trade Fair edifice. The new masterplan for redevelopment was promptly ditched. Adjaye Associates, being the flavour of the month in Ghana, was called in. Large multimillion dollar projects were being parceled and dished to the firm on a silver platter, and Trade Fair joined the list. As is customary, even the pretense of a competitive bid was unnecessary. Architects who had won fair design bids in connection with the project protested, and were routinely ignored. But this was only the beginning.

In an act of extraordinary brazenness, the new Trade Fair leadership sent bulldozers onto the grounds and literally stripped it of most of its historic architecture. The Round Pavillion? Desecrated. The famous Adegbite cubes? What is that? Pulverised. The Chyrosz-Rymaszewski umbrella cones? Please, get real! Violated. It is as if Attila the Hun had arrived in Rome purposely to erase every megastructure of note in the Eternal City. In one short series of overnight raids, Ghana’s only piece of significant industrial-architecture heritage was severely brutalised.

This alarming spectacle of cultural annihilation triggered nothing by way of serious protest among the Ghanaian elites. Apart from protesting the loss of contracts to regime favourite, Adjaye Associates, the architectural profession stayed eerily quiet. It is quite likely that the entire episode would have gone unreported had the new Trade Fair management not also proceeded to wipe out the small business operators who had been attracted to the grounds since the 1990s to contribute their quota to Ghana’s industrialisation dreams. The likes of Colour Planet, a printing press, had their equipment damaged beyond repair when the bulldozers brought down their factories.

It is really hard to fathom how this near-vandalism could have emanated from whatever new masterplan Adjaye Associates had put together. How can a world-class architectural design studio come up with a redevelopment plan that fails to fully preserve vital historic architecture and make accommodation for pre-existing viable economic activity? It is possible to understand how political authorities in a country like Ghana would occasionally oversee a planning process so shoddy that standard heritage preservation and economic rights considerations are tossed aside, but it is much harder to envisage how their conduct might be enabled by world-class architects.

Anyway, in one fell swoop, the new management of Ghana’s Trade Fair expired the last traces of the original vision of the site. The celebrated Ghanaian-Slavic architecture is mostly gone. The network of small businesses providing jobs and maintaining some industrial vitality in that crucial urban enclave has been dissipated. What was created in their place?

Characteristic of Adjaye-inspired mega-projects in Ghana, what we have now are grand and fantabulous futuristic landscapes on paper. Something that looks like a compact version of the hanging gardens of Babylon, complete with snazzy youtube videos has been making the rounds.

Three years after stripping the historic trade fair of its vitality, the government’s policy has been a whirlwind of confusion. This month, it hosted an investor conference to attract partners. Virtually no serious international financiers showed up.

A group of politicians and their assigns gathered to repeat the same tales of coming grandeur and the spectacular rise of a “trade gateway to Africa” from the denuded plains.

According to the Honorary Vice President of IMANI-Africa, Bright Simons, the contract offered to NextGen Infraco gives them the sole right to offer 5G services to consumers.

This, he explains, would give some monopoly to NextGen Infraco in the telecommunication industry.

Speaking on JoyNews’ Newsfile, he explained that in 2021, MTN had applied for a license to run 5G services, yet the company was denied access.

As such, he said  “We are working very carefully and diabolically to construct a new monopoly that controls multiple telecom access, that for us is very dangerous.”

Bright Simons added that, this would also fragment the sector further than it already is.

Again, he said shares of the NextGen infraco are owned by some companies involved in a murky deal.

Watch full video for breakdown;

In a letter to the lead regulator of the telecom sector, the National Communications Authority (NCA), on the 11th of March, 2024, the Minister ordered the NCA Boss to “proceed to conclude on licensing the frequencies to Next Gen Infraco”, based on an “executive approval” by the President of Ghana on 22nd August 2023. To underline the diktat, she reminded the NCA Boss of her previous instruction not to undertake an auction or a tender.

The One-Week Company

The initial spark of the controversy was the exposure by award-winning investigative journalist, Manasseh Awuni Azure of the 4th Estate media program, of the fact that Next Gen Infraco had been incorporated only on 16th August 2023, barely a week before the President’s so-called “executive approval”.

The award of telecom licenses in Ghana is subject to the terms described in section 58(8) of Act 755, the main body of laws governing the telecom sector. Auctions and tenders are the primary model. However, the regulator may engage in direct negotiations to set a fixed price and/or outline specific criteria for the award to a licensee.

A Sweetheart Deal

Using this discretion under the law and on the back of the Ministerial orders, the NCA, in a letter dated 13th May 2024, granted Next Gen Infraco a ten-year exclusive mandate during which period it will be the only company allowed to operate a 5G network in Ghana(with latitude to also run any 4G services it wants).

Three high-value bands were handed over to the company to allow it to set up its network.

Earlier on (29th April 2024), the NCA, in a mad rush to obey the Minister, had sent Next Gen Infraco a comfort letter with all the key terms of the arrangement, some of which clearly needed the anchoring of a detailed contract and a national regulatory framework since the decision substantially alters the playing field for the entire industry as far as 4G and 5G services are concerned.

The 29th April letter, issued 6 days after the company formally applied on 23rd April, acknowledged receipt of the $50,000 application fee.

It restates the intent of the government to make Next Gen Infraco the monopoly wholesale provider of all 4G and 5G connectivity in the country (exclusively for 10 years and over a total licensing period of 15 years).

Essentially, every telecom company wishing to deliver superior voice and data (internet) services to Ghanaians will have to buy in bulk from Next Gen Infraco and retail onwards, regardless of whether it has already spent money on contractors to upgrade its own network to deliver 4G and 5G services or not.

For these massive benefits, Next Gen Infraco only needs to remit $6.25 million to the government. Payment for the remainder of the remaining license fee is nicely spread over a 9.5 year period to enable Next Gen Infraco to essentially “work and pay”.

Where is the NCA Board?

Given that the NCA only had 4 working days between 23rd April and 29th April 2024 to agree to all these terms (not even accounting for the clearing time of the cheque used to pay for the license application fee), it is ridiculous to assume that this was a decision carefully deliberated over by the board of the NCA, a group evidently serving at the sheer pleasure of the Minister of Communications.

Because as anyone who has ever served on a board with strict fiduciary responsibilities knows, a serious deliberation process involving a major policy change (imposing a monopoly wholesale provider on an industry) can’t happen over four days, including drafting of the necessary board and management papers.

Consider also that, in the past, telecom companies have had to find large amounts of money to pay license fees upfront since revenue for the Exchequer has always been a consideration for the leasing of spectrum to private companies. In this case, Next Gen Infraco will continue to pay the license fees only if, over the 10 years, it continues to make money. No penalties are specified for abandoning the license midstream and the only requirement to convert the provisional license issued within 4 working days of paying the license fee (of $50,000) is to pay what is essentially a commitment fee of $6.25 million.

In short, a lot of care has been taken by powers that be to ensure that Next Gen Infraco bears no commercial risk at all in this endeavour. This raises the question, who or what is “Next Gen Infraco”?

How State Enchantment Works

If you listen carefully to the Minister speak, you would appreciate why the term, “state enchantment” is in the title of this brief essay. According to the Minister, Next Gen Infraco is the country’s salvation. Hear her:

The government of Ghana in collaboration with Ascend Ghana [Digital], K-NET, Radisys, Nokia, Tech Mahindra, supported by all mobile network operators in Ghana, starting with AT and Telecel, has launched the NextGen InfraCo.

The idea that MTN is an incurable monopolist deploying market-crushing tools to dominate the Ghanaian telecom market is pretty much dogma in many elite circles in Ghana.

Thus, painting Next Gen Infraco as an alliance of all the kids on the playground against the school bully is bound to resonate massively.

So also is latching on to the “open access infrastructure” concept, which has gained so much attention around the world and respect in certain policy circles.

By framing its actions as consumer-focused, sovereignty-promoting, monopoly-busting, policy-smart, and innovation-enhancing, the Ministry of Communications is shielding the true motives behind its quest to ram through Next Gen Infraco behind a grand mask of feel-good buzzwords.

In the past, we have referred to this phenomenon as “state enchantment“. When done very well, it mutes scrutiny and criticism by making those who ask tough questions look churlish, cantankerous, and blind to great vision. Pure cash grabs are elaborately decorated as transformative state projects. That, dear reader, is “state enchantment”.

A Clique in Charge

The simple truth, however, is that Next Gen Infraco is controlled by a small coterie of investors who today control all the lucrative gigs in Ghana’s telecom center. How do we know?

It started with the equally egregious push to impose Kelni GVG on the telecom sector as a “revenue assurance provider” (i.e. to stop the telecom companies from cheating the government on taxes). A group of activists tried to stop this but eventually abandoned the use of litigation due to spiraling costs. Not, however, before they made some shocking discoveries.

The entire Kelni GVG tender was effectively rigged. None of the companies carefully selected to bid through the restrictive tendering process were proper companies. Today, none of them exist in any serious form. Virtually all of them were also represented in the process by the same law firm, which sent representatives to the bid opening: Integrated Legal Consultants. A company that appears to specialise in providing high-powered nominee services to a range of investors and other economic actors.

Seeing Integrated Legal Consultants and their personnel on the list of the primary shareholding Directors of Next Gen Infraco immediately set alarm bells ringing. Unless, once again, they are being presented as representing the various stakeholders the Minister claims are part of this shadowy “consortium”, the question begs to ask: where are the representatives of the long list of companies she mentioned on the incorporation documents of Next Gen Infraco? Where is Tech Mahindra? Nokia? Radisys (the Mukesh Ambani-controlled entity that promoters of Next Gen Infraco have been using for massive PR these past few days)?

The great, magnificent, and ascendant Ascend Digital!

We know where, “Ascend Digital” is, though. Right in the middle of things. In fact, Ascend Digital has been presented as the Leader of the Consortium. The bare truth, furthermore, is that Integrated Legal Consultants only really represents Ascend Digital, an entity entirely beholden to the same crew behind the Kelni GVG gig.

The only three executives of Next Gen Infraco disclosed to the NCA in the license application process (which requires full disclosure of Directors and management personnel) are:

• Tewu Awoonor: a former Executive of Tigo, now part of the government-owned Airtel-Tigo (AT) entity, who is reported to have left Tigo (before its merger with Airtel and eventual takeover by the government) under a bit of a cloud.
• Chanana Harkerat (as per his national identification information): an executive better known as Harkirit Singh, the CEO of Ascend Digital and Executive Director of Next Gen Infraco (though he mysteriously opted not to appear in the incorporation documents).
• Georgia Augusta Webb: a lawyer at the famed corporate secretarial and nominee services provider, Minkah Premo & Company, who has no actual executive responsibilities at Next Gen Infraco.

We will get back to Tenu later. Ascend Digital is the real gee in these affairs. 

For the last couple of years, Ascend Digital and its controlling minds have webbed their way into the telecom industry with extraordinary heft. They have won several contracts to connect post offices in Ghana using World Bank money.

It didn’t end there. More World Bank e-Transform money (nearly $50 million) went into a raft of other connectivity projects for clinics, district assembly offices, and other rural locations. Frequent readers of this website are aware of our ongoing efforts to probe World Bank financed projects in Ghana. Suffice it to say that the Ascend Digital – Airtel/AT projects are among those that have raised more than a few eyebrows.

COVID-19 App

Ascend Digital was also behind the COVID-19 app branded as “fraudulent” by prominent social commentators. Though the Head of the main IT Agency in Ghana claimed that the said app had been developed for free by Ascend Digital and its partners, it later came to light that as much as a million dollars of public money went into it, even though it was never deployed by the Ghana Health Service. To date, no public investigative agency has had the gumption to investigate.

Smart Workplace Program

Of the many murky projects overseen by the Communications Ministry in recent years, none is murkier than the so-called “Smart Workplace” platform that was called out by the usually pliant Public Procurement Authority as representing an abuse of the “single/sole sourcing” method of procurement.

Other investigators have noted how $8 million authorised by the cabinet for use in building Smart Workplace as a remote working solution for public sector workers during the COVID-19 pandemic eventually ballooned to over $31 million. The company at the forefront of this magical spectacle, Smart Infraco, is an Ascend Digital entity.

The Shadowy Group Monopolising Ghana’s Telecom Sector

Ascend Digital, Smart Infraco, iQuent, Next Gen Infraco, etc. etc. All these are offshoots of the same tentacly shrub, extending its crawling tendrils across the entire telecom sector.

Regarding the 5G play, there is no grand consortium in the true sense of the word. Some companies are indeed lining up in the hope of contracts that the lucky gig holder will issue once all is set.

Some will indeed invest in the SPV controlled by the gig holder if the risks continue to be carried by government.

But it is completely deceptive to make it look as if Next Gen Infraco is indeed an “open consortium” set up by the industry to level the playing field and advance the anti-trust campaign against MTN.

That is how its promoters want it to be seen in order to garner support. Its real motive is to hog the 5G resources of Ghana and flip and flog it for quick cash.

So, what exactly is the problem?

