By Dr. Michael J.K. Bokor
Tuesday, July 15, 2014
Folks, Parliament is said to have approved a loan facility being negotiated by the government to equip the Ghana Armed Forces, even though the Minority had vehemently opposed it because it wasn’t satisfied with some crucial aspects of the terms. (See: http://www.myjoyonline.com/politics/2014/July-15th/minority-washes-hands-off-fraudulent-military-loan.php)
The loan facility totaling 300 million dollars is to be provided by VTB Capital plc of London and will be used to finance the procurement of equipment including air assets and other logistics that will equip Ghana’s military to participate effectively in the United Nations peace support operations in South Sudan and Mali.
We don’t doubt the fact that Ghana’s military needs support to stand on its feet. We welcome measures to strengthen the institution and to keep our soldiers out of harm’s way. But we don’t accept the manner in which the approval was given by the Majority side in Parliament despite the huge controversy surrounding this loan facility.
The loan will not be repaid through the operations of the Ghana Armed Forces but the sweat, toil, and blood of the Ghanaian tax-payer whose sacrifices nourish the national coffers. That is why any attempt to do narrow politics with the issue must not be countenanced, especially, given the controversy surrounding the approval of the agreement.
I congratulate the Minority for standing its grounds; on the other hand, I condemn the Majority for bulldozing its way through to endorse the agreement even when the concerns raised by the Minority have not been addressed to prove that Ghana won’t needlessly be fleeced by the Shylocks out there. Or that internal collaborators aren’t already well positioned to line their pockets with kickbacks!! When it comes to sponging and jobbery, don’t trust the Ghanaian in authority!!
By riding roughshod over the Minority, the Majority side has only succeeded in creating the unfortunate impression that it is helping the government shoot itself in the foot all the more. These loan controversies will bounce back with serious boomerang effects to worsen the government’s credibility problems.
Dr. Mark Assibey Yeboah (a member of the Finance Committee) made my day. He had vehemently opposed the loan facility, describing it as “fraudulent” because Ghana is to pay $11.5million (made up of an upfront fee of $5.5 million and a management fee of $6million) to access the loan. As he put it, the lenders are charging the country management fees for managing their own portfolios. To him, then, “the cost of borrowing does not make any sense under current international credit conditions… that is chop money for somebody and his friends”.
Mr. Assibey Yeboah’s words are really strong and alarming. Thus, the Minority’s objection raises fundamental questions: What are the standard procedures for borrowing money from such sources? And why did the government not follow those procedures to avoid this controversy? Why did the government not look for other sources with better terms? What particularly forced it to stick to this “Shylock” company?
From what transpired in Parliament, one wonders whether the Majority side is being honest in this transaction; that is, if Mr. Assibey Yeboah’s concerns are anything to go by. We have been told that before the matter was brought to Parliament, the Attorney General was consulted to give her legal opinion on the loan. And she had concerns about the interest rate, which prompted her advice in a letter to the Ministry of Finance to review the interest on the loan.
In that letter, attributed to Amma Gaisie (the Solicitor-General), the Ministry of Finance was asked to consult its own Debt Management Division for appropriate advice. The Solicitor-General also raised concerns about the inability of the lenders to monitor the activities for which the loan was contracted, meaning that some due diligent work had to be done before the agreement could be tabled in Parliament for approval.
Given the circumstance surrounding happenings in Parliament today, we ask several questions: Did the Ministry of Finance do what it was advised by the A-G to do? What was the outcome? Did the Ministry of Finance find anything wrong with the terms of the loan agreement to warrant its patriotic duty to press for changes to be made? If not, why not?
Many other questions need to be asked for the Majority in Parliament, the Ministry of Finance, and the Presidency to allay the fears, doubts, and suspicions surrounding this loan facility.
Given the benefit of hindsight from the nastiness that has characterized the government’s record of borrowing money indiscriminately from all sources, one cannot sit down unconcerned when doubts arise over a loan facility of the sort tearing Parliament apart and alarming Ghanaians.
It is not a matter of the Majority side or the government’s wanting to appear to be more patriotic than the Minority section or to create the impression that it is more interested in improving the lot of Ghana’s Armed Forces than the Minority. It is a matter of propriety. Borrowing money from sources under contentious circumstances is unacceptable, regardless of the purpose to which the loan is to be put.
