Feature Article of Friday, 18 May 2012
Columnist: Mensah, Nana Akyea
Feature Article, by Nana Akyea Mensah
I just checked the current price of gold per ounce before settling down to write this article. It is $1563.2 as of 2012-05-14 14:16:29 EST. In August 1999, it was a different story. The price of gold was deliberately engineered to fall to as low as $252/ounce. That was when they struck at us. This case is an additional reason why Mr. Jerry John Rawlings deserves a quiet life in prison, to meditate on his human qualities that led him to the foolishness of controlling key decisions on behalf of all Ghanaians, in a dictatorial fashion, on the basis of pure ignorance, or personal greed, and causing a gargantuan financial loss to the good people of Ghana.
It is impossible to compare this with any form of robbery in our recent history. It is a gigantic fraud orchestrated with Ghana as a sitting duck, whose principal beneficiaries appear to be working in concert, with the clueless Rawlings nodding like a muppet, as imperialists swindled us of our gold! I was especially grateful that a Ghanaweb NPP serial-commentator, who goes by the name, Justice Sarpong, brought this up. The other day, I was looking for the information to no avail, in order to support a comment, when 'Greg Smith, a London-based Goldman Sachs vice president, publicly resigned from the financial firm in a scathing New York Times op-ed piece published Wednesday, March 14, 2012. See: Why I Am Leaving Goldman Sachs - NYTimes.com http://nyti.ms/zO9WWG,
“In the article, Smith lashed out against Goldman's "toxic" culture which, he feels, places profit above the best interests of clients.” NMAWorldEdition gives a summary. “Smith likened the business to an elephant hunt, where bankers push investors into deals that will make the most money for the firm. Adding insult to injury, Smith claimed clients were consistently referred to as "muppets" in internal emails.” And one only needs to read the case of Ashanti-Gold in order to grasp the magnitude of Greg Smith's statement. This is a story of how AngloGold, a British company, bought Ashanti Gold, which was the 3rd largest Gold Mining company in the world, for a song!
AngloGold is an important British company, and I wouldn't necessarily call this a conspiracy for the simple reason that I have no evidence. Also, as Crossed Crocodiles wisely puts it, “I don’t believe much in conspiracies, eventually people talk. The more people that know a secret, the less likely it is to stay a secret. Common interests are a different matter. Individuals and groups can organize and act as powerful forces to protect their own interests without the need to conspire.” [See: IMF’s Man Ouattara Now Head Of ECOWAS http://bit.ly/zy6Cfq.] We may have to keep that in mind if we want to understand how we were swindled of our gold.
Ghanaweb Business News of Wednesday, 21 April 2010, carried a story of “How Goldman Sachs Screwed Ghana”. See: Business News 2010-04-21 http://bit.ly/cZTuoQ. “In 1998,” the story begins, “Ashanti Gold was the 3rd largest Gold Mining company in the world. The first "black" company on the London Stock Exchange, Ashanti had just purchased the Geita mine in Tanzania, positioning Ashanti to become even larger. But in May 1999, the Treasury of the United Kingdom decided to sell off 415 tons of its gold reserves. With all that gold flooding the world market, the price of gold began to decline. By August 1999, the price of gold had fallen to $252/ounce, the lowest it had been in 20 years.”
Goldman Sachs, the global financial institution,”with fraud allegations levied against it has a long history of setting up its clients for a fall, and making handsome profits”, were not only in professional relationship with the 15 European Banks involved in this drama, most importantly, they were also the Financial Advisors to AngloGold, This is clearly a story that reeks with conflict of interest and end up with the hangman's noose around the neck of Ashanti Gold, which killed it off, and enabled its largest competitor in Africa, to buy it off for pennies! This fraud was carried out under the careful supervision of Rawlings, whose so-called “revolutionary vigilance” depended upon the advice from Goldman Sachs!
Goldman Sachs is a trader in gold as well as in Hedge contracts. To make maximum profits, it needs to buy cheap at the supply end, and sell high, at the selling end. In the case of Ashanti Gold, it did more than that. They were paid money for setting up Ashanti-Gold for an inevitable fall from which they directly stood to benefit. The Rawlings PNDC called them in as consultants, and Goldman Sachs simply walked in with their salesmen who sold their toxic products for a nice fee. “The muppets have swallowed the bait!” - they must have sent an e-mail back to headquarters, the day Ashanti Gold, decided upon their advice, to buy their Hedge contracts and bet low!
