Business in Ghana

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Football Is Not Our National Sport: Try “Financial Leakages” And Revenue Diversion

Posted by Business in Ghana on July 28, 2013

Prof. T. P. Ulzen,

A middle aged man is driving to Cape Coast from Accra. Around Awutu, he overtakes the car ahead and round the bend, he is flagged down by the police. He is told that he has exceeded the speed limit. He does not dispute this and is told he will “be processed” for court in Winneba at 10:00am the next morning, to which he agrees.
The policeman is seemingly perplexed. The driver reiterates that he will present himself at court the next morning and asks for the officer’s name. This upsets the officer but the driver says “it’s on your shirt anyway.” but the officer gets increasingly upset, asking “why do you need my name?” The driver says “you are a public official doing your job. I just need your name and number for reference for the court hearing. You have taken my licence so I must be sure of who you are.

A second officer then appears and says “director, let’s just settle this. There is no need to get upset.”
Driver: I’m not upset.
2nd officer: I think you are. If you cooperate I can talk to him and we can drop this matter now, so you do not have to waste your time.

Driver: I do not pay bribes. I understand that I have committed an offence so I’ll come to court.
2nd officer: Oh, chief…..

The driver proceeds westward on his planned trip.
The next day, he arrives at Winneba at 4pm late for court.
Police: Eih. You didn’t come to court this morning as instructed.
Driver: I’m sorry but my car broke down so I got here as soon as I could.
Police: hmmm. You see, now you have to see the prosecutor but it will be complicated. As I know him well, I can talk to him. Otherwise, to get your licence back, you will have to pay 300 Ghana.
Driver: I just want to know the official fine for the offence. I understand that I was speeding and that is a traffic offence.
Police: let me talk to him and see what we can do.
Driver: I just want to know what the fine is so I can pay it.
Police: it is not like that.
Driver: what do you mean?
Police: do you want your licence back?
Driver: yes but I want to pay my debt to the government of Ghana.
Police: as for this “m3n hu bi da”
Driver: I am a patriotic Ghanaian and for my mistake, I am prepared to pay the government.
Police: Director, here is your licence. You can go.
From this account, it is obvious that many in the police act as a criminal cartel supported with recently increased publicly funded salaries, equipment, uniforms, electronic gadgets and communications equipment. They stand between the state and revenue that is the government’s just due. They are often prepared to leave money on the table, rather than collect revenue for the government and good people of Ghana.
Variations of this encounter occur on a regular basis. Officers are seen daily on the highways pocketing bribes with fearless impunity and denying the state much needed revenue. It is very disgraceful and particularly so when one is traveling with foreign visitors or tourists that we welcome to Ghana the “most hospitable country in the world.” The police have no shame at all and are an embarrassment to the nation on a daily basis.
The Police Service clearly has a cultural attitude that is non-patriotic, unprofessional and quite frankly results in economic sabotage of the nation. In order not to have their time wasted, many citizens simply cough up the money and move on but this collusion simply deprives the state of much needed revenue on a constant basis.
Spot fines have been piloted in a few areas but we hear of officers accompanying offenders to ATMs to extort a discounted amount and then writing off the fine.
Their superiors can express umbrage as they often do but simply transferring offending officers does nothing to stem the national hemorrhage. There is also a level of denial in the hierarchy of the police force. Recently, when the report came out that the 54% of Ghanaians thought the police was the most corrupt institution, the spokesperson said something to the effect that the police were not the only corrupt organization in the country and everyone let it ride. They are the law enforcement organization of the country and if that is their best response, As Stevie Wonder would say “Heaven help us all”!
To be fair, if you have to do business with the government of Ghana, and need to pay a fee to have anything processed, the public servant you encounter who is supposed to serve you will obstruct you until you understand that you must give them something to get your just due as a citizen.
How many auditor – generals’ reports have been tabled over the last decade detailing frank robbery of the state by public officials? What has been done? Precious little.
I like the way these losses are described as “leakages”. It suggests that the revenue losses are passive acts of God. We are being actively robbed by people we pay, yet our leadership has not shown the intestinal fortitude to deal with what is estimated conservatively to be upwards of a $5bn annual liability at a minimum; yet we are in line, cap in hand to borrow $3bn from China for infrastructural development. We don’t need aid or loans. We need a new kind of leadership which both major parties have failed to provide thus far. Unfortunately, the 3rd party in the last election (PPP) which would be the theoretical next choice, is so far back that it is unlikely they will form a government any time soon. Anything is better than what has been served up by the two major parties at this point.

