HIPC Ghana Gives Away $45,000,000

The Government of Ghana has decided to cancel a $45 million debt owed it by an American company. This is at the time when Ghana has declared herself highly indebted and poor and is pleading with the International Community to forgive its debts.

Last month, Ghana had to sign a controversial agreement with the United States of America because of a promise of $4 million in military aid annually.

Ironically, the amount of debt that Ghana has forgiven the American Company is the equivalent of more than 10 years of military assistance from the US.

The American Company in question is the Western Telesystems Limited (WESTEL), which owed the National Communication Authority (NCA) over $70 million in penalties for non-compliance with its (license) contract with the NCA.

The NCA stood its grounds and provided cogent facts and reasons to back its imposition of the penalties. But Westel decided to return NCA’s fire with diplomatic pressure. In the year 2001, it succeeded in getting an American Under Secretary for Trade to request the Government of Ghana to cancel the debt. Subsequently, the US government intensified the pressure on the Government of Ghana to deal softly with Westel.

Initially, both the NCA and Communications Ministry were adamant in canceling Westel’s debt. But President Kufuor broke their resolve when he announced that his government would consider the request to slash Westel’s indebtedness.

On October 29, 2003, Communications Minister, Albert Kan-Dapaah announced at a press briefing that Westel has now agreed to pay only $25 million out of its total indebtedness of over $70 million.