Business in Ghana

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Here, There, Everywhere Corruption. Critical News, 27th October 2013

Posted by Business in Ghana on October 27, 2013

Sydney Casely-Hayford, sydney@bizghana.com

Before the weekend drew near, I already had my headline in my head and I was raring to start writing even before Sunday came along.  So incensed with the “take your brain elsewhere” (my re-statement) message from Brigadier Nunoo-Mensah, I started crafting my language ahead of the weekend.

What the General said in public was self-indulgent.  That the President and his team found no reason to distance themselves and even managed to chuckle over it in the face of Ghanaians, was decadent.  That we have arrived at a point in our history when a National security Advisor can suggest to its citizens to leave the country if they cannot find a good fit.  They dare to raise their voices in constitutional gripe, so they can single file line-up and trot on to Togo, Burkina, Nigeria and elsewhere, let slip such poor taste, I figured I had enough meat to devote a good measure of language to this disrespect.

In case General Nunoo-Mensah is not aware, the people of this country have sacrificed as much as he has to make Ghana what it is today.  Many of us have stayed on or fought on from outside to make a point about the moral decay and oppression we have had to contend with in past years, not counting the belt tightening and defending the indefensible most times.

Some persons might not have been AFRC/PNDC/NDC appointees, but those in opposition also galvanized a voice to ensure that different points of view were tolerated and enriched our democracy.

We are nowhere near where we could be at this stage and if we are forced to vacate the land because we are not allowed to voice our differences, then how can we crow a democratic success story to Africa and the World?

I am thankful this autocratic rule is no more in Ghana, and I say unfortunate comment Brigadier-General.  Maybe like Tony Aidoo, you are articulating how you would like to jump off the tumbling ship but cannot do so for many political and security reasons.  As well as skeletons in the cupboard reasons.

But why was I diverted from what could have been a very deeply informed piece?

Well, Subah Information Solutions came up with a complicated contract awarded by the Ghana Revenue Authority (GRA), to monitor and report on call traffic by Mobile Operators.  It is important to make clear what Government has been battling with as far as the Telcos are concerned.

There is on the one side, fraud from landing international calls to Ghana, the other is under-declaration of revenue and therefore a shortfall in tax cedis payable to Government.

One thing I can say for sure as a user, the number of times I receive a call from a friend outside Ghana, which shows up as a local number has increased.  I can say the ratio is about nine out of every ten calls.  This is a worrying sign since we have actually engaged an outside agency to check this abuse.  Global Voice Group, is based out of South Africa, engaged by the National Communications Authority (NCA) to help police this thievery among other things.  It is important that we look at this problem very closely again, to establish for certain where the theft is coming from.

The second matter, relating to the VAT/NHIL and Communication Services tax (CST) reared its head with a video released on Youtube about the contract between the GRA and Subah Information Solutions.  If you have not yet seen the video, follow the link from here.  Subah Video.

Subah is a member of the Jospong Group of Companies.  The video was originally to be aired on Metro TV, but for some reason it was barred from the network.  There were rumors flying all week that Jospong Group had acquired a 60% stake in the network.  I have not been able to confirm this private purchase so I use it carefully.

However, here is what I know and what I have deciphered.

Jospong Group has become a pretty large organization since 1995.  The table below is a list of all the companies I can identify in the Group.  Count 38.  I understand there is more.  The recent indictment by the World Bank in Liberia and the two-year suspension of Zoomlion in that country made the news a few weeks ago.  Its Better Ghana Management Services Company is implicated in the GYEEDA program, but yet to be indicted by Government of any crime.  The matter is currently in the comfortable bosom of the Attorney General.  Other contracts signed between Zoomlion and GYEEDA are also under cozy quilts at the A-G.

