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25.10.2017 Press Release

Statement On Corruption Laid Before Students' Parliament, UEW- Kumasi

By Student Parliament, University of Education, Winneba, Kumasi
Statement On Corruption Laid Before Students' Parliament, UEW- Kumasi
25.10.2017 LISTEN

Rt. Hon. Speaker, I stand before this august house to make a statement on Corruption, a hindrance to national development. My name is Hon. Emmanuel Kparl Mensah. Member of the minority caucus.

Mr. Speaker, Corruption is any act undertaken with the aim of personal pecuniary or financial gratification. It is an illegal, unethical and bad behavior which is unprofessional, unpatriotic, unchristian and inhuman. It involves soliciting for bribes, kickbacks or acting deliberately to delay service delivery in order for the recipient of the service to do something, to speed up the process by offering something by way of gifts or kola. In some cases, involving women, it may end up as ‘bottom power’ where sexual favors are sought in order to award contracts or obtain a job or get promoted or obtain a high exam mark or obtain a passbook to obtain goods for sale. Corruption in Ghana is of old because in the Gold Coast era, our first black civil servants engaged in bribery when giving import licenses or passbooks to women traders, be it SCOA, Leventis, PZ, UAC, UTC, CFAO and the like. Under the first Republic of Kwame Nkrumah, there was corruption but be that as it may, it was very low in scale as the Osagyefo was very severe with himself and he was a role model par excellence. His secret service ticked and the thought of being locked up behind bars at Nsawam Maximum Security Prisons was enough to scare the daylights out of culprits.

Mr. Speaker, In the Acheampong’s era from 1972 to 1978, there was the famous green pen syndrome whereby top brass military corrupted young ladies by giving them chits and notes written in green ink for them to go to GNTC and the banks to get goods for sale (essential commodities or groceries or ‘essenco’) or access soft loans. It became known as ‘fa wo to begye Golf.’ The generals seduced young girls in Accra as they seduced them with brand new bright Golf cars. Some of them, like Utuka, Kotei, Amedume, Yaw Boakye, F.W.K. Akuffo, among others, faced the wrath of revolutionary fervor in June 1979. Sad as it may seem on recollection and sober reflection, the young army rebels thought of cleaning the Aegean stables once and for all in their high falutin utopian zeal. But alas, they themselves later became victims of corruption.

Mr. Speaker, Centre for African Democratic Affairs (CADA) noted with a great amount of concern that corruption today has become widespread in most African countries including Ghana. The culture of the Ghanaian society has made almost every citizen more prone to corrupt activities. However, CADA is of the view that the fundamental factors that endangered corrupt practices in Ghana include: great inequality in the distribution of wealth; political office serving as the primary means of gaining access to wealth; conflict between changing moral codes; the weakness of social and governmental enforcement mechanisms; and the absence of a strong sense of national community.

Mr. Speaker, the lack of ethical standards throughout the agencies of government and business organizations in Ghana is a serious drawback. The issue of ethics in public sector and in private life encompasses a broad range, including a stress on obedience to authority, on the necessity of logic in moral reasoning, and on the necessity of putting moral judgment into practice. CADA asserted that other factors are poor reward system, greed, peer community and extended family pressures, and polygamous household. The influence of extended family system and pressure to meet family obligations are more in less developed societies. Dysfunctional governance and ineffective taxing systems, which make it difficult to track down Ghanaians financial activities, besides, weak institutions and cultural values breed corruption in Ghana. CADA trusts that although the incidence of corruption varies among African countries, ranging from rare in Botswana to widespread and systemic in Ghana.

Mr. Speaker, Corruption in Ghana, in recent years has reached “cancerous” proportions and is demonstrating negative impact on the country's development process. The effect of corruption is the same in both public and private spheres in that the canker results in the misuse of scarce resources that have significantly affected the entire economy through multiplier effects is obvious. It stares in the face of every Ghanaian and for observers of the Ghanaian economy to see. Corruption is negatively associated with developmental objectives. Controlling or eradicating corruption in Ghana will even assume greater significance in the country's quest for development.

