It has emerged that government will absorb 60% of the loan being granted to Members of Parliament and Council state to purchase vehicles. The state will also pay the interests that will accrue on the loans to be given to these public officeholders under Article 71 of the constitution.
This means both the Members of the 8th Parliament and Members of the Council of State will have to pay back only 40% of the loans without interest. This was contained in the emolument committee report which has been approved by Parliament. According to the document, each member of these two bodies is to receive a loan of $100,000 for the purchase of a vehicle.
The government on Tuesday laid before parliament the $28 million interest-free facilities with the National Investment Bank for lawmakers. The MPs are supposed to repay the loan within four years.
A $3.5 million separate facility from the same bank has also been laid for the purchase of vehicles by members of the council of state.
“The repayment of the facility by the beneficiaries shall be made from deduction at source by the Parliamentary Service of Ghana to the NIB. The repayment by the beneficiaries and the Government of Ghana shall be made at the end of every month for the duration of the agreement,” the loan agreement presented to Parliament by the Finance Minister said.
Commenting on the development, Professor Stephen Kwaku Asare said the state is giving the public officials a gift and not a loan.
“You cannot give someone $100,000 plus interests and ask that they give you $40,000 over 4 years and call that a loan. Plainly, you are giving the person a non-taxable gift of $60,000 plus interest structured to disguise its substance. Let us call a loan a loan and a gift a gift”.