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16.08.2005 General News

How “Hotel Kufuor” Was Funded – Part III


How did Chief John Addo Kufuor, if indeed he is the owner of “Hotel Kufuor”, get information about the ECOWAS Regional Investment Bank (ERIB) as to cause him to apply for a facility from the Bank?

Conversely, how did ERIB get information about “Hotel Kufuor” as to cause the Bank to want to finance the Hotel?

There are several possible scenarios.

Influence Peddling, Insider Trading or Both?

First, Ghana's President John Agyekum Kufuor and his Minister of Regional Integration and NEPAD, Dr. Kofi Konadu Apraku, undermined ERIB's assessment criteria for acceptability and imposed their personal choice on the Bank. If this happened, then the ERIB subordinated the interest of the people of the sub-region to the personal interest of politicians who were entrusted with the responsibility to manage the resources of ECOWAS.

Second, the Chairman of the Board of ERIB, Mr. John Saka Addo, who had access to the information, decided to trade the insider information to the advantage of his close family friends, the Kufuors. If this happened, then the one Ghanaian official who was expected to advertise ERIB for private Ghanaian investors to become aware of the availability of funding failed in his duty and instead used the information to benefit his family friend.

This is a more credible scenario, as thanks to Mr. Ben Ephson's 'Daily Dispatch', we now know that Chief John Addo Kufuor's application to the ERIB Bank was made on his behalf by the Prudential Bank of which Mr. J.S. Addo is Chairman and in which SSNIT, of which J.S. Addo is also Chairman, has shares. In Kutu Acheampong's time, such applications were referred to as “From Me To Myself”

Third, Ms. Giselle Yazji was right all along and that the Hotel actually belongs to President Kufuor. Having been made aware of the existence of the facility, the President instructed his Minister Dr. Apraku and his close family friend Mr. J.S. Addo, to work to secure the facility for him.

So far, this appears to be the most credible scenario as it is the only one that would explain why an old, experienced banker like Mr. J.S. Addo would go to the extent that he has done to secure the facility for the Hotel for a 41-year old accountant who is not his peer.

The fourth and least credible possibility is that there were no viable projects to be financed in Ghana, but as we reported in Part 2 of our story, the ERIB inherited over 30 Ghanaian project applications from the erstwhile ECOWAS Fund, including the one from Kofi Asmah's Gelina Packaging Co. Ltd.

With the exception of the fourth scenario, which we discount as a scenario which is not credible, each of the other three scenarios involve serious ingredients of corruption, undue influence, insider trading, influence peddling and conflict of interest.

In the case of the third scenario especially, it would mean that the first and only private sector project that President Kufuor got the ERIB to fund during his 2-year tenure as ECOWAS Chairman was for himself.

In the case of the first and second scenarios, it means that the first and only private sector project that President Kufuor got the ERIB to fund during his 2-year tenure as Chairman of ECOWAS was for his son.

Probe of ECOWAS Bank/ECOWAS Fund

In any of the three scenarios, the transaction stinks to the high heavens.

It perpetrates the poor record of accomplishment and appalling low credibility of African financial institutions, where procedures and sound management practices are subordinated to the caprice of political leaders.

It raises the following wider trans-ECOWAS questions:

· If President Kufuor as a new President could so brazenly abuse the resources of the sub-regional organisation to his own or to his family's advantage, what about those Heads of State were or who have been in office for such a long time?

· Is the ECOWAS Bank the milking cow for West African Heads of State?

· To what extent do these Regional Banks account to the Parliaments of the country-members of ECOWAS?

· To what extent are the ECOWAS Banks accountable to the people of the sub-region?

One lawyer that 'Ghana Palaver' spoke to was of the view that ERIB's involvement in the “Hotel Kufuor” transaction argues for a full-scale probe into the activities of the ERIB, the ERDF, the EBID, and their predecessor institution the ECOWAS Fund for Cooperation, Compensation and Development (ECOWAS Fund).

In his view, we need to know which countries and which companies have benefited from our resources and especially the owners of those companies and their relationships with past and present Heads of state and ECOWAS Ministers of the sub-region as well as to past and present officials of the Bank and the Fund.

Ghana's Purchase of Mauritania shares in ERIB

In a related development, 'Ghana Palaver' has learnt that by a resolution passed at its meeting held in Cotonou, Benin, on 20th December 2004, the Board of Directors of EBID agreed to allow Ghana to purchase the shares allocated to Mauritania since Mauritania had for years withdrawn from membership of ECOWAS and refuses to accept its allocation of shares in A staff member of the Bank who spoke to “Ghana Palaver” on condition of anonymity wondered why it was so crucial for the Government of Ghana to purchase additional shares in a completely new Bank with no track record.

He wondered whether this was a responsible use of scarce public resources and whether under Ghana's Constitution, this was not an “International Financial transaction” that required Parliamentary approval.

It would also be necessary for Dr. K.K. Apraku and Dr. Nii Ashong to convince Ghanaians that the decision to purchase additional equity in ERIB had nothing to do with the financing of “Hotel Kufuor”.