Investments in Ghana’s telecoms industry hits $1.1 trillion in ten years – World Bank

A new World Bank report shows that investments into Ghana’s telecommunications infrastructure within a ten-year period have hit $1.13 trillion.

These investments, made by both government and private companies from 1998 to 2008, represents 1.1% of Ghana’s gross domestic product (GDP), according to the report titled “Africa’s ICT Infrastructure: Building on the Mobile Revolution”.

Ghana was among the top ten countries in sub-Sahara Africa to have received such investments in the telecoms sector placing ninth, according to the report.  South Africa was first with $18.1 trillion, followed by Nigeria, $12.7 trillion and Kenya, $ 2.9 trillion.

The rest are Sudan ($1.8 trillion), Uganda ($1.6 trillion), Senegal ($1.5 trillion) and Tanzania ($1.4 trillion), DR Congo ($1.2 trillion) and Angola ($1 trillion).

“In Ghana, the government invested in extending the fiber-optic network controlled by the state-owned electricity transmission utility (the Volta River Authority [VRA]) and then included the communications assets in the privatization of the incumbent telecommunications operator, Ghana Telecom,” said the report co-authored by Mark D. J. Williams, Rebecca Mayer, and Michael Minges, under the overall guidance of series editors Vivien Foster and Cecilia Briceño-Garmendia.

The report mentions some of the investments made in the country’s telecommunications sector as the completion of Ghana Telecom (now Vodafone Ghana) equipment supply phase 1 in 2003 costing $200 million part of which the Eximbank of China financed with $79 million. The contract was executed by Alcatel Shanghai Bell (ASB). In 2005, an agreement was signed to complete phase 2 of the project costing $80 million with ASB as the contractor.

Another investment that the report captured was the execution of a CDMA 2000 1X network for Kasapa Telecom now Expresso in 2005 by the Zhong Xing Telecommunication Equipment Company Ltd (ZTE). The cost and financier of the project were unknown.

The construction of the $70 million National Fibre Backbone Project which was started in 2006 by Chinese company Huawei Technologies was also indicated in the report. The China Eximbank made available $31 million towards the project.

In 2007, the reprot said there was the construction of a communication system project for the country’s security agencies also partly financed by the China Eximbank and executed by ZTE.

The sale of 70% of Ghana Telecom (GT) to Vodafone of UK in August 2008 for $900 million was not left out in the report. Leading to the purchase of Ghana Telecom the government in 2002 abrogated the management contract with G-Com consortium headed by Telekom Malaysia and bought back the shares.

The purchase of GT including its fixed and mobile lines was seen as a controversial one as some say the $900 million deal was under valued and was not in the interest of Ghana.

The then National Democratic Congress (NDC) in opposition was totally against the sale. The NDC indicated that it will reveal the transaction when voted into power. But after winning elections and the NDC formed the government in 2009, there has not been any significant change in the transaction up to date.

Ghana’s ex-President John Agyekum Kufour under whose presidency the deal was finalized in a recent interview with Metro TV, defended the deal saying it was the best for the country.

According to Mr. J.A. Kufour, Ghana could have suffered if Ghana Telecom was not sold because the world was entering into the economic crunch.

The challenge facing all these schemes, the report says is how to use public resources to boost overall investment in backbone networks without displacing private investment or adversely affecting competition.

Ghana has six mobile operators. They are MTN, Vodafone, Tigo, Airtel, Expresso and Glo which is yet to start operations in the country.

By Ekow Quandzie