Bright Simons, Vice President of IMANI Africa, has called for a comprehensive overhaul in how Ghana handles international contracts and commercial risks.
His remarks come in response to a recent legal judgment in which a U.S. District Court awarded $111,493,828.82 in damages against Ghana in favour of the Ghana Power Generation Company (GPGC).
In a post on X, Simons criticized the government’s handling of the debt, noting that despite partial payments totalling nearly $100 million, the principal amount remains unchanged mainly due to compound interest.
He expressed concern over managing Ghana’s properties, specifically Regina House in London, which reports indicated had been taken over by Trafigura’s GPGC.
“The sheer power of compound interest is evident here,” Simons said. “Despite assurances from the U.K. High Commissioner that negotiations would prevent Trafigura from seizing government properties, Regina House is under receivership, with all rent payments now going to Trafigura.”
Simons emphasized the need for a new regulatory regime to oversee international contracts and proposed that technical analyses of commercial risks should be reviewed by independent analysts not affiliated with the government.
He criticized the current system’s need for more transparency and suggested that interagency chaos and inefficiencies contribute to unfavourable arbitral outcomes for Ghana.
“The interagency chaos should be minimized through a prior interagency committee whenever a contract involves multiple agencies,” Simons stated.
“Too many government workers are accustomed to being ‘sorted’ before facilitating business, which exacerbates risks and leads to costly international judgments.”
Simons also highlighted the necessity for preventive mechanisms within the Presidency to expedite settlements when a government agency is found at fault, arguing that dragging out payments only increases the debt through accruing interest.
In response to concerns about Regina House, Ghana’s High Commissioner to the U.K., Papa Owusu-Ankomah, reassured that the property remains under the ownership of the Ghanaian government, though it is currently under receivership.
He clarified that the property has not been sold, and rent from Regina House does not benefit the government due to the receivership.
“The Government of Ghana still owns Regina House,” Owusu-Ankomah said. “The property is under receivership, and negotiations are ongoing to settle the debt. However, the property cannot be sold to defray the debt without a formal application for such action.”
The High Commissioner’s remarks come as Ghana continues to grapple with the judgment’s financial implications and seeks a resolution to the ongoing legal dispute.
In a country where accountability is taken very seriously by the citizens, the latest Trafigura judgment debt instalment would be the subject of a major inquiry.
But how many know that:
1. Because of a decision to pay in bits, outside an agreed payment plan, Ghana had paid…
— Bright Simons (@BBSimons) August 22, 2024
