How much does Ghana MP make?

By: Kwaku A. Danso

Many people are forced to speculate on the salaries of Ghanaian MPs, Ministers and public officials since such figures are still in secrecy. A friend wrote this on one of our Ghanaians forum and I quote it here to make a point:

“I was appalled to hear from someone close to me that an MP in Ghana made his girlfriend pregnant and decided to send her to the UK to have the baby born there. The MP is married and apparently his wife is not aware of this affair. This girl in question is the daughter of my distant male cousin. The young girl is about 20 to 21 years old”. And then he asked: “how much this MP make to be able to sponsor his own family and a pregnant girlfriend in UK?”

Folks, Since some of us have had a chance to evaluate assets and financial figures in business, let me take this opportunity to share. We have been discussing these ethical issues for decades and in fact, in this case the girls is 20-21 so there is no violation of actual laws except moral laws of man. Unethical behaviors and expenditures of government officials are numerous to cite in our society. Where the MP gets his money from is known in the public but not documented, as Ghana does not disclose such matters. The exploitation was set up by the colonial masters to steal from the colonies. First Premier Kwame Nkrumah started making the salaries of public agencies public, in job advertisements, but then it was closed after he was overthrown. An MP or Minister or many in executive positions in Ghana are in control of or influence many projects that may be awarded by government in their constituency. No contractor gets any contract in any part of Ghana without the MP, DCE or both and sometimes the Assemblyman getting their share. It is standard business and the ordinary man on the street even knows it. Else why would they invest say $100,000 to $500,000 of their own money, some of them loans, in order to get to Parliament? Corruption and share of contracts aside, let us examine how much is taken from government coffers officially.

THE BASE (Taxable) SALARY – The base pay of an MP or government executive is estimated at about $5,000 per month or $60,000, but some Agencies like Electricity Corporation of Ghana (ECG) pay their top executives a a base pay of $15,000 per month or $180,000 per year.

SITTING ALLOWANCES for COMMISSIONS – Remember the case of the ECG Board salary published some months ago? The members of the Board were making from Ghc50,000 to Ghc120,000 for part time work per year. Sitting allowances of MPs, and other highly placed executives can thus be estimated when appointed to Boards, can be estimated. If ECG Board pays out $50,000 to non-MPs, how much do you think MPs get when they attend Committee meetings? Some of them may be making equal amounts or more per committee, and hence sitting allowances may be say $150,000 to $200,000 per year if they are on 3 or 4 committees of Parliament or outside.

OTHER ALLOWANCES – In addition every 4 years they get housing allowances, which may be for a modest house, say $3,000 per month or $36,000 per year. They also order vehicles for their use, up to about $100,000. And the good thing for them, after 4 years the government writes off those vehicles for them. In other words, any public official in executive position, Directors, Chief Directors, etc, may get $100,000 -$200,000 tax free, which at market value at 29% interest would be equivalent to about $190,000 for the $100,000 vehicle. If you took a loan of $100,000 at 29% interest rate for 60 months, your payment x 60 months will come to $190,451 ($38,090 per year). Most of them will take the vehicles home after the four years and order another one! Remember the Commissioner of Energy case, one Chairman Kofi Asante, during the Kufuor administration? A 4 year old Toyota Landcruiser may fetch say $60,000 and proper accounting should count that as income also. In addition they get petrol allowance for the vehicles, I have heard 200 gallons per month or say equivalent of $1,000 if we assume $5 per gallon ($12,000 per year).

PRO and EX-GRATIA EMOLUMENTS – Do we remember s former Speaker the late Lawyer Peter Ala Adjetey and the $90,000 Mercedes Benz order? How about former Speaker Sekyi Hughes and his house renovation issue? Remember President Kufuor and how he let his Secretary and Assistants write a proposal for his ex-gratia emoluments of more than $5 million, including 2 houses, 6 vehicles, paid overseas travel with security entourage, etc? One can guesstimate the MPs also have ex-gratia, after service, of say about $500,000 minimum or for a 4 years term average $125,000 per year.

THE ACTUAL SALARY of a typical MP of government executive is thus a small base which may be a taxable income of $60,000 to $180,000 per year, plus an equivalent of say $150,000 -$300,000 per year in allowances that are not taxed. This is the hidden secrets of our governments and why many fail to declare their assets before taking office. It also explains why the post-Nkrumah Ghana government can never balance her budget. The salary of public officials is hidden and we know no projects get completed, be they for water, electricity, or anything else, especially if you add the corruption factor also. This last part is where the officials on a project of say $20-100 million may have a portion of the money deposited in an account overseas either before or after the project. The estimated standard value used to be 10%, and hence a Minister may end up with $2 million to $10 million in what they call “Consultation fees” on the $20-100mil project. This is bribery! No doubt! According to some contractors, in general public contracts in the district of about $25 million may be doubled to $50 million by the Region and then to $100 million by the time the President office approves it and a loan is sourced. The party then gets to keep say $50 million and the District and Regional executives will share the $25 million. The President is fully aware and dare not talk even if he wants to, since his own family may be directly or indirectly implicated.

If you add annually an MP or Minister will have an official salary of: Base of say $60,000 (may be taxable), plus non-taxable income benefits as: Sitting allowances of say $150,000 (assume 3-4 committees), Housing of $36,000, Vehicle of $38,000, Petrol of $12,000, Ex-gratia emoluments of $125,000 >>Total estimated wages and benefits comes to $421,000 per year for the four year term if anybody wants to add these up for the typical MP, Minister, Presidential Aide who sits on say two committees. Out of this only the base pay of say $60,000 may be taxed. If one factors in taxes due, the gross wages would be far in excess of $500,000 to $600,000 per year.

Please note that all figures are based on interviews with various people over the years. If I am wrong, I challenge the Speaker of the Ghana House of Parliament or other MPs to correct me. My Email address is k.danso@comcast.net

Kwaku A. Danso, M.Eng., PhD (Organization & Management/Leadership) President - Ghana Leadership Union (NGO), Moderator-GLU and GLF Forums. Author: Leadership Concepts and the Role of Government in Africa: The Case of Ghana