It is almost as if these two Ghanaians are joined by the hip: Benjamin Boakye and Bright Simmons. The former an Energy and Extractives Policy Expert; the latter, an Innovator and sage Analyst! Let us agree to call them the duo in this write up. Together they embody what I call the ‘B-effect’ on the policy space in Ghana. Put differently, what they comment on, gains traction almost always. Driven by the belief and passion to provide credible alternatives to topical issues especially in areas where they cut their teeth in social commentary, they have remained resilient. As I write I am reminded of the likes of Malala Yousafzai, Pakistani Activist and Nobel Peace Prize laureate who stood up for women’s rights to education in Pakistan and the late Wangari Maathai, Kenyan environmentalist and Nobel Peace Prize laureate. Amongst them a common thread is that they believed; acted and were resolute.
Bringing it back home in Ghana, the consistent activism of this duo asserts the fact that real power lies in the bosom of an active society; not a government in power. Believe it or not, when the stakes are high and the topic complex such as with corrupt decisions in the extractives sector; they will break it down and distill the issues for public framing and they are good at it too. The discipline of consistency and resilience for me are critical to understand the drive of the duo in speaking truth to power. To sketch this requires uncovering snippets of what has earned them that coveted public policy spotlight. I highlight a few major issues from 2010 when Ghana first exported oil amidst an alleged bid rigging and beneficial ownership scandal of the E.O group, through 2015 when a power crisis led to a 250 MW emergency power deal with Africa Middle East Resources Investment (AMERI) group and its fallout. I also touch on a recent public debate about the dangerously and potentially corrupt gold monetization deal ‘Agyapa’ yet unfolding.
The E.O Group and award of oil blocks when Ghana started oil production
When Ghana first found oil in 2007, the ambience was euphoric. Think of a centenary celebration of a loved one or probably even more than that. The expectation prior to first oil in 2010 was for setting up a regime impervious to corruption in the award of oil blocks for a natural resource that held promise for many Ghanaians. This however was not the case when news broke about the E.O Group, a Ghanaian company that was investigated for acts of corruption on its 3.5% stakes in Ghana’s lucrative oil fields and allegedly said to have had close ties with then President of Ghana. One might say this tainted the excitement among citizens that Ghana’s story on petroleum was going to be different – free from corruption –from what many observed were the challenges our distant neighbours like Nigeria, faced. With the disquiet came a push back. Probably one of the alleged scandals on which many activists tested their patience; this came earlier than expected. While unconfirmed reports in sections of the public later suggested that the E.O Group meant good for Ghana by stimulating investments for the country, the horse had already bolted from the stable. The clean page Ghana could have started with in its petroleum journey somehow was scarred by this controversy but there is at least something to celebrate. That chapter of advocacy was awash with lessons around best practices for the award of oil blocks. It is not surprising that from that point CSO advocacy pivoted competitive bidding as a best practice in the award of oil blocks. Commenting on this, Mr. Boakye shared that Ghana’s new upstream petroleum law which was under construction at the time, failed to capture clearly provisions for competitive bidding as a nascent oil producer. At a time when the civil society space was relatively new to the oil governance and the legislative space not robust to grip corrupt moves, small voices from activists mattered hugely more than anything. For other voices, this phase of oil production in Ghana was a rushed process without due regard for best lessons on governance mechanisms to prevent environmental pollution among others. One of such voices was Bright Simmons’. The duo’s contribution to public framing paid off when in 2018, competitive licensing rounds were initiated. Nonetheless, the range of governance issues raised earlier continue to linger on. Evidence suggests that some of these concerns linger on. From the Public Interest Accountability Committee (PIAC) reports natural gas is largely re-injected into wells and flared than it is used for commercial purposes raising questions as to whether as a country Ghana has been prepared for optimizing the real value of its natural resources. The table below paints this reality:
The peak of power outages in Ghana
On an issue that has shaken the Ghanaian media space roughly between 2012 and 2015, activists stood up again. Ghana suffered debilitating power crises that popularized a term ‘Dumsor’ which loosely translates in the Twi dialect as ‘off and on’. It depicted the frequent power outages that rocked the country similar to South Africa’s current power crises. At the time emergency power measures were introduced to stabilize the situation one of which includes a 250 MW deal with United Arab Emirates based AMERI Energy at a cost of about US$510 million under a Build Own Operate Transfer arrangement for 5 years. Fast forward, when a new government took over, a process was started to renegotiate the deal on grounds it is overpriced. This got sour as the then Minister of Energy was eventually dismissed for misleading the President of Ghana into signing an executive order that would have further indebted Ghana beyond the initial contract period of 5 years to 15 years at further cost of US$1.2 billion. This progressive move of relieving the then Minister of Energy of his job benefited from close constructive criticisms from civil society organizations. Mr. Boakye played a critical role in this! From media framing to short analysis he distilled it for public debate and understanding. I am not surprised to note that similar analysis were undertaken by Mr. Simmons that got Ghanaians talking on the facts of the original contractual obligations and discrepancies of same.
