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FEATURED STORY Tithe Paying Is Certainly A Sin...

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13 June 2012 | Feature Article

Looting and Raping Ghana: the case of NDC and NPP Part 1

NDC and NPP grabbing state assets
NDC and NPP grabbing state assets

The information contained in this literature review tells us how the NDC and NPP and their leaders have raped, looted, and milked Ghana, stealing Ghanaian resources, buying properties that belong to the state without paying for them and squandered the little money that was paid. The literature review is to show Ghanaians the real 'greedy bastards' that President Rawlings has been referring to. In part 1 I focus on NDC while part 2 is devoted to the NPP.

NDC: From Rags to Riches

Most of the current leaders of the NDC who now live in total luxury are people who were poppers and suddenly became rich by seizing state assets and looting what should have gone to Ghanaians.

“…The Ahwoi brothers (Kwamena, Kwesi, Ato), who were key figures in the PNDC and later the NDC, were among the first NDC stalwarts to enter private business. Unlike many others, their business activities were quite open. Prior to entering politics, all three were civil servants with no business background. Widely said to have received a state-guaranteed loan of $30 million as starting capital, they steadily built an economic empire. This included a waste disposal business that enjoyed a profitable contract with the AMA; a hotel near their hometown in the Central Region; and a haulage company called Comstrans. A confidential interviewee revealed that they had also acquired large tracts of land, hoping to invest in real estate. The jewel in their crown, however, was Cashew and Spices Products Limited, or Cashpro, the leading private cocoa and cashew buying company in Ghana …Cashpro was one of only a handful of private companies that were licensed to participate in the lucrative internal cocoa marketing business. The companies received an annual loan with a moderate interest rate at the beginning of each cocoa season from the COCOBOD for their operations. While it is not unusual for a public body such as COCOBOD, to obtain cheap finance for its contractors, it seems that Cashpro was favoured by the government, which controlled COCOBOD. For example, though Ghanaians were told that several firms would be contracted to undertake a cocoa output improvement plan in 2000, Cashpro alone was awarded the contract” (Opoku 2010, p.147).

“…Rawlings' wife, Nana Rawlings, is another prominent political figure known to have had numerous business interests, notwithstanding her efforts to distance herself from them. She was widely rumored to be co-owner (along with P. V. Obeng) of the soft drink manufacturer D&C... She [Agyemang Konadu Rawlings] used the 31 December Women's Movement (DWM), her personal vehicle, and its subsidiary, Caridem Corporation, to acquire several public enterprises, including the GIHOC Cannery, GNTC Bakeries, GIHOC Brick and Tile, GNTC Supermarket, and the former State Transport Corporation. Mrs. Rawlings was rumored to own a number of gas stations and supermarkets in Accra and other cities. She also allegedly owned shares in several hotels, including Accra's La Palm Pleasure Beach Hotel. Using the DWM, she allegedly accessed state guaranteed loans in the millions of dollars” (Opoku 2010, p.148).

“…Tsatsu Tsikata, Rawlings' closest aide, who held a long and unaccountable stewardship of the Ghana National Petroleum Corporation (GNPC) also tried, unsuccessfully, to conceal his business interests and vast fortune. In 1994, the government wrote off $124.7 million owed by the GNPC (World Bank, 1995). Finance minister Kwesi Botchwey questioned Tsikata's judgment and his handling of GNPC finances and resigned partly in disgust over Rawlings' apparent tolerance of this... Just as Mrs. Rawlings used the DWM as her personal vehicle, so Tsikata used the GNPC, effectively personally controlling the GNPC's 20 percent share in Westel, a telecommunications company. Using the GNPC, he also became de facto owner of Vacuum Salt Products Limited (VSPL), which was confiscated from the late S.C. Appenteng in 1992 and turned over to the GNPC. In retrospect, the role of Tsikata's brother, Fui, in vilifying Appenteng in the 1980s is seen by some as sinister” (Opoku 2010, p.149).

