Managing a company and managing a country are not dissimilar. The scale is different, but the principles are similar – Dr Ishmael Evans Yamson
‘Obi nnim obrempon ahyease’, to wit, ‘Nobody knows the beginning of a great man’, our elders say. From the cradle of Breman Kuntanase in the Central Region to the boardrooms of the biggest and most influential companies and organisations in the country and the continent, one man has seen it all. In the process, he amassed a wealth of experience enough to fill the volumes of the famous Balme Library.
At the height of his career, he was the most senior private sector actor in the country as Chairman of the prestigious United African Company (UAC) which became Unilever Ghana. Today, whilst his peers have made peace with retirement and slipped into a routine of ease and perhaps, idleness, he continues as Chairman of the Board of the most profitable company in the country, Scancom Ghana PLC (owner of MTN Ghana PLC).
Today, the icon turns 80, and Bernard Yaw Ashiadey, Ebenezer Chike Adjei Njoku, and Mabel Korkor Ocansey of the Business and Financial Times (B&FT) have gained unprecedented access to the archive of thoughts of Dr Ishmael Evans Yamson (IEY).
Below, they bring you one for the ages.
Colonialism, Independence, the juntas and transition to a democratised economy
B&FT: You have had the privilege of seeing Ghana transition from the colonial era, through Independence as well as the developments post-Independence. The decade after Independence was a mixed bag, to put it lightly. As a person who is very concerned with Africa’s prosperity (and you have written about it), kindly offer us your thoughts on that era and the man at the centre of it all – Osagyefo Dr Kwame Nkrumah. How have developments during that period set us on the course we currently are on?
IEY: I would say, with the benefit of hindsight, that Nkrumah was a very misunderstood person. He was very ambitious and well ahead of his time and I think he misjudged quite many things. He had embarked on far more than the country could cope with at the time. However, it is probably the greatest compliment to the man that decades after he left the scene, many of his ideas have been recycled. The concept of rural industrialisation, which we see being spoken of as the best thing since sliced bread is not new; it is in no way novel.
At the time, for instance, every area with a decent deposit of raw materials had a factory close by. Do we not see the multiple silos around the country that bear testimony to his ingenuity?
Take a look at the Akosombo Dam, which was not only to give us hydropower but to also provide irrigation water for farmlands in the Accra Plains. Its goal has been largely defeated and we can attribute this, to some degree, to our disregard for basic principles. We have built on all our arable land as we appear to have this obsession with buildings. We have put up buildings ahead of planning and now, the planners have to play catch up.
Indeed, 1961 was a watershed moment, it was the first time we read an austere budget; the first sign of cracks in the seemingly invincible armour. But the reaction – on both sides – was far from ideal. There was his highhanded clampdown on enemies – real and imagined. But there was also the burning of his books, and everything related to the man. Perhaps, that was an attempt to have history rewritten. Today, I go around and look for his books, but I can scarcely find them.
As students, we heard many arguments from our professors against many of his policies. But ask again, why should we have argued against the motorway? Can you imagine what carting goods from the Tema port would have been like without the motorway? We had many vertically integrated industries, which were prospering, and yet, we were made to believe it was wrong to have such arrangements. For instance, we stopped assembling vehicles because we were told that we would not be able to compete on a global scale.
We were sold the same narrative over oil palm and how it would lead to a one-commodity economy, which was not viable, especially because our rainfall in West Africa is seasonal, compared to some of our Asian contemporaries. Yet, that has proven to be false but we appear to have become set in our wrong ways. But if we could succeed with cocoa, why couldn’t we have succeeded with oil palm?
On the subject of missed opportunity in oil palm
B&FT: It is estimated that in 2020, Indonesia made US$18.45 billion from exporting palm oil. It begs the question, why has Ghana failed to take advantage of its ‘other oil’ potential?
IEY: As I said earlier, as a student, I was told mono-crop economies do not thrive and that was the principal argument against the exploration of our cocoa resources, and I dare say that is what blocked our minds to what else we could do with cocoa. I went to Malaysia and saw the vertical integration based on oil palm. We make charcoal from our felled trees; they use theirs for furniture. There is nothing of the tree that is thrown away.
