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Ghana politics & security 18.06.13
1. 18 June 2013
Ghana Politics & Security
Executive Summary
President John Dramani Mahama returns to Ghana following a
trip to the UK to attend a G8 meeting and address the Royal
Institute of International Affairs at Chatham House.
The Supreme Court has ordered the Waterville Holdings
construction firm to refund the government all of the sums that
received in a controversial judgement debt case.
Last week the cedi slumped to 2.0075 per US$, the lowest on
record, hurt by falling gold prices and insufficient foreign
currency supply to meet local demand.
Hundreds of shops and stalls were destroyed at Kumasi Central
Market on Sunday 16 June just days after the arrival of a team
of US forensic experts to help investigate a number of recent
fire outbreaks at markets around the country.
Vice President Kwesi Bekoe Amissah-Arthur has told a 2013
Ghana Mining Summit that Chinese are not the target of the
government's on-going crackdown on illegal small scale miners.
Government Politics and Elections
President Mahama returns to Ghana following a trip to the UK to
attend a G8 meeting and address Chatham House.
Trade, tax and transparency were on the agenda at the main pre-G8
Summit event on Saturday 15 June which was attended by heads of
state and government from four African countries including Ghana as
well as leaders and business delegates from leading industrialised
countries.
Much was made during the meeting of the ownership of companies
and land, seen as crucial for developing countries. Emphasis was
also placed on transparency in the oil, gas and mineral sectors.
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The UK extended an invitation to Mahama to attend the event
because his “personal commitment and leadership will help
encourage other countries to appreciate why this agenda is so
critical for current and future generations,” and at the meeting he
highlighted Ghana‟s “vibrant media”, “strong civil society
organisations” and commitment to the Extractive Industries,
Transparency Initiative (EITI).
He told his audience that his government is implementing strong
measures to prevent financial leakages in the extractive industry
and is committed to dealing with foreign companies' “tricks,”
including tax holidays for new multi-nationals. Mahama called for
deregulation of investments in energy, agriculture and roads to
speed up infrastructural development and asked other African
leaders to open up their economies to intra-African trade in order to
promote the movement of goods and services on the continent.
Ahead of the G8 meeting the President said a drastic change is
needed in the way Africa is portrayed in the West, as he delivered a
speech at the Royal Institute of International Affairs on the evening
of Friday 14 June.
Most Western media coverage makes it seem as if nothing good
can come from the continent, despite the steady progress Africa
has made over the years, he said. “The lens through which we see
Africa must show a realistic depiction of what is actually happening
on the continent and how these events are affecting the lives of
ordinary people.”
Mahama also held bilateral talks with British Prime Minister David
Cameron, met with the British Foreign Secretary and granted an
audience to the All Africa Parliamentary Group and the African
Diplomatic Corps in the UK. Cameron said that he would be delighted
to visit Ghana as part of his planned Africa tour.
The Supreme Court has ordered the construction firm, Waterville
Holdings, to refund to the government all the sums that it
received in a controversial judgement debt case.
The court ruled on 14 June that compensation payments received by
the company had been obtained illegally because contracts with the
government lacked parliamentary approval. The company has been
ordered to return all the €25 million paid it as judgment debt. The
decision follows a suit filed by former Attorney General and Minister
for Justice, Martin Amidu, against the company and businessman
Alfred Agbesi Woyome to claim back huge sums of compensation
“illegally” paid to the respondents.
Waterville claimed that, following an open bid in 2006 it won a
contract to rehabilitate the Accra and Kumasi stadiums and construct
three new stadiums in preparation for the 2008 African Cup of
Nations, its contract that was cancelled by the government after the
company had already purchased materials to start construction. The
company subsequently made a claim for reimbursement which the
government paid in instalments.
Meanwhile, Waterville said, that it had contracted a firm represented
by Woyome to provide financial advisory and consulting services in
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relation to construction contract but had no involvement in
Woyome‟s independent claim against the government which
resulted in the payment of GH¢51 million as judgement debt.
