Ghana


At 16.00 Today I Was

On my way to the airport to check in for my overnight flight to Frankfurt, then Munich, then Izmir. Accra airport is dreadful in the evenings so I like to check in early and get rid of my bags, come back home to relax, and then saunter up just before boarding.

When I started this 16.00 thing it was 16.00 both in Ghana and the UK. Then the UK changed to BST while Ghana stayed on GMT. I kept with GMT. I have now to work out, do I use 16.00 local wherever I am, or 16,00 GMT always, or the time in the UK always (which last I didn’t do latterly in Ghana).

Travelling from now till 17.00 local tomorrow in Turkey, so forgive me if I don’t get a chance to post…

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The Puzzle of National Identity

Ivory Coast, like its neighbour Ghana, has recently discovered significant volumes of deepwater oil which is just coming in to commercial exploitation. That does much to explain the unusually hight degree of Western interest in its electoral standoff, and particularly the strenuous French support for President-elect Alassane Ouattara, who is close to French oil interests.

Unfortunately an apparently united international community and strenuous economic sanctions have done nothing to move Mr Ouattara closer to power, and he remains a virtual prisoner in a 5 star hotel, protected by concentric rings of UN APCs. The large majority of the population of the capital, Abidjan, would string Mr Ouattara up given half the chance. The distinct “incomer” districts where Ouattara’s Abidjan supporters live have been pillaged and terrorised by supporters, of Laurent Gbagbo including the army and police. At least thirty Ouattara supporters have been killed this weekend already, as Ivory Coast threatens to plunge back into civil war.

Like most West African states, Ivory Coast has a sharp cultural split between Northerners and Southerners. Meet any Gbagbo supporter and they will immediately tell you that Ouattara is not really an Ivorien at all, but rather from Burkina Faso or Mali.

The root cause of the conflict is the nonsensical colonial boundaries drawn up between the British, French and the US sponsors of Liberia. Again like West Africa in general, the boundaries bear no reference to tribal, cultural, economic or social divisions, other than those since inculcated artificially by the existence of the boundaries themselves. Cultural identities, tribal and chieftaincy loyalties have no relation to these boundaries – and divisions within the artificial nation are potent and dangerous.

Yet is is also true that new national identities do take hold to an extraordinary degree. Cross the border from Ghana and you instantly see a completely different world – Gitanes, scooters, everybody speaking French. Football matches are a vital component of national pride, and the Ivory Coast team is supported enthusiastically by Northerner and Southerner alike. Yet individual national identities are blurred where the border has no tribal meaning.

Artifical borders are not the only unfortunate colonial legacy in Ivory Coast. To a large extent traditional landholding systems were overturned and replaced with large plantations, that made Ivory Coast the world’s largest producer of cocoa. But it also brought landlessness, rural poverty, urban drift and the use of child labour on plantations. Given existing ethnic tensions and this weak social structure, increasing migration from drought affected Mali and Burkina Faso helped create the current tinderbox.

Nor is the international community as united behind Ouatarra as the endorsement of the EU, Ecowas and African Union would appear to suggest. Gbagbo has strong support, including practical covert assistance, from Ghana, where the NDC government views him as an important ideological ally. More crucially still, Gbagbo enjoys strong personal support from Jacob Zuma, who detests Ouattara and views him as a colonial puppet. The Chinese hope that if Gbagbo can be kept in power, the west will be punished and they rewarded with oil contracts. And the electoral situation was not as clear as it seems; the electoral commission and the constitutional court declared different victors, free and fair polling was not really possible in either the North or the South as supporters of both candidates terrorised the minority in the areas they respectfully control. There is also the great unsaid, but which everybody who knows Ivory Coast understands; there are a great many more voters on the register in the north than there are actual people living there.

All of which makes it quite remarkable that Ouatarra received so much international endorsement in the first place. They keys to this are strong and very active personal support from Sarkozy, and the firm backing of Nigeria, Burkina Faso and Mali.

All the signs are that this protracted standoff is going to decline into something much more violent. Neither “President” is interested in compromise. Ouattara is notably vainglorious, while Gbagbo is something of a thug. The Ivory Coast needs to be shot of both of them and to discover younger leaders and a politics that unites its people, rather than serves the interests of opposing northern and southern elites.

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Il Faut Cultiver Notre Jardin

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Outgrower produced pineapples ready for juicing

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Pineapple crowns are replanted. After castration each plant will produce five or six viable suckers which are given to smallholders as initial seed

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The factory farm will produce its first commercial pineapple crop in March 2011

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A small sample of organic peppers from one outgrower being assessed for quality. It is vital that local farmers do not become over-dependent on a single cash crop.

In my first overseas job I had the agriculrture brief at the British High Commission in Lagos for four years. Being me, I threw myself into it and the enthusiasm has never left me. The passages in The Catholic Orangemen of Togo on African agriculture are among my most passionately felt writings.

I remain immersed in the policy questions of the impact of colonialism on land ownership patterns, and the destruction of African agriculture by first world agricultural protectionism and dumping. But there is still no work that makes me happier than practical involvement with African farming communities. My main work in Ghana is in the energy sector, but I have been helping on a voluntary basis with a number of agricultural projects. This one is led by my old friend Felix Semavor.

How do I help? Well, I help to access development funding – in this case, the US government is helping with a feeder road, and the Dutch and Danish governments have helped provide agro-processing equipment. I spent Monday morning working with outgrowers to finalise their business development plans for startup loan applications. I have been advising on meeting the requirements for fairtrade certification, right down to details like methods of latrine construction.

I have also been able to help a little in dealing with potential UK and European customers.

This particular project involves production of flash frozen coconut, pineapple and mango pieces and of juices – primarily mango and pineapple, but we are also looking at pineapple and papaya and other mixes.

