Sun, 26 Mar 2023 Feature Article

Financing Political Parties

Financing Political Parties

The activities of political parties in Ghana are extremely expensive that the state cannot, and must not fund them. The issue of funding must properly be defined such that a structured form of financing will be developed in the end. There are no convincing reasons for the state to fund the extravagant activities of the political parties in Ghana when some critical issues of development are not being addressed.

The state may have engaged in actions that constitute funding; the refund of filing fees to parties that obtain a certain threshold of votes in national elections, and the authorization of the state for political parties to use the national media for broadcasting their campaign messages are clear examples of indirect funding. The Constitution of Ghana clearly indicates the form of indirect funding of parties in Article 55 (11): “The state shall provide fair opportunity to all political parties to present their programmes to the public by ensuring equal access to the state-owned media.” Article 55 (12) states that “all Presidential candidates shall be given the same amount of time and space on the state-owned media to present their programmes to the people.” The state must not engage in direct funding of the parties in addition to these provisions previously made for the effective functioning of the political parties.

Besides the access to state media, a party that obtains a certain percentage of votes is entitled to a refund of the filing fees of its Presidential candidate or Parliamentary candidates. Regulation 46 (1) and 46 (3) of C.I 127 spells out the conditions for a refund or forfeiture of deposits made by Presidential and Parliamentary candidates. A Presidential or Parliamentary candidate must obtain a minimum of 25% and 12.5% respectively in a general election to qualify for a refund.

Such a criterion coupled with access to state media – television and radio, is adequate in indirect funding of political parties in Ghana. The smaller parties are exempted from this strategy as they cannot obtain the required percentage that allows for a refund. The call for the funding of political parties by the state may introduce similar restrictions to cap funding to the larger parties that will perform outstandingly in general elections. The call for state funding of political parties in Ghana may not include the smaller parties as including them will open the floodgate for more “mushroom parties” to be founded. It may well be argued that state funding could bridge the gap between the smaller and the larger political parties in Ghana if a universal resource distribution ratio or formula is used in the process. But funding political parties in Ghana – smaller or larger political parties, cannot guarantee a fair and free political competition. The larger political parties have already amassed huge Political Will and visibility.

The circumstances under which modern political parties in Ghana operate have changed considerably over the last decade; they now need substantial financial resources to gain unnecessary visibility and political support for their ideas. The National Democratic Congress and the New patriotic Party are already visible and do not need the expensive billboards and campaign platforms to sell their ideas. The state may not be able to absorb all or a greater portion of the funding needs of the political parties.

The state needs to enact legislations that structure private funding because there is improper influence of financial resources on political decisions and activities, and these are leading to the loss of independent thoughts and decisions of the political parties. Setting strict rules on parties’ campaign expenditures may partly resolve the issue of funding political parties. There is no appropriate funding amount for political parties in Ghana: the political parties in Ghana have allowed money to have indecorous influence on the political process that every activity on the political chain is monetized.

Private funding of parties should be regulated. But political parties’ financing has similar characteristics like money laundering. The means to channel the financial resources meant for donations can be masked. There are vast opportunities for parties to receive illegal money for their political activities. It is, for instance, recommended in the European Union that parties raise money from the sale of newspapers, magazines or other party publications, fundraising, party festivals, social events and public collections. But fundraising and public collections will still give wealthy individuals the opportunity to involve in funding parties, and influence political decisions as well as parties’ independent thoughts.

Capping the electoral expenditures of political parties, if effectively done, can reduce the demand for funding parties’ political activities in the country. The parties themselves need to cut back expenditure on unnecessary political activities. The larger political parties in Ghana have a crave for profligate political advertisements. They engage in the use of expensive billboards, expensive campaign programmes etc. The state can resolve the issue of financing parties if there is a ban on expensive political advertisements.

Political parties can fund their activities with membership dues if they are not engaged in excessive spending. The National Democratic Congress garnered over six million (6 million+) votes in the 2020 general elections. Assuming the party has this following, a minimum contribution of Ghc50.00 per annum by each member will yield Ghc300 million a year. If members of the political parties in Ghana are loyal to make a minimum monthly contribution of Ghc20.00, they can finance the electoral activities of the parties they support.

Parties “produce” Members of Parliament, Metropolitan, Municipal and District Chief Executives as well as Board Chairs, CEOs of sate corporations etc.: they can levy them to fund their activities. This option must be assessed properly because the parties are implicitly using this strategy illegally. MMDCEs are supposed to be given a percentage of a contract sum of which they pay a portion to the party. Parties can be funded by these individuals who benefit from a party winning political power. Monthly deductions from their allowances can be a source of funding for political parties.

The debate about financing political parties in Ghana is a delicate one: the conclusion should be a result of thorough evaluation of all the key factors that impact on the subject. An attempt to limit the spending of political parties may be rejected by the parties; it is also difficult to achieve. But it appears to be one of the effective strategies to resolving the funding needs of political parties in Ghana. Direct funding of political parties will diminish over time as the type of funding is unknown: are political parties to be funded in election years or on monthly or quarterly basis? Direct funding of political parties must not be an option for financing political parties in Ghana. It is a financial burden that cannot be absorbed.

Political parties as private voluntary associations should be in total control of their own financial affairs. But the state may pay heavily for allowing them to operate their campaigns and other political activities overpoweringly. Their expenditures must be structured with legislations.

Emmanuel Kwabena Wucharey
Economics Tutor, Advocate and Religion Enthusiast.