Feature: When a Thief is Being Pursued, Thieves Join in the Pursuit So, What Happens to a Failing State Asset?

Today, Tuesday of June 25, 2024, the president of the republic will meet union leaders to deliberate over the sale of SSNIT hotels shares. If it is possible, both parties should read this feature article before sitting down to discuss issues. I will want to talk about, failed/failing state assets and the history of sale of state assets

Failed/Failing State Assets: The socialists believe strongly that everything must belong to the state. To them that is the only way the economy of the nation will grow. Blinded by obsession, they fail to recall events from the first republic where state assets yielded losses to the detriment of the economy.

There was the State Farms, which were poorly managed by the workers and administrators alike. In the end while a lot was pumped into the farms to prove that socialism and national ownership were the best options, the funds just went down the drain. When they get to work, workers used farm equipment and inputs to cultivate their own farms nearby, instead of working on the state farms.

In all this, the only sector that yielded good results and earned the country handsome revenue was the cocoa industry, which was and still is, a private industry.

Many state assets fail, due to management or staff or both. In the event that a junior staff does something wrong and warrants disciplining, the union will rise up in protest and solidarity. On every May 1, Workers’ Day, we never hear the head of the TUC, rebuking workers for unprofessionalism, but rather he will make demands on government to always hold the worker high. This aspect of production, which is labour, which may be full of uncommitted workers can help reduce productivity and no one cares, because at the end of the month, salary will come.

Workers in state institutions can report to work late and leave earlier than they should. The excuse is, they did not get vehicle in time, that was why they came late and, in the evening, they have to close an hour or two early, less they get home late. Work time is for gossiping and working lotto, including pilfering things at work and these bring down productivity. Dare management to bare its teeth and the union will be up in arms because the work does not belong to anyone’s father. It is for abanand everybody is aban.

These are contributing factors which make state organisations fail. Such behaviours cannot be accepted in the private sector.

The talk about assisting state entities, even if they are failing, I recall some decadesago, the government mandated Agriculture Development Bank to finance the state’s Ghana Oil Palm Development Corporation. Records showed that the corporation was failing and yet, the bank had to continue to pump in more money which went down the drain.

We once had the Omnibus Service in Ghana, when its buses get broken down they were left as scraps. One patriotic Ghanaian bought the non-functioning buses and repaired them here in Ghana and put them back on the road to ease transportation stress in the capital. That was when King of Kings was born.

Why those buses could not be repaired by Omnibus Services, tells us that work attitude in a state own establishment is far different from that of the private sector. While the state sector looks at the only the unjustifiable welfare of workers, the private sector looks at productivity and profit generation.

I believe in the saying that, government has no business in business. When any state asset is failing, it must be sold off with the first offer made to Ghanaians who will be mandated to make it operational. Government can also invite the private sector to form a partnership and leave the running of the establishment to the private partner, while it supervises administration.

Those screaming madly against the sale of shares of SSNIT hotels, should first consider whether it is proper to keep pumping state funds and resources into an establishment who constantly records losses or to sell it off to generate funds to invest in profitable ventures.

Suggestions are flying around about how to resolve problems in state establishments; like laws must be implemented to check negative conducts of workers and other weird suggestions. It is as if such people do not know what working in state establishment is about.

There is a demon of irresponsibility which seems very difficult to exorcise in such establishments.No matter how many changes are made, if such a demon is there, there is nothing to do but to close shop.

The questions are, what should be done if a state enterprisecontinues to flop? Should state funds be committed to it?

The state must relieve itself from businesses because when they fail, it is the taxpayers’ money, which should have gone into proper use, that would be poured down the drain, seeking to uphold the dignity of the nation.

It is about time, the finance minister renders account to us, of all state establishments, their performance, returns and how much the state spends on them. It will be then that we shall know what unpardonable wastage, the state and government is making.

