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Evalue-Ajomoro-Gwira MP Kicks Against VALCO Sale: Strategic Sovereignty vs. Privatization

Introduction

The future of the Volta Aluminium Company Limited (VALCO) has become the center of a heated economic and political debate in Ghana. As the nation seeks to revitalize its industrial sector, a significant conflict has emerged regarding the ownership and management of this historic state-owned asset. Prof. Kofi Arko Nokoe, the Member of Parliament (MP) for Evalue Ajomoro Gwira and a Board Member of VALCO, has publicly opposed the potential privatization or concession of the company. His stance aligns with the Industrial and Commercial Workers’ Union (ICU), signaling a unified resistance against the transfer of ownership to private entities.

This controversy arises at a critical juncture for VALCO, which is currently undergoing a modernization drive aimed at increasing production capacity. The government argues that private strategic partners are necessary to inject the required capital for this retrofit. However, opponents argue that selling the national asset would constitute a betrayal of public trust and undermine Ghana’s long-term industrial sovereignty. This article provides a comprehensive analysis of the situation, exploring the economic implications, the arguments from both sides, and the potential impact on the Ghanaian aluminum industry.

Key Points

Background

The History of VALCO

The Volta Aluminium Company Limited (VALCO) is a cornerstone of Ghana’s industrial history. Established initially as a reduction plant, it was designed to utilize the abundant hydroelectric power generated by the Akosombo Dam. For decades, VALCO represented the pinnacle of Ghana’s manufacturing capabilities, contributing significantly to the national economy and providing employment to thousands. However, over the years, the company has faced challenges related to aging infrastructure, fluctuating global aluminum prices, and management issues, leading to periods of reduced operational capacity.

The Current State of Operations

As of early 2026, VALCO is operating at a fraction of its potential. Reports indicate that the facility is running at approximately 23% capacity. This underutilization represents a massive loss of potential revenue for the state. The company’s struggle is not unique in the landscape of state-owned enterprises (SOEs) in Ghana, but its strategic importance to the downstream aluminum industry makes its fate particularly critical.

The Role of GIADEC

The Ghana Integrated Aluminium Development Corporation (GIADEC) plays a pivotal role in the sector. As the state agency mandated to develop the aluminum industry, GIADEC is responsible for overseeing the entire value chain—from bauxite mining to alumina refining and aluminum smelting. Recent strategic plans by GIADEC have focused on modernizing VALCO to align with global production standards, which has sparked the current debate over how best to finance this modernization.

Analysis

The Economic Case: Value Addition vs. Raw Export

Prof. Kofi Arko Nokoe’s argument against selling VALCO is rooted in a fundamental economic principle: value addition. In the global commodities market, raw materials like bauxite are sold at a premium when processed into higher-value products such as alumina or aluminum metal.

Currently, raw bauxite is traded at a relatively low price point—estimated by Prof. Nokoe at $40 to $50 per ton. By exporting raw bauxite, Ghana captures only a fraction of the potential revenue. In contrast, a fully integrated and operational VALCO can process this raw material into aluminum ingots. The value of processed aluminum is exponentially higher. Prof. Nokoe suggests that domestic processing could multiply the value of the raw material by tenfold. This multiplier effect translates to increased foreign exchange earnings, job creation, and the development of a robust downstream manufacturing sector that utilizes aluminum products.

The Privatization Debate: Strategic Equity Partner vs. State Ownership

The central tension lies in the method of funding VALCO’s modernization. The government and proponents of the “strategic equity partner” model argue that the state lacks the financial capacity to inject the estimated $2.3 billion required for the retrofit. They posit that bringing in a private partner brings not only capital but also technical expertise and operational efficiency.

However, Prof. Nokoe and the ICU vehemently oppose this view. They argue that privatization—or even a concession arrangement—risks sacrificing national control over a strategic asset. The ICU has warned that such moves are often driven by “extremely positioned individuals” who prioritize private profit over national interest. The fear is that private ownership could lead to asset stripping, reduced workforce, or a shift in focus away from the national industrial master plan.

The NIB Blueprint: A Viable Alternative?

