09.04.2008 Feature Article

State Funding For Political Parties - How Justifiable?

State Funding For Political Parties - How Justifiable?
09.04.2008 LISTEN

In the evolution of Ghana's multi-party democracy, political party funding has always been an emotive issue. The country's political history is rich with stories of individuals who virtually took upon themselves the issue of funding their political parties.

The orientation of political parties just before Independence was one of activism based on deep-seated pan-Africanism that fired a resolve to drive away White colonialists and extremists who, from all point of view, had overstayed their welcome.

Years after colonialism, political parties in the country have undergone the kind of evolution that, although punctuated by brutal and disruptive military regimes, has positioned them to play more meaningful roles in the governance of their people.

The Ghanaian thirst for very modernised political parties is great. Increasingly, the posture of political parties is drifting to one of responsible public organisations which operate all year as viable entities influencing government policies and not just vents for politicians to unleash campaign slogans on helpless electorate in the election year.

The issue of political party funding has received rave headlines in recent times. Evidently, there is the increasing recognition that to enable Ghanaians effectively participate in the governance of the country, there is the need to empower them politically, and that should start by strengthening the political parties.

Such a view is not abstruse. In a logical sense, the engagement of the people in the politics of the time hinges on their active engagement in the healthy politics of their political parties.
That will mean that as non-profit organisations, political parties need to diversify their sources of funding to ensure that their coffers do not run dry even in the non-election year in order to enable them to contribute effectively towards the governance of the country.

The country's constitution guarantees that political parties operate very transparent financial systems:
Article 21 (1) of the Political Parties Act 2000 (Act 574) states that within six months from the end of each year, a political party is to submit a statement of account to the Electoral Commission, including the following: Sources of its funds, membership dues paid, contributions or donations in cash or kind received, properties of the party and when they were acquired.

Additionally, Article 23 regulates the funding of political parties and stipulates that only Ghanaian citizens or firms, partnership or enterprises in which a Ghanaian owns at least 75 per cent and is registered under the laws of Ghana can contribute or make donations in cash or in kind to a political party.

The constitution makes it illegal for non-citizens to make contributions in cash or in kind to political party.

Indeed, Ghana has been praised across the continent for having quite elaborate laws with regard to the funding of political parties.
But the question that often begs is whether the country's disclosure laws really work or are effectively enforced?

Proponents against the state funding of political parties cite the weakness in enforcing disclosure laws and the failure of political parties to regularly submit statements of account to the EC as some of the drawbacks to any proposal for the state funding of political parties.

They are quick to ask: “How accountable will the political parties be and how strong and proper are the structures put in place to ensure that accountability and disclosure processes are sound and working.

While there appear to be many passionate Ghanaians who are not averse to showing their political colour and professing their allegiance, political parties do not seem to have done enough to mobilise resources from their members to fund their operations.

Perhaps, it is understandable that ours is a political system that is still evolving. Thus, such resource mobilisation mechanism may not come easy but then it raises questions about the organisation of political parties in the country.
Clearly, resource mobilisation is usually viewed within the context of an election or election year and that is no doubt one of the most sour points of political party funding in the country.

Political parties are not business entities, yet politics is serious business that thrives on good organisational systems and serious funding.
The funding becomes even more critical if one realises that it is not expected to generate any direct financial profits.

Thus, there is not only the requirement for effective enforcement of accountability and disclosure laws but also the institution of prudent expenditure choices and profiles that make no room for wasteful and unproductive expenses.

To achieve that, political parties clearly need to recognise that funding should be placed in the broader context of the party's overall operational strategy not only in an election year but all year round.

Another serious challenge to political party funding in the country is the much criticised “moneycrazy”.
If politics is a game of numbers, then any strategy that thrives on the wasteful dissipation of funds to woo the electorate cannot stand the test of time.
A party that develops such a strategy over time and eventually finds itself in political wilderness, is bound to wither when the stacks of cash are no more. Perhaps, this is something our infant democracy will soon witness.

The Institute of Economic Affairs's (IEA) proposal for the state funding of political parties recommend that two per cent of revenue from the Value Added Tax (VAT) be set aside in a special fund to support the activities of political parties in the country.
Political parties in the country are bent on jumping at this proposal with glee and that they have but Joe Amoako-Tufuor, who teaches economics at the St Francis Xavier University in Nova Scotia, Canada, has different views.

Writing in the Accra Daily Mail, Joe Amoako-Tufuor notes that such a proposal provides perverse incentives for political entrepreneurship. There are many Ghanaians who share the view of Amoako-Tufuor but the IEA would like to play down their fears.

State funding of political parties is expected to ensure that political parties operate well and are not exploited by individuals who donate generously to the party. Here the assumption is that the party is a public institution with strong democratic principles and not subject to the over-bearing influence of a few individuals.

But the picture may indeed be very different for some political parties in the country. The reality is that there may be some political parties with poor internal democratic systems and which are subject to the control of a few individuals who may not necessarily be executive members.
 In such a case, the political party, though with great public interest and patronage, could not fit the perfect description of a public institution.

Yet, the IEA still believes that political parties need adequate funding, better delivered by the state, to ensure that there is quality leadership for both the state and the political parties.

That may not be exactly bad. But is the country prepared for the state funding of political parties?
Have our political parties shown enough financial discipline to get state funding for their activities?
 If the answer is No, then which should come first: Financial discipline and prudence or state funding?