The Malays have five million hectares and are producing 22 million tons of oil palm and yet, despite having a similar land space, we are scarcely producing one million tons. We have the land, even the flies that pollinate the trees are native to West Africa. Indonesia started well after Malaysia and look at where they are. Why can’t we do a fraction of that? Is it too late?
The opportunities are boundless, oil palm consumes labour. Every hectare would need about four people to work on it, now, imagine we were doing 500,000 hectares, would that not dent the unemployment figure, especially for the rural youth?
Under the John Agyekum Kufour administration, we went there to see things firsthand and that is what resulted in the President’s Special Initiative on oil palm. But we have lost the momentum. Instead of telling the chiefs we want 100,0000 hectares and it’ll bring employment for the locals, we start by saying the land is owned by the chiefs, so we fold our arms. How can we get them to pool their land, and assure them that the land still belongs to them? We import lots of palm oil. The answers are not rocket science and we should not let this be spearheaded by people with no experience in farming.
A true citizen of the land
B&FT: What was the experience like, of being the most senior private sector person, and perhaps the face of capitalism, particularly in those tumultuous transitional periods?
IEY: It was quite the experience, especially under the military regime as there was an existing clash of philosophies. One such incident captures this difference. In the mid-80s, when the crunch was getting tighter, the government was struggling to access finance as the West did not want to hear anything about the military heading countries.
The then Head of State, former President Jerry John Rawlings embarked on a trade and investment roadshow immediately after the drought, and he asked that I come along to speak to would-be investors. However, upon reaching the United States, I was described as the head of the pillaging agent in Ghana, an agent of the entities that were sucking the country dry, stealing Ghana’s money for the West.
It came as a shock to me, and I was understandably furious. Senior members of government, including P.V. Obeng, impressed upon me to overlook the incident. When I had the opportunity to speak, my response was very simple: If I was indeed a leech, why would I be brought over to convince people with reservations to come invest in Ghana?
This was one of many incidents that highlights the difficulty we faced, especially in the mid to late 1980s. The narrative began to change as we made the transition to civilian rule, and I was then relied upon to ease this transition. One of the more satisfying experiences for me was the successful negotiation of the return of the seized textile companies – GTP and Juapong Textiles – to their owners. Receiving the Order of the Volta for me, was vindication that I had served the best interests of the nation during the trying times.
Treating society’s most vulnerable right
B&FT: It is said that much can be known of a society based on how it treats its most vulnerable. You sit on the Board of the Society of Friends of the Mentally Retarded. How would you say we have fared as a nation in addressing the needs of the mentally ill?
IEY: Unfortunately, we treat these people who are some of the most vulnerable in our society and are in desperate need of our care as though they are rejects and this is most reflected in the environment where we attend to them. Sometimes, if I am being honest, it makes you wonder if we believe they do not deserve to live. If we are serious about addressing this issue, we could look at how much land the Accra Psychiatric Hospital has, for instance, and we could give it out to developers to create more space for the patients and this will, in turn, minimise the congestion in other facilities.
A healthy nation is a wealthy nation
B&FT: It is no news that the health sector is grossly underfunded, seeing that almost all of the government revenue goes into debt repayment and servicing as well as payment of compensations. What are some ways health facilities can use to raise additional funding?
IEY: As a people, our philosophy of development is wrong. We always assume everything must be built by the government but there is more money in the private sector for development. If the private sector can fund an undertaking, why should we have the government going to borrow from external entities at a premium? Why not use a profit-sharing model, especially for the provision of social goods.
Using this approach, we can build capital and infrastructure without corresponding borrowing because if we are being honest, no government can build all the infrastructure alone. When we look around us, there is an explosion of diagnostic centres and they are all privately owned and people can pay for these services when it comes to it. Ghana can easily become a medical hub if we want to become one. So, I say we should review our philosophy of development.
The best lessons from MTN Ghana
B&FT: You are currently sitting as Board Chair of the most profitable company in the country – Scancom Plc or MTN Ghana, albeit a foreign-owned one. What lessons can other companies glean from the corporate governance structure of MTN?
IEY: If I had to put it in one sentence, I would say Scancom invests in its business. One thing that surprised me the most was that the existing narrative had been that the money generated by the company was all being shipped out to South Africa. But, then, I joined and saw that despite the sizeable profits, dividends had not been paid in years and to me that was unacceptable.
