Government To Pay 60% of Car Loans To MP, Documents Reveal
A $28 million loan being sought on behalf of Ghanaian lawmakers to buy cars will be bourne by the Ghanaian taxpayer to the tune of 60%, an “intercepted document” appears to suggest.
Even without proper and fuller details, the car loan deal took its place among national headlines earlier this week when it was reported. Now, it would seem a better portrait of the deal is with us.
The Ghana Report has sighted two documents that have been explained as a copy of the loan deal that will be tabled before Parliament for deliberation and approval.
There are two documents. One is titled “The Loan Facility Agreement between National Investment Bank and The Ministry of Finance, Republic of Ghana (Vehicles For Members of Parliament)”.
The other facility agreement is for Vehicles for Council of State.
Each of the 275 parliamentarians will receive $100,000 from the $28 million that will be borrowed from the National Investment Bank (NIB). They are expected to purchase a vehicle of their own choice from this amount.
According to the loan agreement for the Members of Parliament (MPs), the Ghanaian government will have to sanction payment for 60% of the entire amount on a monthly basis over the course of 45 months. The MPs will pay 40% of the amount they were loaned and this will be deducted at source from their salaries.
However, the government will also pick up the 8.5% interest which will be surcharged on the $28 million principal. This means that the government will pay some $474,703.70 every month for the tenor.
The aforementioned amount represents the government’s 60% stake in the principal plus the interest on the entire sum of principal. NIB expects the MPs’ portion of the payment to total $248,888.89 monthly.
This means that each MP will pay just about $905 every month.
In the case of the Council of State, a $3.5 million loan facility agreement has been proposed for the 31-member advisory body to purchase cars.
The loan, under similar interest rate conditions as that for Parliament, is to be paid in 42 months, a period that will see each of the members of the council paying $33,333.33, or $1,033,333.23 combined.
The council will also see to only 40% of the amount that will be borrowed while the government pays $50,000 on each member’s behalf every month.
Public conversations on the loans
Meanwhile, the Director of Public Affairs at the Parliament of Ghana, Kate Addo, has dismissed the grounds on which certain members of the general public have taken issue with the loans for the MPs.
Speaking to Accra-based Citi FM, Addo said the fact that the MPs will pay [some of] the money is a good reason to support the decision.
She argued: “Some of these MPs have their constituencies in remote areas. These people need to have access to their constituencies. Ideally, these MPs have to visit their constituencies at least once a week.
These loans [will be paid] paid by MPs themselves, and they are deducted at source. So it is not as though they are going to get them for free. These monies will be recouped”.
On social media and on radio, different sections of the Ghanaian populace have criticised the decision that seems to have united both the minority and the majority groups in the legislative assembly.
The politics of the loan
In February this year, MPs expressed dissatisfaction with the government securing loans for them to buy cars for their official duties and pay from their pockets.
The legislators argued that such a decision was unfair to them considering that other government officials are given cars to work with.
The Minority Chief Whip, Mohammed-Mubarak Muntaka had raised concerns over the arrangement during the vetting of Osei Kyei Mensah-Bonsu as Minister-designate for Parliamentary Affairs.
He explained that District Chief Executives (DCEs), currently numbering 266 (only about 9 short of MPs) do not have to buy cars to work in their offices.
He lamented, saying, “that state is able to provide, maintain, fuel and chauffeur-drive them; yet in the case of a Member of Parliament, he has to go through all these difficulties.”
This week, the Ministry of Finance presented a loan agreement for $28 million to Parliament for the purchase of 275 vehicles for members of the current crop of Members of Parliament (MPs).