Amidu contended that the alleged agreements between the
government, Waterville and Woyome, were financial transactions
that never became operative for lack of parliamentary approval
under Article 181 of the constitution.
Woyome won a multimillion cedi pay-out after he filed a writ at the
High Court claiming that a 2006 contract to renovate the five sports
stadiums had been illegally cancelled by the previous government
of then president John Kufuor. The award came to light in 2011
after lawmakers examined a 2010 auditor-general report. Two
ministers lost their jobs in January 2012 and there were accusations
of “gargantuan crimes” for the payments‟ approval. A judgement
has not yet been made on Mr Woyome as he is currently the
subject of another matter yet to be determined at the High Court.
Economic Policy and Development
Last week the cedi slumped to 2.0075 per US$, the lowest on
record, having been hurt by falling gold prices, an increase in
dollar-denominated imports, and insufficient foreign currency
supply to meet local demand.
Importers are seeking dollars for raw materials, equipment and
consumer goods but local traders have complained that the Bank of
Ghana is not intervening enough.
Sadiq Abubakar, a currency trader at the Accra-based International
Commercial Bank Ltd., told Bloomberg that the central bank only sold
US$250,000 to his bank last week, equivalent to 12.5% of the
demand received from clients.
The cedi is expected to fall further this week on a sustained lack of
dollars, but the BoG governor, Henry Kofi Wampah, says that
September will see an easing off in the dollar shortage following
inflows from a US$1.2 billion cocoa loan.
The currency has already depreciated some 5.5% this year against
the dollar, although economic growth this year is still expected to be
strong.
Domestic News
Hundreds of shops and stalls were destroyed at Kumasi Central
Market on Sunday just days after the arrival of a team of US
forensic experts to help investigate a number of recent fire
outbreaks at markets around the country.
Also on Sunday a three-month-old baby was killed in a fire outbreak
that engulfed a wooden structure at the Odawna Market near the
Kwame Nkrumah Circle in Accra.
Almost ten major fires have occurred at Ghana's markets in just
under three months including at the Kantamanto Market, Makola
Number Two Market, the Makola Shopping Mall and the
Agbogbloshie Market, all in Accra, and at Kumasi Central Market.
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The Ghana Fire Service is still investigating a fire that blazed
through part of the Kumasi Central Market on 9 June consuming
some three dozen shops and stalls and causing damage of
thousands of Ghana cedis. On 4 June a fire at the Makola Number
Two Market in Agbogloshie wiped out the livelihood of some 400
traders, destroying confectionery, cosmetic products, clothes, bags
of sugar, large quantities of rice and other items.
The government has already stated that it will not rule out arson as
the cause of the recent fires hence the decision to bring in foreign
experts as well as direct the country's National Security Agency to
commence investigations. As a preventive measure the Ho central
market in the Volta Region has been placed under a 12-hour night-
time protection order between the 18.00 and 06.00 by a Ghana
Police Service and Ghana National Fire Service task force.
The victims of the recent fires are to benefit from a GH¢2 million
fund, as announced by President Mahama during a visit to some of
the affected areas last week. There will, however, be increased
pressure on the government to make good on its promise to
redevelop the Kumasi market which was built by the British colonial
administration in 1936, into a modern facility as soon as possible.
The project, a collaborative venture between Ghana and Brazil, is
expected to start later this year, but the Brazilian contractors have
asked for a sovereign guarantee from Ghana before fully
committing themselves to the work. Kumasi's market, which is one
of the largest in Africa, attracts traders from all over the region and
the overcrowded conditions common in many African markets
means that fire spreads easily and is difficult to tackle. Improving
safety inevitably means a reduction in stalls and therefore traders
losing out. In the past profit and politics has usually won out over
safety concerns.
