From the perspectives of the above conceptual clarifications, I want to look at Ghana’s telecom reforms, which were part of the comprehensive Structural Adjustment Program (SAP). The background to the new communication policy regime is the launching of an IMF and World Bank supported Economic Recovery Program (ERP) in 1983. The ERP, which included a World Bank supervised SAP, had a wide-ranging implication for the country. It involved a reduction in public and social sector expenditure, the divesting of the state from businesses and the promotion of the private sector as the kingpin of economic growth. State-owned enterprises were privatized, merged, turned into joint ventures or liquidated (Sarris and Shams 1991, 7; Brydon and Legge 1996; Hadjimichael et. al. 1996).
The sense of losing the nation symbolized by the sale of state-owned enterprises is a lament that one comes across each time Ghanaians discuss matters about their country. The following quotation from anonymous contributor to the Ghanaian internet discussion board,
“Say It Loud” following an announcement by the Finance Minister that 11 state companies were to be sold, captures the spirit of this nationalist angst:
The NPP will sell everything in Ghana before they leave power. Now that they have enlisted about 11 national assets for sale, the next move is to place Ghana on the market for sale.
I thought the NDC was bad. This (sic) guys are vicious. Where is Ghana heading towards?3 An Accra daily4 had reported the Finance Minister as having announced the sale while addressing the Ghana Stock Exchange.
3 http://www.ghanaweb.com/GhanaHomePage/sil2/r.php?thread=551123
4 Accra Daily Mail of November 18, 2002
In retrospect, SAP inaugurated a new policy regime of enhanced private sector participation in national governance, with the World Bank, IMF and other multilateral institutions playing a dominant role in the policy process in Ghana. This transformation for the telecom sector turned out to be one of an intellectual as well as financial dependence on the World Bank, especially for the articulation of national communication policy. The intellectual dependence in particular, according to the Ministry of Communications in Ghana is due to the lack of expertise within the government and within the country on matters pertaining to the new digital economy. All two last governments in the country have referred to this inability as part of their excuse for poor governance over the telecom sector. In the latest of such admission of lack of expertise, the NPP minister of communications, Felix Owusu Adjepong told the country that his ministry was relying on free consultations from Moroccan experts to take decisions on key telecom matters because it simply lacked the required human resources to handle complex policy matters.5
It is against this background that World Bank thinking is crucial. The bank’s thinking can be gleaned from its commissioned study and recommendations for Ghana and other sub-Sahara African countries. The study (Mustafa et al. 1997) was mandated to look into the options available to Ghana and some other Sub-Sahara African countries in similar situations of undeveloped telecom sector. The World Bank study and recommendation and Ghana’s Accelerated Development Programme (ADP) are the main source for this discussion. The Ghanaian program is an outline of governments plan (at least up to December 2000) for the reforms of the Telecom Sector. The World Bank commissioned study, written by a senior staff of the Bank and two consultants, focused on the restructuring of the telecom sector in Ghana, Benin, Mozambique, Uganda and Tanzania. These countries, before undertaking their telecom sector reforms had each chalked more than a decade of faithfully implementing IMF and World Bank directed Structural Adjustment Programs (SAP). So the institutional linkages between these powerful international multilateral financial institutions and the governments in these countries, thanks to SAP, were already firmly established before the process of telecom reforms began. Thus, in reading the World Bank’s report and recommendations one gets the feeling that it provided the intellectual foundations for Ghana’s ADP. Indeed, in the Bank’s own words “the main purpose of the Bank in commissioning this study has been to consider how the Bank’s global strategy for the telecommunications sector can be applied in SSA (sub-Sahara African) countries”6.
The World Bank’s involvement in Ghana’s telecom sector started in 1971 when the government approached the Bank to help it modernize the infrastructure, improve service quality, extend the coverage area of telecom network, and strengthen the overall capacity of the then Post and Telecommunications. The wisdom of the time was that natural monopolies were good, at least for Ghana’s development purposes. The bank approved a loan of 23 million
5 “Communications Ministry Lacks Experts – Adjepong” available at http://www.ghanaweb.com/GhanaHomePage/
NewsArchive/artikel.php?ID=21726
6 This is contained in the “Forward” to Mustafa et al. (1997) written by Richard Stern, Director of Industry and Energy Department, Finance and Private Sector Development Vice Presidency of the World Bank.
US dollars for the project implementation. But according the bank’s own assessment, “the project failed to meet all the objectives mainly due to the difficult economic conditions in the country during the implementation period and management and financial weaknesses with the P&T” (World Bank 1995, 1). In 1988, when the wisdom of the time was beginning to be focused on the private sector and the market as well as a redefinition of the role of the state following the implementation of SAP, the World Bank approved another credit line to the tune of 13.8 million US dollars. It then helped Ghana to mobilize additional funding from Japan, France and the Netherlands for an additional 133 million dollars to undertake network expansion. This cluster of loans was used to fund what become known as the Second Telecommunications Project. The stated objectives were to:
1. assist P&T with the implementation of its investment program for the period 1987 to 1992 through rehabilitation and expansion; and
2. support a program of institutional and management improvement in the sector (World Bank 1995, 2).
