Ghana politics & security 18.06.13

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Ghana politics & security 18.06.13

  1. 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.
  2. 2. Ghana Politics & Security 2 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
  3. 3. Ghana Politics & Security 3 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.
  4. 4. Ghana Politics & Security 4 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.
  5. 5. Ghana Politics & Security 5 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
  6. 6. Ghana Politics & Security 6 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.
  7. 7. Ghana Politics & Security 7 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.
  8. 8. Ghana Politics & Security 8 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. 9. Ghana Politics & Security 9 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. 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
  11. 11. Ghana Politics & Security 11 because the traditional authorities want the money, the operators want the money, the Chinese want the money -- they want the gold.” Vladimir Antwi-Danso, director of the Legon Centre for International Affairs and Diplomacy, agrees that the real issue is corruption among local officials who allowed illegal mining to grow in the country's interior. Yu Jie, a senior official for the Chinese embassy in Accra, said the embassy is not sure how many Chinese are involved in the industry because it has no means of keeping track of its citizens in Ghana. Meanwhile security personnel have destroyed equipment used by illegal small scale miners including dredging machines, pumping machines and generators at the banks of the Bonsa River in the Western Region. The Divisional Police Commander in Tarkwa, Paul Ayitey, said the operation was aimed at stopping the pollution of the river by galamsey operators in line with President Mahama‟s directive to eliminate the activities of illegal miners in Ghana. Flashpoints to Monitor Beijing is putting increasing pressure on Ghana over the treatment of its migrant workers and traders and this could become a factor in negotiations over project finance The government's efforts to bury the Woyome political funding scandal with this week's enforcement of its repayment demand will provoke further scrutiny of political funding to both the major parties. The divergence between President Mahama's growing overseas stature and his mounting domestic problems is provoking more dissent within the ruling NDC. © 2013 All rights reserved Produced by Menas Associates Limited, 31 Southampton Row, London WC1B 5HJ, UK. Tel: +44 (0)20 3585 1401 info@menas.co.uk
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