Mr. Speaker, Ghana will begin to attract one of the lowest rate of direct foreign investment in the world if the soaring negative perception of corruption continues. Those in positions of responsibility and who involve themselves in all manner of corrupt practices can expropriate the country's limited wealth to themselves and to their cronies. What this means therefore is that the private sector is forced to engage in rent-seeking activities, rather than competitive activities to make and maximize profits. When this happens, neo-patrimonialism which is a perverse system that awards economic and political benefits to politicians and their followers becomes pervasive.

In Africa, Mr. Speaker, particularly in Ghana, corruption is flourishing as a result of distortions in the policy and regulatory regime and the weakness of institutions of restraint such as CHRAJ, EOCO, etc. Corruption in Ghana is affecting the vulnerable disproportionately, due to their powerlessness to change the status quo and inability to pay bribes, creating inequalities that violate their human rights. Corruption is hindering Ghana's economic development, reducing social services, and diverting investments in infrastructure, institutions and social services. Corruption is no doubt negatively impacting on Ghana's economic growth and increasing public spending on education and other sectors.

Mr. speaker, the effect of corruption on education comes from the fact that the government deliberately allocates relatively more funds towards specific sectors to make room for graft. And corrupt government officials would shift government expenditures to areas in which they can collect bribes easily. Large and hard-to-manage projects, such as airports or highways, make fraud easy to manipulate and are usually used for those conduit pipes. A new report by Transparency International shows that Ghana's educational sector, for instance is riddled with corruption. The 2013 Global Corruption Report predicts that the standard of education is falling in Ghana because corruption has tainted schools and universities in the country.

CAUSES OF CORRUPTION IN GHANA
Mr. Speaker, Our extended family system in Ghana means we have a heavy dependency load. This is because we lack national institutions to take care of the unemployed, aged and destitute. Our SSNIT and Pension Funds are full of heavy doses of corruption as the workers there are now the supposed beneficiaries and the actual beneficiaries are relegated into limbo. A poor worker in Ghana with meagre pay has to fend for himself and a host of dependents whose expectations are high.

Mr. Speaker, it is important to fight corruption by breaking the cycle of the dependency syndrome. Everybody should be up and doing rather than relying on remittances from relatives working abroad. It is however, not out of step to bend backwards to help our relatives whenever we can but then this should not be overdone as it reduces our marginal propensity to save and to accumulate capital for investment. This syndrome could be an indirect cause of corruption in Ghana. Mr. Speaker, Corruption also rears its ugly head in the public and civil services where subsistent wages abound and there are poor working conditions. If you consider soldiers and civil servants, their remuneration is nothing to write home about. The most corrupt institutions in Ghana are the police, customs, internal revenue, accountant general’s officers, judiciary and the public hospitals.

Mr. Speaker, in the civil service, meritocracy is minimal because recruiters only employ those who can pay heavy bribes. What about admission to our state colleges and universities? It is the same story of tribalism, nepotism, political party cronies and heavy practice of homeboyism. Lucrative jobs are given to cronies who know next to nothing about their jobs or remit. How can we increase real GDP growth if these anomalies persist in Ghana? In management science, there is the famous Peters’ principle of being promoted to one’s highest level of incompetence. Here, we find square pegs in round holes or what is called sinecure. Mr. Speaker, Tribalism is a cankerworm which must be uprooted in this country because it is divisive, retrogressive and it breeds corruption. During the time of Nkrumah (1951 – 1966), corruption was not entirely absent but it was really tamed within bounds because as a principled leader, he led by example and woe betide you, if his secret agents reported you to him. In his time, Nkrumah embraced all the tribes in Ghana and worked with them on the basis of merit, fidelity and commitment to the cause of Ghana and Africa.