SSNIT for example was established to collect contributions from the worker, so that at the end of his working life, the Trust, will pay him monthly pension. One might think that SSNIT, a financial institution will only invest in the money market, but it went in full time competition with major players in the health delivery, real estate and hospitality sectors.

Earlier SSNIT went into banking, where it was doing quite well until, the NDC sold off its Social Security Bank. Perhaps, if only SSNIT, a financial institution,was allowed to be only in the financial sector, it will not have problems, now. It looks like SSNIT is failing in its line of investment and may soon be closed down.

This is so because, recently we were told by SSNIT that in the not-too-distant future, it will not be able to pay pensions again. Then what will happen to it? Sell the Trust to a private investor or close shop and shut down completely? What happens to the Ghanaian worker and his pension?

This is what should alarm Ghanaians and give us a wake-up call. What is exactly going on in SSNIT? How is it managing workers’ funds? How is it managing its’ investments in sectors it has no line of business in? Maybe, this sale of shares of SSNIT hotels, is just an opening of more things to come, as the Trust is dying slowly. This should be the concern of Ghanaians.

A Short Account of Sale of State Assets:

Prof. Stephen Adei once noted that“the immediate post-colonial economy era in Ghana was characterized by high levels of government ownership of enterprises, high levels of economic regulation, and explicit suppression of financial markets and exchange. This trend continued for most parts of the 1960s, 1970s, and early 1980s when Ghana began to change course with the adoption of the Structural Adjustment Program. Most of these programs included the transfer of state enterprises into the private sector”.

In 1983, the PNDC Government launched the Economic Review Programme and passed the Divestiture of State Interest (Implementation) Law, 1983(PNDCL, 326), which came into force on January 1,1988, to divest, thus by the State, of any of its interests in any statutory corporation or any corporate body incorporated under the Companies Code, 1963 (Act 179) or under the Incorporated Private Partnership Act, 1962 (Act 152). The express intent was to dispose of loss-making state enterprises. But was that really the case?

Off, went under the hammer, and Ghacem Cement, Ghana Telecom, Nsawam Cannery, Kanda GNTC, Atlantic Hotel, Meridian and Star Hotels, Abosso Glass Factory, Continental Hotel (Sold to Golden Tulip), West Africa Mills Company, Tema Steel Company, Ghana Agro Food Company, GIHOC Bottling, Gliksen W/A Company and Ghana Oil Palm Development Company, among others, were sold to those in the corridors of power, their close links and associates and foreign entities.

We never had the socialists protesting as they are doing today.

In the banking sector, the state-owned Social Security Bank, managed by SSNIT, and which was one of the profit-making banks at that time was sold to the private sector, with the state first shedding off, 20% of its shares in 1995 and by 1999, the state had only 28%, today, SSNIT has only 19.4%.

In the case of Bank for Housing and Construction, it made a profit of ¢3 billion in 1999 and had a deposit base of ¢86 billion when in January 2000, it was liquidated. Its prime assets, including lands at the east of Achimota forest were sold at cost of three pieces of agbelikalaklo. There was no reason for liquidating a bank of such good standing except for the intent of targeting its assets.

All these happened in a constitutional era and no socialist took to the street to protest.

The saddest is the case of Ashanti Goldfield which as at 1994 was the second largest gold producer in Africa and among the top ten in the world. Ghana then had 55% shares holding the trump card in all final decision making. In 1994, the NDC sold off Ghana’s 30% shares for $400 million and went on to sell the remaining 25%, leaving Ghana without any share in our gold.

Where were the socialists when the NDC government was given away our hens that laid golden eggs? And yet today, when SSNIT who had announced that in the not-too-distant future itwill fold up business, is selling shares in some of its non-profit making hotels, these cowards and hypocrites are out there shouting foul, just for political reasons.

I will always say, that “when a thief is being pursued, thieves will join in the pursuit.”

Those screaming today, must explain why they made no sound or cry when state assets were sold by the PNDC and NDC.

Hon. Daniel Dugan


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