Critics of Ghana’s Byzantine financial services industry say that the latest scandal to hit that sector of Ghana’s economy illustrates perfectly the lax regulatory regime governing the industry. They claim that that regulatory environment is the result of the many incestuous relationships between regulators and players in the industry.
According to those critics the latest industry scandal also exposes the widespread ignorance that exists in much of the Ghanaian media about that sector of our national economy – a fact that has unfortunately allowed sharp practice in the industry to persist.
For many independent-minded and discerning Ghanaians the scandal offers a rare opportunity to take a peek at Ghana’s financial services sector – and it is not a pretty sight they see, sadly. Critics claim that like their counterparts in the decimated capital markets of the West, insider-dealing and plain crookedness, amongst industry players, are rife, in our financial services sector too (and that greed also definitely rules OK in it).
Naturally, over the last eight years that Ghana was ruled by our country’s stooges for neo-colonialism (and eager lackeys of the now-discredited neo-liberals of the West), the industry’s powerful and politically well-connected oligarchs were able to successfully hide behind the coattails of the political Establishment – whose desire to hide their own crookedness from the rest of the world, worked in their favour.
According to “bush-telegraph” sources, for example, powerful politicians using special-purpose offshore vehicles, apparently received kickbacks from the massive fees earned by some of those who profited so mightily from Ghana’s senseless forays into the piranha-infested capital markets of the West, which were made during the tenure of the previous regime.
It meant that whiles a few well-connected and powerful individuals became super-rich, Ghana (a nation whose very lifeblood was once being constantly sucked out of it, as it made regular interest payments on its large external debt of old during the Rawlings regime), incredibly, succeeded in piling up yet more debt once again.
Thus, although Ghana had much of its old debt forgiven not too long after the previous regime first assumed power in 2001, today, as a consequence of the piling up of new debt by that selfsame old regime the country has now ended up suffering from (to use a World Bank euphemism) the same debilitating “debt distress” that once crippled the Rawlings administration.
It is obvious that many more scandals, connected with the frenzied and senseless piling up of that large new external debt by the previous regime, will also soon come to light. The scale of the greed that drove some of those who profited from the massive fees generated by the piling up of that debt will shock most ordinary Ghanaians.
Doubtless, the usual admonishment used to try and silence those who seek to expose corruption in our financial services sector that, quote: “It will discourage foreign direct investment…” unquote, will be deployed against those who seek to expose past corruption within the industry and to criticise its greedy ways.
In the end, ordinary Ghanaians, now having their sensibilities insulted yet further by being asked by some of the selfsame individuals responsible for much of the corruption of the past to pay obscene amounts in ex-gratia payments to the high and mighty of yesteryear (some of whose greed it appears knows no bounds), will be prevented from getting to know the truth about how their nation was crippled because the greed for money of a few powerful individuals drove the previous regime’s insatiable thirst for foreign loans.
Clearly, Ghana would have been far better off seeking loans from China to fund its development during the tenure of President Kufuor, for example, rather than opting to raise money from the capital markets of the West. Much of the nation’s troubles under the previous regime stemmed from the difficulties it was having finding money to meet interest payments on the US$750 million sovereign bonds and the US$200 million GT corporate bonds (issued in London on GT's behalf by Iroko).
Obviously, there were no juicy fees to be had in plumping for the Chinese option – which would have meant that there would be no money forthcoming from that quarter to be shared amongst those who constituted the partnership between the Titans of our financial services industry and the powerful crooks who dominated the previous regime.
Consequently, those then running Ghana chose the capital markets of the West instead – influenced by those amongst them who wanted to secure kickbacks from their cronies in the financial services sector: and it was dressed up as evidence of the confidence the world had in our nation (a corrupt nation swirling with cocaine money that precious few reputable long-term investors – with the exception of those interested in the extractive-industries – would touch with a barge-pole if truth be told).
