There is no disputing the fact that one of the key challenges for a nation such as ours is how to raise funds for the numerous development projects we would like to undertake. It is a truism that Ghana, like most other Third World nations, has often been held hostage to the dictates of international finance gurus through prescriptive economic polices (including the infamous Structural Adjustment Program (SAP) of the erstwhile PNDC) and relatively high interest rates.
Despite differences in political lineage and obeisance, all the different regimes in Ghana have for the most part resorted to international borrowings from the World Bank, IMF and private international financial institutions. It would appear therefore that, to a large extent, our capacity to fund our development depends on the ease with which we can obtain such loans on the international market.
It is clear that we would never be able to borrow sufficiently to provide all the infrastructure and amenities we need to develop. The simple fact is that once we borrow, we need to pay it back, with interest. Even when we get it, competition for the limited funds we borrow is fierce and some sectors are left out altogether. It is therefore a matter of urgency that we as a nation come up with ingenious methods of raising funds to supplement what we obtain from abroad. It is high time our leaders explored alternate methods of obtaining finance to fund programs in Ghana. Otherwise any dream of escaping our inherent poverty could remain just that, a dream.
Previous administrations have tried all kinds of alternate funding sources but quite often these leave very little to be desired. The intricate arrangement under which a presidential jet was purchased by the last NDC administration is still to be resolved. The current NPP administration has tried its hands at sourcing alternate funding but so far its effort has been at best an abject failure. Attempts to secure so-called 'low-interest' loan from the shady International Finance Consortium (IFC) in 2002, and the Chinese New Technique Construction Investment (CNTCI), otherwise referred to as the “Chinese Barber Loan”, in 2004 have been amateurish at best.
All this while, there are quite simple and legitimate ways of getting some 'cheap' money that no one has to date considered nor exploited to date. In this article I want to discuss how the government of Ghana could receive funds from its citizens abroad.
Sourcing Development Funds From Citizens Abroad
One source of potential funding for development projects is Ghanaians in the Diaspora. Today, the number of Ghanaians living abroad is estimated between at around 2 million. In fact, it was recently reported that the number could be as high as three million (About 3 Million Ghanaians Live Abroad; Ghanaweb, 16 September 2004).
No government has as yet considered the vast potential of receiving contributions from the large Ghanaian community living outside the nation. Of course, many towns and villages, secondary schools, charity organisations and even churches are taking advantage of the fact that they know people overseas and tap into them to organise funds on their behalf. Why can't the government also tap into this source for the benefit of the entire population?
Statements by finance officials suggest that close to US$1 billion is remitted by Ghanaians overseas to family and friends in Ghana each year. I used to question the accuracy of that figure until I did the sums. If a million people abroad remit an average of US$1,000 a year, that's a cool US$1 billion! But then, this money is available for the exclusive use of the recipients and, while there are flow-on effects for the economy, the nation as a whole has no hand in utilising the largesse for the benefit of its citizens. And I'm not suggesting we tax remittances either.
If indeed, we have so many people who are able to part with US$1 billion a year, albeit for causes they believe in and/or family responsibilities they cannot avoid, there is reason to believe there is more where that came from. Why can't a government find ways to mobilise some of that money for worthy national causes. We need a bit of lateral thinking on these issues!
On that basis, I have come up with a suggestion. I admit that the proposal is not entirely original but I have considered and provided suggestions to address some of the potential risks associated with such a scheme. I suggest that the government of Ghana set up a special fund (National Development Fund, for example) for the purpose of collecting annual development contributions from Ghanaians living abroad. The key here is it would be a contribution, a sort of voluntary tax.
Creation of Fund - Assumptions
A key assumption for the fund is that able-bodied Ghanaians living overseas would be expected to contribute US$100 per year, as a minimum, into the fund. Estimates of the number of Ghanaians overseas are as high as three million; for the purpose of this exercise, however, I have assumed the number to be around one million. That is a rather conservative estimate, I know.
Assume, for the sake of this exercise, that a quarter (250,000) of that number is made up of students, children aged less than 18 and the elderly. They would not be expected to contribute. This would mean we have three-quarters of a million (750,000) able-bodied Ghanaians overseas. Of course, not everyone is gainfully employed so again assume another quarter of a million (250,000) do not have the wherewithal to contribute to the nation's development fund. That still leaves a significant figure of 500,000 Ghanaians around the world with the financial capacity to contribute to the fund.
Knowing that in every community there are people who simply do not care one way or another, let us also assume that around 250,000 people would not spare a dollar for the nation. In other words, out of the million people who are estimated to live overseas, we assume there are only 250,000 who are ready, able and willing to participate in this funding scheme. If these 250,000 people were to contribute the equivalent of US$100 annually to the development fund, this would amount to a tidy sum of US$25 million interest free money flowing to the nation. Yes, and that is money the nation would not have to borrow and would not have to pay interest on!
Even on the conservative estimates used here, Ghana could potentially have access to anywhere between US$25 million annually and over a 10-year period this means we could plan for projects of up to US$250 million. Throw in the possibility that the existence of such a fund could motivate the numerous Ghanaian associations around the world to embark on more focused fund raising activities the proceeds of which could be directed into it and you get an even bigger financial windfall. How much money could be raised through such channels is open to speculation and, therefore, I would not hazard a guess at this point. Suffice to say, however, that once the Ghanaian community accepts the concept of this fund, it will not be difficult to get our people energised to solicit and raise funds for the specified causes.
