News Headlines
Home » Headlines » The Republic of Ghana for sale

The Republic of Ghana for sale

Columnist: TheNationa Forum

As Mahama gives ports, oil resources to foreigners

A TNF report

In what has been described by political watchers as nonchalant economic governance, President John Dramani Mahama-led ruling National Democratic Congress (NDC) is virtually selling out the country’s oil resources, ports and the sovereignty of the state to foreign interests.

The Mahama-led administration has signed a dodgy Memorandum of Understanding (MOU) with Lonrho Ports Limited, for the latter to develop Atuabo Free Port in the Western Region against the laws of the state.

Per a document titled, ‘Ghana Oil and Gas Freeport Project Commercial Agreement’, which is yet to receive approval of Ghana’s parliament, Lonrho, a 100% subsidiary of Lonrho Plc of Mauritius, has been given the exclusive right to provide “specialised services” for the oil and gas industry at the port without recourse to the country’s laws.

It would be recalled that in a similar dubious agreement for the controversial $3 billion Chinese loan, the ruling NDC gave away the country’s crude where the Chinese government lifts 13,000 barrels of oil a day for a loan that only $600 million is reportedly disbursed in the last three years.

The terms of the Lonrho agreement, stakeholders argue, are clearly in flagrant violation of Ghana’s constitution and also in breach of PNDC Law 160 of 1986 that regulates the operations at the nation’s ports.

The undertakings required of the GoG particularly clause 12.2.1 expressly states “The GoG shall not exercise, and shall use its reasonable endeavours to ensure that no Relevant Authority shall exercise any discretion granted to it under the Constitution of Ghana, any applicable Laws or otherwise in a manner which is arbitrary or discriminatory to the Project, the Developer or any Affiliate thereof.”

Section 5 (1) of the PNDC Law 160 of 1986, grants the Ghana Ports and Harbours Authority (GPHA) the exclusive right to build, develop, manage, maintain , operate and control ports, and not any foreign company.

However, the Mahama administration is disregarding the supreme laws of the land as the Lonrho agreement is unlawfully wiping out this exclusive mandate of GPHA by giving Lonrho the exclusive right to build and operate the $400 million Atuabo Freeport, with tax exemption for 25 years, with possibility of another 25-year extension.

The agreement, which The National Forum learnt is currently before parliament for consideration, further stipulates that no law in Ghana can make the Atuabo Free Port Project null and void even with all its legal deficiencies.

For instance, if approved by the NDC majority in parliament, section 7.1 gives absolute and sole rights in Western Region to Lonrho ports.

It states that “subject to clauses 7.1.2 and 7.2 (Port of Takoradi Oil and Gas Operations), the Government of Ghana (GoG) confirms that the rights granted to the Developer (Lonrho) pursuant to clause 3 (Grant of Rights) of this agreement shall be the absolute and the sole rights of the Developer in respect of entire Western region (including the rights to undertake Additional Projects, which shall however be the absolute and sole rights of the Developer in respect of the Site only) commencing on the Signing Date and expiring on the expiry of the initial Debt Tenor (the ‘Development Rights’).

Furthermore, section 7.1.2 states that “the GoG shall not, and shall procure that no Relevant Authority shall, grant any concession agreement or other agreement similar to this agreement, or any Consent or rights containing the or similar rights as the Development Rights to any third party in respect of the Western Region at any time between the Signing Date and the expiry of the Initial Debt Tenor of the proposed project financing of the Project:

(i) Without the express written consent of the Developer or

(ii) Unless there is an urgent commercial need for additional port facilities to support the hydrocarbon industry of Ghana and the Developer had refused to expand the Free Port Project to fulfill the market demand.”

This effectively means that it is Lonrho alone and no other company including the Ghana Ports and Harbours Authority, that can build or develop any port in the Western region for the next 25 years and beyond.

Late Mills against the agreement

The Lonrho project, The National Forum gathered, was halted by the late President Mills because it was not in Ghana’s interest.

It was however revived when President Mahama assumed office and his close confidants who are power brokers within the ruling NDC lured him to okay the project.

The paper further learnt that the local representative of Swani motors, Tommy Swanikar who is said to be a close friend of the Foreign Minister, is fronting for Lonrho Ports Limited.

Information gathered by the TNF indicates that the Transport Minister is so upset with the whole agreement that she has strategically decided to stay off the transaction as a sign of protest.

GPHA’s Disagreement

As a result of contentious and legal issues raised, the workers of the GPHA are vehemently opposing the agreement, insisting that the whole deal is an illegality being perpetrated against Ghanaians.

In a statement issued last month, the Maritime and Dockworkers Union of GPHA pointed out that “the entire proposal from the Lonrho Ports is but an Estate Development Plan intended to acquire land with government support, obtain a Freeport Status for tax exemption for the next 25 years, renewal for another 25 years, restrict all others, including GPHA, from developing similar facilities within the geographical region and take advantage of the ‘huge’ potential for Ghana’s growth and invite terminal operators to invest in the facility after an initial investment of US$400m on basic infrastructure.”

According to a GPHA’s technical report on the project “the intention to create and develop ports to be administered under the company name ‘Lonrho Ports’…is inconsistent with our current law and maritime development strategy as a country.

“The proposal further seeks to create an exclusive right to Lonrho Ports to develop oil and gas terminal facilities within the Western Region of Ghana. Unless directed otherwise, GPHA is convinced this is not the strategic objective of government even under a Private-Public Partnership business venture.”

What is even more worrying, according to the stakeholders, was that government had indicated that part of the $3 billion Chinese loan would be used to expand the Takoradi port to deliver the services that Lonrho is now being given.

The GPHA workers have therefore called on President Mahama to stop the project so as to prevent some few selfish individuals from sacrificing the collective interest of the nation for “narrow and short-sighted agenda.” According to them, transactions such as the Lonrho agreement, undermine the laws/investment legislation of Ghana and open the flood gates for other investors to come into Ghana, bribe politicians to abandon the country’s laws for their parochial business interests.

GPHA’s concern

A major concern of the GPHA is that the arrangement to allow Lonrho Ports to operate in the Tax Free Zone, “means that all goods and services entering into that Port will be deemed not have entered Ghana and therefore will not attract tax as currently prevails in our existing ports.” “If the project is considered financially viable, why seek the status of a Freeport Tax Free status? The GPHA workers quizzed.