Foreign and Regional News
Officials from Accra and Beijing tread lightly as the row over
treatment of illegal miners dispute threatens to escalate
Chinese diplomats have discreetly asked the government to exercise
some clemency when dealing with illegal immigrants. Beijing is telling
Accra that any targeting of its citizens in Africa would undermine
popular support for China's engagement with the continent. China‟s
Ambassador Gong Jianzhong said that a delegation from Beijing
has held two “fruitful” meetings with the government on this matter.
The implication is, according to one source, is that China regards its
engagement as especially beneficial to Africa – and certainly not a
natural resources grab. The arrest of several Chinese illegal miners in
Accra was, however, partly a reaction to public opinion in Ghana
which is getting increasingly hostile to Chinese migrants of any kind.
The most reviled Chinese migrants are those working – legally or
illegally – in the retail sector which is seen as the exclusive domain of
Ghanaians. There have been several violent incidents around Makola
which is the central market in Accra. Until recently Chinese traders
had set up several stalls there operating in open breach of the law.
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After receiving complaints from fellow traders, immigrations officials
have repeatedly raided Makola and other Accra markets. Although
they have been targeting Chinese traders which are easy to locate,
they have also been arresting and deporting Nigerians and
Francophone African too.
Recent talk show programmes on FM radio in Accra and Kumasi
have revealed a growing popular antipathy to Chinese migrants.
Government officials are concerned that this could spread to a more
generalised opposition to China's economic interests in Ghana,
which have become a critical part of the government's strategy.
Comment and Analysis
President John Mahama answers questions from experts and
expatriates West Africans at the Royal Institute of International
Affairs at Chatham House in London on 15 June. This is an
issue by issue summary of the dialogue.1
On Ghana's commitment to peacekeeping mission in Mali and
problems of regional instability:
It is a question of proximity. Burkina Faso, Niger and Chad are the
countries closest to Mali, and so if there is any brokering of peace, I
1
All direct quotes from President Mahama's responses to questions, which have only been
edited for length.
think the responsibility is better discharged by them than by any of
our other countries. But all of us have a commitment to Mali, and all
of us have a commitment to guarantee the sovereignty of Mali.
Ghana contributed a company of engineers to provide logistics
support and construction engineering, not because we are not
committed to the Mali project but because Ghana has a huge
contingent in peacekeeping operations in five theatres of the world.
What it means is we have about 3,000 troops in peacekeeping. At
any time you have a certain number in peace-keeping, you must have
another number on standby to take over from them. So it means that
- I don‟t know if it‟s a security matter to say what the size of our army
is - but at least 6,000 troops are committed to peacekeeping in
different parts of the world.
So when the Mali project came up, we needed some internal security
ourselves, especially considering that we are going into elections and
the aftermath of elections. So we couldn‟t commit more than we did.
But with things settling in and considering that the UN is deciding to
wind down some of its operations in Sierra Leone and Liberia, we can
be able to commit more troops than we did initially.
Public sector pay awards:
In Ghana we have something we call Single Spine: a new universal
salary structure based on the principle of equal pay for work of equal
value. We found that we had a public service remuneration system
that rewarded people differently even though they probably would
have been doing the same work for the same employer – the
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government. So together with organised labour, it was decided to
come up with a Single Spine Salary Structure. So we had to migrate
people from their existing salary structures onto that system. The
process has been on-going for a couple of years. Because it is a
new system, negotiations have to take place on various allowances
and other remunerations that people enjoyed, and how that would
relate to their colleagues in terms of that spine.
I, as president, have to look at it from the lenses of what impact it‟s
having on the economy. Unfortunately, at the time this migration
was taking place, we‟ve been running a piece of software that did
not allow us to see what the immediate, short-term to medium-term
impact was on the growing salary wage. So by the time we noticed,
public sector wages alone were consuming almost 60% of total
revenue. And what is the size of our public sector – half a million, in
a population of 25 million. So as president, I have a duty to ensure
that money is left over for maternal health, money is left over for
improved quality of education and all that.
So we have been trying to hold down the growth of salaries and
wages, but of course people in their own professional groupings,
looking at what they have gained or lost, based on that are
declaring strikes. We try to talk to them and let them understand
what the general impact of these strikes is going to have on the
economy.