Besides the fact that creating shadowy wholesale monopolies to enrich cronies? Well, as of now, there is no detailed regulatory framework of how this new monopoly wholesale 4G and 5G infrastructure model will work. Such uncertainty is seriously bad for investment.

Secondly, without tight regulations, the wholesale monopoly could abuse its position and price discriminately to serve other agendas. Ascend Digital currently controls AT (the state-owned telecom company), and has been trying to privatise it through the backdoor.

The endgame here is to create an Ascend-AT-Next Gen Infraco complex to become the dominant telecom operator in Ghana.

Such a strategy merely aims to replace the much lamented MTN monopoly with a new one, but this time backed and sustained with government fiat.

Why haven’t we seen a more spirited campaign by Ghana’s Opposition?

Because Tenu Awoonor, the nominal CEO of Next Gen Infraco, has strong ties to the opposition. He was put on the Ghana Infrastructure Fund Advisory Committee when the current opposition was in government, and is a relative of the deceased former Chair of the Council of State during the same period.

Whilst the current political economy calculus has been arranged cleverly to sustain this state enchantment project, there are a number of developments likely to derail it. In subsequent commentary, we will lay out a few.

[This is a quick draft of a developing story. Expect updates.]

Speaking on JoyNews’ Newsfile program, he emphasised the need for transparency in the ongoing CHRAJ investigation regarding the potential conflict of interest involving the agriculture minister and the 60% stake sale to the Roc City Hotel.

Mr. Simons underscored SSNIT’s obligation to disclose all information relevant to the deal, highlighting the need for accountability and public scrutiny in such matters.

“We do not have the full Rock City submissions which have qualified it for this benefit, so some of my comments are about SSNIT investment practices generally, and I think I would be focusing on why I think the country could be better served by the way SSNIT does its investment.

“I would not be able to make an emphatic comment about Rock City itself because I do not have the information, but in the course of the coming days and weeks, we will be challenging SSNIT to put out all the information that it intends to submit to CHRAJ to the wider public. This is not a matter only for CHRAJ, and we commend the member of parliament who has initiated this inquiry”.

He raised concerns about SSNIT’s recent investment strategies with pension funds, noting that these actions have affected the returns on investment.

“Because part of the challenge about this rock city transaction, apart from this conflict-of-interest issue, which I do not want to go into details because, as I said, I want to look at all the information. For instance, has the minister set up a blind trust? What are the mechanisms that he is imposing to ensure there is an arm’s length transaction involved and he is not using his political power to influence the transaction?

“I do not have all the details, so I will be careful, but when I look at the way SSNIT makes its investment, it in a way underlines and, to a certain extent, vindicates why so many people are so suspicious of its judgment,” he noted.

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Dr. Ato Forson, a former Deputy Finance Minister, along with two others, is on trial for allegedly causing financial loss to the state through the importation of 30 ambulances.

This forms part of a 2012 contract between the Ministry of Health and Dubai-based firm, Big Sea Limited, for the purchase of 200 ambulances.

The prosecution’s case is that Dr. Ato Forson issued letters of credit without authorisation from his then boss, Finance Minister Seth Terkper.

However, Mr. Terkper testified in court that he did indeed authorize Dr. Ato Forson to establish the letters of credit.

Read also:

The case is continuing with the third accused, Richard Jakpa, who is currently being cross-examined.

Mr Simons took to social media, posting on X on Saturday, May 25, to voice his opinion on the matter.

Mr Simons believes the case is an attempt to silence the Minority in Parliament.

He insists that letters of credit are not payments themselves but guarantees to honour or refuse payment based on whether certain conditions are met.

“I’ve racked my brains for eons & still can’t understand why this fact so obvious to every business person isn’t clear to Ghana’s Attorney General. The case against the Minority Leader in Ghana’s Parliament for authorising an LC is INCOMPETENT. Not just bcos of this MP’s point.”

“But more importantly because of what an LC is. An LC is not a simple instruction to pay. It is a guarantee to honour or REFUSE payment if CERTAIN CONDITIONS are met/NOT MET.

“This is a pure political prosecution to muzzle the opposition in Parliament. Luckily, it isn’t working,” he posted.

As the cross-examination of Richard Jakpa proceeds, the debate over the legitimacy and motivations behind the charges against Dr. Ato Forson and the other accused continues to intensify.

According to him, the Ghana Revenue Authority (GRA) and SML contract required the latter to, among other things, verify if the prices of goods importers presented to the Revenue Authority were the exact cost on the market.

This was expected to help the GRA determine how much taxes should be charged on the goods and help in revenue mobilisation.

However, he said the KPMG report revealed that the country paid an amount of $15 million to $16 million for the service, which could have been gotten at a cheaper rate on the open market.

Speaking on JoyNews’ Newsfile on May 25, he explained that the service was completely unnecessary.

“In the KPMG report, we learned that some of the services that SML provided particularly, the ones to do with trying to prevent importers from lying about the prices of the goods that they buy which will affect the duty and trying to prevent GRA officers from lying about the right duty they should impose, those services were being charged  at an astronomical cost.

“We ended up paying over $15 million, nearly $16 million. When in fact you have alternatives on the open market which could have cost us barely $20,000. We ended up paying nearly $16 million for this company to apparently help us to prevent importers from lying about the prices of the goods they bought overseas to sell in  this country, when we could just subscribe to commercial databases and paid less than $20,000 or less for the same information,” he said.

Bright Simons added that several other procedures adopted by SML were unnecessary and yielded no results.

Watch video for breakdown:

Counsel for Fidelity Bank, Dr. Dominic Ayine, was expected to move a motion to strike out some of the pleadings of Bright Simons.

However, a lawyer for the IMANI Africa executive, Samuel Alesu, indicated that they had not filed an affidavit in opposition due to the nature of the suit by the plaintiff (Fidelity Bank).

Lawyers holding briefs for Dr. Dominic Ayine then requested additional time to file additional documents in support of their motion.

The presiding judge, Justice Ellen Mireku, ordered lawyers of the bank to file their documents by June 3, after which lawyers of Bright Simons will be expected to file their corresponding documents by June 20 for a hearing to continue on July 4, 2024.

Background:

Fidelity Bank sued Bright Simons of IMANI Africa on March 25, 2024, for posting a tweet in which he claimed that Fidelity sold dollars in a sweetheart deal to the Electricity Company of Ghana (ECG) that may have caused losses.

Fidelity Bank is represented by Dominic Ayine, a private legal practitioner and National Democratic Congress (NDC) MP for Bolgatanga East.

Bright Simons’ comments were based on an earlier tweet by Benjamin Boakye of the Africa Center for Energy Policy (ACEP) that said the rate at which the dollars were sold was 13.95 rather than the Bank of Ghana reference rate, which was less than 11.5 around October 2023 when the deal happened.

Bright Simons entered an appearance on March 28, 2024, and filed his statement of defense the month after. He is represented by Audrey Grey, a corporate law firm in Accra.

Fidelity Bank’s suit, which was later amended, alleged that Bright Simons’ tweet was false, misleading, and a product of his imagination, and was mischievously authored to disparage the bank.

In Bright Simons’ defense, he rejected all the claims of Fidelity Bank. He insisted that the numbers used in his tweet and that of Benjamin Boakye came from ECG’s financial department and were submitted to the Cash Waterfall Mechanism committee at the Public Utilities Regulatory Commission (PURC).

The committee is the one that analyses costs and revenues in the energy sector and makes allocations to various companies in the power value chain.

ECG earlier issued a statement acknowledging the figures in that document but said that they were an “estimation”.

Bright Simons’ media representatives debunked this claim on the basis that the document was still being used months after the transaction, and the data was labeled as “actuals”.

Fidelity Bank’s amended writ included what it said were the true exchange rates used in the deal, which are lower than 13.95.

In an unexpected move, Bright Simons counter-sued Fidelity Bank and asked the court to declare that the deal as a whole is indeed a sweetheart deal as he claimed in his tweet because it was cooked in breach of the Public Procurement Act and the energy policies of Ghana.

He alleged that Fidelity Bank’s Board Secretary sits on the Board of ECG and works on both ends of these deals. Because of this and the decision to bypass the Public Procurement Act, he claims that the deal was ‘crooked and not on arms’ length basis.

He also said Fidelity has refused to disclose the conflict of interest as dictated by the Bank of Ghana’s Corporate Governance Directive.

Fidelity Bank has filed a motion in court to dismiss Bright Simons’ counter-suit as disclosing no reasonable cause of action and an abuse of judicial process.

Bright Simons’ lawyers opposed the motion and cited several authorities that the counter-claims are not an abuse of process and that they disclose a reasonable cause of action because they are linked directly to the defense of his publications as based on public interest to stop such irregular deals that cost the country to lose money.

The lawyers insisted that the court should declare the deals illegal and force Fidelity Bank to refund its profits above the Bank of Ghana reference rate. Dr. Ayine is opposing the push by Bright’s lawyers vehemently.

He says that Bright Simons cannot bring this action in the current matter because it is intended just to waste the court’s time. Bright’s lawyers disagree passionately.

The substantive matters could not be heard at the hearing today, Monday, May 20, 2024, as the affidavits are not ready leading to an adjournment to July 4, 2024.

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IFAD’s loans often go to support projects targeting agro-processing, food security, improved smallholder farmer productivity, and similar goals.

In Ghana’s case, the money was for a ~$78 million project called, GASIP – Ghana Agricultural Sector Investment Program, that officially commenced in May 2015. The goal was simple: boost smallholder farmers’ productivity, output, and income by injecting money into cooperatives through big and medium-sized players called “value chain cluster drivers (VCDs)”, a mouthful term that simply means, “intermediaries”. These intermediaries are to secure funds from GASIP, obtain inputs (like seeds and fertilizer) in bulk, ensure their delivery to farmers in cooperatives, monitor planting and harvesting, aggregate farm outputs, and work with traders to sell at good prices.

Corporate bulk buyers like Nestle; the Ghana Commodities Exchange; tractor and other mechanized services providers; and a host of other actors in the agricultural “value chain” in Ghana were also courted by GASIP to join the initiative. As of 2020, GASIP claimed to have helped bring nearly 100,000 acres of land under cultivation and improved the lives of 50,000 farmers.

An ecstatic Agric Minister asked IFAD to show more confidence in Ghana and drop an extra $105 million. GASIP sounds like a fantastic use of money, but as the reader would have guessed already, there is another, quite different, story that also needs to be told.

Ghana’s Bankruptcy of 2022

As everyone now knows, Ghana stopped paying back foreign loans in December 2022 in the heat of a fiscal crisis that saw inflation go through the roof and the national currency tumble to the ground. How Ghana used all the roughly $30 billion it owed naturally became of great interest. As the country makes strenuous efforts to find more money for its development at a time when the international capital markets have been closed to it, the role of organisations such as IFAD, the World Bank, and the IMF, the only creditors still willing to lend to the country, has come into sharp focus.

A Wider Context of Global Development Finance

Ghana’s development finance issues are, however, for me, part of a bigger policy analysis and research undertaking. I recently wrote a policy note for Paris-based FDL looking into one critical question: why do loans and other forms of development finance released by international organisations like the World Bank and IFAD struggle to make a difference on the ground?

Many global activists are today investing their time, energy, and resources in Western capitals trying to unlock more money for African countries like Ghana. Domestic activists like me, on the other hand, seem more focused on asking questions about what has happened to all the money the likes of Ghana have borrowed already.

This seems like a serious rift, but in some ways, it is a false tension as I hope to show through this short essay on one of IFAD’s loans to Ghana. The big reveal is actually simple: for the likes of IFAD and the World Bank to be able to pump more money into Africa/Ghana, the latter need to get better at receiving and using the money. Because quantity of funds is somehow tied to the quality of spending in the long run.

At this very moment, Africa’s Heads of State have congregated in Nairobi to scheme about how the next IDA replenishment exercise can boost availability of funds for World Bank lending. We won’t find a more befitting time to discuss these issues of capacity to borrow and spend effectively.

The Disbursement Bogey

In the FDL policy note I mentioned earlier, I discussed the issue of “disbursement rates”, how fast money that has already been allocated to a country by a development finance body, like IFAD or the World Bank, actually gets released for spending.

I suggested that slow and stagnant disbursement often means the large cash commitments global activists often push to secure do not always translate into investment inside beneficiary countries. The experience of GASIP in Ghana illustrates this. For the first four years of the program, disbursement barely crossed 10% on a pro rata basis. Essentially, money couldn’t flow because basic project execution at the standard required was stuck.

I also explained in the same paper that there are different ways of increasing disbursement. One way is to enhance project governance and capacity across all key stakeholders so that the project can be delivered according to the international standards the likes of IFAD and the World Bank expect and which are often encoded into the agreements and project charter documents the country consents to.

Assessment Gaming

The second approach is to “game project assessments” and “manufacture progress”. If this is done in a shrewd way, then the lender’s supervisory staff, who also have an incentive to drive project outcomes for their own career success, can breeze over sticky points of governance and keep the funding valves opened.

