J.A. Kufuor’s 20-Year Tema Port Expansion Contract with MPS

How J.J. Rawlings Paved the Way for the Tema Port Expansion —The Tema Port expansion traces its roots to the vision of the Rawlings administration in 1997. At that time, Ghana’s Shippers Council was responsible for the management of containers at the Tema Port, and Rawlings recognized the urgent need for expansion to support Ghana's growing trade. Under Rawlings, the government initiated the dredging of the port, an essential step to create berths for ships to dock, facilitating larger vessels that could improve Ghana’s economic output. Remarkably, these expansion efforts were undertaken without relying on foreign loans. Instead, Rawlings focused on using local resources to build a self-reliant maritime infrastructure.

This was not just about the port; Rawlings’ expansion vision extended to a railroad from Tema to Kumasi as part of the larger Boankora Inland Port project, coupled with the expansion of the Takoradi Harbour. No foreign loans were involved in the dredging, showcasing Rawlings’ commitment to economic independence and local development.

When John Agyekum Kufuor's administration came into power in 2001, they chose a different approach for the Tema Port. Rather than building on Rawlings’ gradual and independent development model, Kufuor introduced the concept of privatization through the creation of Meridian Port Services (MPS) in 2004. This was a pivotal moment as MPS, a joint venture between the Ghana Port and Harbor Authority (GPHA), APMT, and CMA-CGM, was tasked with building and operating a dedicated container terminal. However, this venture drastically shifted Ghana’s control over the port's operations.

Kufuor’s government signed a 20-year concession agreement with MPS to build and operate a container terminal. The contract granted MPS a 30% share of the terminal, with the rest divided between APMT and CMA-CGM. While Ghana retained a stake in the partnership through GPHA, the majority control was in foreign hands. As a result, MPS gained exclusive rights to handle any vessel with more than 50 TEUs, sidelining other operators from participating in container handling at Tema Port. This monopolistic control was very bad for Ghana’s interest in the long term, as it restricted competition and allowed foreign companies to dominate Ghana’s key maritime gateway.

One may draw some parallels between this MPS deal and the infamous Enron-style corporate governance practices, where powerful private entities exert outsized influence over public assets. The Kufuor administration's deal with MPS seems reminiscent of this, as the contract gave MPS near-exclusive control over one of Ghana's most critical assets—the Tema Port.

Fast forward to the present day, NPP surrogates frequently claim that John Mahama sold Tema Port for 30 years. This narrative is false and misleading. In reality, Mahama, during his presidency, restructured the existing 20-year contract with MPS to correct some of the imbalances and disadvantages Ghana faced under the original terms signed by Kufuor. It is essential to compare the two contracts: Kufuor’s 20-year deal with MPS handed over significant control to foreign entities and placed restrictions on competition and Mahama’s restructuring sought to renegotiate some of the unfavorable terms, improving Ghana’s position and ensuring greater local participation. Thus, Mahama’s reforms were an attempt to regain some of the control that had been lost through Kufuor’s initial agreement.

In conclusion, the 20-year contract signed by Kufuor with MPS was detrimental to Ghana’s long-term interests. It gave MPS too much control over container handling operations at the Tema Port, stifling competition and allowing foreign entities to dominate. Meanwhile, the Rawlings administration's approach of self-reliant development without foreign loans stands as a stark contrast to Kufuor's privatization strategy.

The NPP’s propaganda that John Mahama sold Tema Port for 30 years is a diversionary tactic to distract from the bad deal they themselves signed under Kufuor’s leadership. It is high time for Ghanaian voters to critically examine the facts and realize that the Tema Port issue did not start with Mahama but with Kufuor's infamous concession agreement.

As we review the facts, the question remains: Who really owns MPS?

Ebenezer Ato Ntarkurfah Jackson, Cornell University MBA Class of 2015, [email protected]