The story of Ghana's seizure of the ARA Libertad caught my eye while on my way to Accra last month. It seems that when Argentina's currency peg collapsed about a decade ago, some private creditors refused to accept the government's repudiation of its sovereign debt. In this case, an investment fund called Elliot Management (with court rulings in its favour) has asked Ghana to sieze Argentinean property--in this case, a tall ship.
What has tongues wagging here in Ghana is the announcement that Argentina will now sue Ghana of this seizure.
Elliot claims to be owed $1.6 billion, so without a highly favourable valuation, the Libertad represents only a drop in the bucket.
It seemed odd to me for Argentineans to be hiring Kwesi and Kwabinah as hired muscle. Ghanaians are too happy-go-lucky to make convincing enforcers. Even in the event that a Ghanaian court agrees that the Libertad is fair game for seizure, history here favours a suboptimal outcome for Elliot &c.
"I'm here for the money you owe my boss! But if you don't have it, that's okay too."
On my first trip here (in 1996), there were highwaymen along the main road, with a noted concentration near Liberian and Leonian refugee camps. Other highwaymen could be encountered on roads all over Ghana, and a common trick was to pound nails through sandals which would be left on the road. When the vehicles stopped to repair tire damage, the thieves would strike.
The encounters went something like this:
"Hand over all your money!"
The villains move off.
"Wait! You can't just leave me out here in the middle of the forest with flat tires".
The villains return. They help the victim repair his tires. The villains start to leave.
"Wait! I don't have enough petrol to return home!"
The villains return. They give the victim money for fuel. The villains start to leave.
"Wait! I don't have any money for food on the road!"
The villains return. They give the victim money for food. The villains start to leave.
"Wait! I am going to need a drink with my meal to calm my nerves after this robbery!"
The villains return. They give the victim money so he can buy a beer (or alternatively, apeteshie).
The villains leave, possibly with less money than they started with.
In Ghana it is not uncommon for a Ghanaian to find that he owes the government some heavy sum. But the difference between the stated debt and what is finally paid can be immense--and usually in favour of the Ghanaian. That is because the government here--or, rather, its agens--recognize that they can't destroy someone's livelihood just to collect an arbitrary debt. So debt repayment becomes a negotiation--sometimes a very long one--with a lot of compromise on both sides.
That probably seems incredible to someone in North America or Europe, but it is the reality here where the government's ability to pursue its "creditors" is extremely limited.
The Ghanaian court is apt to look at this whole scenario, and rule that due to the trouble this ship represents, Elliot (or its sub, NML) upon taking delivery of the ship will be paid in full. Of course, they can only take delivery after paying the docking fee and the storage fee at Tema. Then they will have to pay a fee for the security provided by the government of Ghana while the ship was in storage. Then there will be the release fee, the exit fee, the immunization fee for whatever crew are brought in to take the ship back to New York . . .