Currently, as we speak, a number of media-folk (described by uncharitable social commentators as “clueless and mercenary hacks”) are being deployed in an effort to stop the public from discovering the massive profits made by the lucrative partnership between some of the greedy crooks amongst our previous rulers and the more dishonest of the Titans of our financial services sector.
Those massive profits are said by some of the industry’s critics to have been made possible only as a result of insider-dealing and other unethical practices – and that it was the partnership between the influential Titans of the financial services industry and some of the most powerful amongst our previous rulers, which enabled a small number of the respectable and super-wealthy crooks in the industry, to get away with their crimes against our nation successfully and for so long.
For simple folk, such as me, it will be interesting to know the dénouement of the latest scandal to hit our financial services sector. What I yearn for most, is that above all, those curious Ghanaians who for years have been dying to know who the owners of Iroko are (and just which of the Titans amongst our financial services sector are their local associates or partners), will finally get their wish.
One certainly hopes that those Ghanaians, who are outraged that at a time when the world is grappling with the consequences of a global credit crunch, when even the most dynamic of economies have tipped into recession, their nation’s resources are being toyed with by clever and respectable white-colour criminals, will have the patience to wait for the murky details of the latest example of the “Kweku-Ananse” creative-accounting and financial-engineering schemes, said to be replete in our financial services sector, to be unraveled.
At some point, going forward, perhaps Ghanaians will finally get to hear how it came about that a bunch of faceless rogues amongst those running a shadowy trading company with Asian antecedents and not having much of a background could come to our country and literally make money from thin air at our cash-strapped nation’s expense because they had friends in high places.
Patriotic Ghanaians must pray that some of the many tentacles of that particular giant "octopus-of-greed" engaged in the massive rip-off of our nation do touch the jurisdiction of least one of the regulators and prosecutors responsible for policing the financial services industries in the US, the EU and the UK. The opportunity to make an example of crooked and wealthy Africans as well as their Asian partners in white-collar crime will definitely be hard to resist in the corridors of power in the capitals of those nations of the West.
As for those in the media who in the past sold their consciences to the once-powerful crooks of yesteryear and are now allowing themselves to be manipulated by the super- wealthy white-collar criminals who dominate our financial services sector (for personal financial gain), one simply hopes that they will at least try and find answers to a few simple questions from the devious minds they are now seeking to sell their consciences to – for the sake of their country and its hard-pressed taxpayers.
Perhaps they can finally redeem themselves by finding out for Ghanaians (and thus helping them separate fact from fiction), the true facts, as regards the wild grapevine stories now doing the rounds and which have to do with the ownership of Iroko – and how it is said by some of Ghana’s conspiracy theorists to have woven a tangled golden-web of unfathomable-greed with honey-coated words to take advantage of our clueless leaders and the nation they ruled to enrich its owners and their local associates. It is said to be a Mauritius-registered offshore entity.
The praise-singers of old, who were such fierce guard-dogs of the previous regime, would do well to tell Ghanaians if any their nation’s wealthy and well-connected business elite, who were able to send their personal net worth into the stratosphere so easily during the previous regime, actually own a stake in Iroko – and if not who are the Ghanaians who led Iroko to the boardrooms of Ghana Telecom and that of the National Investment Bank (NIB) and what was in it for them.
Are they willing, for example, to get in touch with the UK financial services sector regulator, the Financial Services Authority (FSA), to ask them if in their opinion, those uncharitable Ghanaians s who condemn the kinds of methods they say were used by Iroko to obtain business in Ghana – such as the ethics (or lack thereof) underpinning the GT corporate bond it issued on that company’s behalf in London and for which there appeared to be no credible interest-payment plan in place at the material time those bonds were issued in London – have any basis in pointing accusing fingers at Iroko for alleged sharp practice in that transaction?
Perhaps they could also get the FSA to tell them whether in its view the curious NIB promissory notes Iroko discounted for that shadowy trading firm (with Asian antecedents) that is said by some of Ghana’s conspiracy theorists to have “questionable ethical standards” would be acceptable to any self-respecting Western regulator – keen to see corporate good governance principles underpinning all financial transactions entered into by London-based financial institutions worldwide.
