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11.05.2004 General News

AMA Loses Billions To Dubious contracts

By Chronicle
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WHILE THE Accra Metropolitan Assembly (AMA) is struggling to raise funds to tackle its numerous challenges, particularly the sanitation malaise, the Advertising Association of Ghana (AAG) has turned the AMA into a milking cow through a dubious revenue collection contract.

Through a revenue collection contract with the AMA, The Chronicle has uncovered, a lot of destructive acts by the AAG where huge resources running into billions, which should have landed into the coffers of the assembly, could not be traced.

The Chronicle gathered that in 1998/1999, the assembly entered into an agreement that transferred the collection of revenue for outdoor advertising to the AAG for a retention fee of 10%.

Before this agreement in 1998, the Planning Department of the AMA, headed by Nii Teiko Tagoe, put in place an effective numbering system through which the assembly was to keep track of all advertising sites within the Accra metropolis for effective rental fees collection.

But the authorities of the assembly allegedly failed to empower the staff of the planning department to sustain what seemed to be a laudable programme, The Chronicle learnt.

The AAG therefore capitalized on the apparent lack of commitment on the part of the AMA and offered to collect the outdoor advertising revenue on behalf of the assembly for a fee.

Not long afterwards, it was found that AAG could not meet the target as agreed on with the assembly and this prompted the AMA Chief Executive, Mr. Addoquaye Addo, to abrogate the deal.

However, according to The Chronicle sources when Mr. Solomon Ofei Darko, the immediate past Mayor was appointed in 2000, the AAG approached him over the issue and with the help of some insiders like the budget officer, Dr. J.F.T. Awaitey, managed to get the AMA to re-assign AAG the responsibility of collecting the advertising rentals revenue for the assembly.

Under the new contract the assembly was made to agree to pay 25% as consultancy or retaining fees for the collections and this The Chronicle has learnt had created an avenue for the assembly to be short-changed.

The Chronicle has discovered a number questionable acts by the AAG ranging from double receipts, under-declared payment, under-value of sites etc, that had resulted in huge revenue losses running into billions of cedis to the assembly.

Evidence abounds that the AAG had, on a number of occasions, issued receipts of payment on the association's receipts instead of the approved AMA receipts to members.

Advertising analysts told The Chronicle that AMA could make between ¢5 and ¢6 billion annually from the outdoor rentals and described the ¢2.3 billion collected by the AAG last year as a big joke.

As a result of the contract, the AAG, without doing anything, walked away with ¢568.8 million.

“It is ridiculous and shameful for the AAG to tell us that they are doing extremely far better than when the AMA was collecting the rental internally, when we are all aware that most of the top shots are not paying the fees,” a member of the AAG told the paper.

Reacting to the concerns of the public, Dr. Awaitey denied that he played a key role in getting the AMA to hand over the collection of advertising revenue at 25% to the AAG.

He told The Chronicle that it was a collective decision taken by AMA's Advertising Committee of which he is the chairman and insisted that the AAG was doing better as compared to when the assembly was collecting the fees internally.

Dr. Awaitey also said apart from the AAG, the assembly has awarded other contracts for the collection of property rates to private companies at even 30% as consultancy fees and therefore saw nothing wrong about the AAG deal.

Mr. Francis Dadzie, the Executive Secretary of the AAG in an interview at the Ring Road Central offices of the association, defended the contract saying there was nothing wrong with it.

The association, he said, had to create a database and monitor the number of advertising sites in the metropolis for the collection of the revenue.

Dadzie noted that advertising was not the core revenue generation for the AMA and the AAG realized it could help raise the assembly's revenue through the collection of the rental from its members as well as its non-members in the outdoor business, adding that the AMA did not have the capacity to undertake the collection.

“We are in the business, it is our core business, every day we see new billboards, new signs, directional signs which you don't see and know what is going on,” he said.

Mr. Dadzie said the AAG realized that the AMA was saddled with other responsibilities like refuse collection and therefore “we said we knew our members and those in the business; give us the revenue collection to help raise the assembly's funds.”

The association has a staff of 10 assigned to the collection of the revenue, according to Mr. Dadzie, who said he could not dismiss outright the allegation that some members of the AAG were not up to date with the payment of their fees.

He attributed this to the normal financial difficulties that companies faced and said when such situations occurred payment was deferred.

Reacting to the allegation of under-declaring or double receipts, Dadzie said he could recall only two or so instances when the AAG had to issue its own receipt to members due to the postdated cheque the company had issued as payment.

Contrary to the claim by the AAG that the AMA was under-staffed, The Chronicle learnt that most of the labour force used by the AAG was from the assembly.

It also surfaced from the paper's investigations that the AAG does not submit demand notice to AMA for the assembly to be able to know and reconcile how much each company is supposed to pay annually as rental fees.

AAG members, it is alleged are normally warned by the association never to disclose their bills to “intruders like The Chronicle guys”.

For instance in 2003, some of the companies that are rated seventh in the outdoor advertising industry were billed between ¢300 million and ¢350 million as annual rental fees by the AAG to be paid to the assembly.

However, when the paper questioned the Executive Secretary over the bills or how much the leading companies paid last year, he said the biggest firms paid something in the region of ¢200 million to ¢250 million.

The latest figures of the billboard sites the AAG released to the paper are, however, suspected to be under-declared.

A source told The Chronicle that he knew for a fact that about four companies, who placed seventh on the rating of “who is who” in the outdoor advertising industry last year, paid between ¢300 million and 350million and wondered how AAG Executive Secretary would say that even the big shots paid between ¢200 million and ¢250 million.

The Chronicle has gathered that immediately Nii Adjiri Blankson was appointed the AMA Chief Executive, he met the executives of the AAG during which he reportedly expressed resentment about the AMA-AAG contract.

The Chronicle gathered that this and other deals in the assembly were what prompted the new Mayor to state that the AMA was sitting on gold yet was “gasping for breath because of the massive leakages.”

After the war on filth, it is learnt the Mayor will embark on the fight against corruption in the assembly where it is alleged that some of the staff have turned themselves into agents of private companies.

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