Feature Article of Monday, 17 September 2012
Columnist: Danso, Kwaku A.
And the Farmers kids’ Scholarships?
By: Kwaku A. Danso
Cocoa has been Ghana’s main economic backbone and Kwame Nkrumah in his love for Ghana devised this socialist method of buying all the cocoa from farmers, sell to overseas companies at a profit to the nation and use the money to develop Ghana for all. Scholarships, water and sewage systems, roads and highways, electricity and most of Ghana’s infrastructures have come out of cocoa.
Under Nkrumah’s CPP, let us remind those who were too young that corporations and government agencies used to have their annual and quarterly financial statements published in the Daily Graphic. Even as high school kids some of us used to read and started to appreciate what a Profit and Loss or Assets and Liabilities meant. After all these companies belonged to the public and the people had a right to know. Today, 47 years after the enemies of Nkrumah overthrew him and dissolved the CPP, and after decades of trying to erase whatever good Nkrumah did and teach the school kids to diminish Nkrumah achievements, Ghana is at a global disgrace. WE have been rated the 9th worst managed nations, even though reported to have some of the highest growth rate in 2011 and 2012. After 11 years of Jerry Rawlings military dictatorship and transformation to election in 1992, nobody had the decency of leadership to plan for a Parliament House and offices for the MPs.
Ghana has become a nation where money is spent without disclosure and nobody accounts to the people. Planning is also out of the door. No matter we are rated poorly managed. Jerry Rawlings and his PNDC chants of probity and accountability were mere words blowing in the wind and some lost their lives at the firing squad for that. In the mean time, whiles the 275 MPs for the nation of 25 million have no offices in the last 30 years, there is a call or 45 more MPs.
A report posted on the Ghana Leadership Forum on Sept.14 by George A. read:
“The Ghana Cocoa Board (COCOBOD) has secured a US$1.5 billion pre-export finance facility from a conglomerate of international banks to purchase cocoa beans in the 2012/2013 cocoa season. The facility is currently the largest non-oil deal in sub-Saharan Africa and was made possible by 31 banks from 17 countries in Europe, American and Asia. Some of the banks, including Standard Chartered Bank, Standard Bank and SG-SSB Bank, have local presence in the country. The Ghana International Bank Plc acted as the initially mandated lead arranger (IMLA) with Standard Chartered Bank as the facility agent.”
I hereby elaborate on a note I posted and edit and add a few comments. You all note that anytime Ghana government secures external loans, they don't give detail that are standard information in loan transactions in any open society such as most Western nation. These are: the loan amount, annual or periodic interest rate, the term (no of months or years due), whether it is amortized or interest only, and payment amount, and any loan arrangement or origination fees. For those not familiar with financial calculations, a loan of $1.5 billion at 5% per annum payable monthly for ten years will have a payment of $15.91 million per month for the ten years. If the interest goes to 10%, the payment jumps to $19.82 million per month. If payments are deferred for a year, the amount due become an additional $190.1 million for the 5% or $237.9 million for the 10% loan. At the end of the 10 years the $1.5 billion borrowed at 5% would have become a total of $1.909 billion. The 10 years at 10% would have become a total of $2.379 billion.
Loan amortization is not a straight forward Arithmetic. It is for this lack of understanding and a combined criminal lack of care that Ghana keeps increasing in our accumulated debt burden whiles there is no appreciable increase in durable roads, asphalt concrete highways or Motorways, and water and electricity are still problems in the modern day even in the cities.
It is refreshing to note that 31 Banks in 17 countries in Europe, America and Asia would give Ghana loans on the strength of our cocoa product alone, with no government guarantee. The people of Ghana however deserve openness. It can be easily surmised that due to corruption the government officials always fail to disclose. Past Presidents in the post Nkrumah era always seem to be in complicit to this culture called “nkatasoy3” (under-cover deals) in the Akan language. One can guess that for the $1.5 billion these financiers give us, Ghana will end up paying back an additional $100 million, depending on the interest. Within this range from say 2% to10% this will be $30 million to $150 million and plenty of room for moneys to exchange hands among officials. This is where the massive looting of government wealth takes place and millions of dollars go into the pockets of individuals in the government. These people are already on the payroll of Government as executives. For God’s sake, why can’t they be open!
On behalf of the Ghana Leadership Union, I hereby challenge the COCOBOD executives and Board Chairman Dr. Anthony Fofie, and the Minister of Finance Dr. Kwabena Dufuor, to start this culture of openness. Please give the public full disclosure as normally done in the democratic nations, since the money belongs to the people of Ghana. The late President Mills (RIP) sat on the Right to Information Act and we call on President Mahama to sign it now. Please sign it within the next three months before the elections if he is to be distinguished as a man if integrity.
Dr. Kwaku A. Danso
President -Ghana Leadership Union (GLU) & Moderator GLU Forum.