NPP Abstention on $3 Billion Loan

A Political Opportunism or a Miscalculation? I hope NPP and NDC readers and fundamentalists will not judge a book by its cover and begin to attack me as an NPP/NDC stooge (from the above title) before they read and digest the contents of this article.

There is no iota of doubt in my mind that the main opposition party’s (NPP) parliamentary caucus had no objection to the just approved $3 billion Chinese loan that the government of Ghana has contracted. I am also confident that, they did not oppose the now ‘infamous’ STX Agreement but questioned the details of the deal. In all fairness to them, they had serious and legitimate concerns with the details (terms and conditions) of the Agreements as presented by the Executive and supported by the NDC majority parliamentary caucus. That is normal in a working parliamentary democracy.

However, what is troubling is the fact that despite the numerous deficiencies NPP identified as contained in the $3 billion loan agreement, which are obviously inimical to Ghana’s interests, the opposition party did not have the guts to vote against the agreement but chose to abstain. To me, voting against the agreement would not have necessarily meant they opposed the development projects to be funded with the loan. I have read Gabby Asare Otchere Darko’s review of some aspects of the agreement on the Danquah Institute website and do share some of his concerns.

From some of the terms and conditions of the loan, it appears to me as if China wrote the whole agreement and presented it to Ghana for approval. If they were drawn up and negotiated by parties from both sides, then, the Ghanaian representatives either fell asleep, have had too much to drink during the negotiations or the language of negotiations was Chinese, so the Ghanaians did not understand what was at stake. If they had translators and interpreters they did not have good grasp of both languages (Chinese and English). I say so because most of the details of the clauses were so one-sided in favour of China to the detriment of Ghana that one begins to wonder if the Ghanaian side had the skills to conduct robust negotiations to reach an agreement that is fair to both parties.

According to the theory of negotiations, there are three main bargaining methodologies that negotiators can adopt (Soft, Hard and Principled). Soft bargaining involves participants who are friends but one party should be willing and happy to accept one-sided loses as well as make concessions to avoid a contest in order to reach agreement. On the other hand, in hard bargaining, participants are adversaries and their only goal is victory over the other. One party demands one-sided gains as the price of an agreement by applying pressure and demanding concessions to win the contest. In principled bargaining, participants are problem solvers and negotiations are based on merits or objective criteria with the goal of reaching an outcome that is wise, efficient and effective. From the aforementioned, it is crystal clear that Ghana adopted the soft approach and China opted for the hard bargaining tactics with a win, win for China.

Of course, I have no problem with China insisting on Ghana using Chinese companies and machinery to undertake the various projects. After all, China is not a ‘Father Christmas’ and no country would give out such a huge loan and expect that the loan would be used to pay foreign companies to undertake the projects and buy equipment from other countries at their expense. That is what western countries also would have done. However, for China to demand that Ghana pays interest within months of the agreement being approved, when the loans have not been accessed by Ghana, is indeed, a very hard bargain and may be unacceptable. Again, from the clauses of the agreement, they are not far from a bank offering an overdraft facility to a customer.

The only difference in this case is that the facility is not immediately made available to Ghana though interest on the total overdraft whether it is used or not is expected to be paid by Ghana. In other words, Ghana will pay interest on even the loan amount that have not been accessed by Ghana (despite the fact that the lender (the Chinese Bank) still has control of the remaining loan. Isn’t that clever, NDC? What about China exporting their workers to Ghana, when unemployment is high in Ghana? Let’s be honest, not all Chinese workers who will come to Ghana would be experts so why did Ghana not bargain for lower percentage of Chinese workers to be deployed in Ghana?