“…Another politician-turned entrepreneur was Vincent Assiseh, former NDC Press Secretary. Assiseh declined my requests for an interview, but by his own account, prior to joining the NDC, his most prized asset was a corn mill (Assiseh, 2000). Under NDC rule, he allegedly benefited from grants, loans and state contracts, building a “multi-billion empire” that included a construction firm, a cold store, and a printing press. The last [printing press] was the publisher of several state publications, including the propagandist Ghana: We Mean Business, which clearly exaggerated investment opportunities in Ghana. It emerged in 2001 that in 1998, the ministry of local government, at Assiseh's request, deducted 6 million cedis from each of the 110 district assemblies' share of the Common Fund to publish a report on each assembly in the above named book without consulting the assemblies” (Opoku 2010, p.149). Thus Vincent Assiseh illegally deducted and pocketed 660 million cedis from the District Assemblies.

NDC, A-LIFE Supermarket and the collapse of the Bank for Housing and Construction

The allies of NDC benefited from grants, loans, lucrative contracts and other schemes to accumulate capital at the expense of the state and majority of her citizens. One of such horrendous schemes was the A-Life Supermarket and how it contributed to the complete collapse of the Bank for Housing and Construction (BHC) and the near collapse of Ghana Commercial Bank.

“…The events that culminated in what may well have been Ghana's worst banking scandal involving an entrepreneur also merits mention. In December 1996, it emerged that A-Life, a supermarket chain, had accrued debts totaling a colossal 120 billion cedis to three public banks— the Ghana Commercial Bank, the Bank for Housing and Construction (BHC), and the Ghana Co-operative Bank (GCB). SFO (Serious Fraud Office, 1998, p.12) investigators concluded that the loss was due to collusion between management staff of the three banks and officers of A-Life. So crippling was the loss that the BHC and the GCB did not recover and were liquidated. This scandal raises two questions. First, were senior government officials unaware of it? As I have shown, they seem to have been aware of various other illicit banking activities. Second, though a trial began upon SFO advice, it soon petered out. Why, one might ask, did the authorities fail to prosecute a case of such magnitude? This did not entirely surprise political pundits. Interviews revealed that the owner of A-Life, a relative newcomer to business, had friends in high places, most notably Mrs. Rawlings. Many attributed the mushrooming of A-Life shops during the 1990s to this. Further, they said that much of the A-Life debt funded NDC campaign activities in 1996, citing as proof the fact that the bulk of A-Life's bank withdrawals occurred during the run-up to the 1996 elections, mainly in October and November. Thus, prosecution of this case was “politically impractical” (Opoku 2010, p.150).

Selling of State Enterprises to NDC gurus
Ghana's first president Kwame Nkrumah had a vision for Ghana and so built several companies for the country. But the NDC gurus began to sell the companies to themselves. The following are how NDC insiders monopolised the selling of state assets to themselves.

“…Divestiture proved to be a major avenue for the well connected to acquire businesses. Yet it is quite difficult to tell who acquired what, as m any beneficiaries used organizations or friends as fronts. Despite this difficulty, however, there is little doubt that NDC insiders monopolized the business opportunities offered by privatization. As noted, Mrs. Rawlings acquired several divested SOEs through Caridem Corporation, a subsidiary of her organization, the DWM. Similarly, though Edward Addo, a long-standing regime loyalist, officially owns a 30 percent stake in the Ghana Film Industry Corporation (GFIC), the popular view i s that he fronts for his close associate, Kofi Totobi Quakyi, who served as minister in both the PNDC and NDC (Opoku 2010, p.153).