The deficit is not only because of salaries and wages. You must not
only look on the expenditure side, you must look on the revenue
side. Multi- donor pledges of almost 400 million Ghana cedis were
never paid. That expenditure had been budgeted as incoming to the
budget and so that led to the deficit.
New sources of revenue and systems of accounting:
There are a lot of state enterprises and other organisations that have
the capacity to generate revenue and should be able to borrow on
their own balance sheets. We are trying to differentiate that and take
them off the public debt. So if you want to expand a port, for example,
like the Ghana Ports and Harbours Authority is trying to do now, it
should not be placed on the public debt. Let the Ghana Ports and
Harbours Authority, based on the additional revenues that will be
generated by the port expansion, raise credit from the international
credit market and finance that port expansion. We are doing the
same for Volta River Authority (VRA) and power generation, and
several other state-owned enterprises.
Ghana's relations with Nigeria:
Nigeria has a certain leadership role it has to take up. It is the largest
economy in our sub-region. It is the most populous country in our
sub-region. So Nigeria must play a certain role in moving the whole
sub-region forward. Ghana is prepared to work with Nigeria to be able
to do that. So I see ourselves not as adversaries but as partners, in
terms of improving the lives of our people. In the past, Nigeria has
behaved unilaterally and closed their market to every product, no
matter even if it comes from ECOWAS. What we have done is to
engage and say: look, Ghana is no threat to Nigeria. Indeed,
competition between Ghana and Nigeria would improve both of us.
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So let‟s open our markets, let goods and services flow across the
sub-region. It will inure to the benefit of every nation.
Ghana's treatment of migrant workers:
We have a law that says that retail trade in markets is reserved for
Ghanaians. As president of Ghana, I swore an oath to uphold the
constitution and the laws. Until that law is changed, you are
compelled to enforce the law. But let me say that we are passing a
new Investment Promotion Centre Act which takes cognition of
these new developments.
There has been no segmentation in what preferences to give. It
just says „all foreigners‟ without taking recognition of the protocols
we have as a sub-region, in ECOWAS and all that. So I hope that in
passing the new Investment Promotion Centre Act, it will deal with
these issues.
Part of the issue was you needed just US$10,000 to invest in
Ghana; you just had to show that you had an inward transfer of
US$10,000 and you could go into any sector and set up and start
working.
We are facing the same problem in mining. A lot of foreigners have
invaded the mining sector. Again, the law says that small-scale
mining is reserved for Ghanaians. So as president, I have a duty to
enforce the law. In any case, the illegal mining activity is degrading
the environment, poisoning the waters. So I‟ve had to take action on
that. It‟s controversial but those are the risks you take in leadership.
What potential for Ghana's agriculture?
It‟s estimated that 60% of the remaining world arable land is in Africa.
The continent is criss-crossed by a lot of rivers and so there‟s water
for irrigation. The World Bank and IMF had a policy that African
farmers must learn to compete. So, while the developed world
subsidised their farmers, we were asked not to subsidise our farmers.
So the poor African farmer was left to himself. Productivity dropped. It
is only now they realize that that was a mistake and the world needs
to produce more food.
So together with the World Bank, the IMF and other bilateral partners,
we are looking at targeted subsidies. We are looking at extension
services to increase productivity of the smallholder farmers. It is
beginning to show results. In Ghana we have an inputs programme
where we give the farmers inputs on credit and they pay only after
they have harvested their crops, while giving them improved seeds.
Farmers are seeing a jump in productivity of five, six, seven times
what they were getting before. There was a case of a farmer who had
kept planting the same seed, leaving some over after every harvest to
replant, for almost 20 years. He was making less than half a tonne
per acre of maize. Today farmers are seeing six tonnes per hectare
of maize, and that is commendable.
In Ghana, for 2012, we have an overproduction of 200,000 metric
tons of maize. We need to be able to move that maize so that we
keep a competitive price for the farmers, so that it doesn‟t ruin them
and they decide not to farm again.