Taking just individual contributions for a moment, one could argue that US$25 million is hardly enough funding to stop us from crawling to the IMF, World Bank and our so-called development partners for our yearly dose of development aid. That's very true but what this money would do is stitch up some essential funds for specific projects so that borrowed funds could then be directed at bigger and longer-term projects.
How Funds Could Be Used
How would such monies be used? For a start, I could think of several areas where such free money could go. I will discuss just three examples: hospitals, the National Health Insurance Scheme (NHIS) and the Tema Oil Refinery (TOR) debt. Of course, you could mount similar arguments for the education system, schools and student loans; roads and numerous other possible projects.
Take health, for instance. Imagine that we plan for at least one major hospital in each of the regions. Hospitals that are state of the art, fully equipped and staffed to deliver quality services. Why can't we have a third major hospital in Accra, sited in the northern parts (between Tesano and Nsawam); and a second major hospital in Kumasi? Why can't we have a functioning ambulance system?
Of course US$25 million is not a lot of money in the context of national development but can you imagine what that amount would mean for our hospitals. Ask anyone at Korle Bu, 37 Military or Okomfo Anokye hospitals what could be done with that amount of money. Upgrading outmoded facilities and procuring modern equipment to provide better services all year round, that's what!
There has been so much brouhaha over the funding for the NHIS? This is a really important scheme for the majority of our population? I'm not sure how much the whole scheme will cost in a year but imagine that people in the Diaspora could contribute US$25 million towards it. How grateful would the people of Ghana be? If stories about poor old women being detained in hospitals because they cannot afford the fees do not touch your heart, you are not human. I once read about a woman who had just given birth at Korle Bu but could not be released because her family was unable to pay the fees. Just imagine that!
The current government has done well by reducing the amount of debt owed by TOR but I'm sure there's more piling up with the reluctance to increase prices to match upward movements in oil. Of course, increasing the price will amount to an electoral suicide. How quickly could that debt be paid off if we could get overseas-based Ghanaians to contribute towards it. It could even be that because of this, governments may never have to raise prices again. Think about it.
I am sure most readers would be saying to themselves 'fine, but how do I guarantee that those in charge would not misappropriate my money'? Like most of you, I am very sceptical of giving my money to government, no matter their political complexion. In fact, it is because of this scepticism that many good-intentioned people are more likely to continue funding community organisations rather than contribute to a grand scheme as proposed here.
In any major city around the world, you are bound to have associations that raise funds for small community projects in Ghana. I think most of them do great jobs. People are more confident the money they provide would go to needy areas and no one is likely to benefit at their expense. Even so, there are stories about groups and associations in which the disbursement of funds, or lack of it, has led to strife and acrimony among contributors.
For such a proposal to succeed, any government that is bold enough to take this on would need to go to great lengths to disabuse the minds of people like myself about how funds would be utilised. To do this, we would need to be assured that there would be strict rules of accountability on any monies flowing into the fund.
I propose the following. The Bank of Ghana would manage the account in conjunction with a task force on which members of the local media and prominent members of Ghanaian Associations in at least three Continents are represented. This group, of which members would be rotated annually, would decide in advance which specific projects would be funded each year. The Bank of Ghana would need to set up a special account and publicise its details. The Bank of Ghana should commit to publishing an annual financial statement at the end of each financial year stating how much money has been received and how much has been spent.
A website would also be set up to provide the public with information relating to contributions: who has contributed and how much. Every person would have the liberty to see the list of contributors. The existence of such a list would motivate those who would otherwise not give, to do so. There would also be people with the means and the heart to donate more than the suggested minimum.
The website would increase the level of accountability for the fund and ensure that every Ghanaian has an easy way of checking to see that things add up. To address possible privacy concerns, those who do not want their names publicly released could opt to have their names replaced by an agreed identifier. By this approach, all contributions would still be taken into account and every cent, every dollar, every cedi, every pound, every kroner etc contributed to the fund would be accounted for. It would also remove any perception that those in charge of such an account would build mansions, on land or in the stomach, at our expense.
Responsibility of Citizens Abroad
The success or failure of such a scheme would also depend on the eagerness with which the intended targets, Ghanaians in the Diaspora, embrace and actively participate in it. We have been quite vocal in our quest for voting rights. Rights come with responsibilities and this is one way to demonstrate our willingness to do all in our power to assist the nation. I would be proud to think that nobody is held 'hostage' in a hospital in Ghana because my 'widow's mite' is helping to provide insurance for the health of the needy. What about you?
Obviously, these are just my thoughts. I am not conceited enough to think this idea is perfect and does not need fine tuning so I am ready and willing to accept suggestions to refine the ideas. I am not in any position, however, to bring it into being. Now, it is up to the authorities in Ghana to pick up the ideas and run with them as they see fit. Hopefully, my fellow Ghanaians in the Diaspora would support a properly developed and administered scheme to harness our financial resources to help develop the motherland. Alfred Opoku Canberra, Australia Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.
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