GT workers won’t be sacrificed on Vodafone’s altar

By Ebenezer Hanson

Retrenchment, redundancy and redeployment of workers have come to characterize privatizations of corporations and other governmental organizations in this country. Expectedly, labour and actors of the industrial front have been nursing anxiety and apprehension over the fate of the 4, 200 workers of Ghana Telecom (GT) in the event of the successful sale of 70% shares of the company to Vodafone International Holdings B.V. for $900million. But these worried stakeholders have been asked not to fret their souls as the interest of the workers has been adequately catered for.

According to the Minister of Communications, Dr. Benjamin Aggrey Ntim, the Government has guaranteed $40 million to take care of separation arrangements, if any, arising out of separation arrangements of the collective bargaining arrangements over the years ahead and that it has been explicitly provided in the Sales and Purchase Agreement (SPA) that Collective Bargaining Agreement of the terms of employment applicable to GT is to be respected at all times.

“In the course of the privatization exercise we have had meetings with the Commercial Workers Union (CWU) and have assured them that in negotiating for the privatization of Ghana Telecom, the Government of Ghana has ensured that the whole exercise is handled in the spirit of openness and transparency. In this regard we have assured the Union that concerns expressed on the security and tenure of staff by the Union, during the earlier meetings we held with them had all been taken on board in the negotiations currently on-going with Vodafone,” he assures the nation at a widely patronized news conference on the proposed sale.

Dr. Ntim further disclosed that Government has initiated steps to “ringefence” all debts so that the $500 million investment to be made in GT by Vodafone will be applied solely to promote expansion of the company. “This in turn will help to secure the full engagement of the workers at all times in a competitive market. This assurance we have also given to workers.”

He was of the view that considering the dire financial straits in which GT finds itself any tardy action regarding the sale will result in the unfortunate situation of making the GT workers redundant. “The implication of this to the workers and their extended families is unthinkable. This is the reason why government is taking steps to protect the interest of workers,” he added.

The current state of GT, according to the Minister, is one of firm in an economic quagmire. In May 2008, negotiations on Vodafone’s bid proposals submitted in February, Government received an updated offer from Vodafone to acquire 70% interest in GT for a total consideration of $900 million on a debt –free, cash basis. This offer corresponds to an Enterprise Value of $1,286 million for 100% of GT. The transfer and management of the National Communications Backbone were thus included in this offer.


It is to be noted that as at December 2007 the total assets of GT was GH¢531 million as opposed to its total liabilities of GH¢558 million, giving a negative net worth value of GH¢27 million. By May 2008 the total assets of GT were GH¢ 552 million as against its total liabilities of GH¢ 586 million resulting in a negative worth figure of GH¢ 34 million. This definitely should be a source of worry for any investor, Government inclusive.


Again, a look at the working capital of GT also reveals a similar trend. In 2007 a negative working capital of GH¢ 188 million was recorded and by May 2008 this had risen to GH ¢199 million. This situation is rapidly leading to GT’s insolvency and a total collapse if no immediate action id taken.

Meanwhile the Trades Union Congress (TUC) in a statement to the media and signed by its Acting General Secretary, Kofi Asamoah, has rejected the proposed deal saying besides it not being in the interest of Ghanaians the deal has been shrouded in secrecy. Consequently, it has called for a national debate on the subject so that the national concerns expressed should be brought on board.

“In our considered opinion the sale of such an important strategic national asset should be subjected to thorough public debate so that some form of national consensus can be forged before a definitive decision is taken. Government has not subjected this deal to public debate. But such an important deal cannot be shrouded in secrecy,” the statement observes.
The TUC also expresses concern about the possible losses of jobs by workers and more especially the strategic nature of such a national asset. “GT is a strategic national asset and, like other state assets, Government should not offer GT shares for sale as if GT was created solely for financial gains without any consideration whatsoever for its social and national security implications.”

The statement recalled that GT was established in 1995 to provide telecommunication services to the people of Ghana in all the regions, districts and communities. The service being provided by GT is not only for financial gains but also it is a very important social service which Ghanaians expect Government to provide in return for the taxes they pay. “We are not convinced that Vodafone, or any other foreign private company, will meet the social obligation of providing communication services to the Ghanaian people in all parts of the country”.



It says multinational companies, like Vodafone, come in for profit and not to fulfill social obligations. And the fact that within 12 months of the signing of the SPA the Ghana Telecom University College is to be hived off is a clear indication of Vodafone’s lack of commitment to social responsibility, and in this case the training of Ghanaians to take control of the telecommunications sector will become history.

Additionally, the TUC was of the view that with barely five months to leave office it was inappropriate for the NPP administration to hurriedly sell such an important and strategic state asset. It said this creates rooms for reversal of agreements by succeeding governments as has happened in other West African countries.

“In an election year such as this, we do not expect Government to enter into such deals which have the potential to spark controversy and social tension,” the statement advised.

“We note the need for recapitalization of GT, which is the argument Government is using as basis for selling its shares in GT, but we also believe that there are other equally, if not more, viable options that can be explored to ensure that GT remains a public enterprise” .

It advises government should therefore explore other options which will ensure that GT remains viable not only economically but at the same time be able to provide communication services to the people of Ghana. “In our view this goal can be achieved only if GT remains a public asset,” the TUC maintains.