Good intentions cannot always be undergirded by propriety in the acquisition of the loan. That is what the Minority is up to point out and to urge the government (represented by its Majority in Parliament) to address. I agree with the Minority.
We already have numerous precedents to put us on the quivive anytime anything comes up about efforts to get loans from sources. The government hasn’t carved a good image for itself when it comes to loans. The controversy over the STX Korean housing project and the 13 or 3 billion loan facility from the Chinese is still unresolved. That concerning the Chinese loan, particularly, has turned out to be a major cause of the credibility problem that confronts the government. We have been told that even though Ghana has not yet been given the loan, it is paying the Chinese for it, apparently because of the strangulating terms under which negotiations for the loan were made to commit Ghana to atrocious terms. So, Ghana is already paying for what it hasn’t got or will get!! Is this anomaly acceptable?
Given the seriousness of the issues informing the Minority’s objection to the loan agreement, one would hardly expect a herd mentality to give the Majority that leeway. Isn’t there any MP on the Majority side to see things beyond allegiance to a political cause?
It is disheartening to know what James Avedzi (Chairman of the Finance Committee in Parliament) said to support the Majority’s stance as it disagreed with the opinion of the Attorney General. He is reported as saying that “the loan agreement has been with the committee for four months and they have done a thorough job on it, insisting due diligence has been done”.
What “thorough job” did the Finance Committee do that Mr. Assibey Yeboah (a member of that very Committee) didn’t know of, and which would not make him see eye-to-eye with the Majority on that score? Were Mr. Assibey Yeboah and the Minority kept in the dark? How does Mr. Avedzi explain to us that “due diligence” done by his committee?
I shudder to know how shallow Mr. Avedzi could be in his comprehension and justification of the Majority’s stance. According to him, the loan agreement is just a pre-financing facility to fund military equipment under the United Nations Peace Keeping programme. He pointed out that the country will spend $300million on the military equipment and will be paid an amount of $446 million in return by the United Nations, adding a profit of over $100 million will be made from the arrangement.
Lousiness to the highest order, Mr. Avedzi!! There is a huge difference between the anticipated benefits of the loan and the terms under which it is being sourced. What the Minority side objects to is clear (paying so much for the loan is unacceptable!). It must not be misunderstood, misconstrued, or skewed as part of the opposition’s penchant for opposing anything coming from the government that will give it some political capital.
That is why the claim by Ms. Hannah Tetteh (Minister of Foreign Affairs) and Mark Woyongo (Minister of Defence) that “some people do not want soldiers to be equipped” and urged her colleagues to “act responsibly to equip the military” is not only mischievous but is also stupid!!
Every Ghanaian who knows the value of the Ghana Armed Forces (and the fact that the institution is not a drain on the country’s economy) will support any initiative to equip it and ensure that it plays its constitutionally mandated role in nation-building and in international engagements.
Informed people know that the Ghana Armed Forces are recognized worldwide as efficient and instrumental in peacekeeping efforts globally. Ghana earns revenue from such operations and must equip the institution; but looking for loans under dubious terms to do so won’t wash with those now raising serious objections but being shoved off like mere irritants.
The lesson to be learnt here is clear. The Majority in Parliament hasn’t helped Ghanaians know clearly what they need to know. It has used its majority status to give its blessing to a controversial loan agreement that will definitely add to the credibility woes of the government. This use of the majority status raises questions on propriety and morality, not to mention political maturity. Clearly, the Majority succeeded in having its way just because of numerical advantage, which is not good for productive work by Parliament for the good of the country.
Even though accusing fingers are easily pointed at the NPP (the Danquah-Busia) camp for opposing development programmes initiated by its political opponents that is seen as inimical to its political interests, one must be circumspect in undermining it wholesale. In this particular situation regarding the loan facility, I strongly support it because of the doubts provoked by the terms and the arm-twisting tactics of the Majority side. No single Ghanaian can claim to be more patriotic than any other Ghanaian nor should any political party be allowed to behave as if it is the only one that knows how to be in bed with the military. To endear itself to the military? What for, anyway?
I shall return…