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25.03.2004 Feature Article

Ghana Telecom's Problems – Who Is To Blame?

Ghana Telecom's Problems – Who Is To Blame?
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I read the article on the Ghana Telecom saga titled 'Ghana Telecom Paralysed' with great sadness and trepidation. It is sadder still because as a nation it seems as if the crucial lesson to be learned here is going to be missed since the tone of the article seems to heap blame on the former government for selling at $38 million whereas the Malaysians are suing for $300 million.

The question is who is to blame for Ghana Telecom's plight and how could the problem have been avoided? As for how to get out of the current morass, only a lawyer of exceptional repute (which I am not) can tell us.

Why should the NDC be blamed for the current situation? Indeed only the uninitiated in international money and markets would even dream of blaming the former government. A company in crises is always sold at a low price. If later, the buyer is able to add value to it and asks a higher price, it does not in any way suggest that the initial seller is guilty of any of crime. That initial price is only a reflection of the true value of the company. At the tome Ghana Telecom was divested, few Ghanaians had access to telephones. There were no card phone booths and it was almost impossible to get through when you could find a phone. I remember when I was at UST in 1991, we all had to go to the single public phone at the main central post office in town and cue. By the time you got to the phone, it was so smelly of saliva that you had to shorten your conversation time in order to prevent yourself from getting sick. At the time the Malaysians were driven out, there were card phones in every hall at all the university campuses and in all major cities, towns and some rural ones as well. Even the BBC in a Focus on Africa program both on TV and in the magazine praised the improvement in the telecommunications service s in the country. With such improved service it is only natural that a higher value be placed on the company. Then there is the not so small matter of compensation for premature abrogation of contract.

The Malaysians are not wrong. It is our government (the NPP ) which is naive and inept. If the Malaysian demand was unrealistic, it would not have been upheld by international arbitration.

One of the qualities of a good government is foresight and prudence. This case has shown that the NPP government lacks both. Worse, there is the further effect of driving away the Malaysians(against the better judgement and advice of all stakeholders) that is yet to be fully appreciated. Right from coming to power, the government should have been able to foresee these negative effects of terminating the deal with Telecom Malaysia. Did they not realise that lawsuits would follow? The Malaysians set up a tertiary technical institute to train Ghanaians in telecommunications technology up to degree level. What has happened to the institute? Is it not ironic that a government that promised improvement of education would kick off by closing down an existing training institute when our old universities are bursting at their at their seams?

The worst effect of this gaffe by the NPP which we are yet to realise is the effect it will have on other foreign direct investors. While our president continues gallivanting around the globe looking for non-existing investors and wasting our scarce resources, he could have achieved more at less expense by simply protecting investors who were already engaged, like the Malaysians. Is it not sad, that despite the presidents monthly travels over the past 4 years, there has been no significant foreign investment? The reason is simpler than all our 'booklong' ministers will let us believe. The first question any prospective foreign investor will ask is 'How have you treated other investors into your country?' Sadly, they won't ask the president for him to stammer and beat helplessly about the bush. They will do an independent investigation and find out that Malaysia Telecom's investment was nullified for no other reason than a democratic change in government. What would they then conclude? That any investment in Ghana must have a payback period of 4 years or maximum 8 years. Which investor will accept that? A short term investor would be better of with options, futures or spread betting.

How are we going to get out of this predicament? As I said before I can't tell you- I'm technically deficient in this matter. But first, let us start by desisting from trying to reverse every policy put in place by the former government. That has been the foundation of NPP policy. How will the party formulate policy if it is re-elected? There will be no former government's policy to dismantle and since it has no experience making original policies I shudder to think about the result. The government has not performed well as can be seen by the length and breadth of the cues at the various embassies in Accra. They even dwarf those of the heady early 1980s.

So please, don't blame the NDC for Ghana Telecom's problems. Blame the NPP for lacking the foresight to foresee what would follow the ill advised termination of the Malaysian contract. Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

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