The Case Against The Ghanaian MPs’ Loans

The MPs’ Loans scheme is an abusive collusion between the executive and legislative branches of the government to rob Ghanaians and to undermine our so-called democracy. The policy of having the government guarantee loans for MPs to buy private property weakens the capacity of the legislatures to act as a fully independent check on executive action. The policy is not only flawed and fraudulent, but also violates the ethical standards of fairness, justice, common good, and virtue. The loan program is flawed because it is based on a convoluted policy definition and analysis. It is also a fraud because it is a deliberate act by both the legislative and executive branches with the intent of acquiring private property at the expense of the public.

The most critical component of any public policy is the determination of which policy issues will be addressed in the public sector. The definition of a problem in public policy determines how people perceive the problem that is on the public agenda. A clear and genuine definition of a problem not only determines the kind of evidence that bears on the problem, but also helps us to determine which solutions are effective and feasible. Knitting private interests and public interests together by using public resources to acquire private property, as is being done in the MPs’ Loans program, is bad policy.

The policy questions that need to be addressed in this policy debate are: Is the MPs’ transportation issue a public issue or a private issue? What problem does the Loan policy address? And whose problem is it? What alternative choices do we have in dealing with the problem? Which of the alternatives presents the least cost and provides the greatest benefit? The success or failure of the implementation of public policy depends on many factors; among them are the theoretical analysis behind the policy, its political considerations, the technical know-how of the policy’s implementers, and the availability of resources. The MPs’ Loans program is a bad policy because the analytical and political consideration that went into the decision were flawed.

The question is whether the government is responsible for providing transportation for the MPs to perform their official duties. In other words, is providing vehicles part of the conditions of services of MPs? If the answer is yes, then the government has to find the most economically feasible way of providing the MPs with transportation. It is ethically and financially prudent for the government to evaluate its options by investigating which option will produce the most good and do the least harm to Ghanaians. The government needs to find the option that treats Ghanaians equally or proportionally, and serves the best interests of the majority of Ghanaians. We need to ask whether guaranteeing $50,000 loans to every MP, knowing from past experience that they will not repay them, is the best policy option.

Good public policies are guided by certain core principles. First, politicians and public servants are accountable to the public; second, the elites in politics don’t have the right to pursue their interests without constraints; third, government bureaucratic decision processes must be open, accessible, and transparent, as well as responsive to public concerns; and lastly, people affected by the policy have the right to information about the proposed policy program, and the right to challenge the need for the policy. The MPs’ Loans program fails on all these fronts. First, the politicians are providing no information about how much they have repaid of the money previously borrowed. We don’t even know how much our MPs are paid or the total annual expenditure on a given MP. Second, the past has shown us that Ghanaian politicians have pursued their own self-interests without constraint. What is the rationale for increasing the loan program from $10,000 to $20,000, and now to $50,000? Why can’t the public have any input on the discussion?

If the MPs’ transportation is not a public issue, then the government should clearly spell it out to the MPs that they will be responsible for providing their own means of transportation. It is difficult to see the logic of policy argumentation in this program. What is the logical connection between increasing the MPs’ loans and their effectiveness or efficiency? What empirical data warrants the claim that MPs’ loans have to be increased from $20,000 to $50,000, a 150% increase? The policy is flawed because no clear relationship has been established between the sums the government is spending on these do-nothing MPs and their efficiency or effectiveness. The policy question is: What will Ghanaians lose for not providing these loans to the MPs? What are the real costs and benefits of the work of the MPs? Further, the policy undermines the checks and balances inherent in constitutional democracy. Where is the independence of the legislature after colluding with executives to exploit voters? Increasing MPs’ loan limits from $20,000 to $50,000 has no rational purpose except to influence parliamentarians to vote in the president’s way.

It is disheartening and pathetic that the people the Ghanaian electorate has trusted to represent it now prey upon that electorate. The beauty of parliamentary democracy is that the parliament, as a freely elected body, will stand in for the people who have entrusted them with their votes to represent them. The parliament is the main institution through which the will of the people is expressed, and through which popular self-government is realized. MPs are supposed to represent the people in dealing with the other branches of the government. But sadly, in Ghana, MPs have become economic parasites, sucking all the blood they can from the economic bloodstream.

The policy is fraudulent because both the executives and the legislature know the MPs are still delinquent in their previous loans’ repayment, and yet loans are still advanced to MPs in increasing amounts. Large-scale disbursement of public property to special and privileged interests under the pretext of national interest is generally considered corruption. The argument that these MPs don’t have money to buy their own cars flies in the face of the amount they are asking for. Also, if transportation is the issue, then why are professional MPs like Alban Bagbin and others getting new loans when they obtained loans to buy cars four years ago? How many times do people like Bagbin need to buy cars?

Why can’t Ghanaian MPs be modest as legislators in other countries? Joe Biden, the current American vice president, rode the train for many years as a senator. If Joe Biden could ride a train, then why can’t Ghanaian parliamentarians drive less expensive cars in Ghana? Why would someone who claims he can’t afford basic means of transportation ask for a $50,000 car loan? The implicit assumption is that the money will never be repaid. The MPs’ loans can be construed as bribes by the executive branch at the beginning of every parliamentary session, attempts to buy the MPs’ votes with taxpayers’ money. The real cost of the loan amount for each MP for those four years is not $50,000, but $90,000. Even at a simple interest rate of 20 percent, assuming they don’t pay anything by the end of the four years, $50,000 will attract an interest sum of $40,000. So the real cost of the loan after the four years is $90,000. In 1993/94, when the MPs obtained loans, the interest rate the SSB charged on such loans was 29.5 %, but the MPs were asked to pay 2%, and yet refused to pay.

The policy is also unethical because it violates the basic ethical principles of fairness, justice, and virtue. The utilitarian principle of ethics emphasizes that ethical action should provide the most good or do the least harm to the community. Giving $50,000 to MPs who don’t initiate bills, investigate cases, or promulgate laws to deal with present socioeconomic problems is unfair and unjust. The opportunity cost of this expenditure is the ordinary people who are dying in unhygienic hospitals without basic medical equipment and medicine. The ethical principle of fairness demands that society pay people more based on their hard work or their contribution to the public welfare. It is therefore unfair and unjust to spend huge amounts of money on an institution that does not add any value to the society. As Rawls contended, “the issue of fairness comes first, and our principles of justice have to be derived from what could be justified as fair.”

The idea that politics is all about making money is a bad one that needs to be discontinued. Politics does not have to be a bad thing if we have good people who see the world beyond their own self-interest. Marcus Aurelius, one of the best emperors of Rome, observed in his meditation regarding politics, “True politics—the only thing worthy of name and the only thing I will consent to practice—is politics in the service of our fellow man, and in the service of the community … Its basis is ethical, insofar as it is only the realization of the responsibility of all towards all …” Good governance requires transparency and accountability, particularly in financial management.

The MPs’ loans saga is a vivid indication of the contrast between the lightweight promises of our politicians during political campaigns and a truly democratic mentality devoted to the welfare of the state. Some people have written in favor of the resolution, arguing that substantial rewards should be conferred upon the do-nothing MPs. I have a heartfelt conviction that for all the vehemence I may seem to showing on this issue, there is not the slightest element of unkindness in my attitude.