According to the World Bank, it was the government of Ghana that approached it again in 1995, requesting the bank to assist Ghana to implement a new sector policy after it had passed new legislation to breakup the P&T into two separate Telecom Company and Posts Company.
The government request was for both financial and technical expertise. This 1995 request, arguably, marks the moment when Ghana government handed over key telecom policy decisions to the bank.
If the first World Bank assisted rehabilitation of telecom in Ghana was to improve the institutional capacity of the P&T Corporation, while the idea of natural monopoly made sense to the bank, the 1995 request for assistance was aimed at increasing private sector participation in Ghana Telecom (GT). It was also aimed at promoting competition and the
“establishment of an appropriate regulatory framework” (World Bank 1995, 2) under the bank’s tutelage. As part of the assistance package, the bank was to help the government generate revenue through the sale of part of GT. The proposed new sector policy provided for government control of management of GT to be transferred to a minority shareholder who would buy a stake in GT. This minority shareholder called strategic investor was expected to bring in management expertise as well as providing more direct financial investment. In addition, a share was to be sold to a financing institution and another stake sold to local investors in Ghana. The bank was also to guide Ghana through the process of licensing a second main operator to compete with GT, thereby establishing a duopoly in the telecom market. Furthermore, a liberalized regime of licensing privately owned cellular, payphone and small local phone operators were to be incorporated into the new policy package that the bank was to supervise.
The entire project required 450 million US dollars over a period of 5 years ending in 1999 (World Bank 1995). The bank was reluctant to come forward with direct funding approval.
Rather, it counseled that private sources both local and international be approached to support. Logically, it required that GT and its clientele, prospective and real, be re-packaged for the private sector to come in and do cherry picking. For the first time in Ghana’s telecom
history, Rural Telecom emerged as a separate sector in contrast to the main fixed network.
As a new industry, mobile telephony was also designed as a separate sector with different policy direction. It should be noted, however, that under the previous natural monopoly system, while rural telephony was not explicitly marked out, it nevertheless did not get any serious attention because telephony was an urban luxury reserved for the rich and well connected, comprising less than one percent of the country’s population. The bank recommended that in order to attract private sector investors, an IDA support worth 50 million US dollars would be sought to improve GT’s technical base (World Bank1995).
According to the bank, the study found out poor performance of state-owned network operators as the main obstacle to the expansion of the telecom facilities (Mustafa et al. 1997, 8). This is the traditional characterization of reasons for private sector intervention into the public sector economy in developing countries. It is always argued that the state-owned enterprises are poorly run and so private sector participation will introduce competition (Hoogvelt 1997). That is why telecom reforms in Ghana means privatization and the introduction of the market model into the sector. The bank argued that the main aim of reforms is to improve performance of the sector. Performance here is defined as “the availability, quality and price services provided to customers as well as the cost efficiency with which they are provided.” And this can only be achieved by “increasing the role of market forces, separating day-to-day management of telecommunications operations from government and introducing increasingly explicit forms of regulatory control” (Mustafa et al. 1997, 13).
Ghana pursued just that. The country falls within the sub-Saharan African countries that had below 5% of the population having access to phone facilities in1994. Between 1980 and 1994, the Ghana Posts and Telecommunications Corporation could only increase teledensity by 1000 lines annually, far below demand, resulting in a fall in the national teledensity from 0.33 per 100 to 0.31 (ADP document 1994). The then totally state-owned entity P&T was considered as inefficient in meeting the telecom needs of the country. In the bank’s own words, “… the gap between demand and supply has grown (estimates of the additional lines needed to the end of the decade are upwards of 300,000 compared to 50,000 connected lines at present), service quality remains poor and P&T’s institutional capacity and financial position continue to be very weak” (World Bank 1995, 2). Thus the World Bank’s recommendation to divest the telecom sector from the posts was carried out. The Bank’s recommendation followed a trend in telecom-rich Europe where the restructuring had already taken place.
Under Ghana’s ADP, an independent regulatory body, the National Communications Authority (NCA) was set up on the lines of United States’ FCC. With the telecom division reconstituted as separate business organization while the Postal section continued its “public service” but with profit making obligation, the country got set for the privatization of telecom in 1996. The ADP outlines the most radical policy transformation in the communication sector in the short history of the country. Its main objectives can be summarized as:
1. to improve the sector to meet demand and increase the number of lines per 100 people to 2.5 through the agency of the private sector
2. to improve public access by providing more pay phones in the urban areas to be determined by market forces. In the rural areas, it does not say how the services will be provided but it says long term objective is to make one payphone available to every village of 500 people. Individual phones are hardly ever available in the rural areas.