Sometime around 2019, as elections approached, the government of Ghana committed to supporting one million farmers through its Planting for Food & Jobs initiative. A sudden shot of enthusiasm thus went through GASIP. From a disbursement rate of just 10% as of June 2019, the rate was catapulted to 74% in a matter of mere months. Money started to flow like water. Over the next two years, disbursement would hit 86%. By the time the project was about wrapping up, disbursement had hit 92%, a spectacular result.

But at what cost?

The Ratings Issue

The third relevant insight from my paper is that official ratings by development finance institutions of the likes of the World Bank and IFAD have to be treated with considerable caution for reasons that will soon be made clear.

On a scale of 1 to 5, IFAD raters say that GASIP scored a nice 4, with particularly high sub-scores for effectiveness, outreach, targeting, partnership-building, and audit quality.

Reading the final supervision report, dated November 2022, warms the heart.

Yes, there were a few challenges with about 25% of the tractors meant to make life easy for selected cohorts of farmers in certain implementation sites. But tractors weren’t even there before, yes?

True, farmer-based organisations, though eager to learn and improve, were found to lack capacity in various areas, such as financial skills. Only about 4% of the farming cooperatives reached a level of sophistication that could be called “mature” at the end of the program. And, admittedly, there had been inadequate monitoring of loan repayments in some credit schemes established as part of GASIP. Still, a 4-star rating in this area felt just right. As the report puts it, “overall, the provision of financial services under GASIP is performing generally well.”

From cashew nurseries and solar powered mechanical boreholes to innovative hybrid seed kits and rural financial services, the final supervision report preempts the yet to be published completion report with its glowing description of various achievements and celebration of the more than 78,000 farmer-beneficiaries in 1200 cooperatives that GASIP has supported so far.

Even though only 6% of the length of roads anticipated under the public infrastructure component of the project was attained, and just 0.2% of last mile electrical power connections were completed, the “underperformance” was attributed to funds expected from third-party financing partners that “did not materialize”.

High-yield cashew seedlings distributed to farmers mostly went unplanted, but the highlights of the report emphasise the more than 400,000 seedlings grown in the cashew nurseries established under the project. You have to read deeper into the latter sections to learn about the failure to plant.

Netting off these minor disappointments against the overwhelming thrust of success stories lead inexorably to the 5-star rating for the “effectiveness” and “developmental focus” aspects of the project assessment. As the report succinctly explains, “overall, GASIP implementation continues to make good progress towards achieving its development objective. In many of the cases, the cumulative output targets have been exceeded by large margins.”

One gets a sense of how exactly facts on the ground feed into ratings when one considers that the only exciting tangible output promised by GASIP for the “knowledge management” component, making a simple video to document GASIP’s experiences, couldn’t be achieved, and yet performance on this component is rated 4 star.

Fascinatingly, whilst the GASIP project was galloping along, an older, larger, $265 million IFAD funded project, Rural Enterprises Program (REP) was languishing in “potential problem” state. Commenced in 2011 and originally scheduled to be completed by 2020, the closing timeline has been extended three times, with 2025 being the latest one. REP is still rated at more than 4 stars for its likelihood of meeting its development objectives, and has a near 92% disbursement rate (on its core AF1 measure).

In short, when disbursement rates are boosted through assessment gaming, delivery risks escalate.

The Reality Not Told

The last aspect of the IFAD-GASIP case study that resonates with the analysis in my paper is the issue of divergence between ratings, and even official field reports, with the reality as experienced by those directly impacted by such projects.

An important objective of every IFAD loan is how it catalyses partnerships around the intended project to unlock more money and other resources. The IFAD partnership strategy is a detailed framework emphasizing the criticality of this approach to the organisation’s mission. GASIP was thus designed to get local banks and other financial institutions involved. Its success required the government at both the local and central levels to chip in money. The strategic agents mentioned earlier (the so-called “value chain cluster drivers”) are meant to organize and support farmer-based organisations (FBOs) or cooperatives (acknowledged by IFAD as the weakest link in the chain), where the ultimate beneficiaries, the farmers, sit. Various other actors are expected to join in as well. Obviously, trust is absolutely essential in such a system.

While the IFAD supervision reports do contain the information to show that this framework was not sufficiently adhered to and that the non-adherence breaches the agreement the government of Ghana signed with IFAD, it does so in an appendix-like manner. The tables below from the final supervision report shows clearly that the mobilised private financial institutions, including banks, refused to pay the money they committed despite various agreements.

In short, the local banks and other financial institutions that pledged to contribute nearly $17.5 million simply refused to release the monies all through the 9-year life of the project.

Yet, a few months prior, the preceding supervision report had created the impression that these financing partnerships were doing well, even if momentum is tepid.

The partnership linkages with financial institutions have remained low but the crowding in effect of the matching grants have resulted in GASIP monitoring short-, medium- and long-term loans to target groups recording approximately 87% of its US$7 million target.

The equipment financing arrangements under the matching grant where GASIP facilitated the remaining 30% contribution from the beneficiary FBOs through a financier and the FBO-based VSLA arrangements with credit unions and rural banks, where these have occurred, have created additional partnerships which, whilst largely ad hoc in nature, have been in the right direction.

The district assemblies (Ghana’s local government units) also refused to invest even a single dollar or cedi despite their pledges.

Clearly, the final report is more candid about the situation because with the project wrapping up and the clear legal breach unresolved, now was the time to elevate the issue. Yet, no where are the legal implications for the institutions that made commitments and caused other participants in the program, especially farmers, to invest their life savings in various anticipatory measures discussed. Instead, the IFAD report, as already mentioned, observes as follows:

Overall, the provision of financial services under GASIP is performing generally well.

But that is far from being the worst thing about this affair. Leaked confidential observations from Ghana’s Office of the Auditor General that I have seen raise troubling issues about sleaze, graft, diversion of funds, impersonation, and run of the mill embezzlement involving certain senior GASIP personnel, who appear to have forced farmers to attest to receiving resources that simply didn’t reach them. These farmers now feel very duped.

None of these problems, quite well known to domestic actors close to the matter, are mentioned in any IFAD reports. Yet, the sense of injustice and grievance on the ground is so deep, that petitions have gone to Ghana’s Attorney General and there is ample bad blood between some farmer groups and GASIP. The erosion of trust and sense of betrayal is palpable.

GASIP evidently lacked in its design an adequate beneficiary feedback mechanism, a sound grievance resolution process, and tight integrity failure controls. Even though the project would normally be expected to have a steering committee, one with civil society representation, it is reported by disgruntled farmers as either “non-existent” or “toothless”. Its ratings process, in view of all the challenges, could benefit from a massive reset that brings in more community verification actors and a revamped methodology. Despite administrative changes to project rollout over the 9-year period, such adaptiveness and agility could not be found by IFAD and the Ghanaian government.

Enter Fidelity Bank

Frequent readers of this website would recall my recent fracas with a Ghanaian bank that bills itself as the country’s largest private bank. I was not too surprised to see them make a cameo in this saga as the only tier-1 commercial bank mentioned in the reports to have had a direct role in the troubled partnerships-based financing model given their close relationship with the government of Ghana.

Fidelity is reported to have set up the necessary ring-fenced accounts to facilitate the value chain partnerships the farmers need to access tractors, farm inputs, and credit among other benefits.

Our ongoing investigation on the ground, however, found several disgruntled farmers and farming cooperative managers claiming otherwise. Given the nature of the situation, this issue deserves dedicated attention and treatment, which it shall receive in due course.

And now, ladies and gentlemen, PROSPER!

Given what has been recounted so far, one can be forgiven for thinking that the end of GASIP would be marked by serious soul-searching, broad-based consultations, and an effort to transparently reckon with some serious deficits. Following such a cooling off period, IFAD and the Ghanaian government could then make amends before proceeding with any more of such ambitious, trust-heavy, agric value chain programs. The short answer is, “wrong”.

Even before GASIP could properly close, in late 2021, the government entered into another agreement for a successor loan program, an even bigger one. Called PROSPER, it aims to disburse twice the resources allocated to GASIP to 100,000 farmers, and wrap up in 2032.

If all goes well.

[This is a developing story. To be continued.]

The Authority welcomes and encourages the involvement of Civil Society Organisations (CSO) and all stakeholders in public procurement. It helps in the implementation of the law and strengthens the procurement landscape in Ghana.

However, the Authority has taken note of several uninformed and unfounded pronouncements in Mr. Simons’ article about the implementation of the Ghana Electronic Procurement System (GHANEPS). The Authority wishes to clarify the claims and states the following;

1. Contracts on GHANEPS: Based on the numbers provided, the Authority assumes that Mr. Simons was referring to contracts awarded through GHANEPS when he uses the term “tender results”. As of Tuesday, April 23, 2024, there have been 5048 contracts awarded in GHANEPS, coming out of a total of 3205 tenders published. Some tenders have lots that lead to multiple contracts, hence the difference in the number of contracts. Sixty-four percent of these tenders are Request for Quotations (RFQ).

In Ghana, the RFQ method of procurement has a maximum threshold of GH₵100,000, and it is the most commonly used method. The percentage of RFQs out of the total number of procurements conducted in Ghana has been above 60% in the past 5 years. Another point is that, as part of the change management strategy, a grace period was given to Procurement Entities (PE) to conduct manual procurement alongside electronic until the completion of the roll-out to all entities. This enabled them to use small-value tenders to ease their transition from manual to electronic procurement. Therefore, it is normal for Mr. Simons to find a lot of tenders with a value below $100,000 at this stage of the implementation.

Secondly, many of the tenders are meant to lead to Framework agreements. This is where a long-term agreement is established between a PE and a supplier without necessarily committing the PE to a finite quantity of goods or service upfront.

The quantity and value are established at the point of call-off based on conditions agreed in the framework. This method of contracting saves costs and reduces lead times, as well as lowers the need to keep large inventories. It also improves value through economies of scale and enhances the entity-supplier relationship.

Though there are several types of Framework agreements, the standard and common practice is to put no value or just the unit price at the award stage. Framework agreements are very effective for the procurement of commonly used items, simple technical services, medical supplies, and hospitality services, among others. In fact, it is the preferred contracting method among large multi-nationals across the globe for these categories of procurement.

Records on GHANEPS are therefore not “useless” as stated by Mr. Simons. Most of the small value contracts are framework agreements by the various hospitals across the country.

2. World Bank Projects in GHANEPS: As of August 2023, it is a strict and mandatory condition for all World Bank projects that use Ghana’s public procurement system to utilize GHANEPS. In fact, non-compliance with the use of GHANEPS will lead to the cessation of fund disbursement. All current Program-for-Results (PforR) financing projects in Ghana are utilizing GHANEPS.

In addition, the Bank is collaborating with PPA to ensure that Investment Project Financing (IPF) programs are also onboarded to GHANEPS. Due to the differences in thresholds for procurement methods and approval between the World Bank’s procurement guidelines and the Public Procurement Act, Act 663 as amended, GHANEPS was not readily able to onboard these projects.

3. $3 Billion Losses: Less than 30% of government expenditure is estimated to pass through public procurement in Ghana. For 2024, this is less than $6 billion. This makes the claim of $3 billion annual losses through procurement in Ghana highly improbable.

4. It is important to note that this is not the first time that Mr. Bright Simons has misrepresented data on GHANEPS and made uninformed claims. In January 2022, Mr. Simons claimed on Citi TV that the government had spent over $5 million on a system which had only two (2) tenders since its implementation. Both claims were false.

Firstly, there were about 758 tenders published on GHANEPS, out of which 11 were yet to close. Suppliers can respond to tenders until tender closure. The Authority suspects that the claim of 2 was born out of a misunderstanding of public procurement procedures and GHANEPS. Indeed, there were 2 National Competitive Tenders (NCT) on the system on that very day.

However, there were also 9 RFQ tenders that were also yet to close. In addition, there were 747 tenders at different stages past closure. Per the procurement procedures, only the 2 NCT were displayed in the Current Tender section of GHANEPS.

That should not be misconstrued to mean there are only 2 tenders on the system. For transparency purposes, tender opening reports of all tenders and contract award details are accessible to the public and can be viewed without logging into the system.

Secondly, the project expenditure as of January 2022 was about $3.5 million and not $5 million as stated by Mr. Simons. In fact, the entire budget for GHANEPS implementation from the eTransform project is $6.5 million over a period of more than 8 years.

This amount covers the development of the system, operations and maintenance for the period, hosting, roll-out of the system to all government entities, and any changes that are necessary to address teething issues. As of April 23, 2024, 856 procurement entities have been onboarded.

This consists of all Special and Independent Constitutional Bodies, Central Management Agencies, Ministries, Department and Agencies (MDAs), Statutory Fund Management Bodies, Metropolitan, Municipal and District Assemblies (MMDAs), State-Owned Enterprises (SOEs), Health Institutions, and Tertiary Education Institutions. In the process, 3473 Procurement Officers, 4454 management and other key staff, as well as 3782 suppliers, have been trained across all the 16 regions and 261 districts of Ghana.