“Goldman Sachs recommended that Ashanti purchase enormous hedge contracts - "bets" on the price of gold. Simplifying this somewhat, it was similar to when a home-owner 'locks in' a price for heating oil months in advance. Goldman recommended that Ashanti enter agreements to sell gold at a 'locked-in' price, and suggested that the price of gold would continue to fall.” Then, “In September 1999 (one month later), 15 European Banks with whom Goldman had professional relationships made a unanimous surprise announcement that all 15 would stop selling gold on world markets for 5 years. The announcement immediately drove up gold prices to $307/ounce, and by October 6, it had risen to $362/ounce.”
The noose was “locked-in” tight around the neck of Ashanti Gold. With the price of gold rising, Ashanti found themselves being forced to buy gold at high world prices and sell it at the low contract prices to make good on the contracts. In a few weeks time, Ashanti found itself with 570 million dollars worth of losses. It had to beg the 17 banks not to force the execution of the contracts. Who served as the negotiator for the 17 banks and Ashanti? Goldman Sachs. The same company that designed the contracts for Ashanti, making a profit in their sale.”
The basic bankruptcy of Ashanti drove its stock price from an all time high of $25 per share to a paltry $4.62 per share. AngloGold could pocket Ashanti Gold with ease, there and then the price of gold has seen nothing but rising! Goldman Sachs was, of course, paid by AngloGold for their “services”! There is no doubt, that both the British and US governments who facilitated the regime of financial derivatives that produced these toxic Hedge contracts, and creating the enabling environment through the manipulation of the price of gold, would consider such an assault on their own company of national importance like Ashanti Gold is to Ghana, as an act of war.
We have been made losers in a war we did not even know was going on. Led by a leader who did not have a clue, and would not let those who know, even dare to open their mouths! We even had to literally pay our enemies to come and shoot to kill us in this undeclared war for our gold! This is why, if for no other reason at all, it is very important for Rawlings to shut up in shame. I strongly recommend an investigation into the matter, and those responsible for the gargantuan loss punished according to law. I also call upon the Mills Administration to take steps to sue Goldman Sachs for professional misconduct and conflict of interest in their capacity as Financial Advisors to AngloGold, and to seek damages. One thing President Mills must make sure he follows religiously, is not to allow a reckless, dangerously ignorant person to have any say in how this country ought to be governed.
There is something I want to say about the integrity of President John Evans Atta-Mills, before I proceed. Reading Wikileaks on the Akufo-Addo wee saga, my attention was drawn to a completely unrelated but very interesting revelation. I remember that when Mr. Kwesi Pratt, Jnr., was first seen openly supporting the NDC candidate, many were those who accused him of inconsistency, because he used to support the late Professor Adu Boahene of the NPP against the NDC. How could the same person who had been jailed several times by the PNDC of Rawlings, who has been a vocal critic of the Rawlings' dictatorship, turn around and support a political party founded by the same Jerry John Rawlings? It was considered as an unpardonable blunder by the NPP and unthinkable.
Consequently, Mr. Pratt was given all sorts of names. Prominent among them was "opportunist", "a Rawlings spy", "stomach politician" "naive" and so on. Well, it turns out that the guy is far smarter than he looked to his critics! From the WikiLeaks accounts, Mr. Pratt displayed an extra-ordinary insight into the workings of Ghana's politics, and never gave up his struggle against the Rawlings dictatorship. We now understand why his support for President Mills was far from being inconsistent. Like the ancient Romans, Mr. Pratt's support for the NDC candidate was clearly the best way to kill fire with fire.
With brilliant analysis and a rare display of political insight, the Managing Editor of the Insight newspaper correctly predicted the fall of Rawlings under an Atta-Mills Administration, and feared that the Rawlings dynasty could prosper better under an NPP win in the 2008 Presidential election. Thus by supporting the party founded by Rawlings, Mr. Pratt was actually helping in the political demise of Jerry John Rawlings! What is interesting is the fact that this was a time that most analysts were seeing a perpetuation of the Rawlings era under President Mills.
Kwesi was one of the few Ghanaians who saw through the lie that President Mills was a Rawlings Man and not "his own man". I am sure that at that time, even if President Mills had come out to say, in his characteristic manner, "My brothers and sisters, I am my own man!", few would have believed him! But Mr. Pratt knew it even then! A lot of attention is being paid to a very funny revelation in the same cable that “Nana used to smoke a lot of marijuana, and I'm telling you, a lot. Even in the morning, there used to be a cloud around him and you could see that he was high”. But just after that we have the following insight into the insightful politics of the Insight Managing Editor.