 

Accra Compost Limited Pro-writing Publishing
Appointed Time Screen Printing REVSOL
Better Ghana Management Services. Road Safety Management Services
C A Nzema Oil, Royal Heritage
Contrago Trans Saif & Jos
Contrago, Creator Digital Sierra Leone Press
GEBBS Sino Africa Development
Great Consolidated Diamond Subah Information Solutions
J A Plant Pool Limited Union Savings & Loans
J A Spare parts YESDEC
J A Vehicle Assembly Plant Zoil Services
J S A Logistics Zoom Angola
J W Transport Company Limited Zoom Equitorial Guinea
J. A. Quarry Zoom Liberia
Jospong Printing Press Zoom Sierra Leone
Jubilie Tractors Zoom Togo
LESDEP Zoom Zambia
Millennium Insurance Zoomlion Domestic Services Limited
Pensionwise Trustees Limited Zoomlion Ghana Limited

 

When you get a close look at Jospong Group, there is nothing untoward with what Joseph Siaw Agyepong is trying to build.  Where I have grave reservations is when juicy Government contracts have been awarded and large sums of money not monitored and accounted for.

On 8th August 2012, Regional Directors of the NYEP signed a document to the Ministry of Youth and Sports to terminate the arrangements with Better Ghana Management Services because it had failed to achieve its aim and the country was bleeding large sums of money to a private company.  Nothing was done, and as mentioned above, nothing still not done.

With this latest Subah deal, it appears on the surface that the company is into a massive fraud in collusion with the GRA.  However and unfortunately, it is the GRA who is at fault for not coming forward with documents to give reasons and if any, benefits from this arrangement to Ghana.

When the contract was awarded in 2010, there must have been a threshold of sorts to determine the benefits to be expected from this contract.  GRA must give Ghanaians the logic behind this contract and how it expected to increase tax revenues once Subah was engaged.  The logic of award in any such arrangement is always, where are we now and when do we expect to see improvements and how much?

At the NCA, Paa Rock Van Percy has distanced himself from the GRA/Subah contract and directed all questions on this arrangement to the GRA.  But he must know about it, because there are customer privacy issues at stake and the source of any data barring direct integration to the Mobile networks, a point that Kwaku Sakyi Addo makes in the video, will be Customer Service Records (CSRs).  This data is available to both the GRA and the NCA.

It is possible to calculate the revenue from this data using the tariffs declared by the Operators, which is how the NCA will verify the commissions it receives on the CST and that the GRA will also use to estimate VAT/NHIL.

I deduce then that you can monitor the records and arrive at some conclusion as to levels of revenue.  If this is what the NCA is using and what the GRA has contracted Subah to do, then Ghanaians need to be told how much has been saved or what revenue increases there have been since the contract was awarded.  Until this is done, we hold suspect anyone who has a stake in the deal.

We are back to the age old, age old; transparency and its lack.  When open information is kept secret, we assume fraud and corruption and move on to make dangerous conclusions.

Thus everywhere you turn, you hear Zoomlion and RLG underneath cozy comforters with Government Agencies and Institutions and yes, there might be some contracts above board, but there is a large dose of uncertainty at every bend.

Jospong Group has set up many companies, trading with each other, and the GRA would do well to examine the level of transfer pricing within the Group and the possible not-at-arms-length loans and services given to other units in contravention of the Revenue Act.

Under scrutiny, Subah bank transactions look fraudulent.  Loans to its CEO total about ghc1.5million every month, costs of business promotion made in cash are extraordinarily above normal, some cash withdrawals top ghc500,000 and loans to LESDEP, Road Safety Management Services, Nzema Oil and the Group Company itself make it difficult to read anything else but.

If our investigating arms act properly and timely, we might just eliminate suspicion and maybe arrest a party or two, but this way, all we hear everyday and everywhere is collusion and corruption with every turn in Government.

October is over, we are in the final run up to the end of 2013, maybe the most significant thing that can happen this year; the Black Stars qualify for Brazil.  Oh, Egypt can you find a five-nil sting against us next month?

Ghana, Aha a ye de papa.  Alius valde week advenio. Another great week to come!

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