Friday, October 8, 2010

RESOLVE ISSUES AT GHANA COTTON COMPANY (PAGE 18, OCT 8, 2010)

LAST week, the Ghana Cotton Company Limited in Tamale made the headlines following a notice served by some of its workers to lay down their tools due to what they claimed was mismanagement of the company.
Clad in red T-shirts and wearing arm bands, the workers marched through the streets of Tamale and later presented a petition to the Deputy Northern Regional Minister, Mr San Nasamu Asabigi.
The petition, signed by the Local Chairman of the General Agricultural Workers Union (GAWU), Mr Zuanah Raphael, alleged that the workers had not been paid their salaries for the past six months.
It also mentioned that while the company had failed to pay these salaries, its management were spending money on other ventures which included providing car loans, paying huge salaries to top management, renting office premises in Accra at exorbitant costs and sponsoring some senior management members to pursue further education, although some of them were due for retirement.
The workers again accused the management of procuring expired and re-labelled insecticides that had led to the decline in production.
The workers entreated the government to undertake a forensic audit into the activities and operations of the company from 2004 when the company underwent divestiture to expose any wrongdoing.
They also called for a restructuring exercise, which includes appointing a Board of Directors and a substantive manager to redirect the company to attain growth.
In response to these issues, the management of the company issued a press release, signed by its Director of Corporate Affairs, Mr Akamboe Ayirebasia, which described the actions of the workers as unfortunate.
It said the group’s actions did not constitute the collective decision of both senior and junior workers’ unions from the three divisions of the company, which are in Tamale, Bolgatanga and Tumu.
Addressing the pertinent issues raised by the workers, the management said the inability of the company to pay its workers for the past six months was because the company could not make revenue due to a multiplicity of factors that include low yields, low lint prices and high interest on loans.
The management pointed out that while production had reduced from 38,300 metric tonnes to 1,421 metric tonnes, the prices of the commodity had also been unstable.
It further mentioned that the company acquired loans for its farmers at commercial rates and yet some of the farmers failed to repay such loans, and as such has now accumulated to over GH¢2 billion.
On the issue of expired insecticides, the management said it received complaints from cotton farmers about the insecticides, which the company supplied in 2007.
It said investigations were carried out by the company and the Serious Fraud Office (SFO) and no evidence of malfeasance was found. It further stated that while some farmers complained of low yields, others in Tumu who used the same chemicals recorded average yields.
The management also reacted to the objections raised by the workers regarding car loans, insisting that “the loans were given to raise productivity through boosting the morale of beneficiary staff.”
It again defended its decision to sponsor the training of managers, explaining that such training would equip the management staff with the managerial skills necessary to take the company out of the woods.
The management however asked the workers to be patient because the world market price for lint recently rose above 100 cents a pound which is a good sign.
Again, the government has announced a GH¢5 million support for the cotton industry and has promised to double the facility next year should the loan recovery reach 100 per cent.
Aside from these developments, various stakeholder forums have recently been organised to discuss the woes of the cotton industry and to seek sustainable solutions.
It is clear that the cotton industry is facing serious challenges. The emerging rifts in the company could either be that effective communication does not exist between the workers and the management or that certain illegalities are really going on.
Whatever the case, the government must investigate to ascertain the real situation and issues involved and resolve these matters in order to put the company back on track.
Obviously, if the government wants to transform the Savannah Region and bridge the north-south development gap, then the cotton industry is one of those critical areas that must be given adequate attention.

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