I said to MTN, put in your report how much taxes you pay as a percentage of revenue and dividends.
I got to see that the company was aggressively reinvesting its earnings to grow the business. Scancom invests in capital assets, technology, and people, and in addition to this, the company takes risks.
Take Mobile Money, for example, there were initial concerns, and we were saying to ourselves that as we were not the first to the market if we had not captured 15 per cent of the market in the first five years, it would have been a failure. We did it in the first year.
This is a company that is constantly saying: Let us put money, people and skills behind our business. And as you know, tech and telecoms are arguable the most capital-intensive businesses. MTN is confident in its products and services, if you do not have confidence in your offerings, will you risk your money for what you wouldn’t see benefits for another two years? Imagine with me, if we had 10 MTNs in the county, how rapidly we would develop. Now, compare that with our State-Owned Enterprises (SOEs).
Of SOEs, governance and becoming profitable
B&FT: Some 47 State-Owned Enterprises (SOEs) recorded a cumulative loss of GH¢2.61 billion in 2020. Yet, this was a marked 49.2 per cent improvement on the 2019 aggregate net loss of GH¢5.16 billion. What remedy do you propose to return these institutions to profitability?
IEY: The fact that the President appoints the heads of these institutions leaves very little room for objectivity and barely any incentive to perform. I do not think it is right and it is a reason for the bad governance which is responsible for the hapless performance of these institutions.
People go in there without commitment and loyalty to the company. How then can we expect these companies to deliver value? We need to get the governance right. The people at the helm of the affairs of these enterprises have been entrusted with assets that belong to all Ghanaians and they should be accountable. When I look at the assets that some of these institutions sit on and are running at a loss, I know they would not survive in the private sector. They would either be sold off or restructured. How can you say you have GH¢20 billion in assets and say you have lost money, not once or twice, but every year?
After this, they line up with bowls and want the government to give them loans. That in itself should not be wrong but if they continue like that, after some time, that loan would be due for repayment. That is why the loans should be on the government’s balance sheet. After all, they are fully owned by the government, why should they be off the balance sheet? Now, if we were to add these loans to the public debt stock, can you imagine where it will get to. So, we are deceiving ourselves.
SOEs were a fancy socialist idea. Look at what Margaret Thatcher, former British Prime Minister, did during her tenure; she faced hell for her decision to rationalise the SOEs but if she did not do what she did, the economy of Britain would have collapsed.
Those who speak the most vehemently against divestiture, do so not because some went wrong, and I admit some did, but mainly because of personal interest. I believe we should privatise these institutions, and we must do it right. Transparency is key. We should diversify the ownership of SOEs and limit what each person can buy. Look at what happened in Europe and the US, the banks that nearly collapsed and were taken over by the state have all been returned to private hands.
The private sector would not take these assets for free, it will pay real money and when that happens, the government will get money, not suffer losses or get the pressure to go borrow. We should hold these enterprises to the same standards as private firms – If they are being run properly, delivering value as it would as a private firm, then leave it. But if we hear they are paying GH¢1 million as dividends to Government, we must ask how much in assets that company is overseeing and compare it to a private company.
The Minister of Finance is talking about ghost names. 20 years ago, we were talking of the same. Are the ghosts new or resurrected? Who put them there? We can trace them. Do not come to tell me one of the actions is to remove ghost names. There should be no plan; take them off already.
The infamous E-levy
B&FT: What are your thoughts on the introduction of the infamous E-levy?
IEY: I believe the introduction of some version of an e-tax was inevitable because the world’s economic format has changed; almost everything has gone digital. But I think the purpose and explanation given for the introduction of the e-levy are plain wrong. Why should you say without E-levy, we would not be able to do anything developmental? An e-tax was going to be introduced at some point to meet developments in the financial landscape, but the design and positioning are a complete mess.
A digital conversation for the future
B&FT: With the current digitisation emphasis by the central government coupled with MTN’s transition to a fully-fledged, digital-first institution, how important is the investment in affordable and reliable internet for the wider economy?
IEY: It is very, very critical. Ghana currently has internet charges that are cheaper than that of many other countries, in nominal terms but when related to per capita income, it tells a different story.
