Government defends telecoms sell-off against critics

28 Aug 2007

The Gambian government has defended its recent sale of a 50% controlling stake in national fixed line operator Gambia Telecommunications Company Ltd (GamTel) and its mobile subsidiary Gamcel, after critics attacked the deal for a lack of transparency and apparent flouting of public sector business law. A statement from the Department of State for Communication, Information & Technology (DOSCIT) attributed the surprise sale, which it agreed on 1 August with little-known Lebanese company Spectrum Group, to an urgent need to address deteriorating telecoms services. Spectrum reportedly has stakes in many industries throughout west Africa. The sell-off, which followed the privatisation of Gambia International Airlines two months earlier, was described by opposition politicians as a flagrant violation of laws governing public institutions; legislation outlaws the sale of public institutions or their shares without publicly inviting tenders. DOSCIT’s release, however, claims that the move was intended to salvage GamTel and Gamcel’s services and financial situation: ‘It would be recalled that GamTel over the last years had deteriorated in service provision, accessibility and quality of service…It is also experiencing stagnation in network expansion and subscriber base. Furthermore GamTel was near bankruptcy and is heavily indebted…The government consequently has been reviewing various proposals for strategic partnership to give GamTel the needed boost to enter into new business models, new technology with a view to providing high quality and affordable telecommunications services…The approved strategic partner is Spectrum Group, a company with investments in many industries throughout the region. The government and the new stakeholders have jointly assigned [Germany’s] DeTeCon International as the consulting and management partner.’

The leader of the main opposition, the United Democratic Party, lawyer Ousainou Darboe, said the government should have launched a competitive tender, or at least publicised the process: ‘I am not even sure whether the divestiture agency is even aware because everything should have gone through it,’ Mr Darboe told local newspaper The Point. He claimed there was no justification for privatising GamTel, especially when it has claimed to be one of the best managed telecommunications companies in Africa, second only to South Africa, and he posed the question ‘What is a new owner bringing in?’ He went on to say that ‘if government needs to get rid of its own share, Gambians ought to have been given the opportunity to purchase the shares or even if they don’t opt to float it publicly they should encourage some sectors of our business community, Gambians or insurance companies, to pull their resources together and buy it so that it remains in the hands of Gambians. But in this sense, you are putting a very vital player in the economy of this country in the hands of a foreigner and I do not think that is right…Nothing has been done that can be truly called transparent, and this has again belied [President] Jammeh’s advocacy of accountability and transparency. It shows that it is just mere rhetoric.’

Another opposition politician, Lamin Waa Juwara, leader of the Democratic Action Movement (NDAM), criticised DOSCIT’s press release for a lack of detail: ‘I think [the government] owes its people an explanation. GamTel was highly cherished in this country. For it to be said to be near bankruptcy and heavily indebted is news to me. They should tell the people what went wrong,’ he argued.