In the boarding senior schools and colleges of education across Ghana, we mixed freely and interacted beautifully. We even had friends from elsewhere around the globe and there was nothing like tribalism in Ghana. Who then are those who have introduced tribalism in Ghana? Mr. Speaker, I notice that this took root from the early 80s up to now. Another cause of corruption in Ghana is the behavior of charlatan pastors and so-called prophets and men of God who use their vantage positions to mislead the flock. Many priests and bishops are engaged in dubious acts such as adultery, pedophile, kleptomania, homosexuality, Satanism and ostentatious living. Instead of serving and ministering to the flock the word of God, they have reversed roles and they want to be served. They buy themselves expensive cars, mansions and habiliments and extort monies from their gullible congregations. They have turned Judas Iscariots by dipping their hands in church coffers and stealing collection money and offerings.

Mr. Speaker, this reminds me of one of the papacy during the Reformation when Martin Luther criticized bitterly in his 95 theses, issues such as sale of indulgencies, doctrine of transubstantiation, question of the celibacy of the clergy and the questionable acts of the loyal-royal bishops who had concubines and mistresses. If the church itself and its priesthood are corrupt, God save us. Despite the proliferation of religious fervor in Ghana, paradoxically corruption is exploding at the seams. There are numerous cases of corruption in schools, courtrooms, police, and political party conventions, award of government contracts, at state house or seat of government. Trade Union leaders and workers’ representatives have become corrupt as they use union and membership subscriptions to line their pockets, without doing the work of promoting workers’ interest.

Mr. Speaker, Remember, corruption started at the Garden of Eden when Eve was tricked by the Serpent to eat the forbidden fruit. It was corruption of our soldiers which led to Nkrumah’s ouster in 1966. It was corruption which saw the demise of Ghana Airways and the sale of state enterprises such as STC, Nsawam Cannery, Ghana Telecom, Black Star Lines, among a host of others. We find a lot of corruption at the Scholarship Secretariat in Accra where, from time immemorial, some students have been granted state scholarships to study abroad, not on merit but on what is popularly known in Ghanaian parlance as ‘connection’. Do we mean well for our country by engaging in ‘waawaa’ connections and ‘keteasehye’? How long should we sit down for a few people to abuse their offices in feathering their nests at our expense? This does not call for a call to arms but rather being vigilant and scrupulous in reporting saboteurs and corrupt officials. Perhaps, the police and security agents may be in cahoots with the perpetrators of corruption. Despite corruption being endemic in humans, its prodivities can be drastically minimized by removing all semblances of pseudo-bureaucracy and administrative encumbrances and encrustations. We need to streamline and simplify office procedures to reduce the cost of doing business in Ghana. Singapore has done it.

Mr. Speaker, in oil-rich Moslem countries such as UAE, Kuwait and Saudi Arabia, Sharia law is in force and it reduces crime in general. Why can’t we tighten our laws and statutes?

Corruption affects us all. It threatens sustainable economic development, ethical values and justice; it destabilizes our society and endangers the rule of law. It undermines the institutions and values of our democracy.

Many acts of corruption deprive our citizens of their constitutional and their human rights.

Economic implications
Mr. Speaker, corruption and international perceptions of corruption in South Africa has been damaging to the country’s reputation and has created obstacles to local and foreign direct investment, flows to the stock market, global competitiveness, economic growth and has ultimately distorted the development and upliftment of our people.

Public money is for government services and projects. Taxes collected, bonds issued, income from government investments and other means of financing government expenditure are meant for social grants, education, hospitals, roads, the supply of power and water and to ensure the personal security of our citizens.

Corruption and bad management practices eat into the nation’s wealth, channeling money away from such projects and the very people most dependent on government for support.

Mr. Speaker, countless studies around the world show how corruption can interrupt investment, restrict trade, reduce economic growth and distort the facts and figures associated with government expenditure. But the most alarming studies are the ones directly linking corruption in certain countries to increasing levels of poverty and income inequality.

Because corruption creates fiscal distortions and redirects money allocated to income grants, eligibility for housing or pensions and weakens service delivery, it is usually the poor who suffer most. Income inequality has increased

THE EFFECT OF CORRUPTION
Mr. Speaker, corruption is undoubtedly the current hot-button topic in Ghana because of the alleged BOST and Presidency corrupt scandals. Admittedly, the aftermath of this sagas has exposed the modus operandi of typical bureaucratic fraudsters, but beyond that it has also shown the insidious nature of corruption by the very people who are supposed to protect the country and more importantly illustrated the evil effects of corruption on Ghana.

