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07.02.2021 Feature Article

Self-Centredness Is Destroying Us Gradually!

Self-Centredness Is Destroying Us Gradually!
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The make-up of the people who are currently in control of the institutions and entities whose actions – and/or negligence – determine how Ghanaians should lead their lives, is quite frightening to observe.

Many of these people “suffered” before they got their qualifications and now that the qualifications have earned them their lucrative posts, they want to be as anonymous as possible. “If your neck doesn't stick out” (they seem to say to themselves) “no-one will notice it and conceive any idea of cutting it off!”.

But the result of this is that the organisations they run are often too colourless for the public good. There is just too little information about the operations of the companies they head. Yet the performance or non-performance of these companies determine, to a large extent, the quality of life of the people of this country.

I have had power outages of long duration in the past two weekends. They were both sprung on us unannounced! If I knew whom to quiz about them, I would do so. But whenever I have tried that, my name and telephone number were taken down (after being tossed up and down by “telephonists” who seem selected purposely to irritate one so that one would drop one's enquiries!.) Finally, I was told that I would be called back. That never happened!

Believe me – even a private company that's in charge of our most important public utility – second only to electricity – took me along that path. And that's Ghana 2021 for you. No-one seems to be in charge of anything, when it comes to the interests of people who do not hold political power. “Satisfy the top, and the top will protect you from the bottom!” It's a very cynical but effective attitude to adopt if your company's profits are dependent upon the approval of the powers that be and not on the goodwill of the public.

But it is dangerous to allow hidden faces to run our economy. For, these days, even the countries that offer a relatively comfortable life-style to their citizenry are careful to encourage consumers' interests to help create a business climate based on meritocracy.

Gone are the days when, in places like the USA, the UK, Germany and France, a man built up a business and then handed it down to (usually) his eldest son. Who also did the same. From generation to generation.

Shareholders have been largely responsible for the demise of this system. As businesses grew, their need for capital to help them expand and/or meet competition, also grew. So they went private and invited shareholders to invest their money in the companies' operations.

And when the shareholders came, they looked for performance in the companies in which they had invested their money.

If the members of the families that originally owned a company, could attract business and thereby enable the shareholders to earn a profit on their investments, all well and good. But if the family members allowed their inherited paternalistic or nepotism-flavoured foibles to affect their attitude to business affairs, they were usually booted out. Conspiracies involving employees who have turned against those who hired them are not scanty in the annals of company lore.

Their successors were a breed of engineers, economists and management personnel who proved their worth with mainly one thing, namely, the “bottom line”. Dividends can't lie. And when you regularly maximise them, the shareholders whose pockets are filled by your annual results, support you. Otherwise, out you go.

When last did you read the Annual Report of a company in this country? Maybe such Reports are regularly mailed to shareholders. But do they send copies to the media? Or do the media have to go to the Registrar of Companies or the Ghana Stock Exchange to fish out reports about how company A or company B is doing?

Without constant discussion in the media about how companies are performing – or not performing – how do we know which companies to buy shares in (assuming we are interested in investing)?

When the catastrophic mortgage crisis initially broke out in the UK in September 2007, Britons didn't learn of it from Companies House or the London Stock Exchange. The tycoons in charge of the mortgage and securities businesses were too smooth to leave paper trails about what they were up to, which was to fool the so-called regulators with unorthodox practices.

It was a journalist called Robert Peston who managed to penetrate the secrecy to write an article in the London FinancialTimes, disclosing that Northern Rock Building Society (which had become a bank) was about to crash!

Peston became and instant hero, as radio and TV stations chased after him. Within 24 hours, long queues had formed outside Northern Rock's offices, made up of customers anxious to take their money out.

The British Government now had to bail the company out.But eventually, it died. Its mortgage business was taken over by Virgin Money.

But the Northern Rock “bail-out” was effected by the Bank of England deploying an unorthodox policy called “quantitative easing”, Through this method, the Bank of England opened a “facility” allowing high street lenders to tap central bank reserves at a cheap rate. In other word, tax-payers were paying for the fraudulent practices of the mortgage and securities tycoon, who had earned huge bonuses from “sub-prime mortgages” that had now gone bad.

After Northern Rock came the fall of Lehman Brothers on 15 September 2008. Lehman Brothers, described as one of the biggest financial players in the USA had crashed. This occurred in spite of “rescue operations” by the private sector, whereby investment banks, Bear Stearns and Merrill Lynch had been “swallowed” by rivals.

In the aftermath, major lenders, mostly banks in the US, the UK, Japan and Europe, all had to be bailed out by their respective governments, as the entire global financial system reeled with shock.

A co-ordinated move began, with the central banks in the US, the Eurozone, Japan, Switzerland, Sweden and Canada dishing out “quantitative easing”. Interest rate cuts became widespread.

For its part, the US Congress approved a whopping $700bn “Troubled Asset Relief Program (Tarp)” plan. Another plan was also put in place that obliged banks to accept purchases of $250bn worth of the shares of other banks. Thus, Goldman Sachs, among others, was able to boost its reserves with government loans. Capitalist system or public-backed gambling?

But the financial calamity had not ended. On 25 November 2008, the US central bank, the Federal Reserve, unveiled a new plan that launched a further $800bn of quantitative easing.This involved printing money to buy assets off financial institutions, in the expectation that they would reinvest the funds in the wider economy. It included spending $100bn buying “sub-prime” mortgages from mortgage providers, Fanny Mae and Freddie Mac! $500bn was also spent buying shaky, mortgage-backed securities, issued by banks.

Still, the financial crisis was not solved and on 18 March 2009, the biggest bombshell fell on the financial system, as the Federal Reserve increased its QuantitativeEasing debt pile by$1 trillion, adding government debt to the mortgages on its balance sheet.

These catastrophic incidents in the economies of the wealthiest countries in the world, occurred in places where business information is relatively easy to obtain and where the media and consumer groups are always probing to unearth hidden shady practices. The financial failures of these countries in 2007-9 ought to warn us that we could suffer a worse calamity if we are not careful. I mean, if such information had been regularly available here, could we, perhaps, have alleviated the effects of the bank failures and loan scheme fiascos that our financial system has been enduring?

Certainly, there is an unhealthy secretivenessabout business affairs in Ghana that should be addressed. Whom you know appears to be the major criterion in relation to recruitment, for instance..

Worse, qualification for promotion to big jobs in business seems to be entirely based on degrees and professional certificates. What people have actually done in their fields, is almost always a “secret”. The question is, why?

As our economy expands, entities in both the private and public sectors need to become more responsive to the public need for information. They ought to be required to do so by law. But it appears that too many of our law-makers and law enforcement agencies may be in cahoots with the businesses in operation in the country.

Proof? Cast your mind back to the way the issue of a company that experienced a huge infection of Covid-19 in its factory at the beginning of the pandemic, was dealt with.