But to fully realise the goal of affordable internet, we must first address the factors that drive cost. There are so many taxes that the telcos have to pay, in addition to ballooning electricity and logistics costs and they can only absorb so much. By now, we should have actively started the conversation around 5G so that we are not left behind but it would not come cheap. We desperately need a discussion around the matter between the government and the private sector.
Africa’s net-zero plan or is there one?
B&FT: Much has been made about achieving Net Zero emissions and total transition to ‘clean’ energy. This comes despite Africa being the lowest polluter, as well as having a store of fossil fuel, which it might need for its industrialisation drive. What approach should the continent, in general, and Ghana, in particular, adopt in its transition, especially as the West does not appear too keen to subsidise Africa’s transition?
IEY: The question should be: What is Africa’s strategic thinking towards the shift? The transition will be forced on us regardless of what we do or fail to do. Amazingly, we are anchoring our hopes on a sunset industry. Does it make sense? As the global north is moving, we are celebrating registering more fossil fuel-powered cars? What kind of cars are being produced at these plants we have in the country. Have we thought about these things?
What should Africa be doing or not doing as timelines are being given? Do we know where we are going? We need to define how Africa goes about its transition – Africa has to decide and negotiate in a manner that does not put it at a disadvantage. If we wait to be sponsored or financed, why should we not get the short end of the stick? By now, we should have banned vehicles beyond a certain age from entering Ghana if we were serious.
Pensions, investments and pension systems
B&FT: As an octogenarian and consultant, you have first-hand knowledge about the necessity of pensions. What steps can be further applied to deepen pension coverage? The new guidelines on investments for Tiers 2 and 3 Pension Funds by the National Pension Regulatory Authority (NPRA) seek to mandate fund managers to diversify away from government securities, how important is this? What other factors should be taken to achieve this?
IEY: First and foremost, the fund managers and the trustees are aware of their fiduciary responsibility. The quality and sustainability of the value of investments on such a scale are very important and outside of government bonds, the rest are quite risky. I do not envy pension fund managers because their job is quite a difficult one. But as they do the balancing act, they should watch the bonds and make sure it does not become junk.
It is not an indictment on the side of other asset classes or stakeholders because, if we had a stable and sustainable macroeconomic environment, the pension fund manager would feel free to invest in anything – manufacturing, distribution, technology, or even startups. But who would honestly tell his fund manager to invest in some fanciful company? That’s better for the Venture Capital guys. As we have more and more people outside the employment market, fewer people are contributing to the funds, and we know that pension funds thrive on numbers.
With SSNIT, for instance, they have done well so far but going forward it would not be easy unless the economy bounces back. At this point, I would not fault the fund managers for putting their money in bonds.
Real Estate, affordability and the cedi’s daily dalliance with dollar
B&FT: Despite some outliers such as Kenya, the lack of housing is an Africa-wide problem, with the deficit ranging from 30,000 in Burundi to 3.5 million in Egypt, according to the United Nations Population Division 2014 World Urbanisation Prospects report, and Ghana is no different. What do you propose can be done to address demand-side and supply-side constraints? Considering the rate of depreciation of the cedi, is it feasible for mortgages to be denominated in the local currency?
IEY: The answer remains simple, we must get private money into affordable housing. There is no shortage of capital, it is the absence of a proper framework and environment. The state should be working to assure investors of, not just political stability but macroeconomic stability because the government simply cannot do it, even as a social investment. And with the basic principle of economics, if supply grows, the prices of the units will come down.
B&FT: … and the recent BoG dollar directive?
IEY: What the managers of the economy should be looking to do is to work towards removing the incentive to speculate as price controls and similar interventions just would not work. You cannot police the black market. The question of why people have begun to speculate recently should be answered.
Of football administration and benefiting from its billions locally
B&FT: The global football industry is comprised of an estimated four billion fans through whom some US$28 billion is raised in revenue annually. Despite the evident passion for the game locally coupled with many reinvigoration campaigns, Ghana has failed to take advantage of it, particularly in terms of revenue generation. What has gone wrong and what must be done to remedy the situation?
IEY: Again, I will point to the private sector as sponsorship comes from the private sector. But it demands a well-organised football administration, one that creates confidence for all stakeholders.