Mr. Speaker, the following are simple ways in which corruption negatively impacts Ghana’s economic growth:

High prices to consumers
When entrepreneurs and businessmen are required to pay bribes before necessary permits are issued, they tend to view it as a cost of doing business and therefore pass that cost onto consumers (that is you and I) who suffer from high prices. Thus for example, when a Ghanaian businessman goes to Tema Harbour to take delivery of goods, all the bribes that are paid may be tacked onto the final price they would charge consumers.

Mr. speaker, corruption reduced investment leads to reduced goods and services and inflation

In extreme cases, the extortion of bribes from entrepreneurs can be seen as a tax which can reduce the incentive to invest. Foreign entrepreneurs for example will shy away from corrupt countries because they claim the cost of doing business is too high when one factors in the bribes. Reduced investment leads to reduced goods and services, a concomitant reduction in gross domestic product and inflation.

Imports is one way to deal with shortfalls in local production but that unfortunately puts pressure on Ghana’s foreign exchange reserves and balance of payments.

Mr. Speaker, corruption reduced commitments from donor agencies

Corruption reduces the effectiveness of aid flows through the diversion of funds from their intended projects. Like many other developing countries Ghana benefits tremendously from aid inflows from donor agencies such as UNICEF, UNESCO, USAID etc. but increasingly these agencies are now concerned that their aid fosters sustainable development and not end up in the pockets of corrupt government officials or finance unproductive public expenditure. The agencies are therefore focused increasingly on issues of good governance and in those cases of poor governance; some donors have scaled back their assistance. Recently The US State Department has indicated that corruption in Ghana is on the ascendency and no serious efforts are being made to stop this danger for society.

Mr. Speaker, reduction of foreign direct investment

According to World Bank Development (1997), FDI may still flow to countries in which corruption is systemic but only if bribery is affordable and results are predictable. Corruption can have a negative effect on foreign investment because for most foreign firms, corruption is a cost of doing business to be recouped from revenues. Consequently, if the costs become too high or unpredictable, they disengage or shun the country altogether. High levels of corruption add to the risk of Ghana being marginalized in the international economy.

Mr. Speaker, corruption also reduce tax revenues
Corruption also brings about loss of tax revenue when it takes the form of tax evasion or the improper use of discretionary tax exemptions. The centerpiece of Anas work was to show how the corruption was depriving the Ghana government of much needed tax revenue. There are the familiar stories of tax officers receiving bribes and looking the other way as tax evasion runs rampant.

Mr. Speaker, government’s inability to finance budget expenditures - Deficit Financing

By affecting tax collection, corruption has adverse budgetary consequences. Tax revenue is used to finance budget expenditures, therefore with reduced tax revenues; the revenue section of the national budget is reduced, resulting in adverse budgetary consequences.

Revenue shortfalls lead to budget deficits which have the following economic effects:

A) Savings that could be productively invested is absorbed by the deficit

B) Borrowings to meet the deficits leaves higher interest obligation for future generations

C) Government’s ability to respond to legitimate economic concerns with social and economic programs becomes hampered leading to reductions in standard of living

Mr. Speaker, Poor maintenance of public infrastructure

Because of corruption, maintenance and repairs always takes a back seat to new projects. For fear of being exposed, corrupt officials prefer to approve new projects rather than spend to revamp the old corrupt projects they approved in the first place. The result is that new projects are constantly being undertaken whilst existing infrastructure is left to deteriorate.

Mr. Speaker, corruption reduces Investment and Economic Growth

Finally empirical research and regression analysis indicates that the amount of corruption is negatively linked to the level of investment and economic growth, that is to say, the more corruption, the less investment and the less economic growth. Analysis further shows that if the corruption index improves by one standard deviation, the investment rate increases by more than 4 percentage points and the annual growth rate of per capita GDP increases by over a half percentage point. In effect, a country that improves its standing on the corruption index from, will enjoy the benefits of an increase of 4 percentage points of investment, with consequent improvement in employment and economic growth.

