UNCLAS SECTION 01 OF 02 ACCRA 001369
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: ECON, EFIN, GH
SUBJECT: GHANA: ECONOMIC HIGHLIGHTS - JUNE 2004
1. (U) This report covers noteworthy economic events and
activities in Ghana for the period May 17 - June 25, 2004.
The issues covered are:
-- Westel/GoG Negotiations Nearing End
-- Maryland State Trade Delegation
-- Ghana Meeting on ECOWAS Common External Tariff
-- Free Enterprise Marathon
-- U.S. Inaugurates Economic Training for Media
-- HIPC Debt Relief from France
Westel/GoG Negotiations Nearing End
-----------------------------------
2. (SBU) Bill Taylor, the General Manager of Westel, a
subsidiary of Western Wireless International (WWI), told Post
that he will make one last try to reach an accord with the
GoG that will allow Westel to stay in Ghana and avoid
international arbitration. The stumbling block is the GoG,s
recent action to enforce the July 2002 decision to charge all
mobile operators in Ghana for mobile spectrum, even though
Westel contends it purchased spectrum as part of its original
contract. Westel now faces the prospect of paying USD 27.5
million for mobile frequencies, on top of the USD 25 million
fine it has tentatively agreed to pay over 7 years (Note:
the fine was for failure to meet operating requirements).
Therefore, Westel might have to pay USD 52.5 million just to
stay in country.
3. (SBU) WWI has been negotiating the sale of its Westel
shares with several potential buyers, including South African
mobile operator MTN. However, MTN,s main interest is mobile
operations in Ghana, so the new spectrum fee is a deal
killer. Taylor will meet a last time with GoG officials to
try to work out a deal. He stated that if he cannot convince
the GoG to waive or drastically lower the spectrum fee,
WWI,s plan to sell out of the market would be frustrated and
its only remaining option would be to shut down and take the
GoG to international arbitration.
Maryland State Trade Delegation
-------------------------------
4. (U) Maryland,s Lt. Governor Michael Steele led more than
40 public and private sector participants on a trade
delegation to Ghana on June 17 and 18. The focus of the
mission was to tap into commercial opportunities for Maryland
companies created by continuing market liberalization efforts
in Ghana and AGOA. The group met with President Kufuor, the
Minister of Roads and Transport, and the Minister of Trade
and Industry. They also met with Ghana Airways officials, as
Maryland is home to the troubled Accra-BWI route. The Embassy
offered a country team briefing, and the Speaker of the
Parliament hosted a working lunch for the Lt. Governor, the
Ambassador and some delegates.
Ghana Meeting on ECOWAS Common External Tariff
--------------------------------------------- -
5. (SBU) As part of the development of the ECOWAS Customs
Union, slated for 2008, Ghana recently completed a report on
the likely impact of an ECOWAS Common External Tariff (CET)
on Ghana. This report is also the forum to identify any
temporary exemptions Ghana will request from the CET, such as
preexisting bilateral free trade agreements or special export
zones. On June 22, The Ministry of Finance hosted a
stakeholder workshop, attended by 20 government officials and
one industry representative, to discuss the report, which was
prepared by CEPA (the local Center for Policy Analysis).
6. (SBU) CEPA,s data focused narrowly on existing tariff
exceptions and the impact of the CET on government revenue,
without offering an assessment of the CET,s effect on
industry or key products or how Ghana,s tariffs compared to
the rest of the West African Economic and Monetary Union
(WAEMU). The inadequacies of the report generated
significant complaints and offered little opportunity for
discussion. Ghana,s report to ECOWAS is due June 30, so it
is unlikely the GoG will make substantial improvements to the
CEPA document before then. The GoG is also unlikely to put
forth substantive requests for exemptions from the CET, which
would have to be phased out by 2007 anyway. Despite
frustrations voiced at the meeting, Ghana,s stakeholders are
moving ahead with the process of adopting the ECOWAS CET and
the workshop was a step toward that end.
Free Enterprise Marathon
------------------------
7. (U) Ambassador Yates hosted Jack Shewmaker (former
President and COO of WalMart) and Robert Rich (President of
Rich's Products) at a June 19 reception to support Students
In Free Enterprise (SIFE). SIFE is a university volunteer
program on 1800 campuses in 40 countries that gives students
the opportunity to learn, practice and teach the principles
of the free enterprise system. The Ambassador attended the
Ghana National SIFE Championship on June 20 where the
students presented projects that improved the lives of poor
communities. The winning school, University of Cape Coast,
presented four projects that included teaching savings habits
in a poor community, establishing a small food processing
business, teaching bookkeeping to market women, and
establishing a scholarship fund for poor primary school
students. The winners will compete in September at the SIFE
2004 World Cup in Barcelona.
U.S. Inaugurates Economic Training for Media
--------------------------------------------
8. (U) USAID/Ghana and PAS Accra collaborated in a ceremony
to mark the beginning of a USD 100,000 journalism and
training program on economic and financial reporting. USAID
contributed the funding and worked with PAS to identify the
Ghana,s Journalists, Association as the cooperating
institution. They designed a nine-month program for 100
journalists in Accra and in two other regional capitals that
will include both classroom teaching and 10-day internships
with financial institutions.
9. (U) The program also coincided with Ghana,s selection as
one of the countries eligible for Millennium Challenge
Account (MCA) funding. When U.S. Treasury Under Secretary
John Taylor spoke in Ghana recently about developing
economies and MCA, Ghanaian leaders remarked on the need for
the media to effectively explain complex poverty reduction
strategies to the Ghanaian population. The editor of
Ghana,s most popular daily applauded the US-sponsored
training in an op-ed and noted the US Government,s ongoing
support for the media in Ghana.
HIPC Debt Relief from France
----------------------------
10. (U) France announced it would cancel 116 million Euros
(USD 140 million) of Ghana,s debt (under HIPC) during a
2-day visit by France,s Minister delegate for Cooperation,
Development and Francophony in June. Ghana and France also
signed an agreement for a 1.5 million Euro (USD 1.82 million)
grant to fund feasibility studies on potential priority
projects in Ghana,s urban and rural development. The grant,
provided through France,s development agency, AFD, would
also be used to finance sector specific studies that
contribute to institutional reforms. Since 1985, AFD has
provided 400 million Euros to finance some 70 projects under
a series of bilateral cooperation frameworks with Ghana.
Yates