Kwesi Pratt is not just a principled, militant and courageous leader of enlightened public opinion, but an intelligent, clever and deeply insightful one! WikiLeaks, Reference id 08ACCRA1509, Subject: Ghana Elections: Political Pundit Predicts Ndc Win, Source: http://wikileaks.org/cable/2008/11/08ACCRA1509.htm:
¶ 3. (C) On the subject of the NDC, Pratt said that Atta-Mills was one of the most incorruptible politicians in Ghana. It is just not in his character to take bribes, and in fact that was why former president Jerry Rawlings chose him as his running mate in 1996. About a year before that election, Pratt said, Rawlings had paid a visit on Atta-Mills, who at the time was the director of Ghana's Internal Revenue Service, to check on income figures he had been given by his finance minister, Kwesi Botchwey. When those tallies didn't add up, Rawlings lost faith in Botchwey (who resigned shortly afterwards, following 12 years in that position) and somewhat like Diogenes searching for an honest man, Rawlings chose the political neophyte Atta-Mills as his vice-presidential candidate. (NOTE: An interesting historical aside: Rawlings and his first-term vice president, Kow Arkaah, never got along well, but Arkaah's fate was sealed when Rawlings suddenly attacked him, punching and kicking him, at a cabinet meeting on December 28, 1995. Even after the beating, Arkaah stubbornly remained in his position, and one year later, while he was still sitting as vice president, John Kufuor, the opposition NPP flagbearer, chose him as his vice presidential candidate, giving Arkaah the strange distinction of running against his own government while still in office for the same position he already held. END NOTE) ACCRA 00001509 002 OF 002
¶4. (C) To prove his point about Atta-Mills' character, Pratt said that Rawlings had tried to extract a promise that Atta-Mills would allow him to name four key cabinet positions -- Foreign Affairs, Interior, Defense, and Finance -- in exchange for Rawlings and his wife actively campaigning on Atta-Mills' behalf. According to Pratt, Atta-Mills refused, and when Pratt asked him why, saying that he could have said yes and then reneged on the agreement after being elected, Atta-Mills reportedly said that he couldn't do that, because he is not a man who can go back on his word. In the end, both of the Rawlings have been campaigning vigorously for Atta-Mills because, Pratt said, Nana Agyemang Rawlings is convinced she will go to prison if the NPP is victorious.
¶5. (C) Repeating what the Embassy has been hearing from other sources, Pratt said that Rawlings has no real influence over Atta-Mills. The two men, whose personalities are diametrically opposed, have little in common, but have arranged a political marriage of convenience that will be annulled as soon as Atta-Mills is inaugurated. If the NDC wins, Pratt is convinced, Rawlings will no longer have a political voice that resonates with the people, and the victory "will put an end to the Rawlings factor forever." In the case of an NPP win, however, Pratt fears that Rawlings could gain a new lease on life in national politics, re-emerging as a redemptive figure hailed by an army of disillusioned and disenfranchised youth. They will lose faith in the political system as represented by moderates such as Atta-Mills, and more readily succumb to the spell of Rawlings-style demagoguery.”
In retrospect, we are all the wiser. The Rawlinges were cut down to size at the Sunyani Congress, where his wife was only able to garner a humiliating 3% vote challenge to the incumbent. Afterwards, it took their robbing shoulders with the NPP, to become “relevant” again as a political nuisance to the NDC. Such morally and ideologically bankrupt couple want to control a ruling party which did not vote for them, and by extension the destiny of all Ghanaians! It is such a pity that the NPP is not interested in the principles of democratic governance of this country but are rather foolishly latching on to the ridiculous claims of the Rawlingses to have intellectual property rights in the logo of a whole political party! They remind me of a pair of cockroaches with their backs on the floor, kicking in the air as if that is the only solution left to get up. Methinks it is time for the couple to quietly remove themselves and to move on into the dustbin of history.
Oh, how I wish the mere departure of Rawlings would signal the end of our woes! But it wouldn't! In fact, the news coming out from the Minister of Trade is equally alarming, if not more! The problem Ghana faces currently is that her position on the EPA, is not different from that of the NPP, so there is no strong opposition from anywhere. We have not even heard of the position of the CPP on the matter. This concerns an announcement by the Minister of Trade and Industry, Ms Hannah Tetteh, in an interview published in the Monday, 27th February 2012 edition of Business & Financial Times. The paper carried an interview with the Trade and Industry Minister, Ms Hannah Tetteh, on the Economic Partnership agreement (EPA) titled ‘The EPA debate”.
According to the interview, “the Minister is committed to the ECOWAS Platform for the full EPA with the European Union. However, failing that, in her view, then Ghana should fall back on the Interim EPA between Ghana and the European Union.” There has since been a lot of reactions with the Minister in question remaining tight-lipped. This is a matter that concerns not only our own lives, but the fate of our continent and the future of our children. If the Minister thinks we are going to keep quiet over this, she must be joking!