Agyapa gold deal: Domiciling Ghana’s gold assets in a tax haven in perpetuity without regard to its sovereign rights.
The Agyapa deal is a sad initiative by the government of Ghana to sell off of 49% of Ghana’s gold royalties in perpetuity in exchange for an upfront amount of US$500 million on the international market. In design, this comes across as a creative way to maximize returns from gold mining but looking beneath exposes serious corruption risks such as bid rigging, conflict of interest etc which had already been investigated and reported by Ghana’s office of the Special Prosecutor. The hoopla from this deal was not just about the undervaluation of Ghana’s mineral assets but squarely about plans domiciled a state company to manage the gold assets in Jersey, a secret jurisdiction. I wrote about this last year and shared my frustrations. Others like the Duo distilled the issues for public understanding. On the undervaluation, for instance, Bright Simmons questioned in his writing the value of Ghana’s gold assets under the deal at US$1billion explaining that it serves not state interest and does not demonstrate propriety. What is interesting is that contrary to government’s valuation his arguments peg the figure at three-fold more at US$3.6 billion. Indeed many CSOs sided with this in other papers written to put pressure on a surprisingly uncompromising government bent on undercutting the true owners of mineral resources – the people. About the same discussion, Benjamin Boakye’s analysis uncover that Ghana will be better off without a gold monetization scheme. His modeling compares a business as usual scenario of royalty collections from mining companies, as is the status quo, with a gold monetization scenario proposed by government under the deal. The results are stark. He demonstrates that on a yearly basis, Ghana will lose $61 million should the current royalty scheme be replaced with the Agyapa deal. Adding salt to injury, the legal ramifications of the deal are unfathomable and this was raised again. The duo decried the tax incentives to Agyapa Royalties and the attack on Ghana’s sovereignty as the agreement denies the government any right neither to vote to seek the sole interest of the country nor against shareholder resolution even though it is a majority shareholder. Yes, you just read that and the fight continues not only in the natural resource sector but generally other sectors where procurement has been in the crosshairs.
Public Procurement and financial impropriety
Why would any leadership pursue a deal that not only throws its sovereignty on its head but denies the rightful owners of natural resources a say? Answer to this lies not only in the fecklessness of institutions with regulatory power but a gap that celebrates partisan politicking and its dispensation over and above patriotism. Readily coming to mind is the politics of tax incentives, waste and how I am convinced, played a part in Ghana’s current sad economic situation that has led the country to the IMF, the 18th time. I will spare a few lines to show how the duo has responded to these. On waste and tax frauds, Mr. Simmons has consistently called out state authorities and reference here is to the Minister of Communications on a scandalous telecommunications monitoring platform that is alleged to have set the country’s coffers back by US$178 million and many others including the 2020 national elections IT infrastructure mired in procurement controversy and criticisms of economic loss of up to US$150 million to the state. Procurement irregularities have consistently been highlighted as well and here Mr. Boakye and others decry non enforcement of sanctions for public procurement breaches and the like. En bloc, if these calls on the need to manage public finances prudently were without merit, external bodies such as the International Monetary Fund (IMF) will not corroborate them. But guess what? Echoes of same are reflected in the fund’s Article IV reports. In 2021, the fund decried Ghana’s tax exemptions regime and asked for a rationalization of VAT and import duty exemptions. The energy sector debt alone based on the Fund’s analysis could be at least US$1 billion yearly through 2024. To learn that today, Ghana government has made a U-turn to the IMF to negotiate support for its ailing economy is an indication that that the ‘noise’ from CSOs and indeed, Mr. Boakye and Mr. Simmons, has been worth it.
As to whether a joint analysis should be delivered by Mr. Simmons and Mr. Boakye on a major policy issue such as we have with the IMF bailout currently, I would not be able to tell but what I can say is they are probably joined somewhere even if it is by a thread thought! To anyone else, think of the discussions underscored above as a compendium of thoughts and opinion of two social activists in Ghana and you may have made a point. But when you think of them as the oomph of civic movements pushing for real change, you probably would have lit a torch that others will continue with in their own corner of this governance journey. My two cents though are that a lot of house cleaning is necessary to turn Ghana’s fortunes around and civic movements driven by passionate activists with the ability to trigger a ‘B-effect’ will be the nerve wire of this sought-after fortune.