Government Says Privatisation of Ghana Telecom to Stand

The Inter-Ministerial Review Committee, set up by Communications Minister Harunna Idrissu to review the sale of a 70% holding in Ghana Telecom (GT) to Vodafone in August 2008 for US$900 million, recommended that the government consider renegotiating the terms of the Sale and Purchase Agreement, the BBC reports. The crux of the committee's report—as per the opposition's objections at the time—was that the "government of Ghana did not get value for money from the sale".

After the contents of the report were leaked, the government published an official statement on it. At the time, the government said that it had taken note and will soon make public its position on the recommendations (see Ghana: 19 October 2009: Committee Report Recommends Renegotiation of Ghana Telecom Privatisation to Vodafone).

In an official statement just released by Chief of Staff JH Martey Newman, the government says that "after a careful review of the findings [of the report…Government] accepted the recommendation of the Committee to re-engage with the management of Vodafone International and ensure that there is compliance with the country's laws. This process of re-engagement is without prejudice to any legal suits pending before the courts of Ghana."
The central thrust of the government's statement is to look into the operation of the national fibre backbone, which the government itself commissioned and was included in the sale to Vodafone. The transaction included a number of key assets, including mobile operator One Touch, ownership of exclusive rights of access to the Sat-3/WASC submarine cable from Ghana, and the fibre-optic national backbone currently being built by the government (see Ghana: 4 July 2008: Vodafone Acquires 70% of Ghana Telecom for US$900 mil.).

The government statement specifically says that "the re-engagement would also include issues relating to the operation of the National Fibre Optic Backbone which is considered a strategic national asset by many Ghanaians. The National Communications Backbone Company (NCBC) which is managing the Fibre Optic Backbone will enable Government promote its key ICT policies and must be an open-access network that serves the whole country with competitively-priced services….By this action, Government is looking forward to the realization of the true value of the fibre optic backbone and a consideration of its policy objectives in order to arrive at an outcome that benefits the people of Ghana."

Outlook and Implications

The crux of the report was that the "government of Ghana did not get value for money from the sale". Opposition parties—at the time including the National Democratic Congress (NDC), which is now in government—complained that the deal undervalued GT. Parliament ratified the sale with 124 votes against 74, which should have brought formal closure to the opposition's objections (see Ghana: 15 August 2008: Parliament Ratifies Vodafone Acquisition of Ghana Telecom). However, the NDC made a manifesto pledge to review the agreement and, to that end, Minister of Communications Idrissu formed a five-member committee in April 2009 to investigate various aspects of the deal (see Ghana: 28 April 2009: Government Committee to Investigate Ghana Telecom Privatisation). Instead of a "Re-negotiation" as called for in the committee report, the government's response is for a "Re-engagement" with Vodafone.

Besides the national fibre-optic backbone, the government's statement also says that:

• "Government would set up a Joint Working Team to engage with Vodafone to ensure that the decisions outlined are implemented."
• "Government accepts the recommendation that in future, negotiations involving government must be handled by a team of technical experts and negotiators. In addition, copies of all government agreements would be lodged with government archivists as required by law with a second repository lodged with the Attorney General. Ministries, Departments and Agencies (MDAs) that retain copies must superintend the execution and implementation of the respective public agreements to ensure that the best interest of Ghana is protected."
• "As recommended by the Committee, Vodafone GT would be expected to provide detailed reporting requirements based on audited accounting and reporting principles for the attention of the re-engagement team. Also to be considered is the possible return of some GT investments including landed properties and the Telecom Emporium to the Government of Ghana."
• "Government has also taken note of the Committee's findings in relation to the appalling financial state of GT before the SPA which the Committee attributed to gross mismanagement, financial malpractices and irregularities by Telenor/Telecom Management Partners (TMP) and later the three-member Interim Management Committee (IMC). Government will institute investigations into and an audit into the management of GT by the TMP and the IMC led by Engineer Dickson Oduro Nyaning."