Business in Ghana

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A Message For Cocoa Board, GNPC and TOR

Posted by Business in Ghana on November 30, 2010

By Kwaku Adu-Gyamfi (Voice of Reason), NJ, USA

For Ghanaians to get real equity, please list these companies on Ghana Stock Exchange Market, anything less is just a joke.

Who are the true owners of the Cocoa Board, TOR and GNPC?

Why can’t ordinary Ghanaians buy shares in Cocoa Board and GNPC or TOR, if they’re the true owners   of these companies?

First the Cocoa Board:

Well, the unthinkable has happened in the cocoa industry because the state owned company doesn’t have forward-looking minds!

The Cocoa Board reportedly has $1.5 billion foreign loan while the U.S scientists are busy working to improve cocoa   survivability and yielding potentials!  Wow, so much money for a single government agency with no competition.

Cocoa’s DNA has been cracked opened by scientists in the States and may claim the paternity of the cocoa DNA. But I wonder if the Ghana Cocoa Board gives a damn. It will rather concern itself with the $1.5 billion loan it just got from the international banks.

Ghanaians don’t mess around when it comes to cool cash. The cocoa board is tripping all over itself for securing a whopping $1.5 billion loan from the international banks, supposedly to “purchase cocoa”. Yeah, right! All that money is for the farmers, Duh!

First of all why is Cocoa Board portraying itself as a ‘hero’ for securing a loan of $1.5 billion? It wants to be seen as a very prudent business oriented entity that deserves a pat on the back. It should be scorned not to be praised. We’ll talk more about   the money later in my next article.

Now here is the news: Scientists at Mars—the maker of Snickers, M&M’s. Milky Way and other confections have cracked opened the DNA of “Theobroma cacao” (the cocoa tree). I guess that is not significant news to register on Cocoa Board’s seismograph .News like that will most likely end up in the trash can of the cocoa board’s mail room.

According to the report, the essence of this  discovery  is that  the DNA information could help scientists in breeding trees that have high yield and are  resistant  to diseases. It’s also believed that  the “new DNA information could lead to  chocolate that  tastes better  and contains more flavonoid”( the  ingredients that  are thought by  scientists to be healthful)  Hummm,I wonder what  had the Cocoa Board and our universities been doing all these  years.

The issue is not the discovery. The issue is the origin of the discovery and who owns the DNA patent. The last time I checked America didn’t have any rain forest to produce cocoa tress. Cocoa is Ghana’s embryonic produce and a major part of the backbone of our economy. But for  companies in the U.S to spend  energy and money to discover the genetic make up of a product that  comes mostly   from West  Africa goes to  show  how less  premium  we put  on our raw material.  It also speaks volumes  of the resources availability and, quality of  our universities and  colleges.

With that in mind my question is: When is cocoa Board going to be operated as a real business entity? Why should cocoa board just buy cocoa beans, when it should be producing many products made out of cocoa? And why did it go outside the country to raise   funds when it could have sold shares to Ghanaian citizens so as to allow them to own a piece of Cocoa board? This is no brainer. What are we doing with all the MBA graduates in the government?  All that is a mystery that had me guessing for days.

There is a cardboard packing company in the States that really knows how to make use of its resources. It has its own tree plantations where it gets its raw material to produce the cardboards. It also sells logs to the building industry and it builds houses.  Don’t forget that its main product is still cardboard for packaging.

One mistake we made   that stands  up is that  for decades Ghana and Cocoa  Board  have  refused  to export finished cocoa  products—which will  fetch more money than the  raw material. That has helped to forfeit our right to have any interest to dig deeper to find out more about the product. Processing the cocoa beans in Ghana would have given us the opportunity to discover a lot of things about the produce we take for granted. The processing of the cocoa beans in Ghana will boost our local economy through the creation of decent jobs, and related taxes for government.

For the cocoa Board to be a viable business (or maybe not) it needs to be partly in production of the cocoa beans it buys. This could operate like the  Grower Scheme the Ghana Oil Palm Development  Corporation operates in the Asuom & Kwae areas of the Kwaebibirim District, where farmers are given better inputs  to cultivate,  access to new information to improve their farms, and some other incentives.

I’m even tempted to suggest that it should be on the Ghana stock Exchange market so Ghanaian farmers and all the towns in the cocoa producing districts  be encouraged to buy shares into the Cocoa Marketing Board.   That alone will allow the ‘share holders’ (the farmers) to appoint and fire the board of the directors as they please to make it accountable. It will also give   towns and villages the incentive to invest and act as a source of revenue.

