How Ghana Telecom was `gang-raped`

A leading member of the Convention People's Party and an economic consultant, Dr. Nii Moi Thompson has explained the reason why he described Ghana Telecom management under the Norwegians as a “gang-rape”. According to him ever since he made this comment there has been rancour among the public because he did not give specific examples to back his assertions.

Bellow is a full and unedited statement he sent to the Chronicle to clarify his assertion. Read on. My description of the mismanagement of Ghana Telecom under the Norwegians as amounting to “gang-rape” obviously created a great deal of discomfort and even rancour among the public. This was to be expected, as the original news item did not include the specific examples I gave to back up that assertion of “gang-rape”. This article should help fill that void.

I chose the term purposely to portray the seeming impunity with which GT's management, specifically under the Norwegians (and not the Malaysians), systematically stripped the company of money that should have been ploughed back as investment to grow the company and strengthen it against its competitors.

Besides their well-publicised “fat salaries” and questionable “management fees,” consider the following excerpts from an internal audit report of GT under the Norwegians: “Project work (not provided under contract): These are payments which the former CEO, Mr. Oystein Bjorge in the company of Dr. Eva von Hirsch were unable to explain to me when I queried such payments. At a meeting with the two which lasted about three hours, the only explanation they could give was that the Board Chairman was aware of such payments…When I pressed further for details of such payments, they told me that were not 'cheap' and that they had 'pushed' extra payments and termed them Project Work”.

In 2005, these illegal payments to the Norwegians cost Ghana Telecom and the people of Ghana a little more than US$6.4 million. Over their 5-year stay, this would have cost the company (and Ghana ) about US$32.0 million, enough to have supported the capital investments that the government now says GT could not afford.

While the Norwegians were having their way with GT, some Ghanaian members of management were involved in their own orgy of fraudulent activities against the company. There was, for example, a contract for “debt collection” which was improperly awarded and for which billions of cedis, which could have been invested in GT, were expended in “unlawful payments” to the “debt collector”, according to an internal audit report.

The report said the following: “The agreement in itself is flawed in many respects. How can we justify paying 10.0% commission for debts aged between day 0-120 days? This implies that as soon as an invoice is issued to a debtor [mostly ministries] the collection agent could quickly go and demand payment and receive 10.0% commission, whereas all debtors are given 21 days to settle their bills. At this point, we have not even allowed our Credit Control Department, which is under the DCFO to perform their functions. What is the justification in paying 10.0% commission for new debts whereas GT's net profit margin (PBT/turnover) for years 2003 and 2004 was 8.0%”.

The overall report makes depressing reading and shows that over the years GT had in fact generated enough resources to finance its growth, but those resources were mismanaged by people who today are publicly championing the sale of GT to a so-called “strategic investor” whose motives and objectives remain murky, at best. “It is likely,” said the report, “that many unauthorized payments like the Debt/Credit Control and Provident Fund Services described earlier…have been made without the knowledge of the CFO (Chief Financial Officer).”

Having the capacity to address such problems, at GT and other government agencies, including ministries, is at the heart of the national development challenge. Anyone seeking power must demonstrate that capacity. To accommodate our problems by always outsourcing them to foreigners in the offensive belief that they are inherently better managers than we are is to condemn ourselves to perpetual exploitation, under-development and contempt from the rest of the world.

Nii Moi.