Open letter to the Ambassador of the Republic of South Korea in Ghana

Friday March 27, 2020

 

His Excellency,

KIM Sungsoo

Ambassador of the Republic of Korea in Ghana

 

 

Dear Sir,

I write to you in these difficult times when our two countries as well as the rest of the world remain united in the fight against the deadly coronavirus pandemic. It is my prayer that, as a matter of urgency, we find a solution to save lives; and that all bereaved families will find some solace and consolation.

Ambassador Kim, I, and I am sure almost all Ghanaians, have a huge respect and reverence for your country; not only because we have maintained very fruitful diplomatic and bilateral relations that have lasted over the decades, but also because we are a huge consumer of Korean products; be they cars, mobile phones or services.

There is some significant unity and mutual respect among us and, indeed, COVID-19 has reminded us all in a very striking but cruel way that the world has become a global village where we must be each other’s keeper because what happens in one country affects the other; and if one of us is not free, none of us is free.

It is this unity of purpose that can help us overcome the world’s economic woes, and therefore I am a firm believer in a free enterprise and liberal economy where investment opportunities remain open to all.  I do know you are also a firm believer in the ‘Ghana Beyond Aid’ vision.

CUPIA, Korea Customs Services

I am sure you have followed the disagreement that has enveloped an attempt by Customs Uni-Pass International Agency (CUPIA), an agency of the Korea Customs Service (KCS), to invest in Ghana’s ports system and take over operations of the Ghana National Single Window (GNSW), a service that is currently being delivered excellently well by two indigenous Ghanaian-owned companies – West Blue Consult and Ghana Community Network Services Limited (GCNet).

CUPIA, from your country, is in partnership with Ghana Link Network Services Limited to execute the task of operating the GNSW in Ghana, and I respectfully remind you by this letter that a country’s reputation, credibility, integrity and even motives can be affected by the brand it associates or partners with.

There is a disturbingly embarrassing documentation by the government of Sierra Leone over a contract it awarded one of the companies of Ghana Link to offer in Sierra Leone similar port services that CUPIA of Korea Customs is entering into a partnership with Ghana Link to do in Ghana.

I have attached copies of that report to this letter just to further your due diligence checks on the company your country’s CUPIA is partnering. The terrifying documents were written and signed by the Chief Minister of Sierra Leone, the Solicitor General of Sierra Leone, and the Financial Secretary of the Ministry of Sierra Leone.

You will discover that the government of Sierra Leone not only terminated the contract it had with the Ghana Link subsidiary, but also froze the company’s accounts and accused it of tax evasion and an inability to develop and operate a single window system in that country -although this was a major requirement in the contract.

Background, Termination of Contract

Your Excellency, the government of Sierra Leone contracted Africa Link Inspection Company (ALIC), a subsidiary of Ghana Link Network Services Limited, to develop, implement and keep up-to-date a Computerised Risk Management System, and to develop and operate a single window concept among other services for the country.

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Six years after the contract was signed, the Ministry of Finance in Sierra Leone undertook a financial and technical audit of the work being done by ALIC – owned by Ghana Link.

The official audit and technical reports made the following findings:

 

  1. As part of the agreement, ALIC was to develop the single window concept for Sierra Leone. This part of the agreement was not complied with or implemented by ALIC.

 

2. ALIC is 100 percent owned by Ghana Link.

 

  1. The company tax liability was about Le. 45billion. There was no evidence ALIC had paid corporation tax to the sovernment.

 

  1. There was Revenue loss to the government of Sierra Leone.

 

  1. ALIC had not been complying with section 4.3 of the agreement in respect of training programmes dealing with local and overseas training courses in the areas of Computerised Risk Management System, Transaction Price data and other areas of inspection.

 

  1. ALIC’s financial statement shows a loan of US$4million from its parent company, Ghana Link. This is however at variance with the amount shown in the Balance Sheet of Le 6billion as at December 31, 2017.

 

 

  1. ALIC’s US dollar loan from Ghana Link carries an interest rate of 30 percent, which is extremely higher than the commercial rate – and this was suspected to be a strategy to evade tax payment as interest payments are deductible before dividend payments.