The project is primarily aimed at the export market, and I believe will be very succesful. The factory will ultimately support some 10,000 outgrowers. Once an outgrower cooperative has a total of 100 hectares, the economics comfortably support a communal tractor and pickup.

All is not entirely straightforward. There has been a widespread failure of the mango crop this year. probably because of exceptionally heavy early rains during the flowering period. Growers are establishing large pineapple fields. These have to be sloped, as retained water can quickly lead to Phytophthora infestation – something we have largely eliminated. But the result is of course the danger of soil erosion in the rainy season. There is no sign of a real problem yet, but these are early days and we are looking at bunds and intercropping.

I have tried very hard to affect my country’s foreign policy, both from the inside and the outside of the political establishment, to improve respect for human rights. I have achieved a small amount and been personally hurt by the attempt. I will still keep trying. But nothing is better for the soul than working to help people in poverty improve their lives, and to produce crops from the earth. Voltaire was right. Il faut cultiver notre jardin.

I do hope that you will buy and read The Catholic Orangemen of Togo, which I hope is a profound text on the condition of Africa disguised as a series of anecdotal romps. That was what I was trying to do, anyway.

http://www.craigmurray.org.uk/archives/2009/01/buy_the_catholi.html

Apart from which, I am moving house on Thursday and am somewhat strapped for cash. If you too are strapped for cash, there is an option to read it free on line. If you have already read it, buy a copy for someone else as a present. If you think its rubbish, buy a copy for someone you don’t like as a present!

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Overworked

This sounds pretentious to me too, but its 12.54 am here and I have just got home after a working day that started at 7.20am – and yes, just meetings all day and then dinner and drinks with business contacts can indeed be work, even if it is enjoyable.

Have to set off in six hours for the North of Volta region, so really no chance to blog for some time. Serves me right for not being back in Ghana for too long.

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They Have Got The Wrong Man

I am very sorry that former Presidential Chief of Staff Kwadwo Mpiani is on trial in Ghana.

It is undeniably true that corruption spiralled in the last couple of years of President Kuffour’s second term, and particularly after the untimely death of Finance Minister Baah-Wiredu. I have a hypothesis, based on wide international experience, that it is a worldwide phenomenon that corruption increases exponentially from around the seventh year in power. In Ghana, it happened to the Rawlings governments too.

I have written in detail about this, and I have argued that it is essential that corruption in Ghana is punished, so that it is not thought that senior politicians have immunity. Ghana must not develop Nigeria’s culture of corruption.

http://www.craigmurray.org.uk/archives/2010/02/the_uk_and_corr.html

But it seems a great pity that Kwadwo Mpiani has been singled out for the first high profile tria since the NDC came to power. Kwadwo is a hate figure for the then opposition and now governing NDC; I know from many conversations with senior NDC figures that they regarded him as the hub of corrupt dealings.

But in fact, this is the opposite of the truth. Kwadwo was deliberately excluded from the worst examples of corrupt dealings – he was kept out of Sahara, Balkan and Zakhem. This is precisely because Mpiani was not part of the corrupt clique who kidnapped the financial control of the closing stages of the NPP government.

I say this in his defence, despite the fact that Kwadwo and hs brother Sarpong in recent months launched a number of really nasty personal attacks on me and my family in the Ghanaian media. I say it simply because it is true.

It is also interesting that the only high profile corruption trial so far is brought over the Ghana @ 50 celebrations. They were indeed far too extravagant for a developing country like Ghana, but there is one other interesting feature. They are closed, finished, over and done with. There is no continuing revenue stream.

http://news.myjoyonline.com/politics/201004/45113.asp

That is in contrast to the much bigger contracts suspected of corruption, like Balkan, Vodafone, GIA, and Zakhem. These are continuing projects with big money still flying around. Is it wrong to conjecture that projects with continuing revenue flows are less likely to be prosecuted, because money is still available to buy off officials and politicians?

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The Cancer of Corruption: What $150million Gets You In Ghana.

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This is the Zakhem power station site at Kpone. The particularly distincitive feature is the lack of any power station.

I am grateful to CitiFM in Accra. Having been misled into publishing photos of a completely different power station, they have had the grace to apologise and publish a corrected story.

http://www.citifmonline.com/site/news/news/view/3556/1

Unfortunately their original photos of a completely different site, nothing to do with Zakhem, were seized on and re-used by almost the entire Ghanaian media as evidence that I was talking nonsense.

My favourite recent news headline was “Craig Murray is Not In His Right State of Mind”.

http://elections.peacefmonline.com/politics/201002/38966.php

Zakhem are loudly threatening to sue me. They make the following key points:

– Zakhem Construction Ghana is a separate company from Zakhem International Construction Ltd of London

– They have received only 39.5 million dollars to date towards the turbine installation

– They have carried out a good deal of work including engineering design, land clearance, construction of perimeter wall, and 40% of the procurement of balance of plant

– Work was delayed by a change of site

My information on some of these points differs. But none of that alters the fundamentals. The Government of Ghana bought the turbines direct from Alsthom. Zakhem were to install them and provide the balance of plant. They have been paid tens of millions of dollars upfront, starting over three years ago, but have never even started digging the foundations, nor supplied the key components they were paid to procure, including transformers and fuel tanks.

Ordinary people, some of them struggling below the poverty line, pay taxes in Ghana, particularly through VAT. Over a hundred million dollars of their tax has already gone forever into the power station pictured above. There is no sign of them getting any benefit for their money. Meanwhile Zakhem and former government functionary Paul Afoko have pocketed millions.