Someone needs to draw the President's attention to the fact that some of his friendly observers are worried. And we have reasons to be, owing to lack of assurances by the President himself on what direction Ghana ought to take. I repeat a part of an appeal by Sylvester W. Bagooro, Political Economy Unit of TWN-Africa, Email: [email protected], and then rest my case. See: Rejoinder: The EPA Debate, sorry, Hannah Tetteh is wrong! http://bit.ly/JIafk2
“First of all, a most recent study (South Centre, November 2011), which updates the 2005 study undertaken by the UN Economic Commission for Africa (UNECA, April 2005) estimates that the cost, due to new duties under the EU Generalised System of Preferences (GSP) that Ghana will incur will be in the region of $52 million, whilst that of her current commensurate loss of tariff revenue from an EPA will be about $374 million.
It means that failure to sign the EPA the companies will lose $52 million (paid as duties to EU) whereas signing it will mean that Ghana government will lose $374 million as tariff revenue. The costs of signing an EPA far outweigh the benefits even from this narrow and limited criterion of net fiscal balance.
Secondly, Ghana will have to say goodbye to any industrialisation efforts if the EPA was signed with the EU. The EU’s position, as indicated in the interim EPA, on the elimination of tariffs for 80% of trade; restrictions on the use of export taxes and quantitative restrictions; the provisions on the bilateral, and the standstill clause; will undermine Ghana’s efforts to industrialize and its ability to move up the industrial value chain. As a result, Ghana will remain a perpetual supplier of raw materials, with all the adverse implications that this entails including worsening the unemployment situation in the country.
For industrial development, Ghana needs to ensure that the policy space is maintained for those industrial sectors which are being developed. Binding most tariffs at zero level under the EPA will disable Ghana’s ability to protect the sectors that are being developed to move up the industrial value chain. As acknowledged by many world renowned economists, no country, with the exception of Hong Kong (Province of China), has managed to industrialize without going through the infant industry protection phase.
Furthermore, Ghana, as a country, needs to take into consideration the long-term threat to its development. The EPA envisages going beyond trade in goods to trade in services as well as trade rules in areas such as Investment, Procurement and Intellectual property. Late last year the Association of Ghana Industries (AGI) was reported to have raised the alarm about how Foreign Direct Investment (FDI) is crowding out domestic enterprise. One of the causes of this is the devastating effects of the indiscriminate trade liberalisation that Ghana and other African countries have autonomously pursued for the last 25 years.
As of now, these autonomous measures can be reviewed and even strategically reversed. However, a binding free trade agreement like the EPA, complete with non-execution clauses and far-reaching sanctions regime, prohibits the positive interventions in support of domestic producers which are the tools of any meaningful industrial policy.
Finally, one of the main lessons of the global economic crisis that has cast its shadow since 2008 is that this is the time to be diversifying trade away from over-reliance on EU markets. It is clear to all observers that the economic chaos that has engulfed the EU in its Euro-zone shows no end in sight and the prospect of long- term stagnation is becoming ever more real. Why should Ghana hang its hope on a market that is in serious crisis?”
For the avoidance of any doubts, President John Evans Atta-Mills is the best man for the job, so far as I am concerned. The very fact that this matter about Rawlings came up from Mr. Justice Sarpong, an NPP busy-body, more-brawn-than-brains kind of person, released this in a forum specifically pointing out that Akufo-Addo is still the greatest threat to peace in Ghana in the year 2012, without commenting on the irritating facts, [See: Akufo-Addo Is His Own Straw Man! | Feature Article 2012-05-13 http://bit.ly/L4KxDQ] shows that the NPP is slowly developing a guilty conscience about the incessant ethnocentric calls for death and mayhem on other ethnic groups, led by Nana Akufo-Addo himself, with his “We Akans are not cowards” and “all lynch be die!” “We must take power at all cost”!
President Mills needs to know, as the front-runner in this race, that Ghanaians are counting on him to do the right thing. Akufo-Addo's Victory 2012 is sinking from internal sabotage and intrinsically stupid utterances by its leadership. The President needs to crack his whip and bring this Minister into order, otherwise the difference between his candidacy and that of the Akufo-Addo candidacy would narrow down so close that it might not even matter who would win! I hope this would not be the case, as the political energy behind the President could go dramatically down. I know for instance that the CJA is watching this with eyes wide open.
Forward Ever! Backwards Never!
Nana Akyea Mensah, The Odikro.
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