Mr. Speaker, what do we think are some of the importance of corruption, do we have any… ?This means that, those who are into corruption just do it to enrich themselves.

THE WAY FORWARD
Mr. Speaker, One can state that abject poverty and poor service conditions of workers in Ghana are heavily and positively correlated with the incidence of corruption. This is why the Millennium Development Goals which were targeted to be achieved by 2015 are cardinal. Poverty reduction and intervention mechanisms need to be intensified to minimize the inclinations to be corrupt. Now that Ghana has discovered oil and gas in commercial quantities, we should be very careful in not contracting the contagious Dutch Disease of complacency and reckless spending. We need to be circumspect in our marginal propensities to consume, import, and tax. To alleviate poverty and bridge the wide income gap, there is need for tax reform to broaden the tax base and also close up the tax leakages in the informal sector.

Mr. Speaker, workers’ tax burdens need to be made light so that they have more take-home pay or disposable income. We need to increase domestic production to reduce inflation and help reduce government expenditure and debt service burdens so that national savings can be used to mitigate dire poverty by providing adequate social and public infrastructure such as quality schools, hospitals, roads, water and electricity supplies, among others. Our oil, gas and mineral resources are finite and non-renewable so we should ensure that their exploitation does not mortgage or jeopardize the interests of future generations by ensuring sustainable development. We should ensure that the current pension and social security contributions to government do not become a heavy burden for future generations who will be taxed to pay those retiring. It is known that oil has the potential to create many scandals.

Mr. Speaker, Singapore is a tiny island state at the tip of the Malay Peninsula and it is an archipelago or collection of islands, including part of the mainland where Malaysia is. It is a city-state which straddles a very important sea route from the west to the east at the Strait of Malacca. At the independence of Ghana in 1957, Ghana and Singapore were at par socio-economically in terms of development indicators or indices..

But now in 2017, Singapore is an Asian Tiger with a considerable per capita income of 22,952 is far greater than Ghana’s of about 1,710 dollars. Singapore has no minerals as they derive most of their revenue from stevedoring and docking fees, just as the Suez Canal is to Egypt.

Set up Anti-Corruption Commission in Ghana with support from donors such as JICA, DFID, USAID and SIDA.

Intensify national campaigns to educate and enlighten citizens about the ill effects of corruption on the Ghanaian economy.

Set up welfare schemes (the dole) for vulnerable groups. Not only government but churches and NGOs can partner with government in PPP (public private partnerships) to look after the old.

Improve salaries and service conditions of public servants such as civil servants, teachers, police, medical staff, army and local government workers.

Decentralize most of the governmental services for development to trickle down to the grassroots because effective development is bottom-up and not top-down.

To strengthen the auditor-general and accountant general’s staff by training more professional accountants.

Monitor closely the lifestyles of public servants and bank employees, using the BNI.

All public servants to declare their assets before and after leaving office.

Intensify the teaching of ethics in schools and colleges.

Set up Ethics Committees in all institutions and ask all institutions to publicize their social charters and ethical codes of conduct. These committees to serve as watchdogs and vigilantes or whistle-blowers.

To enforce corporate governance in all public and private institutions by following the examples of the UK’s Combined Code or the Sarbannes-Oxley Act 2002 of the USA, the Singapore Code, Australian Code or the King’s Code of South Africa.

To strengthen oversight and gate-keeping functions of the professional bodies by encouraging as many employees as possible to enroll and register with reputable bodies such as CIMA, CA (Ghana), ACCA, CIM, CIPS, ABE, ICSA, CFA, CPA, GAAS, MAG, GUJ among others.

Strengthen and reform the law on corruption and to recommend stiffer penalties for culprits.

Encourage public servants to go for refresher courses.

Journalists to intensify investigative journalism to expose scams and scandals.

Conclusion
Mr. Speaker, from the cumulative force of the above points, it is clear that corruption has a strong potential to steal the wealth of a nation and impoverish its people. The more corrupt a country is the lower its economic growth rate.

Thank you.

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