US embassy cable - 04ACCRA2213

UNCLAS SECTION 01 OF 02 ACCRA 002213 
 
SIPDIS 
 
STATE PASS OPIC 
 
E.O. 12958: N/A 
TAGS: EINV, EAIR, ENRG, GH, OPIC 
SUBJECT: GHANA: FINAL PARLIAMENT ACTION IN 2004 
 
REF: ACCRA 02044 
 
1. This cable highlights significant legislation that passed 
Parliament during its October 5 - November 4 session and 
follows up on bills of particular US interest, as highlighted 
Reftel. 
 
2. In its final session of 2004, Parliament ratified the 
OPIC-Ghana Investment Incentives Agreement, passed the 
agreement to purchase VALCO from Kaiser Aluminum, and 
approved a new civil aviation law and enabling legislation 
for the West Africa Gas Pipeline (WAGP).  Econoffs pushed 
extremely hard for passage of these four items during early 
October meetings with Parliamentary leaders (see reftel). 
(Note: The Minister of Parliamentary Affairs told the 
Ambassador that he appreciated the nudge from the Embassy on 
these matters.) Parliament also passed the Venture Capital 
and Long Term Savings bills, both priorities for President 
Kufuor and his administration. 
 
3. Parliament ratified the OPIC Investment Incentive 
Agreement between Ghana and the U.S. on October 19.  This 
agreement, which was signed in 1999 but never ratified, 
replaces the 1967 OPIC-Ghana agreement.  The new agreement 
will remove the lengthy GoG approval process that currently 
delays approval of OPIC projects by months,  OPIC will now be 
allowed to operate in Ghana's private sector without prior 
GoG approval of individual projects. 
 
4. Parliament passed the Civil Aviation Authority Bill on 
October 28.  This replaces the 1996 civair law and will 
ensure Ghana's compliance with obligations under the 
International Civil Aviation Organization (ICAO).  The new 
law also strengthens the regulatory powers of the Director 
General of the Ghana Civil Aviation Authority (GCAA).  (Note: 
 Econoffs stressed to leading Members of Parliament that this 
bill was critical for Ghana to stand a chance of retaining 
Category One status during the FAA safety reassessment later 
this year.  End Note) 
 
5. Following strong lobbying by Finance Ministry, Attorney 
General's office, Kaiser Aluminum officials and Econoffs, 
Parliament approved the VALCO Purchase Agreement on October 
28.  This agreement completes the GoG's purchase of 90 
percent of the issued shares of Volta Aluminum Company Ltd 
held by Kaiser Aluminum for USD 18.5 million (see septel). 
There was some concern that Parliament's minority parties -- 
mainly the NDC --  would not support the agreement because 
the GOG had previously made a payment of USD 5 million to 
Kaiser without prior Parliamentary approval.  However, the 
Attorney General's strong support for the agreement during 
several extraordinary meetings with the Finance and Trade and 
Industry Committees overcame any opposition.  The result was 
that the minority parties overwhelmingly supported the 
agreement and it passed with 120 votes in favor and only one 
vote against. 
 
6. Parliament passed the WAGP Bill on November 3.  This bill 
incorporates into Ghana's domestic laws the provisions of the 
West African Gas Pipeline Treaty between Ghana, Benin, 
Nigeria and Togo, which Ghana ratified in June 2004. 
Parliament also approved a USD 40 million loan agreement 
between Ghana and Nigeria to help Ghana fund its 16.3 percent 
equity stake in the West Africa Pipeline Company (WAPCo). 
Both actions were critical for WAPCo to achieve final 
investment decision for the pipeline by the end of November. 
 
7. Parliament also passed the Long Term Savings Bill on 
October 28 and the Venture Capital Bill on November 3. 
President Kufuor and Cabinet Ministers publicly stated that 
these two bills were their top priorities for this session of 
Parliament. 
 
8.  The Venture Capital Bill requires the establishment of a 
Venture Capital Trust Fund, which will make capital 
investments in small and medium scale enterprises and promote 
the development of a venture capital industry in Ghana. The 
GoG intends to finance the Trust Fund using approximately 20 
to 25 percent of National Reconstruction Levy. 
 
9. The Long-term Savings Bill passed allows for the formation 
of tax-deductible savings schemes to serve as a supplementary 
savings for retirements, home ownership and education. 
Employers may also make use of the fund to arrange pension 
funds for employees. 
 
10. Comment:  Minister of Parliament Owusu-Agyapong told Econ 
and Poloffs on October 5 that there was little chance 
Parliament would have time to cover its ambitious workplan. 
This was an abbreviated, last session before the December 7 
elections and Owusu-Agyapong doubted his ability to maintain 
a quorum, with most MPs out on the road campaigning.  That 
Parliament cleared its entire docket is a testament to how 
much it has improved as an institution.  That Owusu-Agyapong 
reoriented the schedule to emphasize the four items of 
interest to the U.S. is an indication of the willingness of 
Ghanaian government entities to cooperate with the U.S.  It 
also is an indication of the strong influence in Parliament 
wielded by the Executive Branch.  End Comment 
YATES