These “leakages” as they are called, also occur at the Local Government level. Market traders pay 20p a day to a tax collector in most District Assemblies. Most of this haul never makes it to the assembly. This is a system that may have worked in biblical times but not suited for the 21st century. If the District and Metropolitan Assemblies really want this revenue, it would be easier just to have the market traders pay roughly Ghc 30.00 every 6 months at a designated bank or other financial institution. They would then take evidence of their payment to the assembly and get a sticker or certificate confirming that they are in good standing. The current tax collector would now be deployed as an inspector and identify defaulters for legal action. There would still be” leakages” but the Assemblies would receive a lot more revenue.
We are full of self-congratulation for deporting over 3000 illegal Chinese environment-destroying gold miners but no one is addressing how they got into the country in the first place. Who collected money and turned the other way? How did the Chinese in such large numbers get access to the land and waterways they so recklessly desecrated? Ghanaians are at the centre of this. Will they be found and prosecuted? Like the Auditor- General’s report, if past history is our guide, it will be ignored and thieves will go unpunished so they can pillage and loot again and again. Laying waste to Ghana is now a spectator sport. The president issued a directive for the Attorney-General’s Department to act on the Auditor- General’s report but the Attorney – General’s Department was itself indicted in the report. Clearly, there has to be a way in which the constitution empowers at least one arm of Government to rise above this costly deadlock.
The cost of ignoring this scale of corruption is what we see in poor sanitation, high maternal mortality, the poor state of our roads and the declining quality of education which has been so sadly politicized. Many of our university graduates are barely literate and not employable. One only has to scan the national dailies for a regular army of grammatical, syntactical and other errors. Yet these publications, presumably have editors. There is a current parliamentary debate about the need to raise taxes on the few identified sources of revenue while we let upwards of $5bn “leak” away, to use the local lingo.
Irrespective of the outcome of the Supreme Court case, rooting out systemic corruption is the only sustainable and affordable development plan for the nation.
We need leadership that is determined to find solutions to this problem across the board, so that after the tax net is broadened to include many who run a parallel tax free economy, the revenue goes to the state and is applied to truly serving national development goals. More to the point, corruption is so common that it is a wonder thousands of people are not being prosecuted daily. To this end, Mr. Martin Amidu’s crusade to retrieve funds for the state in the Woyome affair is refreshing. It took a former attorney-General and Vice-Presidential candidate to fight the system. What is the ordinary citizen to do? If he is a pariah in his party then there is something seriously wrong with the party he belongs to and he may need to join forces with one of the smaller parties. Democracy should be about values not just ideology.
Most of our institutions are perennially underfunded and underperform as a result of the constant drum beat of diversion of state funds to individuals at the expense of the state. We are spending roughly 70% of GDP on salaries for a public sector that is bloated and shows little objective evidence of productivity in the service of development. It is time for bold and purposeful decisions like downsizing the civil service but modernizing it with technology to ensure efficient and corrupt free services for the public. Many will have to be re-trained for other jobs that are currently unfilled because of the paucity of skilled and well –trained personnel.

Admittedly, there are many hard working and patriotic Ghanaians who toil every day in the ethical desert, that Ghana has become but they need strong leadership and support to move the country towards its development goals. We must shed the classmates we have on the International Corruption Index like India, Nigeria and Zimbabwe if we are to recapture and exceed our former position of greatness in the comity if nations.
Our crisis is not about the results of the last election. Ours is a crisis of the quality of leadership Ghana has been subjected to for decades. The challenge is to transform how the country conducts its business in the service of its citizens. It is not just about a balance sheet of imports and exports.

President Mahama should have at least an additional “wise” man or woman seek and implement solutions to reduce the cost of rampant corruption to the state. Corruption is like anything else. It must be anticipated and prevented by carefully designing our operational and service systems. Following the implementation of such preventative measures, those who then breach the law must face the prescribed outcomes, otherwise nothing would have changed. If The NPP petition before the Supreme Court is successful, their task will be essentially the same.

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