Ghana government remains the sole buyer and exporter of the main cocoa beans. In the absence of competition, are the farmers getting money worth their salt and sweat? It’s about time private buyers are allowed in to buying the cocoa from farmers so market forces (demand and supply factors) determine prices, then government steps in only to ensure fairness of transactions, and its appropriate taxes.

I understand the government is considering some incentives such as a small state pension that can directly compensate cocoa farmers for their enormous contribution to the state. With that we also add this: What about giving every cocoa farmer who produces above a certain weight of cocoa per year a scholarship right to appoint their ward for the state to give that child two/three year sponsorship in a school or apprenticeship with strict systems in place, so that unlike GCB scholarship, only deserving children receive the package?.

These suggestions are not palatable so it will never happen in Ghana any time soon because that will put the affairs and control of Ghana Cocoa Board into the hands of the ordinary Ghanaians, instead of politicians and party foot soldiers. Any concerned MP, especially those from cocoa-growing district should speak out now for the people you represent.

Now the Ghana petroleum corporation (GNPC) and TOR:

By the end of December 2010, GNPC will be the most viable and perhaps the richest company in Ghana .How worried should Ghanaians be by that prospect?

Not very much! Say our policy makers and politicians. But that is a government controlled company. And most state-run companies are not very prudent when it comes to our money and interests.

So can we hope for a better financial future for ourselves and children by just praying? Good luck with that!

No, we can’t and shouldn’t.

Supposedly Ghana’s share of the oil is going to be managed and operated by   GNPC. In few years it is probably going to be the envy of the world with its potential to be one the viable companies in Africa.

My question is:

Since when did the government run any viable or successful company? The Ghanaian business grave yards is littered with the skeletons of  Ghana airways, Ghana telecom, Black Star Lines, sugar factory, Tire factory, Glass factory and many, many failed state owned companies. So the idea that the government owned GNPC can manage our share of the oil judiciously is laughable.

So if we truly want a total equity for every Ghanaian to enjoy we have to turn things around.

HERE is my RANDOM THOUGHT ON GNPC AND TOR:

1) Turn GNPC and TOR into public-owned companies

2) Float their shares on the stock exchange market and every Ghanaian should be allowed to own specific amount of shares.

3) The Ghanaians will have the power to appoint and fire the board directors for the interest of the companies, not the government.

4) The government will only act as a referee to see to it that things ran smoothly as planned.

5)The  money that will be  raised from the initial public offering(IPO)can be used  to start our own  “solar valley” factories to crank out  solar panels to  blanket the entire nation with solar panels and be the  leader in solar technology  in West Africa. The company will create good paying jobs and at the same time protecting the environment and allow Ghanaians to have access to relatively reliable supply of power. It will be a win, win situation for Ghanaians and Ghana. Say hello to constant   electricity supply!

6) The companies and their management will be accountable to the share holders not the government of the day.

How does that sound to you?

Please don’t call me a dreamer!!  It’s not impossible to get this done if we put our hearts and minds to it. But whether or not the policy makers will read this piece and act on it is another matter.

I know what you’re thinking: “But kwaku the rich people will end up buying all the shares for themselves and their families”. No they won’t. There will be a mechanism in place to check the abuses by people who will take advantage of the system and hijack such a good  idea.

Yes I  know there  are talks  about how to distribute the oil money: They say  Ghana  is going to have one account  for infrastructure, one for the next generation, one  for investment. But, don’t believe the hype. Most Ghanaians would be happy to live with just being share holders of the Ghana Oil Company and Tema Oil refinery. That will guarantee that when the companies make money every share holder makes money. It’s the best way to pass along this generation’s investment to the future ones. Yes, we can still create Oil Trust, where a percentage of the oil money will be kept for the future generations and put money aside to fix our crumbling infrastructure.

Make no mistake about it. With our over-sized expectations ordinary Ghanaians are going to be alert and monitor every move of our politicians and policy makers. So those who still have a mega watt appetite to consume state funds should be aware.

It can’t get better than that. There will be no hanky-panky. So anything less than a fair equity is just a joke and a way to fool Ghanaians.

I hope this idea will find its way into the national campaign, next year. What do you think?

*The author is a social commentator and a founder of the Adu-Gyamfi Youth Empowerment and Educational foundation at Asuom in the District of Kwaebibirim.

 

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3 Responses to “A Message For Cocoa Board, GNPC and TOR”

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