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Zakhem Roundup

The Ghanaian partner of Zakhem is the extraordinarily wealthy Paul Afoko. There is a fascinating expose of some of Afoko’s activities with Zakhem in Ghana here. The sad thing is the way that money provided for development aid, and wrapped up in that language, is used to line the pockets of the ultra wealthy:

The loan facility, which was approved by the African Development Bank, was packaged as the center piece of a public-private partnership project, as well as a project in line with Ghana’s Poverty Reduction Strategy (GPRS), and the banks strategic policy on supporting poverty reduction by improving the investment climate and facilitating public private partnership.

http://www.eturbonews.com/11332/we-have-been-duped

Here is a report of a bribery investigation in a Zakhem project in Liberia:

This whole matter hinges on the taped conversation between Harry Greaves and Aloysius Jappah. Although neither Jappah nor Greaves definitively admitted to who was responsible for initiating the offer of $300,000 USD. It is our findings from their statements during the interrogation that an offer to give bribe or receive bribe was made and that both Mr. Greaves and Mr. Jappah participated in the transaction.

http://www.liberiawebs.com/index.php?view=article&catid=120:special-report&id=2018:report-lprczakhem-contract-investigated-by-moj&option=com_content&Itemid=410

When the United Nations says “Controversial” it means “Corrupt”

Government Cancels Zakhem Contract

(Public Agenda)

The Government of Liberia has cancelled the contract entered into by the Liberia Petroleum Refining Company (LPRC) and Zakhem for the rehabilitation of damaged facilities of the LPRC’s facilities on the Bushrod Island.

Justice Minister Christina Tah said that the contract was not in the interest of the Liberian people and therefore it had to be nullified.

The “controversial” Zakhem contract valued at over US$25 million was negotiated for by the former managing director of LPRC, Mr. Harry Greaves who was later sacked by President Ellen Johnson Sirleaf.

http://unmil.org/1article.asp?id=3610&zdoc=1

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CitiFM

Sorry about the unintentional ambiguity in my last post. As of three weeks ago, when I was last on the Zakhem site, they had not even begun to dig the foundation trenches, and the turbines were not on site. There was no assembled pipework. So I am convinced that the photo published by CitiFM could not be the Zakhem site. The most likely explanation is that it is either the VRA store or the Sunon Asogli power station.

CitiFM however tell me that they took the photos in good faith believing they were photographing the Zakhem site. I accept that, and CitiFM are going to check up on what they have photographed. That is why I have removed my post about CitiFM.

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Ghana Corruption

The debate in Ghana over my article on corruption has become very fierce. Zakhem International are threatening legal action. The Minister of Energy and Moses Asaga have said things which are broadly supportive of me.

http://news.myjoyonline.com/business/201002/42231.asp

http://blogs.myjoyonline.com/sms/2010/02/17/energy-minister-speaks-on-murrays-claims-of-uk-corruption-in-ghana/

I outlined today that I had been raising the Zakhem contract with both NPP and NDC governments at the highest levels. I was so concerned at serial payments being made to Zakhem with no work undertaken that I took Kwadwo Mpiani, then Chief of Staff to the President, to the site. He indicated to me that he was very disappointed with progress and that he had been told the foundations were finished, when in fact they were not started.

Kwadwo’s brother Sarpong came on air in a radio interview today and said that Kwadwo did not say that. I am sure that he did (and there were other witnesses), but I don’t quite understand Sarpong’s point. It was plain from this and other conversations with Kwadwo that Kwadwo was not involved in any corruption. Equally I found John Kuffour not well informed on the issue but disappointed with the lack of progress.

I then raised it with the new government, with Vice President John Mahama, and with Energy Minister Joe Oteng Adjei. They initiated an investigation which I believe is ongoing.

Zakhem have put out a statement in which they claim they had received only $39 million. That is contrary to my information, which I believe to be well sourced. They also give a breakdown of how $39 million was spent. If I find it, I will post a link.

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The UK and Corruption in Ghana

THE BRITISH GOVERNMENT ARE THE BIGGEST HYPOCRITES

British High Commissioner Nick Westcott is not afraid to step in to controversy. Having boldly told us that Vodafone did nothing wrong in their acquisition of Ghana Telecom, he now lectures Ghana that incoming governments must respect contracts entered into by the outgoing government.

Of course, that is true. As a general point, it is a simple statement of the legal position.

But we all know that Dr Westcott did not mean it as a general point. He meant that investigations into contracts including Kosmos and Vodafone must be stopped. Otherwise, he warned, investor confidence would be damaged ?” a warning that foreigners would take their dollars elsewhere.

But what is the logic of this position? No government may question any contract entered into by a predecessor, no matter how corruptly? That if you are a dreadfully corrupt foreign businessman, who has bribed a minister, you only have to hang on until the government changes, and then you cannot be investigated? Plainly this is a nonsense.

The fact is that, as detailed in a series of articles in the Financial Times of London, there are a whole number of questions about the Kosmos deal which give experienced observers great cause for concern.

One which particularly worries me is how, on the best oilfield in Ghana, Kosmos were able to get a royalty rate of only 5%, when the average on other fields is over 11%. There are suggestions that partners from EO were active on the Ghanaian government side of the negotiation.

There are also credible stories of Kosmos handing EO millions of dollars in cash notes for “marketing and publicity”.

Is Ghana forbidden from investigation because the government has changed? No, and they must not be bullied out of it by the British, Americans, IMF or World Bank. Those will always back wealthy Western companies against a developing African nation.

The Vodafone deal suffered ?” at the very least ?” from a lack of transparency and a lack of a level playing field for others ?” including France Telecom ?” who wished to compete. The final sales price was definitely too cheap.

I would like to know how Ghana Airways’ invaluable routes were awarded to GIA – a bunch of obscure and inexperienced investors who came only fourth in the official assessment of bids. The result has been the almost total disappearance of Ghana’s whole aviation industry.

I would like to know how industrial development funds were given to a network of companies the ultimate ownership of which traced back to the Minister of

Industry.