Given the circumstances of our nation, and at a time when even bigger financial institutions in the wealthy Western nations face an uncertain future and are being propped up by their governments (which are busy pumping vast amounts of taxpayers’ money into private banks in partial-nationalizations), how would the FSA view what industry critics describe as a “financial-sleight-of-hand “(the “Ali-Baba-magic" financial-skullduggery) that the prompt discounting of those promissory notes by Iroko represents?
Just what were those promissory notes issued for? Is what one hears (from the bush-telegraph) that discounting those promissory notes netted that shadowy trading company with zillions of hard-to-come-by US dollars in the blink of an eyelid? Above all, how would the FSA react if such an “odd” and unsanctioned transaction (by a publicly-owned bank's board of directors)had occurred in the UK’s financial services sector between a bank funded with taxpayers' money and a shadowy private foreign-based trading company?
Over the last eight years that Ghana was ruled by the greedy stooges for neo-colonialism (and lackeys of the now-discredited neo-liberals of the West), the clever and respectable rogues in our financial services sector were able to successfully hide behind the coattails of the political Establishment – whose desire to hide their own crookedness from the rest of the world, worked in their favour. It worked a treat for those oligarchs.
It is the desire to hide the massive profits made by the lucrative partnership between some of our previous rulers and some of the Titans of our financial services sector (made possible by insider-dealing and other unethical practices), which enabled the respectable and super-wealthy crooks in the industry, to get away with their crimes against our nation successfully for so long.
Today, they now have to face the music for their arrogance and hubris of the past. Sadly, now that the day of reckoning is upon them they are scrambling to avail themselves of the services of some of the amoral mercenaries in the Ghanaian media world – in a desperate attempt to prevent the law from finally catching up with them.
A major concern of many of those who have closely monitored the extraordinary growth of the financial services sector of our economy has been the many incestuous relationships between regulators and players in the industry. For example, it would appear that a tradition has now been firmly established that no self-respecting central bank governor in this country should fail to spend his or her years of retirement as either the owner of a private bank or the director of one.
It would be interesting to know what those now clamouring for tighter regulation in the financial services sectors of the major Western capitalist nations would say about such a development – were such an unfortunate occurrence to evolve there too: and regulators were busy setting up their own banks or taking up plum non-executive roles in financial services companies, upon their retirement.
The Mills administration must understand that transparency in all business transactions is what attracts reputable foreign direct investors into emerging markets. They must resist the temptation to allow opaque practices and the corruption it breeds to continue to be hidden from public view and to go unpunished – because they fall for the mantra used by the clever crooks who profited so mightily from the Kufuor administration’s corrupt ways and enabled them to get away with their nation-wrecking activities: that shining the spotlight on corrupt business deals “will frighten away foreign direct investment.”
On the contrary, transparency in our financial services sector (as well as all the other sectors of our national economy) is precisely what will attract the kind of long-term foreign direct investment that is guided by corporate good governance principles, into our country.
Hopefully the new minister for communications, the Hon. Haruna Iddrisu, wll bear that in mind when he tackles the GT/Vodafone sale and purchase agreement that the previous government entered into - and which in furtherance of they also succeeded in railroading a bill through the previous parliament: which astonshingly passed an "illegal law" indemnifying all those who participated in that shabby deal from future prosecution for any illegal actions they may have been guilty of in striking the deal (contrary to our constitution which admonishes Ghanaians to fight corruption - not encourage it).
The corruption of the past that bedeviled Ghana’s financial services sector and eventually led to the difficulties our nation faces today must never be allowed to occur again – and the only way to prevent their reoccurrence is to expose all the shady deals that went on during the tenure of the previous regime: and prosecute all those who helped to cheat our nation and enriched themselves at our nation’s expense in the process. A word to the wise…