3. Expand the use of mobile phones through the agency of the private sector.
4. No restrictions will be placed on businesses to construct private networks
5. Telecom tariffs should reflect cost of investment so that investors can recoup their cost.
(ADP document 1994).
6. generating revenue for Government from the sale of Ghana Telecom which will be created once the split of P&T has been completed. Government will sell its controlling shares (World Bank 1995, 2).
The economic rationalization of this World Bank-inspired reforms was premised on the democratization of telecom facilities. The state failed to make telecom facilities available to some 95% of the population between 1957 and 1994. What is interesting is that the bank believed that privatization would ensure that benefits will spread throughout the entire population and supporting this claim with social welfare gains that privatization has recorded in the developed economies, which pioneered the process of telecom liberalization (Mustafa et. al 1997, 8).
Now the market model is being tried as an alternative route to the solution of this development problem. At issue here is the way the postcolonial state has shifted into accepting commodification of telecom as a fundamental principle of policy. What does this mean for the idea of the postcolonial nation-state as one that is in the process of becoming? The promised imagined community is here shifting to a promise of a globalized market. This is because the spatial logic of commodification is economic globalization.
There is no doubt that the nation-state model was derived from the European and North American experience, including policy attitude towards national communicative structures.
Telephone and broadcasting were considered public structures that underscored the democratic communicative fabric of the imagined community. Jan van Cuilenburg and Denis McQuail show the main trend of the European practice was to consider telephony along with postal service as public monopoly and effective branch of government, until the main infrastructure was put in place. “The electronic media were seen as engineering and infrastructure too strategically essential to the state and to industry to be left to the uncertainties of the free market”(Cuilenburg and McQuail 1998, 61). While the American approach differed fundamentally in terms of ownership and system of regulation, Cuilenburg and McQuail do point out that both models shared certain common features including: a) treating communications media as branches of industry with strategic importance; and b) subordinating communication to the imperatives of the national interest. The national interest is here understood as not conditioning access to the logic of the market, but using public funding to put in place the basic infrastructure that could not have been provided by private capital. The idea here is fundamentally related to the understanding that democratic life will suffer if the market were given a free hand to do the decision as to who gets connected.
But in recommending the privatization of telecom in Sub-Saharan Africa, where less than 5% of the population have access, the World Bank is basing its thinking on contemporary European experience.
This reflects in part the consensus view that the future of telecommunications lies with private commercial provision of services under relatively liberal regulatory arrangements.
In part, it also reflects the specific common aims of the telecommunications policy of the European Union (EU). Formally, the EU has focused on the gradual liberalization of international services between member states and the standardisation of regulatory processes to eliminate barriers to entry at the national level. The responses by member states to this policy have tended to include plans to extend liberalization moves to domestic as well as international services and to privatize incumbent operators (Mustafa et al. 1997, 13-14)
It is true that the EU formally focuses on gradual liberalization, but it formerly did not.
First of all, what we have here is a Europe that is now using the market model after successfully using the state to put in place the basic telecom infrastructure. The World Bank experts know this but prefer to insist that Ghana and other African countries use the market model to solve their basic infrastructure problem. The market has become the new magic wand for development and modernization. The history of shifting paradigms of communication regulation from heavy public service orientation to an increasing marketized sector in Europe is totally absent in the World Bank’s understanding of the European experience. To go contrary to this will mean admitting that a strong state role is needed to fund basic infrastructure first before we adopt contemporary European practice of opening to the market.
The World Bank policy agenda says that the greatest economic gains for sub-Sahara African countries depend on the introduction of “competent commercial management” into the telecom sector. Its argument is that commercialization has become a priority in the industrialized countries and so developing countries should follow suit. It also points out that
“profitability”, “productivity” and the ability to meet “demand” should be the criteria for success (Mustafa et al.1997, 21). The idea of “demand” applied here is “effective demand”
in economic terms, which means the ability to pay from the side of the consumer, determined by the demand and supply curve. It is different from demand for services as defined by social and political need from which life depends. The question of humanist gains (as opposed to economic gains) is lost in the vocabulary of the World Bank. It was the quest for a civic imagined community that warranted the end of colonialism and the emergence of the postcolonial nation-state in the first place. That is the legitimacy of the postcolonial state, which is premised on the promise of citizenship to the people is being lost now.
The shift to thinking of the aim of policy in economic terms therefore is worth noting as a moment of re-articulation of the mission of the postcolonial state. The shift is from a state that prioritizes value based on need to a postcolonial state that has adopted commodification as its new modus operandi in the global economy. Interestingly Murdock and Golding (1999,
127), in their study of British telecom policy have noted that references to citizens, and the interest of citizens, have been deleted in favor of references to the interest of consumers. Is it just a coincidence or is Ghana merely copying from its colonial master?