A dedicated Secretariat was set up for the implementation of GHANEPS, manned by about 21 people. In addition, the PPA is in the process of rolling out support centers at about 50 locations across the country with an additional 100 support staff to ensure the availability of adequate support for suppliers and PEs. All of this is covered by the above-mentioned budget.

Conclusion

The Authority takes the opportunity to assure Ghanaians that the transition of Ghana’s public procurement from manual to electronic is on course. It has entered the enforcement phase this year. PPA is working with the Ministry of Finance, the Ghana Audit Service, the Internal Audit Agency, the Office of the Attorney General, the Controller and Accountant General’s Department, and other local and international stakeholders to ensure that all public procurement in Ghana is done through GHANEPS by the end of 2025.

The introduction of GHANEPS is increasing accessibility, transparency, and fairness in public procurement in Ghana.

PPA remains open to all stakeholders who strive for more transparency, efficiency, and value for money in government expenditure.

What the data instead shows is a correlation between volume increases or decreases and exogenous (external) economic factors. That is simply to say, several factors, other than SML’s work, have bigger effects on whether Ghanaians buy and use more petrol or diesel in any particular period.

Take, for instance, the fact that more residual fuel oil (RFO) was consumed in Ghana in 1999 than in 2022. The demand for this fuel was historically boosted beyond its traditional importance in the marine industry due to its use in legacy equipment in the industrial sector.

As other petroleum products supplanted RFO, however, volumes dropped significantly. Following a very similar trajectory, the volume of kerosine consumed in Ghana in 2022 was 30 times less than that consumed in 1999, obviously, in part, because of the rise of LPG.

Indicative of the challenges in Ghana’s fishing sector, premix fuel consumption has halved over the last ten years. Aviation fuel consumption in 2012, seven years before the SML contract was signed, was nearly 10% higher than in 2020, the first year after the SML monitoring regime went into effect. It is not hard to understand why: COVID.

Clearly, there are broad and exogenous, factors impacting fuel demand, consumption, and, thus, volumes that can be easily, and mistakenly, subsumed under the ambit of regulatory monitoring and whatever magic SML claims to be performing in the sector.

Focusing only on gas oil (“diesel”) and gasoline (“petrol” or “premier motor spirit”), the main fuels consumed in the downstream sector elicits the same trend: consumption rises steadily, punctuated mainly by factors exogenous (external) to the fuel industry and it’s regulation (see chart).

For example, petrol consumption was steady for much of the decade between 1999 and 2009 until the completion of HIPC, the discovery and commencement of oil production, and the completion of the 2015 – 2019 IMF program, combined to trigger an economic mini-boom.

The surge in consumption continued until dumsor (Ghana’s perennial power crises) peaked in 2015, leading to a major cratering of volumes.

The mini-boom created by the end of dumsor, the completion of the IMF program, and the return to the Eurobond market with a vengeance, account for the last spurt of growth that just ended in 2022.

As far as tax increases are concerned, the “SML is responsible” argument is even more ridiculous since, besides volumes, pricing is a major determinant of how much taxes the government rakes in.

Ghana has at various times had ad valorem and ex-depot price-based taxes that link the price at the pump to the government’s tax revenues.

Is SML in any way responsible for price changes at the gantry, depot, or pump levels? How then does one isolate the effects of pricing from historical tax revenue trends (before and after SML’s intervention) to isolate the specific contribution of SML’s work?

Only through the kind of sophisticated statistical work done by the likes of IMANI and ACEP has it conclusively proven that SML has not affect tax revenues.

According to him, the policy think tank was not directly involved in the organisation of the ‘dumsor’ vigil in 2015.

The actress, along with several industry figures, including musicians and actors, led a similar protest in 2015 during the tenure of the National Democratic Congress (NDC) under former President, John Dramani Mahama.

Miss Nelson in a post on X, expressing her frustration over the current situation called for collaboration to organise the vigil because IMANI made it a success.

However, Mr Simons has clarified the 2015 vigil was organised by pressure groups and not IMANI.

He added that, IMANI has diligently been chasing relevant stakeholders on several issues relating to the power supply ecosystem but have never seen the actress amplify any of that.

“Ghana’s problems require long-term consistent advocacy best suited to INSTITUTIONS. Do YOU support such institutions? Does Ms. Nelson?” he quizzed.

Below is Mr Simons’ post:

BB,

Those… aren't her forte.

Perhaps you MUST realise that the Ghanaian public is DEMANDING EQUITY & CONSISTENCY in checking the government.

If the vigil was used to press for fixing DUMSOR during NDC, surely, it's justifiable to wonder why it's not being used during NPP.

— GONJA MAN (@1Farakhan) April 23, 2024

ALSO READ:

• #DumsorDemo revival: Yvonne Nelson reaches out to Imani Ghana for the second time

• Kumasi residents hold night demo against ‘dumsor’ [Video]

SML is the name of a hitherto unknown entity created in 2017 by timber merchant, Evans Adusei, and a relative just before it entered into discussions with various state agencies to offer “revenue assurance” services.

A mysterious new entrant

The company popped into Ghana’s public consciousness following a documentary and a series of investigations by MFWA-backed investigative outfit, the Fourth Estate.

Away from the limelight, activist think tank ACEP has been probing the SML affair as part of an elaborate review of “revenue assurance” programs in Ghana for more than a year.

Alongside broader public financial management (PFM) work in the natural resources sector by another Ghanaian activist think tank, IMANI, ACEP’s careful unpacking of the situation has uncovered multiple redundancies and duplications of efforts costing the Ghanaian taxpayer tens of millions of dollars for little value in return.

The thrust of the SML arrangements is summarised below.

• SML has been given a series of contracts to block illegal tax evasion and tax avoidance schemes in Ghana since 2019. Beginning with a contract to support the Ghana Revenue Authority (GRA) in detecting invoice fraud, SML’s tentacles soon spread to the downstream petroleum sector, where it is supposed to assist GRA in fighting under-declaration of fuel volumes and, by extension, taxes collected by the fuel marketers from consumers on behalf of the government.
• In June 2023, the Finance Ministry wrote to the GRA to advise an expansion of the scope of these contracts to cover minerals exported by Ghana, from which roughly 70% of export revenues are derived. 
• None of these contracts were competitively awarded. No serious due diligence was conducted on the capacity of SML to deliver any serious value, which is not surprising considering its total lack of track record in this area until it secured the contract. SML’s beneficial owner and principal, the timber merchant mentioned earlier, had no prior Information Technology (IT) business experience either, even though IT is a central plank of the SML value proposition.
• The downstream petroleum regulator, the National Petroleum Authority (NPA), has signed multiple contracts with companies such as Nationwide Technologies (an agent/affiliate of Texas-based Authentix Inc) and Rock Africa, a company led by former e-waste consultant, Francis Gavor, all of which are meant to fight fraud, adulteration, and under-declaration etc. GRA could very well have engaged the NPA to institute a data-exchange regime. 
• SML was, at the time investigations commenced, earning 21 million Ghana Cedis (GHS) a month (or ~3.5 million 2020 dollars) from a pricing regime which granted the company 5 Ghana Pesewas (5 GHP) for each litre of the product covered.
• In the expanded contract scope, SML will henceforth earn 0.75% of the total “volume value” of all mineral resources exported out of Ghana. It will also earn $0.75 for each barrel of “petroleum products” sent overseas from Ghana’s oilfields. 

Why the SML deal is a scandal

There are many things wrong with the SML affair. The procurement abuses are obvious: how did the government learn about the magical revenue assurance mojo of this timber merchant and his new entity to warrant such massive trust? Why did the ever-pliant Public Procurement Authority, long discredited after its previous boss was found engaging in his procurement shenanigans, accept the eligibility of this deal for sole sourcing? 

The pricing is atrocious: SML gets a share of Ghana’s most prized revenue streams for fighting fraud with no clear parameters for measuring the progress of that fight. 

And the underlying logic of the arrangement, especially in the context of multiple state agencies spending precious public resources to pursue the same objectives, is hopeless.

The government’s defence

The government has mounted a spirited defence of the contract. 

The heart of the GRA’s defence rests on a purported improvement seen in revenue numbers since SML volume monitoring began. We quote the GRA statement verbatim below.

The work of SML over the period has led to a significant increase in the figures reported in the downstream petroleum sector, from an average of 350 million litres per month in 2018 and 2019, to 450 million litres per month from 2020/2021.

This represents over a thirty- three percent (33%) increase in volume reporting and an average of an extra 100 million litres per month at a levy rate of GH¢1.44p.

The extra revenue variance gained for the two (2) years will exceed GH¢3billion. This performance is attributable mainly to the introduction of ICUMS and SML systems.

There is, unfortunately, no grounding to this strange analysis.

The SML defence “falls flat”

For the argument to be sustainable, proof has to be shown that SML’s interventions have led to an uptick in volumes recorded over and above the historical trend of increases over time. What the data instead show is a correlation between volume increases/decreases and exogenous economic factors. 

Take, for instance, the fact that more residual fuel oil (RFO) was consumed in Ghana in 1999 than in 2022. The demand for this fuel was historically boosted beyond its traditional importance in the marine industry due to its use in legacy equipment in the industrial sector.

As other petroleum products supplanted RFO, however, volumes dropped significantly. Following a very similar trajectory, the volume of kerosine consumed in Ghana in 2022 was 30 times less than that consumed in 1999, obviously, in part, because of the rise of LPG.

Indicative of the challenges in Ghana’s fishing sector, premix fuel consumption has halved over the last ten years. Aviation fuel consumption in 2012, seven years before the SML contract was signed, was nearly 10% higher than in 2020, the first year after the SML monitoring regime went into effect. It is not hard to understand why: COVID. 

Clearly, there are broad and exogenous, factors impacting fuel demand, consumption, and, thus, volumes that can be easily, and mistakenly, subsumed under the ambit of regulatory monitoring and whatever magic SML claims to be performing in the sector.

Focusing only on gas oil (“diesel”) and gasoline (“petrol” or “premier motor spirit”), the main fuels consumed in the downstream sector, elicits the same trend: consumption rises steadily, punctuated mainly by factors exogenous (external) to the fuel industry and its regulation.

For example, petrol consumption was steady for much of the decade between 1999 and 2009 until the completion of HIPC, the discovery and commencement of oil production, and the completion of the 2015 – 2019 IMF program, combined to trigger an economic mini-boom.

The surge in consumption continued until dumsor (Ghana’s perennial power crises) peaked in 2015, leading to a major cratering of volumes.

The mini-boom created by the end of dumsor, the completion of the IMF program, and the return to the Eurobond market with a vengeance, account for the last spurt of growth that just ended in 2022.

The SML value-addition scam

Only basic arithmetic is required to establish the groundlessness of the “volume increase” proof adduced by the government in support of the SML intervention. 

As evidence that the SML contract has had no effect on things, we can compare the volume increases since the SML monitoring regime went into effect with previous growth phases. Between 2008 and 2015, for instance, volumes increased by more than 112%, on the back of a compounded annual growth rate of nearly 11.5%.  

The post-SML situation, on the other hand, saw volumes increase by 18.5% between 2019 and 2022, on the back of a mere 4.34% annual growth rate (the reader should see this in the slope of different segments of the above curve). In simple terms, volumes have increased by far less in the post-SML era than they did during previous eras.

SML may deserve to be surcharged not compensated

The obvious question that arises from the data is whether the fall in volumes that has been experienced between 2021 and 2023 should be attributed to the incompetence of SML. If not, why?

Petrol and diesel volumes dropped 7% and 8%, respectively, between 2021 and 22 due to a combination of economic slowdown and fuel price hikes. In fact, diesel volumes were lower in 2022 than in 2020, the year COVID-19 shut down parts of the economy. The data for 2023, so far, shows that petrol and diesel volumes will be lower than in 2021. 

Should these statistical facts be taken to mean that the SML monitoring regime is losing the country money? Should a surcharge be applied based on an extended application of the same logic of “performance attribution” in the government’s defence of the contract?

The billion-dollar scope-extension

Considering the above analysis of SML’s current work in the downstream sector, it naturally follows that the extension of the contract to cover 70% of Ghana’s exports derived from the minerals and petroleum sectors will lead to a similar misattribution of value, and will amount to, therefore, to a total rip-off of the country. 

First, there is no historical trajectory baseline computed in the contract that would enable the determination of “additional volumes” attributed to SML’s work.

Moreover, there is no mechanism to determine how to exonerate/absolve SML if volumes fall and when or how to surcharge them for real underperformance in any given year.

The so-called “value for money audits” mentioned in the contract are not defined, and, given the general feel of the contract, may well be undefinable. 

From the analysis conducted by IMANI and ACEP, depending on certain developments in the minerals and petroleum sector, SML’s cumulative earnings from the contract could exceed $1 billion over the horizon anticipated by the contract.

These developments include the activation of new oil fields; prospects of refined petroleum exports (for example, if Sentuo fully comes onstream); continued surge in gold production; effective local refining of minerals such as bauxite and lithium, thereby increasing their value in light of the contract’s construal of “volume value”; and the discovery of new minerals or commercialisation of currently unexploited deposits. 