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We must assist the West African smallholder farmer, and also have
a mix of medium to large-scale commercial agriculture. So we are
working with the World Bank on that. There‟s a new programme for
medium to large-scale commercial agriculture that we have signed
for US$100 million, with the World Bank. That is going to be put into
place, together with all the work that we are doing with the Alliance
for a Green Revolution in Africa and the Sasakawa Foundation and
all the other groups that are helping us to raise the productivity of
our farmers.
Essential strategies to promote democracy:
Why are we able to sustain our democracy? I would say two things.
One, everybody must have a stake in the process. Democracy is
not an event, it‟s a process, and it needs patience, as I was saying
in this speech. You don‟t declare democracy, hold one election and
think that the dividends of democracy will be seen immediately. It
takes time. It has taken Ghana that long, from 1992 to now, to see
some of the progress we have made, the successes that we have
chalked. So everybody having a stake and everybody being able to
participate is one of the most important things that we should do.
Also, ensure that when the dividends from democracy start to
appear, you must share down the class chain so that every group of
society is able to benefit. That‟s why in Ghana we take our social
intervention programmes seriously. Recently I have created a new
Ministry of Gender, Children and Social Protection, to coordinate all
the social protection programmes we are engaged in, to make sure
that we are targeting the right underprivileged families and helping
to graduate them out of poverty. We are not reinventing the wheel
here; there are many best practices. Brazil has done it successfully.
So we are looking at all the best practices and trying to implement
them in Ghana so that, as quickly as possible, we graduate our
people out of poverty.
When people come out of poverty and they see that life has meaning
and they can realize their potential, then they have a stake in what is
going on in the country. But where you have a situation where a few
people are growing richer and the bulk of the people are growing
poorer, then it creates the situation for instability.
How to change the winner takes all political system and devolve
power:
In our constitution and our laws, we have a system that 8% of total
government revenue is disbursed directly to the District Assemblies,
the local governments. 8% of total government revenue is shared
amongst 235 districts or something like that. They have an assembly
that decides how it wants to spend the money. They make their own
budgets. They decide education is a priority, they want to build school
blocks, or want to build clinics or want to use it for agriculture, or
whatever they want to use it for – they decide what they want to use it
for. When it happens, people have a stake in the nation and they are
willing to participate in democratic transformation.
Our District Assemblies concept has been a model and many
countries have come to take a look at it. We have achieved political
decentralization; there is no doubt about that. The next stage we
9. Ghana Politics & Security
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need to move to is fiscal decentralisation – move the resources to
the districts to empower the people. It‟s not the easiest of things to
do, I assure you. When people are used to holding resources at the
centre, they are very reluctant to let go. So all kinds of excuses will
be made up: there‟s no capacity at the district level, they can‟t look
after the money properly, it will lead to misapplication of the funds,
corruption and all that.
Well, let‟s decentralise the misapplication of the funds and the
corruption – let‟s decentralise the corruption. Because who says
that when the resources are in the centre, there is no corruption and
misapplication? We need to trust our people at that level to take
their destiny into their own hands. So I am a driver for pushing
decentralisation, and happily I have quite a lot of support and a lot
of people who have a very good grasp. Mr Kwamena Ahwoi in
Ghana is the godfather of decentralization. So I have very good
advisers and we‟re going to continue to push the decentralization
agenda until we move those resources to the districts and let them
take their destiny into their own hands. I‟m committed to that.
Youth unemployment:
If you take our countries, if you take people below 35, they
constitute nearly 60% of the population. So it‟s no longer right to
say the youth is the future – the youth is now, the youth is our
present. So we need to work to ensure that the youth is engaged
and that they are able to realize their full potential. If there is
anything that causes me sleepless nights as president, it‟s not any
legal challenge to my legitimacy or any such thing – it‟s about youth
unemployment and job creation. Africa in the next few decades is
going to become the most populous continent, and also probably the
most urbanized. Most of our youth and people are moving to urban
centres. So, one, how do you ensure sustainable cities that
guarantee utilities and other facilities to people in these cities? Two,
how do you create jobs for young people?