The British High Commissioner has the problem entirely backwards. It is not that the government is not honouring existing contracts. I am Chairman of several companies, including Atholl Energy. Atholl had a contract with the NPP government which has been honoured by the NDC government, because we carry our our work diligently and honestly.

The problem is that where contracts are not honest, action has not been fast enough or decisive enough to root out corruption.

Two of the worst examples are in the energy sector. Let us look at the case of another British company, Zakhem International Ltd. They are building the Kpone Power Project for VRA.

VRA bought the turbines from the manufacturer, Alsthom for US $70 million. They then paid Zakhem US $80 million upfront to install them and provide the ancillary equipment.

After three years, what do Ghanaian taxpayers have to show for their US $150 million? Absolutely nothing. An empty field at Kpone, surrounded by Ghana’s longest concrete wall so the Ghanaian public cannot see that their money has been stolen.

What is happening about it? Nothing, because Zakhem and their Ghanaian partners have stolen enough money to bribe all the officials involved. They are now claiming around town that the new government is also “In their pocket”.

Most of the $80 million has vanished forever, while the $70 million turbines are now badly damaged by disuse.

Or look at Balkan Energy. They claimed to have spent US $100 million on refurbishing the Osagyefo barge, at a time when they had really spent less than US10 million.

Under an astonishingly corrupt contract, Balkan are to lease the barge for $10 million per year, from the government of Ghana, but then charge Ghana over $40 million per year for its use as a “Capacity charge”. They will in addition charge the government of Ghana for the fuel, and make a profit on that too.

It is as if I rented your car from you for 100 Ghana cedis a month, then rented it back to you for 500 Ghana cedis a month plus charging you a premium on all the petrol you use.

Balkan stand to make a total of about $1.5 billion dollars in profit from the people of Ghana from this terrible deal. It is the most corrupt contract I have ever seen. It is astonishing that a country like Ghana would enter into a contract with Balkan, whose owner, Gene E Phillips, has stood trial as a gangster in the United States.

These are not crimes without a victim. Everyone who pays any VAT or other tax in Ghana is putting money into the pockets of these disgraceful conmen. Most of the taxpayers of Ghana are very poor, and the money is being taken by people who are very rich.

That is why I am speaking out. I am not supporting any political party. I am supporting the ordinary people of Ghana.

I first spoke out about corruption in Ghana back in 1999, when I was Deputy High Commissioner there. It caused a sensation in the Ghanaian media at the time. But people do not know that I was nearly sacked by the British government as a result.

The British government did not object at all to my attacking corruption in Ghana. The reason I was nearly sacked was because I said “Sadly some British companies have been involved in this corruption”. I was carpeted by the British government and told I must never mention British companies’ corruption.

At the time I was thinking of the British company International Generics Ltd and their involvement in scams over the La Palm and Coco Palm hotels.

The hypocrisy of the British government in defending corrupt British companies was most famously seen when Tony Blair ordered an end to a prosecution of the arms company BAE over massive bribes they had paid in Saudi Arabia. Blair declared that prosecuting BAE was not “In the national interest”.

Last week BAE again escaped criminal prosecution and were allowed to pay a fine instead, for corruption in Africa including Tanzania.

So Nick Westcott is only continuing a British hypocritical tradition of condemning corruption, unless it is British corruption.

The truth is that sadly there was a major increase in corruption in Ghana especially in 2007 and 2008. That was a major reason why the Ghanaian people voted to change their government. But so far there is little indication that the new government has done much to root out the corruption.

The danger in this is that ordinary people will become disillusioned with the political process.

Ghanaians are not stupid. People know who stole money, and they see them swanning around town in their fancy cars, unashamedly living the highlife. This can corrupt society. Young people can easily draw the conclusion that the way to make money is to be a corrupt politician or a drugs dealer.

The further danger is that, just like in Nigeria, they conclude that all the politicians of all the parties are into the corruption, and that is why everyone gets away with it.

I did not used to think that was true in Ghana, but I really am beginning to wonder, unless we see some effective action soon.

So rather than protecting the corrupt, the British High Commissioner should be offering help and assistance actively to attack corruption. That includes corruption by British companies.

He should also remember that, with oil revenues within touching distance, Ghana will soon have her own investment funds and no longer be so dependent on foreign investors. It is not for the colonial master to kick Ghana. The boot will soon be on the other foot.

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Cadbury’s Demise a Disaster for Ghana

Cadbury’s were using Fair Trade Cocoa for generations before the phrase was invented.

Cocoa in Ghana is a smallholding crop, with individual farmers having a hectare or two of mixed crops, including cocoa. It is not a plantation crop as it is in Brazil or Ivory Coast. That is why Ghanaian cocoa is of higher quality, and commands a premium on commodity markets. Cadbury’s chocolate in the UK uses 95% Ghanaian cocoa.

The Catholic Orangemen of Togo, p184

A major reason that Ghana is the most stable and successful of Sub-Saharan African countries, is that traditional landholding patterns were not broken up by colonial usurpation. (White men ?” and their cattle ?” died like flies in the climate here. Wheat wilted).

Cocoa farming has for well over a century provided the backbone of a thriving agrarian society in Ghana. That widespread economic base has in turn enabled the continuation of traditional chieftaincy institutions and other indigenous forms of government.

Colonial population displacement is the root cause of many of Africa’s conflicts. In Kenya and Zimbabwe, conflicts we dismiss as tribal or as the result of African bad governance, in fact come down to the long term consequences of tribes displaced from their land by the British, and being forced to settle in other tribes’ territory.

If you don’t understand that, you don’t know Africa. The idea that the land was desolate before whites came, or that African forms of agriculture are unproductive, is nonsense which I tackle in The Catholic Orangemen of Togo.