“The family of Peter Peperah, ex-deputy minister of trade and industry, acquired Mim Timbers in a deal widely seen as scandalous. According to the Ghanaian Chronicle (January 24, 2001), Mim Timbers was sold at a give-away price of $2 million. The Peperah family issued a rebuttal, asserting that it paid $5 million for Mim Timbers, renamed Scanstyle, and that contrary to reports Peperah played no part in the acquisition of the firm (Ghanaian Chronicle, January 31, 2001). Curiously, the list of divested state owned enterprises (SOEs) published by the DIC omits Mim Timbers, so it is impossible to verify how much it was sold for. Scanstyle's management refused to discuss these issues when I visited the firm in August 2000” (Opoku 2010, p.153).

“It is noteworthy that figures who had stridently opposed privatization did acquire SOEs. Ebo Tawiah, the rabid critic of divestiture, reportedly acquired an interest in a divested SOE. Kojo Tsikata, another “socialist,” became owner of Gold Coast Motors and reportedly acquired some of the assets of GIHOC (Oelbaum, 2002). Tsikata, of course, was the former national security chief and one of Rawlings' closest confidantes” (Opoku 2010, p.153).

State Owned Enterprises given to NDC allies for free/credit

“Two striking features of divestiture in Ghana merit attention, as they shed light on the exercise. Firstly, sales on credit were very high. Secondly, the outstanding debt was still excessive by 2000. Of the divestitures undertaken by the Divestiture Implementation Committee (DIC) 72.7% had unpaid debts (Appiah-Kubi, 2001), some dating as far back as 1990. There were two reasons for this. First, some buyers clearly lacked the wherewithal to meet their obligations. Second, SOEs were used mainly to reward NDC loyalists so they faced little pressure to pay up”

“…Certainly, critics interpreted the high degree of credit sales and of unpaid debts as proof that SOEs were deliberately allocated to political allies. The most notorious example of this was divestiture of RT Briscoe Motors to a group of “investors” who clearly lacked capital. To enable them secure a bank loan to make an initial payment, the DIC handed over the company's assets to the new buyers to use as collateral. RT Briscoe Motors employees, who had made a failed bid for the company, objected vociferously to this, accusing the DIC of being antiworker and of underhand dealings. An outcry that national assets were being allocated to political allies forced the leadership to authorize the SFO to investigate the manner of the divestiture of RT Briscoe. DIC records as of September 2000 indicated that the buyers, Sabat Motors, had paid 1.9 billion cedis of the sale price of 3.7 billion cedis, but SFO (Serious Fraud Office, 1998) shows that no payment had been made” (Opoku 2010, p.154).

The prominent, if not leading, role of the excessively partisan DWM leaders and other NDC figures on the DIC board ensured that the SOEs that were sold to Ghanaians went to regime allies. Evidence that association with the NDC seems to have been an essential prerequisite of acquiring SOEs and in securing assistance generally prompted a NDC parliamentarian to ask in parliament whether the government was trying to develop a new class of businessmen where Political Party card qualifies one for assistance. DIC records show that some insiders acquired public assets, made nominal deposits—if they did at all—and had their debt defrayed by end-of-service benefits. In effect P/NDC operatives appropriated public assets (Opoku 2010, p.154).

“In stark contrast, opposition-aligned entrepreneurs were excluded from acquiring SOE. My own research found no instance in which a member of the opposition acquired a SOE. But Oelbaum found one case in which a member of the opposition bought more shares in a divested SOE in which he was already a shareholder. He hastens to add, however, that this prompted the sacking of a senior member of the DIC” (Opoku 2010, p.155)

Corruption, insider, collusion, cronyism, nepotism
“Nepotism and self-dealing served as major avenues for NDC allies to acquire fortunes. Political allies were privileged in contract awards. Eddie Annan, a contender in the NDC's presidential race in 2007, was awarded some of the most coveted procurement contracts. Annan enjoyed a near-monopoly on the supply of computers, computer hardware, and software to state institutions. Also, the state-run Golden Beach Hotels and the national pension and insurance fund reportedly bought no other vehicles except Seat models for which Annan was the agent. Further, he was contracted to rehabilitate Ghana's main harbor at Tema” (Opoku 2010, p. 157)

