Executive Director of the Ghana Centre for Democratic Development (CDD), H. Kwasi Prempeh, has raised concerns over the agreement signed between the Power Distribution Services (PDS) Limited and the government of Ghana, in relation to the national power supply takeover by the private firm from the Electricity Company of Ghana (ECG).
The government of Ghana recently suspended its concession agreement with PDS.
The decision was communicated via a press release by Information Minister Kojo Oppong Nkrumah on Tuesday, 30 July 2019.
The statement said the action to put the agreement on hold was necessitated by “the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further due diligence”.
The government said a full probe has been initiated into the agreement and steps have been taken to ensure that “distribution, billing and payment services continue uninterrupted”.
Commenting on the issue in a write-up, Professor Prempeh observed that: “The national interest is not served when cronyism and self-dealing are packaged and presented for popular consumption as economic nationalism. Using public power to enable or facilitate the transfer of public wealth into a few private hands is not ‘nationalistic’ or ‘patriotic’ merely because the chosen beneficiaries are fellow nationals”.
Even though he encouraged private investments by Ghanaians, he was quick to add that such transactions must be done rightly.
For him, “we cannot afford and must not countenance the creation of a Ghanaian version of ‘Russian oligarchs’ in this town”.
Below is his full article:
H Kwasi Prempeh writes on PDS. et al:
Let’s not fool ourselves or be fooled–over and over again! The national interest is not served when cronyism and self-dealing are packaged and presented for popular consumption as economic nationalism. Using public power to enable or facilitate the transfer of public wealth into a few private hands is not “nationalistic” or “patriotic” merely because the chosen beneficiaries are fellow nationals. Our long experience of this kind of venality should be lesson enough.
For it to serve the national interest and also pass the smell test, “local ownership” rules reserving a stated percentage of equity in privatisation or private-public deals to nationals must proceed, at the minimum, on the basis of:
(1) a clearly written policy and legislative framework, not by means of ad hoc, selective discretion; (2) equal opportunity for all eligible, interested, and capable nationals to acquire the offered interests; (3) a credible, transparent, competitive process, free of conflicts of interests, for determining the terms of the deal and for selecting the winners, not some shadowy, opaque, backroom wheeling and dealing; (4) prompt payment for the full value of the equity participation acquired; and (5) full disclosure of the beneficial owners of the interests acquired.
The role of Government and public officials involved in such transactions is that of a fiduciary, with a nonwaivable duty to act solely in the best interest of the Republic and people of Ghana, and not to further the private interest of any third party, individual, group, or corporate, involved or interested in the transaction. Ideally, citizens should have a statutory right to challenge and enforce the exercise of the government’s fiduciary duty through court action.
Surely, let us encourage local private investment, ownership and participation in strategic sectors of our economy. But we must not do so at any cost. Both the process (how we do it) and the outcomes (for whose benefit we do it) matter. Whatever is worth doing is worth doing right. We cannot afford and must not countenance the creation of a Ghanaian version of “Russian oligarchs” in this town.