Displacement to form vast cocoa estates has been part of the cause of conflict in Ivory Coast. The estates are attended with other evils ?” erosion and devastation of soil nutrients caused by monoculture, widespread use of child labour, and the conversion of independent small farmers to landless day labourers. These are but some of the ill effects.

The estates also produce low quality cocoa. It seems a truth in agriculture that over-intensive monoculture produces tasteless food. Most British people realize that Cadbury’s chocolate tastes better, but don’t know why. The answer is in the cocoa.

What Cadbury’s use in the UK is from independent Ghanaian smallholders, and is the equivalent of wines from an ancient small chateau or boutique Californian estate. They pay extra for it, and their willingness to pay extra has been a key part of keeping the Ghanaian small farmer going.

Kraft on the other hand use the mass produced estate cocoa; the equivalent of soulless and tasteless wine from multiple fields and huge stainless steel tanks. They source mostly in Brazil ?” the World’s most tasteless cocoa ?” and Ivory Coast. The bad taste in the mouth from the cocoa is both real and metaphorical. The estates in both countries make massive use of child labour.

It is a fact that Cadbury’s practices in dealing fairly with small African farmers dated back directly to the ethical precepts of their Quaker founders. I had occasion to prepare a report for the British government on the Ghanaian cocoa industry, in response to concerns about the use of child labour on Ivory Coast estates. I visited numerous Ghanaian farmers and Cadbury’s headquarters in the process, and have met Cadbury’s buyers in the field in West Africa over twenty years.

I have no doubt that in order to rack up the return on their vast investment, Kraft will switch to the cheap and nasty cocoa they normally use. This could be the worst thing to hit the Ghanaian rural economy since blackpod disease.

I sympathise entirely with those concerned about the effects in the UK of this takeover ?” just the latest manifestation of the fact that our society knows the price of everything and the value of nothing.

But try to spare a thought for the ill effects in Africa too.

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Oil Must Benefit Ordinary Ghanaians

Ghana’s discovery of major oilfields is set to transform the country. But there has been little public debate on the fundamental effects that this will have, or even on upcoming short term government decisions that will have a major impact. So I contribute a few thoughts to encourage debate with my Ghanaian friends.

So far, there has been more interest in the international media than in the Ghanaian media over the question of whether the Ghanaian government will allow Kosmos Energy to sell its stake in Ghana’s bonanza Jubilee oilfield to Exxon Mobil for over 4 billion dollars, as Kosmos and Exxon Mobil have already agreed.

But Ghanaians should be very keenly aware of what is happening. The issue raises complex questions which go to the heart of the future of Ghana, a future that will be radically influenced for good or for ill by Ghana’s new position as an emergent oil rich state.

It may help to isolate and consider the following issues involved in the case, each of which is both critically important for Ghana, and a vexed point of dispute in Ghana’s vibrant political culture.

So let us look at Kosmos in the context of:

Property rights and state interference in the economy

Benefit to Ghanaians from Ghana’s mineral resources

The struggle between China and the West for influence in Africa

Environmentalism

Corruption

Property rights and state interference in the economy

To start with property rights, it has been put to me by Western diplomats in Accra that the government interference in Kosmos’ desire to sell its shares to Exxon Mobil is a signal that the NDC has not changed its spots, and is still a statist party opposed to free enterprise. But I am not sure that is fair on the NDC. Oil and gas concessions are not simple property rights. They are governed by long complicated contracts setting out many and onerous obligations on the owner of the concession, including for example obligations to carry out agreed exploration programmes.

A senior government minister has told me that Kosmos’ contract includes a clause giving GNPC a right of first refusal should they decide to sell, and that Kosmos agreed a deal with Exxon Mobil in breach of that clause. If that is true, then it is Kosmos, not the government, who are in the wrong. I would stress that I have not myself seen the contract and this is the province of the lawyers. But there are plenty of legitimate reasons why there should be such a clause. For example, it would be most undesirable if a single company were to buy up all Ghana’s hydrocarbon assets, establish a local production monopoly, and become an overwhelming power in the state.

Equally, the state would not wish concessions to go to a company who were interested in shutting down Ghanaian production to boost the oil price from their production elsewhere, were technically incapable of production, or were funded by drugs money. I hope that those examples illustrate that there can be a legitimate role for state intervention: the question is whether such intervention should be exercised in this case.

But the right that Kosmos do have is to receive the fair market price for their share. That must be at least what Exxon Mobil have offered. The Ghanaian government do not have any right to force Kosmos to sell to another buyer for less than the 4 billion dollars. That would indeed constitute an unfair infringement in property rights. But the right the Ghana government does have is to impose tax on the transaction.

Benefit to Ghanaians from Ghana’s mineral resources

Which leads us to the question of how ordinary Ghanaians will benefit from the oil. Here, there is one remedy that requires instant governmental action: whoever Kosmos sell to, the transaction must be heavily taxed as a massive capital gain.

An investor deserves their profit. Kosmos have bought their share of the concession, and had exploration expenses. Let us estimate that Kosmos expenditure at a generous 500 million dollars. The price they agreed with Exxon Mobil is reported variously at 4 or 4.5 billion dollars. To take the lower figure, that leaves them with a capital gain of at least 3.5 billion dollars.

The taxing of that 3.5 billion dollars must be the first major benefit to Ghana from its new oil industry. Ghana must here and now set down a marker that it is not, on oil, going to be ripped off to little general benefit, as it has been by the gold industry. The necessary amendment to the oil law must be rushed through so that Kosmos’ super capital gain is taxed at a minimum of 40% – whoever they sell to.

It is well established internationally that tax rates can be varied, windfall taxes can be imposed, and that national taxation approved by the legislature cannot be deemed limited by prior contract. Kosmos would complain, but a complaint that they only pocketed 2 billion dollars, not 3.5 billion, should be given limited sympathy. The tax should have to be paid by the purchaser direct to the government of Ghana, with Kosmos paid only the net sum after tax.