A critical component of the anti-privatization argument is the reference to the National Investment Bank (NIB). The ICU and Prof. Nokoe point to the recent recapitalization and restructuring of NIB as proof that the state can successfully rehabilitate its own institutions without ceding ownership. If the government could mobilize resources to stabilize NIB, they argue, a similar approach—through budgetary allocation, development bank financing, or strategic state funds—should be applied to VALCO. This perspective emphasizes sovereign control and the belief that state enterprises can be efficient when properly managed and funded.

Political Weight and Boardroom Dynamics

Prof. Nokoe’s dual role as an MP and a Board Member of VALCO lends significant weight to his opposition. As a legislator, he represents the constituency directly affected by VALCO’s operations, and as a board member, he has insight into the company’s internal affairs. His statement that the specific sale proposals have not yet been formally tabled before the board suggests that the push for privatization may be happening at the bureaucratic or executive level (within GIADEC or the Ministry) before reaching the corporate governance body of VALCO. This highlights a potential disconnect between policy formulation and corporate oversight.

Practical Advice

For Policymakers: Ensuring Transparency in SOE Management

To navigate the VALCO impasse, policymakers must prioritize transparency. The allegations made by the ICU regarding “aggressive scheming” need to be addressed with clear communication.
1. **Open Dialogue:** Establish a tripartite committee involving the Ministry of Trade, GIADEC, the VALCO Board, and the ICU to discuss the modernization roadmap openly.
2. **Feasibility Studies:** Conduct and publish independent feasibility studies comparing the long-term economic impact of state-led recapitalization versus private partnership.
3. **Clear Timelines:** Provide a definitive timeline for the $2.3 billion retrofit to manage stakeholder expectations and prevent market speculation.

For Investors and Stakeholders: Understanding the Aluminum Value Chain

Stakeholders looking to invest in Ghana’s aluminum sector should understand the distinction between upstream mining and downstream smelting.
1. **Value Capture:** Investments in downstream processing (smelting) offer higher economic returns for the host country compared to raw material extraction.
2. **Risk Assessment:** While privatization promises efficiency, it carries the risk of regulatory capture and social unrest if labor interests are ignored. Investors should consider models that balance profit with social responsibility.

For Labor Unions: Advocating for Modernization

The ICU’s role is crucial in safeguarding workers’ rights, but modernization is inevitable for survival.
1. **Skill Upgrading:** Unions should negotiate for training programs that prepare the workforce for modern, automated smelting technologies.
2. **Productivity Agreements:** In exchange for job security, unions can collaborate with management to set productivity targets that make state-owned operations competitive with private sector benchmarks.

FAQ

Conclusion

The debate surrounding the sale of VALCO is more than a corporate governance issue; it is a defining moment for Ghana’s industrial policy. Prof. Kofi Arko Nokoe and the ICU have presented a compelling case for retaining state ownership, emphasizing the immense economic value of domestic processing and the feasibility of state-led recapitalization. The argument that raw bauxite exports yield minimal returns compared to a fully integrated smelting operation underscores the need for strategic patience and investment.

While the government’s pursuit of a $2.3 billion investment is understandable given the urgent need for modernization, the alternative model—exemplified by the NIB recapitalization—suggests that state ownership does not preclude efficiency or growth. Ultimately, the path forward requires a balance between securing necessary capital and preserving national sovereignty. For the Evalue Ajomoro Gwira constituency and the nation at large, the goal remains a revitalized, efficient, and Ghanaian-controlled VALCO that drives value addition and industrial growth.

Sources

* **Life Pulse Daily.** (2026, January 18). *Evalue-Ajomoro-Gwira MP kicks towards VALCO sale.*
* **Industrial and Commercial Workers’ Union (ICU).** (2026, January 14). *Statement on the Proposed Concession of VALCO.*
* **Ghana Integrated Aluminium Development Corporation (GIADEC).** *Strategic Plan for Modernization and Expansion.*
* **Volta Aluminium Company Limited (VALCO).** *Operational Performance Reports (2025-2026).*
* **National Investment Bank (NIB).** *Recapitalization and Restructuring Overview.*