31.05.2003 Feature Article

A Tale Of Two Companies: Obuasi Mines & Ghana Airways

A Tale Of Two Companies: Obuasi Mines & Ghana Airways
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According to BBC news, the government of Ghana is contemplating selling its share of about 20% in the Ashanti Godlfields Corporation. Such a move will certainly be music to the ears of AGC management who since the NPP attained power, has been campaigning endlessly to force the government to give up its shares, and thereby the golden share which provides the government of Ghana a veto over management decisions that would be inimical to Ghana's overall economic interest.
Throughout the debate, the AGC management portrayed the golden share as an albatross that prevented growth of the company. As I pointed out in an article last year on this page, such AGC concerns were suffocating lies. The AGC wanted the government of Ghana out of AGC sharedom so that AGC could either sell all or parts of the conglomerate.
It now appears AGC stratagem is coming to a successful fruition. AGC is now in serious talks with AngloGold of South Africa regarding a merger. The golden share is constantly waved by AGC management as a deterrent to such mergers. But multinational companies never had problems with similar arrangements in the developed world! Nor has the government of Ghana given any indication that it would use the golden share capriciously.
The Obuasi mines is the key to Ashanti Goldfields as a multinational conglomerate. Obuasi is the most profitable of the mines AGC owns. Obuasi must therefore be seen through the same prism by the government of Ghana. The government's singular interest ought to reflect reality. While I fully support the government's investment campaign, it will be a huge economic and financial mistake for the government do fully divest itself of the major industry in the land. We do not have a good regulatory regime in Ghana to placate the loss of the golden share which serves rightly as a dog in the manger policy.
Maintaining the golden share does not in anyway imperil the government's avowed investment campaign. As I pointed out, other countries like Germany, Italy, Malaysia, and Britain held on to golden shares when they de-nationalized some of their state-owned companies. It seems to me that AGC management has now been successful in lassoing the government of Ghana into accepting AGC corporate interest as being beneficial to Ghana. That would be a lie, too.
I hope the government of Ghana reads between the AGC lines (or lies) and refuse the AGC campaign with contempt.
Contrast the governments apparent willingness to sell its shares in AGC, shares which as the old saying goes, is as good as gold; with the governments refusal to sell off the corrupt, debt-ridden Ghana Airways. The government of Ghana refuses to divest itself of the problem Ghana Airways because of a perception that Ghana Airways has a 'sentimental attachment' to Ghanaians. Thats hogwash, in my view. The national carrier is a national disgrace. Recently, Ghana Airways had to lease aircraft in order to fly to the United States. Why?
Well, after 9-11 (that is September 11, 2000 terrorist attacks on New York and the Pentagon), the US Department of Transportation required all airlines flying to the United States to outfit the entrance to the Pilot cabin with heavy metal doors that would be impregnable to a possible hijacker's assault. Ghana Airways had not fitted its doors by the beginning of this year. Thus, the US government declared Ghana Airways could not fly such planes to Baltimore or New York.
It is a well known fact that Ghana Airways provides instant flying gratification to the Ghana elite and their loved ones. For the Ghana Airways employee, the airline still offers free flights to them and their family members; with no delineation as to who a family member is. And of course, these workers and family members have the right way of flying ahead of ticket-paying customers.
These and other reasons, account for the government's refusal to do away with Ghana Airways. Ghana Airways serves the corporate interest of the elite and their chosen underlings. And the people of Ghana are left to bear the brunt of a suffocating debt which siphons needed funds from other projects that would better benefit Ghanaians.
The government of Ghana may argue that by selling its share its share in AGC, the government will be flush with cash to undertake some needed development projects. Well, when Jerry Rawlings sold much of the shares of AGC to investors in the 1990's, the government of Ghana accrued tens of millions of dollars from the sale. That money was squandered overnight. And Ghanaians were given the ruse that the money was used to address balance of payment deficits!!!
With that as a background then, let me ask; which should be more sentimental to Ghanaians? 1 A badly-managed, corrupt debt-ridden airline which has become a disgrace to Ghanaians and the flying public? Or, 2 A profitable goldmine with millions of tons of gold still remaining underground? The choice will have lasting economic repercussion for Ghanaians yet unborn. Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

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