Ghana: phone vote

Much is at stake for Vodafone, Ghana and beyond on Tuesday, when parliament is expected to reconvene temporarily to consider the sale of a 70% stake in Ghana Telecom to the UK-based company.

Ghana Telecom’s privatisation has long been expected and been attempted before.  A 1997 deal, which saw Telkom Malaysia acquire a 30% stake went sour, and the government bought it back in 2005. A fresh privatisation process was launched soon thereafter, with the latest 900 million dollar deal agreed this July.

Nevertheless, the sale has become a political football ahead of general elections in December, in which the ruling New Patriotic Party (in power since 2001) faces a strong challenge from the former ruling National Democratic Congress, which has so far prevented parliamentary approval.  The latter accuses the government of undervaluing Ghana Telecom in order to address a rising fiscal deficit that is embarrassing for a government which came to power promising responsible economic management.  A legal bid to block the deal has also been launched, by a group called ‘Concerned Ghanaians’.

Vodafone’s continued interest is well-founded: telecoms privatisations are underway in many African countries, where the sector is still experiencing rapid growth.  With markets saturated in the developed world, Vodafone and other major players are looking to emerging markets to bolster revenues and growth.  However, the politicking underway in Accra illustrates the challenges of doing business in Ghana in an election year.