The loan agreements portray a picture of master servant relationship, with Ghana being subservient to China. But that should and must not have been the case because Ghana has strategic advantage that the negotiators could have used bargaining chip to secure better and favourable terms and conditions for Ghana. Ghana’s new oil is a strategic asset that Ghana must use to her advantage in negotiations with other countries, especially, in bi-lateral agreements. For example, China needs oil for her insatiable appetite for energy to drive her industrial expansion and other ambitious development programmes and so is Ghana in need of China’s hard currency and other resources for her infrastructure development. So Ghana was not in a weak position but a position of considerable strength to drive a hard bargain with China. How come Ghanaians negotiators threw this precious advantage away and went to the Chinese begging with an empty bowl to be given the crumbs from the dinner table, is anyone’s guess.

Another legitimate concern of the opposition that I sympathise with them is the lack of due diligence and transparency. China’s record on fighting corruption is anything to write about. At least with the west, most have enacted anti-corruption legislation to check abuses of loans to foreign countries, both by their own companies and citizens as well as having systems to monitor the use of such loans by the recipient country. With China, corruption could be undetected on both sides, so there is the potential for a double whammy.

That is where I have my bone of contention with the opposition party for their failure to vote against the agreement in parliament. I am not naive to assume that NPP vote against the agreement in parliament would have killed the agreement, since the NDC would have used their majority to push through the agreement. My argument with the NPP is that, they are doing a good job in opposition but not enough. Having identified the weaknesses in the agreement, they must be able to reach out to some objective members of the majority to persuade them to come to their side to defeat the bad agreement in order to improve it. The defeat of the agreement would have forced the Executive to renegotiate sections of the clauses that were inimical to Ghana and secure a better deal for Ghanaians. Though NPP parliamentarians were not under any obligation to cast a vote (nay or yea), abstaining was worst than a vote against.

I suppose NPP made a calculated choice since voting against the agreement would have been misinterpreted as opposing the projects, which could cost them votes in 2012, especially in the Western region, so they had no option but to abstain. I can assure them that they have done a disservice to Ghana and their party. They have made a monumental error of judgement because NDC will be able to remind the people of Western Region that NPP did not vote for the projects for the region. This is not just politics but party politics so do not expect NDC to say that NPP abstained. What does abstention in a lay person’s view? As a child, I did not fully appreciate my late mother when she insisted that I could only be either “odum or wawa”, not both. This is when she had two different edibles to share among three young sons and as the youngest I had the habit of wanting bits of both. Now grown up and matured, I have realised that she was right because being both does no one good. NPP wanted to eat their cake and still have it (by copying my childhood habit).

In fact, NPP have shot themselves in the foot by abstaining because they neither upset nor won the hearts of the people of Western Region and all the coastal towns who are the beneficiaries of some of the projects to be financed through the loan agreement. However, had NPP done their home work well to secure enough votes to veto the loan agreement the government would not have abandoned the agreement but renegotiate for a better deal for Ghana and NPP could have claimed the credit for the improvement, which would have been a vote winner come 2012. With the abstention, what message would they sell to especially, the people of Western Region? This action smells of political opportunism or cowardice.

Is politics in Ghana just about the two main political parties undoing each other for the sake of being in government or its about developing Ghana and improving conditions for all Ghanaians? I am tempted to believe that the latter is the case and if I am right, then there should be synergy between NDC and NPP no matter their ideological differences. The interest of Ghana and improving the quality of life for all Ghanaians should be a motivating factor for the two main parties to sometimes (if not all the time) work together for the common good. That is precisely why I am of the opinion that it is vital for the opposition to reach out to the political divide in the name of mother Ghana with the shrewdness at which they are able to identify and point out the deficiencies and weaknesses in (bilateral) agreements.

Whilst a friend of mine who has been following recent political development in Ghana longer than myself is of the view that NPP is far better in opposition and should stay there, I say it would be better for them to use their skills and voting power to veto and improve agreements and bills in parliament rather than abstain so that they can come to power. Otherwise, abstention would keep them in opposition for longer. I think it is time for Ghanaian politicians do to politics without being party political all the time. Being party political all the time (as both NDC and NPP do), is just about scoring political points and supporting or opposing for the sake undoing the each other. That may or may not be a vote winner but it gets Ghana on the road to nowhere.

Source: Kofi Ata