As has been amply demonstrated, such earnings, in the current framing of the engagement, would be attributable to SML regardless of which exogenous forces (such as local value addition, economic cycles, new discoveries, global commodity prices, global commodity demand etc.) are truly driving the increase in export or consumption volumes. Clearly, the entire arrangement is illogical and cannot be sustained by any rational justification.

SML’s Solution Architecture

SML has protested the Fourth Estate’s coverage and pushed back against the analysis of IMANI and ACEP. It contends that its upfront investments in cutting-edge technologies and skilled staff entitles it to hundreds of millions of dollars of Ghana’s money. 

The scope of the planned investments can be summarised by reference to section 15 of the amended and restated contract signed in 2023. 

The software, sensors, networks and skillsets being promised by SML are valued in cursory fashion at ~$75 million in two tables found in the appendices of the contract.

The government did not perform any valuation of these assets prior to executing the agreement.

Given that SML retains the full intellectual property of all these systems, they are meant to be applied to the assignment on a mere subscription basis during the term of the contract.

Presumably, then, the contract could have been drafted on the basis of the value of such subscriptions to the procuring entity.

It is completely perplexing how the leasing of agent-operated software suddenly translated into a design to share revenues accruing from the country’s fuel consumption and mineral exports.

Besides the total lack of auditability of the financial numbers involved, the technical specifications of the software and instruments being offered in this billion-dollar agreement are also vague to the point of uselessness. Below, we reproduced the entire schema for the reader’s own appreciation.

First, as any analyst with any experience whatsoever in any technical field would agree, these “specifications” are meaningless. Even basic diagram legends, notations, and references are missing.

The NITA enterprise reference architecture used in Ghana, and other elementary rulesets for IT design in the public sector, were all breezily dismissed for hurriedly cobbled together patchworks that convey no information about how the fancy blockchain technology SML says it will deploy to prevent the mining and petroleum companies from cheating Ghana will actually succeed where all other state agencies have failed.

In order not to bore the reader, this author will not delve further into the technological aspects of the proposed solution, as can be discerned from the diagrams.

Suffice it to say that the proposed RFID-blockchain approach in the way it has been laid out betrays a woeful misunderstanding of how each of the interacting domains – blockchain, RFID, Xray, gold assaying, gold bar moulding, mineral weighing etc all work.

In a proper investigation, the sheer incongruity of the architecture and its porous logic shall be exposed.

This brings us to the President’s decision to engage KPMG to investigate the SML affair.

Enter KPMG

Ordinarily, any referral of a raging controversy of this nature to technical experts ought to generate some relief. Yet, in this case, the President’s intervention sends mixed signals and can be rather counterproductive. Below, we list some reservations activists have raised.

• The President’s action came after the matter had been referred to Ghana’s statutorily independent Office of Special Prosecutor, which has acknowledged receipt. 
• The President’s action attempts to pre-empt a parliamentary enquiry into the matter and has been described as unwelcome by the Parliamentary Opposition. 
• The terms of reference issued to KPMG do not cover critical areas like the underlying procurement process and the essential logicality of the actual solution architecture. 

There are broader issues of concern as well. 

As everyone knows, KPMG, like the other Big Four professional services firms, is heavily exposed to public sector work in Ghana. It is the advisor to the government on its pandemic relief small business stimulus package.

It is advising the GRA, which is at the centre of the SML storm, on the recruitment of technical and other staff to boost delivery capacity. It manages the ESLA tax vehicle on behalf of the government.

More to the point, it regularly pursues “revenue assurance” jobs from various government agencies, including the GRA.

In some ways, therefore, it is a technical advisor to the GRA in some of the very areas it is being asked to investigate. It is also a competitor to SML in respect of some of the very areas it is being asked to investigate.

Literally, all practice lines at KPMG are implicated in this assignment: audit, accounting, assurance/compliance and consulting. With only 12 partners spread across these practice lines as at last count, the idea of interlocking Chinese walls is simply impractical in an assignment of this nature. 

In recent years, the complexities of confidentiality, conflict of interest, and political economy dynamics have made the involvement of Big Four firms in politically high-risk assignments fraught with reputational pitfalls.

In Ghana, we saw the recent incident where GRA appeared to have built on initial work by KPMG to justify the hiring of a ghostly revenue assurance firm, Safari Tech, to trap telecom giant, MTN, a company that KPMG regularly serves (such as it did in MTN’s 2017 capital market transaction).

That issue degenerated into a contentious mess involving the Ministries of Finance, the GRA, and the Ministry of Communications, leading eventually to what amounts to a political, rather than a technical, settlement.

In other jurisdictions with superior oversight and institutional maturity, such risks have exploded into serious blowouts. In the UK’s politically sensitive Grenfell Tower inquiry, KPMG had to step down over conflict of interest issues.

In fact, protracted issues of a similar nature compelled KPMG to suspend further government work for a period in the UK and to even sell some of its business units in order to sustain public trust.

In Australia, multiple confidentiality and conflict of interest abuses linked to public sector work have engulfed all Big Four firms, including KPMG.

Closer to Ghana, South Africa provides the most intense example of why Big Four firms should avoid becoming embroiled in politically high-risk assignments. KPMG was manipulated into whitewashing the Gupta cabal and assisting a faction within the Zuma regime to fire a Minister they felt was obstructing the state-capture goals of the cabal. KPMG was abused by commentators as facilitating plunder and later lost lucrative client business. 

This author cannot presume to lecture KPMG’s risk leaders on which public sector assignments to accept.

The firm’s global reckoning with politically sensitive work, however, counsels extreme caution. The SML assignment, judging by its terms of reference, and the timeframe of only two weeks, presents many slippery slopes for KPMG. 

The firm’s In-Flight Review (IFR) framework, which requires partner-level interfacing at multiple rungs of an assignment, and different tiers of internal and external quality assurance, should preclude a rushed and cursory surface-skating over the many delicate issues raised in this essay in a mere two-week period. 

Where these controls in KPMG’s public sector consulting work have failed around the world, the driving factor has invariably been the fraught pressures of the political economy, systemic conflicts of interest, and the relaxation of standards to meet unrealistic project goals and timelines.

There may well be a narrow role for KPMG in assisting statutory and/or constitutionally independent authorities, such as the OSP, Parliament, and the CHRAJ in conducting tightly narrow and highly technical studies on hyper-specific aspects of the SML affair, in ways that do not put KPMG in the position of “clearing” or indicting a client or competitor.

That determination has to be made by the authority concerned, and in the pursuit of forensic goals only such authorities, and not a private entity like KPMG, truly have the lawful powers to pursue.

We respectfully ask KPMG and the President of Ghana to support truly independent state agencies to delve into this affair without undue assumption of primacy or procedural interference. 

A country that has just repudiated its debts and is in the middle of an IMF bailout program needs to demonstrate the highest levels of fiscal prudence.

Unfortunately, this SML development and the handling of its aftermath threatens to further dent Ghana’s PFM credentials.

It behooves the government of the day to pull back from the brink whilst there is still time to salvage some scraps of PFM credibility.

Coronation-like landslides matter

His non-coronation is a source of great anguish for party bosses who have done everything to make the ascendancy of the Vice President to the “flagbearer” position resemble a sweeping endorsement from all corners of Ghana’s oldest political party. Since the return to democracy in 1992, no candidate has won the presidential elections without a landslide victory during their party’s primaries.

For instance, the Opposition Leader, himself a former President and Vice President, garnered nearly 99% in the Opposition NDC’s primaries six months ago. The sitting President, in keeping with the same trend, scored nearly 95% in the 2014 primaries that blazed his way to the presidency.

On those occasions when a presidential candidate has won by less than 85% in their own party’s primaries (like in 2002 and 2006 during the NDC primaries; or in 2007 and 2010 during the NPP primaries), their chance of winning the subsequent national elections has been almost nil (the 2000 elections being a notable exception).

It would seem from the record that carrying a party to a successful showing in Ghanaian general elections requires a candidate to mobilise a resounding and sweeping endorsement, a coronation, in essence.

The Magic Rise

The current Veep has had a charmed life in his political career. Plucked from relative obscurity, like other Veeps before him, from the technocratic halls of the Bank of Ghana to join the NPP presidential ticket a few months before the 2008 general election, he had everything to prove.

Since then, the 60-year-old politician has earned his stripes by transforming himself into the ruling NPP’s most ardent champion of the party’s signature, slogan-heavy, political PR style.

His impeccable academic credentials and northern ethnic and Islamic religious heritage in a party dominated by Southern, mainly Akan, Christians combined to endow his rise with a certain kind of exotic fairy-tale flourish.

His profile rose in the party so dramatically that at one point a coronation seemed inevitable as party bigshots lined up behind the narrative of his inevitability.

And then Ghana’s economic down-spiral began, eventually landing in a catastrophic heap requiring an emergency IMF bailout and national insolvency.  

The same credentials in economics that had catapulted the Veep in the eyes of the party’s elite gatekeepers during the party’s spell in opposition, and made him the most effective lampooner of the ruling government’s economic policies, have today also become his undoing. His lack of deep grounding in the ruling party is suddenly an issue again.

The grassroots of the party are suddenly being asked by his rivals in the party whether they get what all the fuss is about that Oxford economics degree and those majestic lectures that have defined his rise. Many, it would seem, are suddenly unsure about the grand narrative of the Veep’s specialness.

A Maverick party-pooper

Which is probably why the Veep’s most effective rival in the primaries is a maverick businessman and veteran ruling party parliamentarian who boasts of employing 7000 people despite not bothering to complete his undergraduate degree in a suburban New York university.

The said rival’s shoot-from-the-hip politics and eccentric campaign style of criticising the record of the government even though this is an internal election has rattled party bosses who have been at pains to deny his accusations of their favouritism towards the Veep, whilst still needing to give as strong a hint as possible that failure to elect the first Muslim and Northerner as the NPP’s presidential candidate will seal the charge against the Party of being biased towards the predominantly Akan Christian South.

The Primacy of Identity Politics

All said and done, there will be no coronation tomorrow, Saturday, the 4^th of November, 2023. The Veep is expected to come ahead in a comfortable lead but considerably below the threshold that super-successful candidates have scored in internal primaries ahead of victory at the national polls. What does this mean for his chances in the 2024 general election?

If the 2024 elections were to be fought primarily on policy performance, then, coupled with the less-than-complete mobilisation of the ruling party’s base represented by the expected results of the primaries, the opposition NDC would have won in a heartbeat. But like elections all over the world, policy is rarely the sole defining factor, and the issue of identity politics looms large.

If the Veep wins the primaries as predicted, the NPP’s historical strength in the southern and middle-belt Akan areas means that he will have far more latitude in pressing identity-related issues in the Muslim majority areas and the geographical North of the country than the Opposition’s candidate, who is a Christian from the North. The reason is simply that the NDC has a somewhat fraught relationship with voters in the Akan heartland, urging serious circumspection about how they approach campaigning in the North for fear of alienating the highly populous Akan regions.

Because ethnic alliances and allegiances in Ghana usually radiate through the political parties to envelop the candidates, rather than the other way round (very different from the case in Kenya and Nigeria in that sense), the Veep is unlikely to lose many Akan and Christian voters regardless of the intensity of his campaign team’s overtures to the Islamic and Northern constituencies, which frees them to be more creative and adventurous.

The Opposition’s only hope of countering this new dynamic is to come up with their own dynamic to unsettle the Akan heartland of the ruling party.

In a recent tweet, I consolidated one possible approach around the idea of an “Akan heartland vote-puller” being selected as the running mate to the Opposition Leader.

Upon reflection, it is clear that more than that would be required in terms of effective messaging and campaign machinery all-round targeted at the fraying seams of the Akan meta-identity.

Recall that the ruling party won the presidential race three years ago with 500,000 votes, a significant gap that the Opposition must close before they can cross the line.

One controversial point is that the “Akan Heartland” refers less to all the Akan regions and more to those parts of the Akan-dominated geography with predictable voting patterns. Highly urbanized coastal towns like Cape Coast or Mankessim tend to swing with the national mood and are thus less susceptible to the kind of strategy discussed above.

It is true that the Opposition is extremely confident of winning the next elections. Their conviction comes from the belief that the Veep embodies a number of serious electoral risks. Some say that a sizeable number of evangelical Christians in the swing voters’ category might baulk at voting for a Muslim (Ghana has never had a publicly-confessed Muslim as President). Others say that the Veep is so deeply entangled with the policy chaos of recent years that he will be ready fodder for scathing satirists when the campaign season starts.

The religious question, as already hinted, can go either way. What the Veep loses from the evangelical community, he may gain from the devout Islamic community.

The policy charges are stronger. The Veep sold himself as an economic guru responsible for architecting a wholesale transformation of the country.

The self-evident reality is that the country has declared bankruptcy and large portions of private wealth have been wiped away in the most intense economic crisis since 1983.

Then there is a nascent IMF austerity program. As he himself wrote in 1998, IMF programs tend to create losers and winners, generating electoral consequences.

True, in recent years, the Veep has also positioned himself as a digital champion, and some allege that as the economy has tanked this “tilt” has now become a hard pivot.