 

Based on the above and other findings, on January 30, 2020, Sierra Leone’s Chief Minister, Professor David J. Francis, wrote to the Ministry of Trade and Industry instructing it to terminate government’s contract with Ghana Link and ALIC.

Your Excellency, it is surprising that this is the same company your country’s Customs is partnering in Ghana to develop and operate the same single window and trade facilitation services for which its contract in Sierra Leone was terminated.

There are several credible companies, investors and students here in Ghana that can be empowered or partnered for clean investments – as your country has demonstrated all over the continent to the admiration of the world.

It is noteworthy that the Ghana Link-CUPIA Korea partnership to develop and operate a single window system in Ghana has so far been a demonstration of technical incompetence and sheer unpreparedness, despite the unrestrained political support it has enjoyed from a few key top government appointees.

Their piloting exercises have not lived up to expectations, and have exposed them to ridicule.

Your Excellency, Ghana Link-CUPIA still do not have a single window system that has been tested and demonstrated here in Ghana; and up till date, trade facilitation and declaration at Ghana ports are still being done by the existing vendors, West Blue and GCNet.

We have a saying in Ghana, that “he who keeps silent in the face of a wrong-doing is guilty of that same wrong doing”. You cannot keep silent over this anomaly, sir.

Local Agitation on the Rise

Civil Society groups, policy think-tanks and relevant stakeholders in Ghana have unanimously publicly condemned the Ghana Link/CUPIA contract and cautioned it will lead to revenue loss and disrupt Ghana’s trade facilitation achievements.

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Legal brains have also questioned portions of the contract; for instance, there is agitation that termination of the Ghana Link/UNI-PASS contract by government, either voluntarily or through material breaches occasioned by it, attracts graduated fees of between US$93million in the first year to US$12m in the tenth year – given that the UNIPASS/Ghana Link Network Services single window contract was awarded for US$40million for ten years.

The contract even demands that the systems being operated by the two Ghanaian companies, GCNet and West Blue, and their intellectual properties should be taken from them and handed over to Ghana Link/CUPIA before they can work.

Truly, government has written to the two companies to hand over their systems – an incredible directive meant to work against indigenous Ghanaian companies to the advantage of a foreign competitor from your country.

Financial brains have questioned the economic sense of the Ghana Link/UNI-PASS contract which states that the processing fee for the UNI-PASS system will be 0.75% of Free on Board (FOB), compared to the existing combined fees of GCNet (0.40% of FOB) and West Blue (0.28% of CIF) which sums up to 0.68%. However, as government receives 35% out of GCNet’s 0.40% fee, in real terms GCNet receives 0.26% (0.40% less 35%). This means the total cost to government under the existing system is 0.54% (GCNet’s 0.26% + West Blue 0.28%) while UNI-PASS’ fee will be 0.75% of FOB.

The Ghana Institute of freight forwarders (GIFF) has also raised red flags over the fact that it took Ghana Link in collaboration with CUPIA of Korea Customs Services some five days to successfully make just one single declaration of imported goods into Ghana; an embarrassing evidence the company is not ready to take over operation of the Ghana National Single Window

Among the groups that have publicly spoken against the Ghana Link/CUPIA Korea contract and planned takeover of the GNSW are the Alliance for Social Equity and Public Accountability (ASEPA), Good Governance and Advocacy Group Ghana (GGAGG), Vanguard of Truth, IMANI Centre for Policy and Education, members of the Minority in Ghana’s Parliament, Watchdog Journalists…

 

Brand Association

Your Excellency, these genuine concerns and their continuous nature rub very negatively on the reputation of your government and on your country per the brand association. Many of Ghana’s youth and future leaders are observing keenly, almost in disappointment, and wondering what the exact motive of CUPIA of KCS may be, and why the company and your country has agreed to associate itself in this untidy situation.

My humble self, concerned journalists, relevant stakeholder groups and civil society groups are keeping fingers crossed while awaiting a response from you.

We would have booked an appointment for a group meeting, but we are restrained because of the order to observe social distancing as a way of containing further spread of COVID-19.

We however respectfully await a response from you.

 

Thank you.

Sincerely yours,

Halifax Ansah-Addo

Editor-In-Chief

The New Publisher

 

niihalifax@yahoo.com

+233242186444

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