An empty government Treasury has added to the problems of the.world economic depression to make life very difficult for people in the Ghanaian economy this year. That tax money – around 1.5 billion dollars – should be pumped into programmes which boost employment and economic activity. I would prioritise social housing and water, both of which need urgent attention in Ghanaian cities.

As a side issue, with gold at over $1,000 an ounce, I would strongly recommend the Ghanaian government to slap an immediate windfall tax on the gold producers.

You cannot consider the question of how ordinary Ghanaians will benefit from the oil, without looking at the terrible warning of Nigeria. The country has become a byword for corruption, fraud, thievery, drugs and violence. It may not be politically correct to say it, but we all know it is true. Because of Nigerian oil, Ghana is theoretically up to now a much poorer country than Nigeria, but in fact ordinary Ghanaians have a much better living standard than ordinary Nigerians (and yes, I have lived over three years in each country). Nigeria’s institutions have collapsed – to give just one example, Ghana’s universities thrive whereas even the great University of Ibadan is a literal wreck.

How does Ghana avoid becoming another Nigeria and escape the “Curse of oil”?

When Nigeria started pumping oil, its currency appreciated dramatically (and was kept artificially still higher). It became cheaper to import food than to grow it. Nigeria’s agriculture and rural economy collapsed. For example, in just ten years Nigeria went from being the World’s largest exporter of palm oil to being the world’s largest importer of palm oil. With the rural economy shattered, there was a massive population influx to the cities. But the oil wealth was monopolised by a small elite, and the majority found only squalor and degradation.

The first economic priority for Ghana once the oil starts flowing must be to keep the Cedi value low. Very low domestic interest rates, and the discipline to isolate a healthy amount of oil revenue in offshore development funds, will be an essential part of this strategy. At the same time, revenue must urgently be directed to rural infrastructure, to increasing farm prices and developing agro-processing industry, on a scale not previously attempted. Ghana already has a major problem keeping young people in farming. Think how much this will worsen when oil starts to flow. If the rural economy collapses, much of the weft of Ghanaian society will go with it, such as meaningful chieftaincies.

Plans to increase electricity generation and replace and extend Ghana’s aged electricity distribution network are an essential part of a policy to encourage economic activity and production throughout Ghana, not just in the oil centres. The failure of NEPA to provide a reliable nationwide electricity supply has been one of the chief causes of Nigeria’s failure to win economic development from oil.

Tax and royalties from oil production alone, nor the economic activity generated by offshore oil production and downstream industry, will generate the government revenue required to achieve all these things. For that reason, my answer to the Kosmos conundrum would be for GNPC itself to purchase the shares, at the price that would have been paid by Exxon Mobil. Hugo Chavez, while I am sceptical of his democratic credentials, has shown what a determined government can do for social equality with oil money. GNPC has offers on the table from major banks to fund the acquisition.

The struggle between China and the West for influence in Africa

China has an active policy of seeking to extend its influence in Africa, at the expense of Western influence. The Kosmos deal, and indeed the development of Ghana’s petrochemical resources, has become mixed up in this. As known to the Western embassies in Accra from their government contacts, rather than Exxon Mobil, the Ghanaian government wishes the stake to go to the Chinese National Offshore Oil Corporation.

That has made international news headlines, as a competition for an African mineral resource that pits China and the USA in head to head conflict. The US Embassy in Accra and the Obama Adminstration certainly see it that way. I suspect the Chinese Embassy do too.

Having just come back from Washington, I would assure you that the Americans are going to be very unhappy with Ghana if Exxon Mobil are blocked by the government, just in order to give it to the Chinese instead. If the Ghanaian government forces the sale to the Chinese for less than the Americans were prepared to pay, that would cause widespread outrage in the international community.

The clue is in what I just wrote: “Competition for an African mineral resource”. Those who kid themselves that either side is in this primarily for altruistic reasons, are easily deceived. Outsiders want African resources; that has been the truth of African contact with the rest of the world for centuries. That is not to say that there is no altruism in the relationship. From the West, I think of it as guilt money for slavery and colonialism. But whatever the motivation, the truth is that Ghana has over the years received hugely more free aid money from the UK and US than it ever has from China – totalling billions of dollars – and that it will do so this year too.

When asked by Ghanaian friends about .the relationship with China. I always tell them that, if offered genuinely free money, they should certainly take it. Equally, if these Chinese buses are reliable (time will tell) and cheap with good credit terms, certainly buy them. But the much vaunted billions in Chinese aid for Ghana is not readily apparent. Have you seen it? There are some football stadia – not a huge economic driver. The Bui project is a soft loan, not a gift, and the capital price is inflated.

Aspects to the Chinese way of doing things come with what aid there is. In particular the importation of low level Chinese labour, including convict labour, rather than giving jobs to local people, and some very unfortunate Chinese attitudes to employee relations and to Africans in general.

The government is working on a plan whereby the Chinese would get Kosmos’ part of the Jubilee field in exchange for building undersea gas pipelines, and the Chinese would also develop the onshore storage facilities, and perhaps refining and downstream industry too.

The problem with this plan is that that the Chinese do not want to pay 4.5 billion dollars upfront for the Kosmos concession. But if not they, who would pay Kosmos? Kosmos can certainly be taxed. Kosmos can within reason be controlled over to whom they sell. But the absolute right which Kosmos must retain is to sell their share at the market price.

The sums of money involved are mind boggling – that a share of less than a quarter in just one field is selling for over 4 billion dollars, shows how the economics of oil will dwarf the rest of the Ghanaian economy. That is why so many companies are anxious to be involved. That goes not just for the production from fields, but for all the downstream activity too. What worries me is that there appears a government determination to hand control of the bulk of Ghana’s nascent hydrocarbon related development to the Chinese, rather than deal on the basis of fair and open competition.

