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Ghana’s Opposition Warns International Investors to Beware

Ghana's main opposition National Democratic Congress (NDC) party is warning international investors that it reserves the right to review all contracts signed by President John Kufuor's government in its haste to sell off the country's assets. The NDC is questioning what it describes as the government's unfortunate haste to sell Ghana Telecom, the nation's telecommunications giant for a pittance of $900 million to Vodafone, a British based telecommunications company.

The opposition party contends that the government has hugely undervalued Ghana Telecom, saying the company's cellular competitor was purchased for a whopping five billion dollars. But the government denied the accusations, adding that it wants to generate enough funds to inject into the country's economy. John Mahama is the NDC vice presidential candidate in this year's general elections. He tells reporter Peter Clottey from the capital, Accra that the opposition is not against privatization.

"We have looked at the agreement governing the sale of 70 percent shares to Vodafone, and we think that it is not conducive to the national interest. We are not directly against privatization because if you remember in 1997, we sold 30 percent of Ghana Telecom to Telecom Malaysia. But the problem with this present agreement is that we think that it is an undervaluation of the asset if you consider what is being thrown into it. There is a national fiber optic backbone that is being added to the deal that rights the high-tension grid that belongs to Volta River Authority that is also being added to the deal in addition to the entire fix network system of Ghana Telecom, and the whole mobile network. And we think for that package, I mean 900 million (dollars) is undervaluation," Mahama pointed out.

He said the opposition is not convinced President Kufuor's government should recapitalize the country's telecommunication giant.

"As we stand, Ghana Telecom is probably still the biggest telephone operator, that is if you fix their network and the mobile network together with the amount of optic fiber it controls. And we don't think it has to do recapitalization, I think that what government wants to do is to sell it (Ghana Telecom) and use the money to finance the deficit in the budget. Several ministers have said that the money is needed to close the budget deficit and I think that is why there is an undue haste by government to sell to Vodafone," he said.

Mahama said although parliament is yet to ratify the sale of Ghana Telecom, the opposition wants to warn investors from hastily signing contracts with President John Kufuor's outgoing government.

"It was brought to parliament before we rose and parliament was not able to take it. And so, as far as I know, until parliament is reconvened, that agreement is not one that parliament has looked at. We are advising investors. You know, this government is in its lame duck years, and there seem to be an undue haste to sell off state owned enterprises before they leave, for what reason I don't know. But certainly, we are telling investors to be very cautious. I think that some of these decisions should be left to the next president. There is an undue haste in these last few months to sell off a lot of state enterprises, and I think that is not in the national interest," Mahama noted.

He said some parliamentarians of the ruling party are against the sale of Ghana Telecom.

"There are several members in the majority who think that this sale is not proper, and that is why the government was not able to take it at the last sitting of parliament," he said.

Mahama said the government is not making enough money for the sale of Ghana Telecom, which the opposition claims is even more reason why President Kufuor's government should rescind its decision to sell the telecommunication giant.

"You know, this sale is for $900 million and it does not include the indebtedness of Ghana Telecom, which stands at almost $400 million. And so it means essentially what government is getting out of this whole agreement is $500 million for all the assets of Ghana Telecom, including Voltacom and the national fiber optic backbone. And I think that that is not sufficient. It is totally undervalued," Mahama pointed out.

Meanwhile, a group of concerned Ghanaians have filed a lawsuit to restrain the government from selling Ghana Telecom. The plaintiffs said the causes of action for the lawsuit include recklessly causing financial loss to the state; unlawful disposal of public property; entering into a contract of sale detrimental to the public interest; undervaluing public property for sale to a foreign company; and entering into a public agreement without due process. The group wants the court to revoke the Kufuor government's agreement for the sale of Ghana Telecom to Vodafone international.