For most people, the digitalisation results are sound but modest. For hardcore policy people, like some of those who regularly read these pages, however, there is actually a lot to fault about Veep’s handling of the so-called digitalisation agenda. Let us look at a few of the most prominent digitalisation flagships.

Digital Addressing

Ghana has spent millions of dollars on a pre-existing digital application reskinned into a national geotagging platform by a private app developer. 

This is despite the said system merely drawing on open-source mapping solutions available at no cost from the primary geolocation platforms. It took years for Veep and his team to realise this.

Instead of a serious fix, he hastily announced to the country three years ago that Google has agreed to “upload” Ghana’s mapping system into its platform when such a move would be completely pointless as Google already offers the Plus Codes system that duplicates the full set of functions ineffectively performed by Ghana’s quaint customisation.

Needless to say, nothing of that sort happened. A little more genuine consultation with the Ghanaian tech community would have saved the country money and ensured that resources go towards more value-adding geolocation integration into service delivery instead of replicating pre-existing geotagging systems.

As it is now, all the digital platforms serving Ghana simply use Google or other digital geolocation tools, not the national system.

National ID

The principle that national identification can be a critical foundation for public service delivery is not new.

The World Bank’s ID4D initiative launched in 2014 builds on policy awareness dating back decades, with various European governments introducing national IDs in 1938 and thereafter before civil rights concerns led to a slowdown in their momentum.

The Ivorien national ID Card scheme, for instance, has been running continuously since 2001.

It is undeniable that Veep’s sponsorship of the Ghana Card project has led to the fastest and deepest enrolment of Ghanaians since efforts to roll out a National ID for Ghanaians began in 2003.

More Ghanaians than ever before now have a secure form of ID that is compatible with other digital services.

But a great deal of the good that could have been done by this system has been forgone due to the extreme profiteering approach adopted. The system as it currently exists is primarily a cash cow for its enterprising private sector “partners”, who are not merely contractors but effective controllers and owners of the underpinning technology infrastructure.

Matters came to a head when the country was effectively subject to blackmail during the latest mass voter registration. The private contractors demanded millions of dollars before the country could commit to providing enough cards to first-time voters.

In the end, plans to rely solely on the Ghana Card had to be abandoned. At the end of the exercise, it was noted that over 60% of young voters registering for the first time did not have a Ghana Card. The high expense has prevented sufficient coverage despite the program costing over 40 times the cost per capita of India’s much-praised model.

In a similar vein, promises to tightly integrate government services have failed to be realized because every such integration requires participating state agencies to pay millions of dollars to private contractors for basic database linking. 

Rather than focus on providing a low-cost KYC mechanism over the internet to boost the digital economy, the private vendors driving the Ghana Card are focused on selling hardware terminals for card validation to financial institutions, scuttling the government’s open banking promises.

The dramatic resistance of the Ministry of Communications to the attempt to foist these terminals on telecom agents led to a bizarre situation where the Ghana Card was the sole document for SIM card registration yet telecom operators could not validate the cards in real time.

The country was bewildered to read letters from the National Identification Authority discrediting the approach of the Ministry and insisting on selling these devices and services.

Perhaps, the height of confusion was reached when a misguided effort to bypass the Ghanaian passport and embed the country’s core e-passport mechanism into the Ghana Card resulted in comical clashes with the world body at the helm of affairs, ICAO.

In the end, promises to get all of ECOWAS to submit to Ghana’s model for e-Passport functionality failed as, obviously, most countries prefer to conform to ICAO’s pace and strategy.

And a raft of others

In his digital champion heydays, not a day went by without the Veep launching one “transformative” digital project or the other. A careful assay of the outcomes of most of these projects leads to very sobering conclusions.

Since MASLOC, one of the government’s small business lending programs, was digitized in 2020 to great fanfare as part of the Veep-led digitization agenda, ostensibly to eliminate inefficiencies and graft, Ghana’s Auditor General has published scathing reports showing a degeneration in performance, including rising default rates, across activities such as its PINCO, poultry, and tricycle-acquisition projects.

In 2019, the Veep launched a national e-procurement system to fix bid-rigging and other procurement abuse only for the country to be thrust into procurement scandal after scandal, from the cathedral affair to the current Bank of Ghana mess.

At one point, even the head of the procurement control agency was entangled in a bizarre “tenders for sale” scandal leading to his indictment. It goes without saying that the e-procurement system launched to great fanfare by the Veep has had no impact whatsoever across most procurement entities even in the central government.

Conclusion

In short, the hard pivot from economic transformation to digitalisation-for-transformation by the Veep has not shielded him and the ruling party from the looming confrontation with the government’s policy record in the 2024 elections.

And yet, to reiterate my earlier analysis, neither policy performance nor the failed coronation is definitive in assessing the chances of the Veep should he win tomorrow’s internal contest as predicted.

His mould-breaking ascent has introduced certain uncertainties into the settled electoral calculus of Ghana that should give pause to those in the Opposition’s electoral strategy team celebrating the imminent collapse of the government at the 2024 polls.

As of this moment, the 2024 chessboard is only getting set, and one-half of it is cast in the shadow of a man readying his fugu for a date with destiny.

Rattled by unprecedented demonstrations against his tenure by Ghana’s political opposition, the governor of the Bank of Ghana described the protestors as “hooligans”.

The choice of language is uncharacteristic of Ghana’s suave and urbane leading central banker. When he was first appointed, few would have guessed that his term would see such a spectacle. Rarely, anywhere in the world, are central banks the usual target for mass protestors. And this Governor in particular came to office enjoying massive elite confidence. 

For nearly a decade, until he decamped to the African Development Bank (AfDB) in 2011, he helmed the research function for the Bank of Ghana. In this role, he highly supported Ghana’s small but committed think tank and research-oriented activist community. When our community mobilised against what we saw as lazy banking, the Governor, in his then research-led capacity at the central bank, was a source of analytical influence.

Changing Habits

Then he got into the apex role and everything changed. He began to push poorly conceived policies such as forcing massive recapitalisation requirements across the banking industry when the real challenges were poor capital adequacy owing to years of failure to deal with toxic assets and poor corporate governance. Protests, warnings, and laments went unheeded. He stopped listening to the independent policy community, treating their views with contempt. Many specialised banks catering to niche segments of the economy were forced to close down for no sensible reason. Despite the brutal weeding out of small and specialised banks, capital adequacy continues to be a problem for a quarter of Ghana’s banks. And the fruits of the failed recapitalisation program are still shedding their seeds.

Legacy Unravelling

Meanwhile, the one bold action that could have defined his legacy, the closure of insolvent banks that previous governments did not have the stomach for, has had its aftermath badly mismanaged.

Whilst, elsewhere, publicly funded bank bailouts and takeovers have yielded nice profits for the State, a thoroughly lacklustre recovery and liquidation process in Ghana has saddled the taxpayer with billions of dollars of liabilities with no prospect of getting most of the money back. The US government, for instance, has earned more than $30 billion on its bailout investments due to effective recovery management. 

After mooting costs in excess of $3.5 billion three years ago, following massive failures in the recovery & liquidation program (with a lower than 10% rate recorded in one category, for example), the Bank of Ghana stopped accounting to the public altogether. 

One should therefore not make the mistake of assuming that the $5.45 billion loss that has triggered these unprecedented protests for the removal of the governor came in a vacuum. The disaffection has been brewing for a while. Judging from the history of missteps outlined above, one should also be inclined to take the central bank’s loud protests of innocence with a massive sack of salt.

Here is the case for the prosecution.

First, let’s get this out of the way: a central bank can indeed make losses, and many routinely do. As far back as 1993, the IMF’s Alfredo Leone did a fine paper cataloguing the possible sources and ramifications of central banking losses.

What has caused a ruckus in Ghana is thus not the mere fact of lossmaking, but rather the scale of it, the causes, and the surrounding sleaze. 

Sheer scale of the Loss

The Bank of Ghana’s declared losses for 2022 are on the order of 8% of Ghana’s entire GDP. As the array of charts below from the OECD (Ono & Pina, 2023) shows, the size of the loss in Ghana’s case is truly phenomenal.

Bank of Ghana lied blatantly about peer comparisons

What is worse, the Ghanaian central bank, to further absolve itself of all blame, proceeded to publish a table attempting to underplay how bad its losses were in comparison with peers elsewhere. It comically inflated the losses of the Dutch central bank from 1% of GDP to 11% in order to mask its own unprecedented challenges.

But comparing it to GDP does not do full justice to the stupendous scope of the mess. When compared to the total equity of the Bank of Ghana (BoG) in the previous year, the resulting ratio is nearly 1200%. This is eye-popping from a historical point of view. For instance, a chronicle of historically significant central bank loss incidents by economists John Dalton and Claudia Dziobek (2005) from the 1990s produces a comparative average of just 35% (compared with BoG’s 1200%, that is).

The causes according to the Bank of Ghana

The BoG has listed four main causes for the loss: 

• A 50% haircut on its holding of government debt
• Exchange rate losses
• Increases in operational expenses
• Interest expense on monetary policy operations

Of these four reasons, only the last can be adduced to support the BoG’s innocence, but it accounts for only 6% of the losses. The three other causes stem from underlying problems for which the BoG cannot in any way escape blame.

Impact of the Debt Restructuring Program

A truly independent central bank would not have been left holding the can in the way that the BoG was exposed during Ghana’s disorganised domestic debt restructuring process (DDEP/DDR).

As the IMF itself has warned, central banks should shield their credibility when participating in domestic debt restructurings.

Every serious central bank is thus careful not to allow itself to be used for political convenience by the fiscal authorities (the central government) when they spend their way into a ditch. 

In Greece, during that country’s 2012 debt restructuring episode, the central bank cleverly demanded that important state assets be pledged onto their books in order both to maintain balance sheet integrity and to keep the politicians honest. 

In Barbados, a central bank recapitalisation plan was built right into the domestic debt restructuring program. 

That is why during the heady days of the Greek debt crisis in 2012, the country’s central bank actually turned a profit (see detailed extract from the relevant annual report).

In short, the BoG, by being too cosy with the politicians, by lacking a serious negotiating spine, by failing to show tough love to the fiscal administrators, and by sheer cluelessness of the political economy of Ghana, has seriously damaged its reputation by destroying its balance sheet.

Why the massive debt holdings in the first place?

And how come the BoG was holding so much government paper in the first place? It claims that this was because prudent investors didn’t want to buy government debt beyond a certain limit, yet the government was determined to live above its means, so the BoG had to step in, like a daft dealer with a soft spot for a junkie. 

Hence, in 2022, the year in which the loss was recorded, BoG alone was responsible for more than 40% of all banking sector lending to the government. Or, at least, for the outstanding stock of the sector’s debt to government.

But this is not telling the full story. Between September and December ending of the same year, the BoG doubled its holdings, according to interviews given by its Head of Research. Let that sink in: in the course of just three months, BoG printed or conjured nearly 40 billion Ghana Cedis (GHS) or ~$4 billion to protect the government from the need to kick its habit of overspending.

Compare this situation with that of one of Ghana’s closest peers, Kenya, where the central bank held just 2% of government debt (versus 46%+ held by the private banking sector).

The loose quasi-fiscal behaviour is part of a pattern

Perhaps, Ghanaians would have been less infuriated had the BoG’s crimes been limited to these technical and wonkish infractions. But imagine their alarm when it then also emerged that the central bank has been engaged in dodgy procurement and reckless overspending on itself; and was, in addition, dishing out lavish packages to its Board of Directors.

The $250 million Headquarters project

A cynic once said that, “how you do anything is how you do everything”. Those inclined to cut BoG some slack for the losses stemming from its reckless lending to the central government have to face the shambolic project management that has seen costs of its new headquarters balloon by nearly 300% at design stage.

Documents from the procurement regulatory authorities show that even before construction could take off, approved estimates shot up from ~$80 million to more than ~$200 million. Now that the construction rate is at roughly 40%, total cost projection is between $250 million and $300 million. In fact, cost and time overrun models suggest that cost variations worsen during actual construction, so the total cost may well hit $500 million. 

These cost overruns are far above the medians recorded in Ghana and the region by experts, as shown below.

The 300% to 500% cost overrun numbers emanating from the BoG’s headquarters project (compared to median rates of 75% in Ghana) illustrate a general pattern of disregard for prudent financial management.

This is on top of the fact that the BoG has revised designs to remove the high-value features such as the state-of-the-art data center, currency processing system, and integrated security management system.

In its defence, the BoG has provided benchmarking data from the Africa Property & Construction Cost Guide.

But its computations are highly misleading because it has used the average costing for “prestige office high rise” for the entire project scope when, in actual fact, 60% of the gross project area is covered by other elements such as a multi-storey car park.

Properly weighting the different components of the project yields a per meter square cost for the project that deviates from the benchmarking guidance by nearly 70%.

On top of all this, the BoG chose to use restrictive tendering on national security grounds when none of the qualified vendors has any special national security clearances that set it apart from any of the 100 or so contractors in Ghana that would have qualified to place bids in a truly transparent and merit-driven process.