To say that there is a lack of transparency would be an understatement. A convoluted deal with the Chinese over Jubilee, pipelines, processing and downstream is being put together without anyone else being invited to tender. As far as I can see, it would give the Chinese Kosmos’ stake in the Jubilee field, with the Chinese paying much less than it is worth.

I may be wrong. It may well be that the Chinese proposal genuinely involves a huge aid component, or is of high quality and competitively priced. But in that case, they would only benefit from an open process.

Environmentalism

There is no such thing as an environmentally friendly hydrocarbon industry. Production is messy, and use of the end product pollutes and causes climate change. There is no point in pretending otherwise.

But Exxon Mobil’s record on controlling local pollution effects at the point of production is abysmal. Their record in Nigeria (and Alaska) is appalling from the point of view of environmental degradation, community relations, repression and major corruption. They have a reputation as the most irresponsible polluting oil corporation in the World – with the exception of the Chinese National Offshore Oil Corporation, who are even worse.

It is worth a note in praise of Tullow Oil, partners and operators in the Jubilee field. An Irish company, their commitment to Ghana and to local employment and procurement has been exemplary.

It is vital for the future that a large part of the energy generated by hydrocarbons, and the resulting revenue, is devoted to funding the industrial development of renewable energy technologies. Ghana has great potential for wind energy, solar energy and above all wave and ocean current energy. Major projects in these areas should be developed with oil revenue.

Corruption

Those Ghanaians who have been fortunate enough to acquire stakes in Ghana’s oilfields, are set to become the richest people in the land. Their families may be in a dominant position in Ghanaian society for generations. There is an understandable concern for who those Ghanaians are, and how they acquired their stakes. That seems to me a perfectly legitimate area for investigation, perhaps initially by the parliamentary energy committee.

Many government ministers are at least partly motivated in their opposition to the proposed Kosmos/Exxon Mobil deal by a belief that those close to ex-President Kuffour own a share in Kosmos, with the inference that the share was corruptly obtained. I do not know if that is true. I have not seen any evidence. If there is evidence, let it be properly investigated and acted on. If there is no evidence, forget it. But do not let us have policy in the most vital area dictated by partisan rumour.

Strangely, it is bipartisanship which is most worrying me. I pray that Ghana will never become corrupt at all levels like Nigeria, even though we know that oil brings that tendency. Yet there appears to be very little vigour in investigating and prosecuting corruption.

Both President John Kuffour and President John Atta Mills, on coming to power after defeating the previous government in election, appear to have taken the same view. As I see it, they judged that in Ghana’s new democracy, it is essential that when the government changes, it should be seen by all that vindictive action is not pursued against members of the other party. Only a very small number of middle ranking figures have suffered from anti-corruption action.

These were the actions of wise and generous hearted men. But the danger is that this forbearance can result in a toleration of corruption. A situation can even arise where the political class as a whole see the public purse as something they can loot, with the parties taking turns as they go in and out of power, and all the politicians agreeing not to pursue each other for corruption.

I am not saying that Ghana has reached that stage. I am saying that it is a danger and that you can be too tolerant. I first became known in Ghana when I warned of increasing corruption in the last years of the Rawlings administration. The same thing happened, only on an even bigger scale, in the last two years of the NPP government.

Let me put that in perspective: Ghana’s governance is still great compared to any other African country, and a huge amount of development has been achieved by generally first class government in the last decade. Corruption flourishes everywhere, including the UK. But it must be fought with more single-minded purpose than I see at present. With oil revenue coming, it is essential that the line against corruption is now drawn.

Let me conclude by saying that I offer these opinions simply as a friend of Ghana. They are entirely my personal view. Now that I am retired I can give an honest opinion without reference to the British government, IMF or World Bank ?” all of which would disagree strongly with many of my views here. Ghanaian policy is of course for Ghanaians to decide. I merely hope that I may provoke some thoughts useful to that purpose.

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Simon Mann Should Still Be In Jail

I am not rejoicing at the return of Old Etonian Simon Mann from jail in Equatorial Guinea. His failed coup attempt was just one of a series of ventures in which a group of upper class public school English former officers worked with former apartheid era forces to try to seize control of mineral resources across Africa.

You can find the story of my own involvement with them, the full background and the untold evidence of Blairite complicity in my book The Catholic Orangemen of Togo.

http://www.craigmurray.org.uk/archives/2009/01/buy_the_catholi.html

Long term readers of this blog will know that Mann’s erstwhile mercenary partner, Lt Col Tim Spicer, frightened my publisher out of the book by commissioning Schillings to send threatening letters under the UK’s notorious libel laws. But the book is entirely true, eyewitness stuff, as witnessed by the fact that, since self-publication, over a thousand copies have been sold while tens of thousands have read it free online – but there has been no sign of the threatened libel action from Spicer.

New Labour, of course, went on to consummate their relationship with Spicer by making him a multi multi millionaore providing mercenaries to their invasion of Iraq.

Had Mann’s coup succeeded in gaining the oilfields of Equatorial Guinea, it would almost certainly have resulted in the deaths of large numbers of Africans, just as Mann and Spicer organised in their in Executive Outcomes days. That is why I think he should still be in jail.

Strangely, I share that desire with Jack Straw and the with the Foreign and Commonwealth Ofiice, for very different reasons. They are pressing Mann to keep his mouth shut.

http://www.independent.co.uk/news/world/africa/foreign-office-warns-mann-to-keep-quiet-1816864.html

Straw has admitted the FCO had prior knowledge of the coup attempt. Just how far their involvement went is something they appear keen for Mann not to tell us.