The teams, themselves need good governance. When I was younger and teams were better run, I would be at the stadium six hours before kick-off with my bottle of soft drink and sandwich, but because of how things have been allowed to deteriorate, it appears we have lost the youngest generation (as they know the names of players elsewhere but not locally); the local game is not as attractive to them. As such many companies are not as attracted to the local game. The question is; what value will the companies get? How many people will buy Hearts or Kotoko shirts?
The teams have not created value for themselves so why would anyone want to buy into that value? When you sponsor, you are buying into a value and hoping that the value will spill over to your brand but that value is not there in the Ghanaian football industry today. Every day, there is a scandal at the FA. Is that where you go and put your money? Years ago, it was an honour to sponsor the national team. There has to be an FA that people trust.
Post banking sector clean up and quality of assets
B&FT: You are on record for asking that domestic banks who struggled with raising the Bank of Ghana’s GH¢400 million recapitalisation requirement merge or fold up. What is your assessment of the industry since those comments were made? Should we still be looking at mergers, would that strengthen the industry further?
IEY: If we are being honest, we still have several banks with not-so-strong balance sheets. We have a very small economy and many banks and they are all trying to do the same thing. There is no competitive advantage in certain sectors. Comparatively, how many Ghanaians save? We are not like East Asians. We are not bringing strong specialisations in the industry. All the banks appear to do is collect cheap deposits, buy bonds and lend a bit to the real sector.
Innovation in the sector is very slow and low. How many of our banks are just investment banks or agric or SME-focused? It is difficult but when one person cracks it, they will reap the rewards. No bank will accept that they are one of the too many, everyone thinks they will survive. But if we want a stronger economy, we will need stronger banks that can absorb more risks.
Attaining a prosperous Africa – the lessons
B&FT: Your book – Africa in search of prosperity – is a treasure trove. What informed your decision to publish your essays? What was the general reaction to the points you captured within its pages? How far off are we from attaining a prosperous Africa? What steps should we take to ensure this is attained, at most, in the lifetime of your grandchildren?
IEY: It breaks my heart to say it but we are very far off. The things that made us ‘rich’ are no longer there. The things we needed to build on are long gone. The world economy is no longer natural resource-dependent. As a people, we are barely participating in the growth dynamics of the world.
It was only about five years ago that we started on the digitisation train. Unless we rethink our development strategy, honestly, it would not get better. We are producing many people but if we are not careful, our human capital will go down the drain. African leaders are well-trained individuals and they know what to do, the question remains why they have not.
Every generation must always plan for upcoming generations. I do not think ours has done the next generation a world of good. We are leaving the country in a worse state than what we had. All of us have failed and we should think hard and fast about our legacies, not just individual legacies. I think I have done some good but not nearly enough, and my generation could have done better. But for as long as we put politics ahead of the country, we will continue to regress.
A post on the importance of a good wife, family
B&FT: You speak of your wife and marriage in the most glowing of terms. How have both contributed to the making of the man Ishmael Evans Yamson? And what words of advice would you give to young(er) couples as they navigate the waters of matrimony?
IEY: Marriage to my wife, Lucy, has kept me grounded and given me the platform for what I am today. We bonded so much in our earliest years over even the most basic things like doing our chores together. Her uncle once saw me on my knees scrubbing and asked my wife why she was letting me do that, she responded that I took the initiative and she had to catch up.
But I must add that my views on marriage were shaped by what I saw in my grandfather and how much he loved his wife. I would say, for a marriage to be successful, it must be built on mutual respect and trust. Every union demands this, but it is more so in marriage; in matters of emotional and physical fidelity as well as finances. I tell you what, every bank account of ours is in the name of Lucy and Ishmael Yamson.
But for people who are becoming more and more independent, we also need to understand the role of the wider family in marriage. Let me add also, that in many situations, being members of the same religious community – the same church – is crucial.
B&FT: Does a man as accomplished as yourself have any regrets?
IEY: If I have any regret, I would say I took on too much. I had always wanted to be the model ‘corporate’ person, for me, entrepreneurship was daunting. Have I achieved all? No. I should have written more books, at least on my life and experiences as well as governance. Managing a company and a country are not dissimilar, the scale is different, but the principles are similar.