Accra, Ghana//-A Management Consultant, Harry Yamson, has stated that Ghana’s reputation in the world of finance and commerce is at risk because of the penchant for disrespecting terms of contracts signed by governments.
Speaking to Samson Lardy Anyenini on Newsfile, Saturday, Mr Yamson revealed that Ghanaian governments have failed to understand the effects of abrogating agreed contracts on the ability to be considered suitable to receive financial credit from International bodies.
“There is this absence of an understanding about the implications for our financial reputation in the world of finance and commerce. Ghana is also in need of establishing its credit worthiness and part of that depends on how well we respect contracts.
“If we are displaying year after year that we have a penchant for putting in place dubious contracts or we have a penchant for dubiously terminating properly agreed contracts, neither of these helps us with our creditworthiness,” he said.
His concerns arise from the state being slapped with a $170million judgement debt by a Commercial Court in London.
The damages to claimants, Ghana Power Generation Company (GPGC) was directed by the London Court after government, through Attorney General Godfred Dame and State Attorneys, failed to meet a 28-day deadline to challenge the award of over US$134 million in favour of GPGC in 2018, for wrongful termination of a contract between the two parties.
According to the Management Consultant, since this development, no government official has been able to tell Ghanaians exactly what needed to gave been done to ensure that in terminating this contract, the state did not suffer loss to this extent.
This lack of rigour displayed by government, he said, is worrying.
“The Attorney General, as I have heard him speak on radio, has made it very clear that he wasn’t involved. The Minister who made the recommendation to the Cabinet has said it was his job to advise the Cabinet and whatever cabinet agreed was done. So, everybody is passing the hot potato and at the end of the day, it simply tells us that we do not have rigour. We need to have rigour.”
Following the $170million judgement debt, Attorney General, Godfred Dame stated that the Power Purchasing Agreement signed between the erstwhile John Dramani Mahama government would be investigated by the Criminal Investigation Department (CID) of the Ghana Police Service.
According to Mr. Dame, the originators and signatories to the contract are to be blamed for the huge loss to the state but Ranking Member on Parliament’s Energy Committee, John Jinapor has pointed accusing fingers at the Akufo-Addo-led administration.
This blame game, according to Mr Harry Yamson is a canker that needs to be gotten rid off.
He noted that it has come to a point where Ghanaians should be able to hold an individual or group accountable for causing financial loss to the state.
“Who is ultimately responsible? After I have listened to you and I have listened to this matter, is it the Parliament? Is it the cabinet? Is it the Minister? Is it the Civil Servant? There is a whole locus that is being discussed and we can’t say that ultimately, there’s this one Minister appointed by the President or in office, serving as a public officer who is responsible for this decision.
“That also, is not good and supposed to stop. It has to be possible for us to say that, in this matter, there’s a single person who is ultimately responsible for ensuring that there’s rigour, for ensuring that the decisions are done and made in a timeous manner and that Ghana is protected in all things. That is missing,” he noted.
In addition, he encouraged that there should be an audit of Cabinet’s actions, and the officials who terminated the contract.
“It is the number one thing we should have done when we returned from the arbitration,” he said.
Incomplete processes before termination of GPGC contract resulted in judgement debt
The Dean of the Faculty of Law at the University of Professional Studies, Accra (UPSA), added that government’s inability to complete all processes before terminating the GPGC contract, resulted in the $170 million judgment debt against the state.
Speaking on the same program, Professor Ernest Kofi Abotsi, explained that, before contracts are terminated, there is an assessment of the balance of benefit and liability to inform the parties involved, whether to push forward and terminate or comply with the clauses in the contract.
Although holding the view that this procedure was followed by the government, Mr Abotsi noted that the processes were not completed to ensure the State is not hit with claims of damages.
“It appears to me that somehow, some calculations weren’t done or some consultations weren’t complete and in the process, it explains why we are here,” he told host Samson Lardy Anyenini.
He, therefore, questioned the bases on which government was advised to terminate the contract when indications showed government may be liable.
“The question is who are the people who are making those assessments? Those are assessments that can be done. There are lawyers whose field are simply to specialize in quantum assessment so they will advise properly on what steps to take.”
“Everything depends on the calculation of your risk liability, i.e. If you should comply or terminate the contract, what is your cost? For the termination of your contract, your calculation should be, if you do not comply with the termination clause, what is your potential assessment of damages in case you are sued in court?
“So I have to do a commercial calculation and do an assessment of the balance of benefit and liability, and once I think it balances on the side of benefits, I go with benefit. I just terminate and go away.”
“I suspect these were done but if they were done, then the question is, when the decision was taken not to comply with the Committee’s decision, again what were the consultations? Who was speaking to who? What assessment was done? Ultimately, did we have clarity on how much it will cost if we terminate in compliance and breach of contract? he quizzed.
Prof. Kofi Abotsi revealed that an Attorney General can be held responsible for causing financial loss to the state if investigations prove there was negligence.
He said there is no immunity for the Attorney General in the 1992 constitution.
“He is liable if he fails to exercise skill and diligence” he stated.
Prosecutions in GPGC judgement debt saga will come to nothing
A Petroleum Economist and Political Risk Analyst has predicted that any prosecution that will be initiated with regard to the $170 million Ghana Power Generation Company (GPGC) judgement debt saga, would come to nothing.
Contributing to discussions on JoyNews’ NewsFile, Saturday, Dr. Theophilus Acheampong said the nature of governance, as practised in the country, would potentially serve as a stumbling block to the prosecution of any government official for the judgement debt accrued.
“I think this whole idea of prosecution and all of that realistically, I don’t think it will come to anything; it will come to nought, because of the way the political system and the governance structure and things work.
“I am inclined not to believe that anybody will actually be prosecuted based on whatever has happened. But we would end up paying the money anyway,” he said on JoyNews’ Newsfile Saturday, June 26.
He added that the mess the country finds itself in, is purely due to the lack of due diligence on the part of the state.
He stated that “we did not do a thorough enough work.”
“In fact, we went to sleep after signing the contract and we were expecting the party to have followed through on most of the conditions subsequent without realizing we needed the actual State to facilitate licenses etc.
“So eventually, what then happened was that the so-called 45 days between the signing of the contract and the things being delivered ended up being pushed forward and forward down the line,” he added.
According to him, the harm that has been caused due to the government’s lack of due diligence, only shows the failures of the governance value chain in protecting the national purse.
“So we can’t absolve, as a State or as a government, ourselves of responsibility in causing this harm in the first place. And it shows various levels of failures along that governance value chain,” he said.
His comment comes after a London-based United Nations Commission on International Trade Law tribunal issued its final award, ordering the government of Ghana to pay a whopping $170 million in damages to GPGC for failing to meet set deadlines in contesting alleged unlawful termination of a contract between the two parties.
Myjoyonline
