Fear that the New Patriotic Party (NPP) government’s abrogation of the mobile money interoperability contract that the Bank of Ghana signed with Sibton Switch, was a reckless and costly one, is already biting home.
Thanks to civil society organization, IMANI Ghana, Ghanaians have now realized that the Ghc19.5million of public money that the NPP has sunk into the project which Sibton had proposed to pre-finance without government committing a dime of public money to, is not the only money that has gone into the project.
Prior to the Bank of Ghana (BoG) doling out the money to the Ghana Interbank Payment and Settlement Systems Limited (GhiPSS) to fund the project, the same NPP government had paid Hatian company, GVG/Kelni $89million to do part of the very work that GhIPSS is to do.
In addition to monitoring mobile money transactions, GVG/Kelni was also to monitor simbox fraud, a function that Franklin Cudjoe, President of IMANI Africa, points out that Subah Infosolutions and Afriwave have already been contracted to handle.
“What kind of duplication, profligacy and outright waste is this?” an exasperated Franklin Cudjoe lamented on Accra based Joy FM over the weekend.
GVG was contracted by the NPP government in 2017 to supposedly check revenue losses, monitor and report simbox fraud and also monitor mobile money transactions on the various telecoms platform.
At the time of their engagement, Subah and Afriwave had already been engaged by the previous NDC administration to also check revenue losses and monitor simbox activities.
Mr. Franklin Cudjoe has already pointed out that Subah, which was contracted at ghc75million in 2010 by the Ghana Revenue Authority to oversee revenue assurance activities within the telcos is already in a turf war with Afriwave, which was engaged by the National Communications Authority (NCA) in 2015 to provide interconnect clearing house services.
The NCA had paid Afriwave Ghc40million to do the job which created jurisdictional problems with Subah. However, in spite of the ongoing turf war, the NPP government had wastefully engaged GVG/Kelni in 2017 to do the same work that Subah and Afriwave were already doing – monitor revenue activities and check simbox fraud.
At a whopping $89million, the added responsibility given to GVG was supposedly to monitor mobile money transactions. But, before the NPP had come into office, the Bank of Ghana had in 2016 contracted Sibton Switch to build, own and operate the mobile money interoperability platform which would provide the Central bank the platform to properly monitor the growing mobile money transactions.
Senseless mess up
The move by the BoG to have the mobile money interoperability platform built was in response to phenomenal growth in mobile money usage which had leaped from Ghc171million in 2012 to Ghc36billion in 2015, and yet percentage growth kept dwindling.
Sibton was to finance the project and then claw back its money over a 25 year period. However, in spite of the fact that Sibton had duly gone through tender and beaten two other companies to get the contract, the NPP government decided to abrogate its contract.
The government then turned round and gave gHc19.5million of public money to the GhIPSS to rather build the platform. Interestingly, the decision to build the platform had been taken in spite of the fact that the same NPP government had earlier paid GVG/Kelni a whopping $89million to do part of the very work that the GhIPSS platform is supposed to do – monitor mobile money transactions.
IMANI’s Franklin Cudjoe has made it clear that the deal is a duplication of the responsibilities of Subah, Afriwave and the GhIPSS interoperability platform and must therefore be scrapped.
“Scrap the new deal” and provide a “progress report” on the Subah and Afriwave deals,” Mr. Cudjoe said on Joy FM.
He pointed out that “The new deal which is totally needless is to do the same thing- ensure revenue assurance, monitor the platform for fraud. What has been added now is to monitor mobile money transactions on the platform.”
According to him, this extra responsibility to the Haitian company is also needless because government has signed a 4.5 million under the mobile interoperability transactions.
The Tanzania lie
Later in write up, Mr. Cudjoe slummed the NPP government’s claim that it signed the deal with GVG because GVG helped Tanzania increase revenue in a similar contract there.
Dismissing the claim, Mr. Cudjoe referenced a story in which Tanzania’s leading telecoms company had debunked claims that increase in revenue to the government had been due to monitoring systems set up by the government through GVG.
VODACOM [Tanzania] had refuted reports that huge increase in tax revenue from the leading mobile telephone company was linked with installation of a monitoring system by a regulatory authority.
Vodacom’s Executive Director, Ian Ferrao, had said in a statement that the 1.9bn/- tax payment for July this year which rose from an average of 360m/- per month was not a result of installation of Telecommunication Traffic Monitoring System (TTMS) by the Tanzania Communications Regulatory Authority (TCRA). He said it was a result of the Finance Act 2016, which widened the tax scope to include 10 per cent excise duty on money transfer services on top of the 18 per cent VAT that is already payable.
Franklin Cudjoe questioned why the NPP government would cite GVG’s supposed wonderful performance to defend the bad deal when Tanzanians themselves are pointing out increase in tax collection on telcoms platforms there was not due to GVG’s efforts.
IMANI cries blue murder
“which is why imani is asking, what exactly will gvg find to merit free cash $89m when international call rates are still steep at 19 cents per minute in addition to the surtax on international calls?
“so, what it means is that any future declaration by the ministry of increased revenues due to this needless gvg will be solely attributable to the increased taxes on calls and attendant high volume of mobile money traffic on the ghipps platform,” the IMANI africa president pointed out.
Franklin cudjoe continued that, “besides sim box fraud which the ministry claims is one reason they want gvg to get free money thrives on very high international call rates and taxes.
“so the simple thing to do is to remove the incentive for sim box fraud as Nigeria has done by lowering taxes on calls. This is how we evaluate projects, not tell us that because Subah and Afriwave contracts were so bad, the ministry is saving Ghana $1.1m off these same ‘bad’ contracts. Why should the same bad contracts be your standard? why pay GVG $1.5m every month for 5 years to find the so called hidden revenue? don’t you pay them a percentage of hidden revenue only if they find any? haaba!”
Meanwhile, as GVG Kelni enjoys a whopping $89million to duplicate work that Subah, Afriwave and the GhIPSS platform are already doing, it is reported that the mobile money interoperability platform that GhIPSS has built for ghc19.5million is not functioning properly.
Former Deputy Finance Minister, Casiel Ato Forson, has revealed GhIPSS has entered into agreements with telcos including Vodafone, to charge an extra 0.30% on transactions to mobile money users on the platform due to the extra investment by the telcos into making the system operable.
As the duplications and wastages go on, Sibton Switch is said to be pursuing international arbitration over the abrogation of their contract by the NPP government in the UK. If the company is successful, Ghana would be saddled with a huge judgment debt.