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Ghana – Nana Akuffo Addo Should Concede Now

In the course of this election campaign, Nana Akuffo Addo was repeatedly accused of arrogance by opponents and commentators alike. His lack of populist body language has cost him dear, but being lucky enough to know the man personally, he is a charming, considerate, witty and good humoured man who serves you in his home with his own hands – which is not true of many of his detractors.

So it is with regret that I say that it is essential for the good of Ghana that my friend now concedes defeat. With 9 million votes cast, only the tiny fraction that is 23,000 votes separates the two candidates, with one last constituency, Tain with 51,000 voters, voting today.

But Tain is an NDC constituency and has not been strong NPP in recent history. The kind of winning margin Akuffo-Addo needs there is near impossible. There have been recurrences there, now, of the thuggery and intimidation that have marred the second round in many places.

But the governing NPP’s decision to boycott today’s Tain run-off can only be construed as a decision to repudiate the entire election result. I see nothing else it can mean. Particularly when combined with yesterday’s failed attempt to obtain an injunction against the results.

We are already seeing more political violence in Accra than we have in the past decade. If the government repudiates the election result, then force becomes the only arbiter. It has been plain in Accra the last few days that the security forces will back the NDC, as they have historically. In not accepting the results, the NPP risks starting a fight it cannot win.

Look at the broad picture. This race is quite incredibly close. I have no doubt, that if you eliminated all cheating by all sides, the result would still be within just 1%. The NDC started from a base of 45% in 2008 and have, beyond any shadow of a doubt, genuinely picked up support in this election.

If you have two runners over one hundred metres, and one clocks up 9.86 seconds and the other 9.87 seconds, that does not make the loser a bad runner. But there has to be a winner, and the adjudicator’s decision must be accepted.

It would be unfair for Akuffo-Addo to lose, but it would also be unfair for Atta Mills to lose. The NDC have the genuine and consistent support of between 43% and 50% of the electorate over the long term. You cannot keep a group with that much support permanently out of office, and a system which did keep them permanently out of office would not be a true democracy.

The NDC has its liberal and democratic wing, personified by Vice President Elect John Mahama and Moses Asaga; and it has its wing that would happily jail the opposition on any pretext, personified by Tony Aidoo and Nana Konadu Rawlings. Jerry hovers between the two. Atta Mills is a good man, though how strong he is against Jerry remains to be seen.

But for the NPP not to hand over power gracefully, would strengthen the hand of the old PNDC undemocratic tendency in the NDC, and could lead to allegations of plotting and unconstitutionality.

I was heavily involved personally in 2000 when John Atta Mills, like the gentleman he is, undercut the hardliners in his own party by conceding defeat before the result was announced. It now behoves Nana Akuffo Addo to do the same.

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John Atta Mills elected President of Ghana

It appears that John Atta Mills has been elected President of Ghana. Although the result will not be declared until tomorrow, it now appears in practice impossible for Nana Akuffo Addo to close the gap.

There remain a number of concerns about the count which puzzle and worry me. In particular the swing ti Mills in the final fifteen constituencies to declare appears to be three times the average swing over the rest of the country. Constitutencies which together delivered a net majority to Nana Akuffo Addo of over 150,000 in the first round have yielded him a majority of only about 40,000 in the second round. Looking at each in turn and the swings in the surrounding constituencies, there is no readily available explanation that occurs to me. For example Bantama and Kumawu in Ashanti region, both in the final batch of results, showed substantial falls in Nana Akuffo Addo’s vote whereas all the other seats in Ashanti Region had shown a sufficient increase. Beyond doubt the last twenty constituencies to declare have been much better for Atta Mills than any rational amalysis would lead you to predict.

However I understand that the Electoral Commissioner, Kwadwo Afari-Gyan, is inclined to accept the result as genuine. He was personally out and about during voting in some of the Volta constituencies which particularly concerned me earlier.

I would trust Kwadwo Afari-Gyan with my life. I personally witnessed him, just the two of us in the early hours of the morning, refuse to budge when soldiers held his wife and children at gunpoint and threatened them unless he falsified the result of the 2000 election. If Kwadwo accepts the result, so will I, and I urge Ghanaians to do so too.

Alternation of power is a healthy feature of democracy, and Mills is a good man. But the elephant in the room is the ex-dictator, multiple murderer and half (at least) mad Jerry Rawlings. Does he still control his protege Mills? We have no choice but to wait to find out.

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Serious Concerns of Fraud in the Ghanaian Election

I am becoming very concerned about the electoral process in Ghana. With 207 results declared, John Ata Mills has a lead of 200,000 votes, but in the first round Nana Akuffo Addo had a majority of 170,000 in the constituencies yet to declare – and has been substantially increasing his lead in his strongholds in the second round, while falling back elsewhere.

I hve already mentioned the extraordinary leaps in the NDC vote since the first round in some Volta constituencies. And now we have this extraordinary result declared:

Evalue Gwira (Central Region)

Nana Akuffo Addo 10,818 (minus 36,182 on first round)

John Atta Mills 9,094 (minus 5,906 on first round).

Elsewhere we have the extraordinary appearance of 50% more NDC voters in just three weeks. Here we have the disappearance of 75% of NPP voters in the same period.

In my book The Catholic Orangemen of Togo I introduce the concept of the margin of cheating.. There is regrettably cheating in elections in every country in the World. The problem becomes acute where the amount of cheating exceeds the margin of victory. That is the suspicion which will always hang over the Bush election win in 2000. It looks like this Ghanaian election is going to be won by a figure within the margin of cheating.

Incidentally, in Blackburn where I stod against Jack Straw in the last general election, almost a third of votes were cast by postal ballot – three times the national average. The postal ballots favoured Jack Straw by a margin far higher than the “normal” ballots. I would estimate that Labout boosted its vote by cheating in Blackburn by some 20%.

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