Another author Prof. Eboe Hutchful has detailed the massive corruption and collusion and insider trading carried out by top members of the NDC. He argues that the P/NDC departed from its initial ideals of probity, accountability and transparency as it embraced predatory financial behaviour. Prof Hutchful notes that:

“The most disturbing evidence of regime transformation was the reemergence of predatory behaviour on the part of the ruling political elite. Corruption became more blatant in latter years eroding the ascetic image that had served the regime so well in the difficult days of the adjustment and robbing it of the moral stature and ability to demand sacrifices. Commissions on state contracts destined for the coffers of the NDC were alleged to be widespread (estimated to be 10-15% of contract values) as were demands that businesses large and small make contributions to the NDC; the price for this was the growing number of abandoned or poorly finished projects” (Hutchful 2002, p.223)

Hutchful notes how Kwame Peprah as minister of finance and as chairman of the Divestiture Implementation Committee engaged in collusion and insider dealings amassing wealth at the expense of the state:

“In the first a senior Minister [Kwame Peprah] recommended the divestiture of government shares in a major bank. The consultancy for the divestiture was then granted to a new company, among whose main shareholders were the minister himself and a business partner...In the subsequent divestiture, the bulk of the bank's shares were acquired by the same company. A contract for the evaluation of bids for a major state oil company undergoing divestiture also went to an American corporation for which this company was a local partner. (This award was allegedly made without tender, and is said to have led to the World Bank withdrawing funding for the contract). In the second case, a secret investigation by the Serious Fraud Office revealed that of some 58 consultancy contracts issued by the DIC, 30 had gone to a single company, owned by a senior official of the DIC (the chair of the DIC, by the way, was the same Minister mentioned. The chair of the DIC was the Minister of Finance” [Kwame Peprah] (Hutchful 2002, p. 224).

The authors argue that the use of the divestiture programme as a political patronage instrument to reward NDC's friends and political insiders, led to the limited success the privatisation in Ghana achieved its goal of enhancing efficiency, private sector investment and employment.

Kojo Appiah-Kubi pointed out that 909.617 billion cedis was realised from the Divestiture programme. He noted that the “the privatisation of AGC [Ashanti Goldfields Corporation] alone produced [fetched Ghana] about US$454 million” (Appiah-Kubi 2001, p.212). If you want to know how the US$454 million or the entire 909.617 billion cedis was used please ask the NDC. But Ghanaians were obviously not happy with how the money was used. In 2001 a study by three scholars including Ghana's Professor Gyimah-Boadi to ascertain the success of the P/NDC economic policies including the privatisation of State Owned Enterprises and how the proceeds were utilised, found that: “only 7 per cent [of Ghanaians] were very satisfied” while “over half of all Ghanaians (53 per cent) were dissatisfied” (Bratton/Lewis/Gyimah-Boadi 200, p. 248). In other words Ghana and Ghanaians are the victims of the NDC assault on the nation's resources. Stay tuned for part 2 which is focused on NPP.

By Lord Aikins Adusei, [email protected]

Reference

Appiah-Kubi, Kojo (2001) “State-Owned Enterprises and Privatisation in Ghana” The Journal of Modern African Studies, Vol. 39, No. 2, pp. 197-229

Bratton, Michel., Lewis, Peter and Gyimah-Boadi, E. (2001), “Constituencies for Reform in Ghana” The Journal of Modern African Studies, Vol. 39, No. 2, pp. 231-259

Hutchful, Eboe (2002) “Ghana's Adjustment Experience: The Paradox of Reforms.” Geneva: United Nations Research Institute for Social Development, pp.268

Opoku, Darko Kwabena (2010) “The Politics of Government-Business Relations in Ghana, 1982–2008” Palgrave Macmillan, pp.264

quot-img-1Our Glory is not in never falling but in rising every time we fall – Confucius

By: Valdo Abruquah quot-img-1
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