In Ghana what we have been doing is noticing that young people
come out of their educational system at various levels; a lot of them
come without the basic skills for the world of work. For most
entrepreneurs and businesses, they would prefer that people have
skills and are ready to hit the ground and start working from day one.
Most entities don‟t have the time to take you through training and all
that. So one of the things we have been trying to do is to get the
young people who are coming out of school and put them into a
training or apprenticeship programme, to provide them with skills so
that they will be able to fit into the world of work.
The next thing we need to do is to see how we can adapt our school
curriculum to prepare the children more for the jobs that are being
thrown up and that are available. A lot of the unemployment in Africa
is structural. It is because young people are coming out of school and
being trained in curriculums and courses that the labour market is
now throwing up. In Ghana we have a new oil and gas industry
coming. We have several sectors that are looking for middle-level
engineers, technicians, even welders, plumbers, electrical,
mechanics, all that kind of thing. Then you have schools throwing up
marketing graduates, grammar graduates and so on. You are going
to have a misfit between what the labour market demands and what
10. Ghana Politics & Security
10
the school system is producing. So we are looking at all that and
seeing, with those coming out, how can we retrain them and make
them able to be employed. But, in the medium to long term,, to fix
the school system, to provide the kind of skills that the labour
market is looking for. So that‟s something that we‟re doing.
You can have an economy growing but it might not necessarily be
creating jobs. So that is another area we‟re looking at. That‟s why
we‟re passing legislation like the local content legislation, to ensure
that investors who invest do so in a win-win situation, both for them
and for us. If you invest in the oil sector, of course you might not be
able to find somebody who fits a certain job immediately; we allow
you to take in an expatriate but in a certain period of time you must
either look for a Ghanaian who can work there or you must train a
Ghanaian to take that place. Also guarantee services to Ghanaian
companies and all that. We think that by doing that we should be
able to increase the opportunities for our people in terms of jobs.
Security Conditions
Vice President Kwesi Bekoe Amissah-Arthur has assured the
2013 Ghana Mining Summit that the government is not
targeting Chinese citizens in its on-going crackdown on illegal
small scale miners.
Responding to reports in the international media detailing “round-
ups” of Chinese citizens, and protests in Shanglin county in China‟s
Guangxi province, where relatives of illegal miners denounced
“violent attacks” and “lootings” targeting the Chinese, the Vice
President told the summit that the impression created by sections of
the international media that Chinese are the targets of the crackdown
against illegal mining was “not correct”. He said that recent steps
taken by the government to stamp out illegal small-scale activities by
foreigners, “is because small scale artisanal mining, by the laws of
Ghana, is reserved for Ghanaians”.
“What we have seen in the recent past is not only the flagrant
disregard for our laws on small scale artisanal mining, but the
introduction of heavy duty equipment in surface mining by nationals
of other countries”, he said. He pointed out that over 50 suspected
illegal miners from Nigeria, Niger and Togo had also been
apprehended following the arrest of the illegal Chinese miners.
Ghana has since released all 169 Chinese miners detained by its
immigration authorities in the crackdown on illegal mining, the
Ministry of Foreign Affairs said in Beijing. They are returning to China
in several batches with assistance from the Chinese embassy in
Ghana and a team sent by the Guangxi and Fujian governments,
according to ministry spokeswoman Hua Chunying. China recently
sent an investigative team comprising officials from the ministries of
foreign affairs, commerce and public security to Ghana to protect the
rights of Chinese citizens, Hua said.
Prominent financial analyst Sydney Casely-Hayford told local
reporters in Accra that the government's crackdown would not
permanently stamp out illegal mining because Ghanaian traditional
leaders and businessmen often encourage the practice. “It's quick
and easy money,” Casely-Hayford said. “There is nothing you can do
12. 12
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