A Pattern of Procurement Abuse

The BoG’s spending inefficiencies are revealed through a record of poor and sleazy procurement decisions.

The BoG has invested, and continues to invest, in a raft of ventures, ranging from hospitality facilities to medical installations. In many of these cases, the procurement practice is far from transparent, and rarely is it ever above board.

For example, a number of contracts for multimillion dollar hotel facilities have been awarded without competitive tender.

In one particularly egregious instance, a contract already awarded to a company called, Maripoma, was stripped off and awarded without competitive tender to a favourite, DeSimone, which has also benefitted from non-competitive invitations to bid and actual contracts in the Bog headquarters and national cathedral episodes, respectively.

The national security arguments ring completely hollow not just because the corporate favourites that win these awards have no special national security clearances over and above those that are denied the opportunity, but also because we see a shift in favourite contractors whenever new governors come to office. Furthermore, contractors excluded from bidding on national security grounds by one public agency often undertake work of similar scope awarded by other agencies, sometimes even under the same dubious national security pretences. 

Lastly, and perhaps worse of all, the Bank of Ghana routinely buy ordinary items, like Toyota vehicles, to the tune of millions of dollars using the same restrictive tendering and single-sourcing approaches.

Per this author’s calculations, more than 90% of routine procurement in the last few years at the BoG bypassed competitive tendering or otherwise fell short of standards.

What is sad is that it wasn’t always like this. Under some previous administrations, the BoG regularly resorted to competitive tender for most of its procurement needs.

Board largesse

Perhaps, one reason why the management of the Bank of Ghana hasn’t been reined in despite all the profusive abuse of procurement standards, lavish overspending, and reckless quasi-fiscal behavior, is the shrewd distribution of lavish treats to the BoG’s board members.

For example, consider that the entire annual cost to Barbados for maintaining its central bank board is $60,000.

In Ghana, the equivalent spending is close to $800,000. The cost of upkeep of the BoG’s board is more than 300% higher than that of the Central Bank of Kenya’s.

“Board capture” through treats and perks is a well-known tool used by some corporate management for suppressing true oversight and fiduciary controls.

The sum of it all

It should be evident from all the above that the reasons given by the Bank of Ghana to absolve itself of all blame in the current controversy are hollow. The stiff-necked refusal to accept the need for serious policy and corporate governance reforms at this very sensitive institution, whilst reminiscent of the general posture of the current political administration, does not become such a critical institution.

If the governor does not change the approach to engaging with critics and the public, show signs of genuine listening, and commit to a transformative program to rebuild trust, his term is likely to go down in history as the worst Ghana has ever seen. Which would be a real shame, given the hopes he inspired when he was first appointed.

In a tweet, he stated that both the National Democratic Congress (NDC) and the New Patriotic Party (NPP) have a lot of work to do prior to the 2024 general election.

He indicated that the NDC has maintained its level of support from 2020 whereas dissatisfied NPP supporters did not partake in the bye-elections.

To him, the ruling party, NPP, has more to fear in the 2024 presidential and parliamentary elections.

NDC retained the Assin North seat, garnering almost the same number of votes in 2020 at the swing constituency.

The NPP also retained the Kumawu constituency seat, a traditional stronghold for the party.

Below is his tweet:

1/
If the recent parliamentary by-election in the stronghold of Ghana's ruling party was interesting, then today's episode in the swing constituency of Assin North is 10x more.
Polling data suggests that the NPP & NDC are neck in neck with the NPP ahead by a whisker. pic.twitter.com/CGNqxkufsA

— Bright Simons (@BBSimons) June 27, 2023

What the 2 recent parliamentary by-elections in Ghana show is that:
1/ The Opposition NDC is maintaining its level of support from 2020
2/ Disgruntled supporters of the incumbent NPP are mostly staying home
3/ NDC has yet to excite non-NDC voters
4/ NPP has more to fear in 2024

— Bright Simons (@BBSimons) June 27, 2023

When the above tweet was made, the Chamber of Bullion Traders, a gold merchandising lobby group in Ghana, was aggressively lobbying and briefing about their grievances over the Gold for Oil program and the harm it was causing to their interests.

The government’s decision to hoover up large quantities of gold from the small scale mining sector to support the gold and oil barter agenda could, according to their analysts, spell the end for some of their members and set in train a slow spiraling death for the entire private gold exporting sector.

It would seem that all the briefings and counter-briefings have roused anti-government media activists who have this weekend drawn first blood.

WADR, a Washington DC based non-mainstream media outlet strongly opposed to the current Ghanaian government has made a number of allegations corroborating some of the briefings swirling in the undergrowth of Ghanaian political chatter. Their allegations are backed by invoices and trade documents featuring actors who have been mentioned in confidential briefings as architects of the Gold for Oil program.

At the heart of the fascinating schema, as per the briefings, are two highly secretive and super-discreet investment bankers and dealmakers who also double as on-off financial advisors to former British Prime Minister, Tony Blair, himself a favourite Advisor to Ghana’s Vice President.

The two men – Reyhaan Aboo and Prashant Francis – are principals of London-based Portman Partners and UAE domiciled Alphastream.

They, especially Mr Francis, were key enablers of Prime Minister Blair’s now dissolved, and once highly scrutinised, Firerush Ventures.

Alphastream’s key operatives are JP Morgan alumni who are well connected with the American investment bank’s powerful Ghanaian network, with members ranging from fund industry gurus to a former junior Finance Minister.

Alphastream, with primary investors in a UAE Sovereign Wealth Fund, brands itself as a multi-commodity royalty streaming company. The same business the ill-fated Agyapa entity attempted to enter.

According to the briefings, now corroborated by documents leaked to WADR, the Bank of Ghana has signed a secret agreement to sell $1.1 billion worth of gold and an unspecified quantity of silver through Alphastream to obtain dollars for procuring refined petroleum products.

It is absolutely unclear what specific value Alphastream adds in a simple gold export transaction but theories, mostly unsavoury, abound.

Regular readers would recall our recent tweet that Russia’s Litasco, under pressure from the EU’s expanding sanctions regime following the Ukraine invasion, has set up in the UAE and is exploring creative trades. Litasco is reported to have brought in the first consignment of gasoil blends from the Baltic Port of Vystosk under the Gold for Oil program.

Given Litasco’s reputation for “crude oil for refined products” deals, most notably in Nigeria, its involvement in Ghana’s barter program was unsurprising. Yet, impeccable sources insisted that they had not taken gold for payment.

The shadowy intrigues surrounding the very first transaction cast a harsh light on the opacity, lack of forthrightness, poor policy grounding, parliamentary sidelining, and zero accountability beclouding the entire Gold for Oil program.

Such murkiness could only deepen the clouds of suspicion and provide more fodder for the whispering campaign. One mystery above all drove the intense chatter: how had Litasco been paid?

The leaks to WADR shed light on this strand of the affair and ties some of the loose ends of earlier analysis. The money no doubt came from StoneX Commodities DMCC, part of the $1.7 billion a year trading wing of the StoneX Group, whose precious metals unit, especially the Girish Surendran trading desk, has been particularly aggressive of late in exploring multi-sided transactional solutions.

According to WADR, 502 kilograms of gold, out of an Alphastream quota of 18 tons, plus an unspecified quantity of silver have been freighted on Emirates airlines to StoneX’s refinery in the UAE.

Based on proforma invoice pricing, the total value of the shipments should amount to about $33 million. Roughly equivalent to the approximately $32.8 million that 41000 metric tons of Rotterdam gasoline blend would have cost on CIF basis using the relevant Argus pricing benchmarks.

short, as many people have said in the past, the whole Gold for Oil program simply entails diverting gold from Ghanaian private sector players and selling through politically connected middlemen for dollars in Dubai. Then paying a Russian trading firm that already buys crude from Ghana and, finally, netting off in spot settlements. Far from the revolutionary gameplan of recent government narratives. At first approximation, the scope for backhand fees and hidden premia is, unfortunately, massive.

Had this convoluted ring-a-ring-a-roses been equivalent to a conventional oil trade intermediated by the usual Ghanaian Bulk Distribution Companies (BDCs), we could have put the whole thing down to the Ghanaian politician’s need for populist dramatics. But the multiple layers of related parties playing middlemen for a cut and the thick cloud of opacity ring serious alarm bells.

Some of the claims of WADR are hard to follow and the organisation’s key activists use unconventional scales and conversion rates (examples: suggesting that “129 pounds = 1kg” and that 1 pound of local gold costs 5000 GHS, both of which are erroneous).

But the general concerns about shadowy brokers have been raised by others far more steeped in the commodities industry, and fears of potential losses for Ghana are reasonably grounded.

The slow rate of gold mobilisation, no doubt funded by cash printing with inflationary potential, and the multiple hoops of exchange rate and credit exposures, all come together to suggest a tottering wreck of a scheme that may be too clever by half. There is, after these revelations, no rational basis for holding on to a belief in the scheme strengthening the Cedi or leading to lower fuel prices at the pump.

Before further leaks and more confidential briefings ensue, we strongly urge the government of Ghana to publish every piece of information relating to the various roles played by the Bank of Ghana, Precious Minerals Marketing Corporation, Litasco, StoneX, Alphastream, and the secret local gold aggregator muscling out the established gold traders and exporters in this strange procurement scheme.

Why should every policy of government become a magnet for drama and controversy?

[This is a developing story. Updates may be made to this note as more information emerges.]

Note: Views shared are solely those of the author.

This was revealed in high-level meetings between the country’s authorities and top finance and economic sector actors on Friday, the 2nd of December 2022, as the country’s senior men’s football team battled the Uruguayans for World Cup glory.

Regular readers of this site will recall our earlier mention of the authorities’ intent to have a “shallow restructuring” of the country’s debt and our assessment of any such approach being unlikely to make a serious dent in the macrofiscal situation.

After hiring four international consulting firms, and crunching the numbers more soberly, the government seems to have come around to the reality that a somewhat deeper restructuring is required.

Driven by a strong compulsion to fast-track its impending IMF program, the government appears also to be backtracking on earlier commitments to design a “market-led” debt treatment strategy.

Financial sector actors report that the tone of the authorities during Friday’s initial engagement was not one of delegating the strategy formulation for the proposed “debt exchange” to the Ghana Association of Banks, securities and dealers, and other such industry groupings.

The government is determined to drive the process.

The Finance Minister expressed fears of Ghana being shut out of the international capital markets for the next three years.

Consequently, the strategy is to aggressively revive relationships with bilateral donors (like the UK, US, Germany, France, China etc.) and multilateral institutions (like the World Bank, African Development Bank, etc.) in order to attract more cheap money in the form of grants and other concessional types of financing.

Doing this, he reckons, would require a “stamp of approval” from the IMF. 

It is thus the government’s strategy to quicken the tempo of meeting any prior actions the IMF formally imposes once the government submits its Letter of Intent for a Fund program hopefully this month. The seeming haste in powering through the debt restructuring stems from this factor.

The Finance Minister’s Technical Advisors disclosed at a high level results of an internal debt sustainability analysis which confirms long-held views on this site that Ghana’s debt is not sustainable under realistic fiscal conditions over the medium term.

In fact, subject to stress testing, even a consistent series of low or zero fiscal deficits may not be able to bring the debt onto a sustainable path in the next 10 years.

On both solvency and liquidity grounds, debt treatment (some kind of default) is now unavoidable and inevitable in any scheme to make Ghana’s debt bearable without permanently damaging the economy.

Given that Ghana’s debt carrying capacity is of medium calibre, debt sustainability requires that debt-to-GDP ratio be brought down from the current level of more than 100% to 55%.

The debt service ratio (how much of government income is spent on paying interest and repaying principal) must likewise be brought down from over 60% to a more prudential 18% level.

In the view of the Technical Advisors, tackling the fiscal deficit alone will bring down debt-to-GDP to a still high 85% to 90% range, when the prudential target is 55%.

It will moreover require an “extreme adjustment” involving successive primary surpluses in a country that has only seen such surpluses 3 times in non-consecutive years in the course of the last 30 odd years.

The growth implications of such an extreme fiscal adjustment would be dire in a developing country where government spending is highly stimulative. In short, a complete non-starter.

Faced with these strong constraints, the government is compelled to take difficult decisions on the debt stock.

To stay true to a political preference for avoiding “principal haircuts” (i.e. failing to repay part of the debt) in the domestic context, the decision has been taken, as far as the local debt is concerned, to instead have steep coupon discounts.

In simple terms, if the government can’t repudiate a part of the domestic debt, then it will heavily reduce the interest it pays on it and how long it takes to pay through various techniques. 

The Finance Ministry concedes that using coupon discounts alone will not bring the actual domestic debt stock down, and thus will not enhance solvency. Coupon cuts and tenure extensions are merely “partial support”, but they will nonetheless bring much-needed short-term liquidity relief (reduce the year-to-year stress on the government from having to pay very high interest rates in a time of financial distress).

It follows then that some of the “support” for lowering the total debt stock simply has to be found from principal haircuts on the foreign debt (in simple terms, Ghana will not pay back all the external debt it owes). More on that later.

On the domestic front, the government’s plan is to recall all the bonds and other debt securities it has issued, with the exception of treasury bills, and return to investors new bonds with new terms (the technical term is creating “exit bonds”).

Because the existing bonds are too “fragmented” (many and diverse), the government will consolidate. After the restructuring, there will be only 4 types of local bonds with different maturity and interest terms. 

The maturity profiles (when repayment will be due) of the four bonds will be 2027, 2029, 2032 and 2037, with an average weighted life of 10 years.

The local debt stock will be split among the four exit bonds as follows:

2027 – 17%

2029 – 17%

2032 – 25%

2037 – 41%

That is to say, regardless when the original bonds an investor held were due to mature, they will now be exchanged for new bonds that will mature according to the above timelines. 

As part of the trade-off for not cutting the face value of local debt, the government will freeze principal repayments of the local debt but not necessarily that of the external debt.

All local bonds due for repayment will simply be rolled over in line with the new maturity terms. 

The 2027 bonds will see principal repayments made in two equal instalments in 2026 and 2027. The 2029 bonds will be repaid in two tranches in 2028 and 2029.

The 2032 bonds, on the other hand, because of their size, will have a three year repayment schedule starting in 2029.

The 2037 bonds will see repayment over a five year period. In all cases, interest payments will fall linearly in proportion to the principal amortisation rate. 

The transformation aimed for is one of a constant linear payout rate on local bonds from 2026 onwards, in effect phase-shifting the burden on government away from the present to the post-2026 horizon. The government is of the view that such a model creates predictability to the benefit of the financial sector.

Regarding interest payments, the authorities intend to pay no (zero) interest across all bonds in 2023. In 2024, it intends to pay 5% interest. And in 2025, the interest rate will increase to 10% and stay constant across all bonds till the last bundle matures in 2037. Readers may put this in perspective by comparing the current average weighted interest rate of more than 21% per annum.

To reiterate, these measures are expected to only bring the key solvency indicator, debt-to-GDP, down to 85% from the current 100% plus level (the latest IMANI estimate is 108% without Sinohydro obligations and contingency liabilities emanating from the energy, cocoa and roads sectors).

And now to the most controversial part. The government intends for these measures to apply equally to the entire domestic debt stock, except for treasury bills.

No discrimination is envisaged for the debt secured through special vehicles like ESLA and Daakye or those issued locally but in USD, or even the so-called “Templeton bonds”. The only nuance involved is that the spreading of these “special” government debt obligations across the four exit bonds will follow a certain order and pattern.

No mention was made of government debt that are not in the form of marketable securities. Supplier/contractor debts, bank loans and various overdrafts were not touched on at all in the deliberations.

To pacify the clearly traumatised audience, the Finance Ministry gurus dangled the benefits of a quick IMF program and accelerated return to stable macrofiscals. They projected a likely drop in inflation (and potentially interest rates) to single digits resulting in positive real returns on the new exit bonds.

The government pledged to double down on liability management, including a fastidious commitment to improved sinking fund management to ensure that come 2026, the government will be in a position to resume servicing debt at an elevated level. Some industry observers are worried of a repeat restructuring as was the case in Jamaica in 2013.

Some vague assurances were given by the government about special measures being introduced to ensure limited or zero negative spillovers into the financial sector as a result of the debt restructuring program. Somewhat more tangibly, the government discussed the prospect of a new liquidity fund that will help financial sector players in dealing with a sudden upsurge in redemption requests (customers trying to pull out their money from the financial system). 

The possibility of loosening some prudential ratios related to liquidity, leverage, risk-weighting of assets and capital adequacy was mulled without any concrete commitments. Regulatory forbearance was however affirmed, especially in relation to minimum capital, asset class limits and the standardisation of the accounting treatment of revalued bonds. Pension Funds were consoled with news of upcoming support measures to mitigate against mounting redemption risks. 

No information was provided about the moral hazard implications of all this regulatory laxity in the trusteeship process, among others.

As hinted above, the President’s premature commitment to “no principal haircuts” was not tenable when given. The authorities are now trying to manage the fallout by shifting the burden of adjustment to external debt and deepening coupon discounts. Our understanding is that the government will offer external debt holders the following terms: a 30% principal haircut, a 30% coupon haircut and a three-year moratorium (or standstill) on interest payments.

This essay is much too brief to delve into the differential impacts of the different debt exchange models politically available to Ghana and their resulting effects on different classes of investors. The academic, technical, policy and professional literature on that subject is very vast. On the whole, however, it is safe to say that Ghana’s current “opening gambit” proposals tilt enough to the “higher loss” end of the spectrum for a large enough group of investors to trigger some banding-up resistance soon after the announcement.

So where does all this lead to as far as the short-term dynamics of Ghana’s economic crisis are concerned? We have not heard enough to update our previous analysis, though we suspect that the occasion to do some of that will arise in coming days. For now we will reiterate our standing assessments:

• Consistent with the government’s posture, “stakeholder consultations” will remain perfunctory. No serious attempt has been made to mobilise major factions of the society behind these plans. Not even the ruling party is fully briefed about the entire strategy set of the authorities. 
• The Opposition Party in Parliament is not sufficiently primed to play a major role in these developments.
• The frontbench has not shown any clear signals of pushing any detailed alternative policies. There are some concerns that the leadership is fickle and unsteady. Impending internal primaries have also weakened Opposition Party leaders and distracted some Members of Parliament.
• That notwithstanding, the government’s strong inclination to entirely ignore Parliament has serious risks.
• Civil Society actors, including the unions, have yet to develop anything remotely like a united front, Still, the complete disinterest in “meaningful engagement” with these groups on the part of the authorities will create negative conditions in the information environment. The lack of an “elite position” on the planned measures will result in a highly discordant public conversation with massive amounts of misinformation being generated without significant counter. The principal religious bodies and others, seen as more sympathetic to this government, for instance, are in no position to credibly calm waters.
• We reiterate our earlier position that, next to poor stakeholder mobilisation, the biggest risk to the proposals is litigation, including the possibility of class actions inspired by political opposition actors and unions.
• Some of the local debt instruments are subject to English law, heightening the prospect of some holdouts being facilitated by the use of the London courts to frustrate the government’s timeline.
• Some other local debt instruments are overcollateralised by tax revenue and may become the subject of domestic litigation.
• We have suggested in the past that a Greece-style law may have been helpful in moderating litigation risks but the government’s preferred timeline for action and disinterest in meaningfully engaging the Opposition has apparently ruled this out for now.

It is important to bear in mind that these are merely the government’s initial proposals. Haste has been the foremost consideration in coming up with them. The rubber however meets the road in the rough and tumble of the democratic process. Some of the risk factors indicated above can only be resolved by strategic backpedaling by the government with perfect timing. 

The true quality of the Ghanaian government would be seen in how it sequences and orchestrates its concessions, whilst holding its red lines, as it navigates the process post-announcement. 

Whilst the underlying technical appraisals guiding its actions are reasonably thorough, I am afraid I do not have too much confidence in the government’s mastery of the political economy of crisis management.

A statement, signed by the Ag. Head of Corporate Affairs, Dr Abudu Abdul-Ganiyu, said that “the post should be regarded as a mix of half-truth, insinuation, self-praise and alarmism.”

Mr Simons, in a social media post, alleged: “How many are even aware that until recently the Ghana Card brand design itself was not even owned by Ghana? That it was owned by a French company & the country had to pay to get it? When Civil Society scrutinises your government, be grateful. There’s a war for the soul of your country.”

But to the NIA, the controversy the said post has generated is wholly needless and destructive.

“The artwork for the Ghana Card was designed by SAGEM MORPHO (now IDEMIA) of France which won the contract for the production of the first generation of Ghana Cards in 2008.

“The said artwork is the same one used for the Ghana Cards issued under the Foreigner Identification Management System (FIMS) to qualified foreigners lawfully resident in Ghana and the current generation of Ghana Cards,” the statement indicated.

According to the NIA, the artwork was acquired because it wanted to have sovereign control over it, multi-nationalise it with the ECOWAS Card, and get IMS II to evolve it in the best interest of Ghana.

“The current Ghana Card artwork was produced by Intelligent Card Production Systems Limited (ICPS) a wholly owned subsidiary of the Margins ID Group (the only Integraf Certified facility in Africa to Central Bank Level).

“Under the direction of NIA/IMS II, ICPS redesigned the Ghana Card to reflect the evolution of the card from a 2-D bar code card to a high security, ultra-modern, dual-interface, chip-embedded, multi-functional identity card combined with the mandatory security features of the ECOWAS Electronic Machine Readable Travel Document/card (e-MRTD),” a portion of the statement read.

This comes on the back of allegations that Zoomlion is in charge of a yet-to-be implemented towing levy by the Ghana Private Road and Transport Union (GPRTU).

The Union announced the imposition of a towing insurance service on all their members without a membership ballot, effective October 2022.

Following this, Bright Simons alleged that Zoomlion had cut a deal with the Union.

But in a statement released by Zoomlion said it has no deal or connection with any road towing programme.

“We find the tweet firstly by Bright Simons and by Ghana Web unfortunate and repulsively regrettable especially where there was no fact checking from Zoomlion Ghana Limited before the publications,” the statement read.

It has therefore demanded a retraction and an apology from Mr. Simons, failure to do so, they have cautioned will trigger legal action.

“We, therefore, wish to demand a retraction and an apology from Bright Simons and Ghanaweb on the said publication as quickly as possible otherwise, we shall take legal action to address the matter.”

Read the full statement below:

Until Joy News’ Newsfile on Saturday, January 18, 2019, there were many things the nation was confused about and many others most Ghanaians simply did not know.

The controversy over the Commission’s plan to compile a new biometric register has been raging for some weeks now, but on the news analysis show, the following ten stunning revelations were:

1. Even though the EC had made it look like it was conducting “stakeholder consultations” to build consensus towards procuring a new solution soon, Bright Simons revealed that not only had the EC taken the decision nearly a year ago but that it had already finished a tender 8 months ago and was just about to award the contract when the controversy broke. The EC revealed that it plans to compile the new biometric register by June 2020.

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2. The EC never publicised the Expression of Interest and Request for Proposals on its website or in the media and it never revealed any details about the bidders or the evaluation results months after the process had been conducted. It has still not done so and its website has been down for almost a week. There wasn’t a single press release about any of this. The EC’s IT consultant said that even though there was a ¢5000 to get the necessary documents the EC would have given them for free if asked.

3. All along, the EC has insisted that the entire Biometric Voter Management System and Register are at the end of their service lifecycle and are useless hence the need to discard them and buy a brand new system. Bright Simons revealed that the EC has spent millions buying new equipment since 2011 and that for the 2016 elections 72,000 BVDs were freshly upgraded and purchased. Some $7.2 million was also spent on BVRs and other systems. VSATs and VMS solutions have been bought intermittently as late as 2017.

4. Clara Kassar-Tee shows that the framers of the laws of Ghana did not really anticipate this constant compilation of fresh registers every 8 or so years. The statutory principle has always been to compile the register once and revise it with new information periodically. The EC did show from references to C.I. 91 that the law allows new technology features.

5. The EC has constantly argued that the cost of buying a new system is lower than the cost of upgrading the existing system. It came out that this view is just the EC’s speculation since it has never issued a formal Request for Quotations to augment the parts of the existing system that really needs upgrades and is based on the assumption that all the existing equipment has to be replaced by STL. Bright Simons showed that only a part of the system needs fresh equipment and that these could be acquired for far cheaper than the $5145 per BVR and $917 per BVD claimed by the EC.

6. The EC has long insisted that by spending $3500 per BVR and $400 per BVD, it will be saving Ghana as much as $20 million. It emerged that many countries in Africa such as Zimbabwe, Kenya, Nigeria, Benin, Sierra Leone, and the Democratic Republic of Congo have bought the same equipment for significantly less. There was an argument between the EC IT consultant and Bright Simons about the BVRs bought for Kenya for $750. The EC IT consultant insisted that the cost of that BVR did not include the peripherals but Bright argued that he had the catalogue and that the peripherals were pre-integrated.

7. All along most Ghanaians thought that “facial recognition technology” is a completely new system being introduced. Bright insisted that there are two levels of that technology, manual and automatic and that the current system already had manual facial recognition technology in place, as is the case in most countries with a biometric voter system.

8. Though many people had already heard discussions about the 0.6% manual verification rate and the EC’s concern that such a failure rate was high, few were aware that this failure rate is dependent on calibration over which the EC has some control or that it is better than even some international systems reviewed by US-based NIST, one of the world’s leading authorities on standardisation.

9. Though there have been many arguments about transferring the data in the existing system to a new system, Bright Simons made fresh revelations about how using a technology called WSQ the biometric data can be reconstructed from the EC’s image archives.

10. The EC’s IT consultant, Yaw Adjei Ofori-Adjei, who was also on Saturday’s show revealed that the same company that developed the biometric software (ABIS) currently in use was part of the bid in the EC’s tender and that it was operating independently of STL.