How Property-Owning Democracy Was Bastardised

PROVIDING HOMES FOR THE PEOPLE - Asare Otchere-Darko

March 2009 is ending with agitation over Ga lands and the threat of a similar agitation in the Western Region. In my view all this could have been effectively avoided or neutralised if only the New Patriotic Party was steadfast and more radical in its realisation of the dream of a property-owning democracy.

In April 4, 2007, I wrote an article explaining ‘Development in Freedom’ – the slogan of the NPP –– the party of proponents of free market and developmentalism like Danquah, Busia and Dombo. That article argues, fundamental to the doctrine of Danquah-Busiaism is the principle that freedom is the primary end as well as the active means to development.

The party’s policy, in the thinking of J B Danquah, "is to liberate the energies of the people for the growth of a property owning democracy in this land, with right to life, freedom and justice, as the principles to which the Government and laws of the land should be dedicated in order specifically to enrich life, property and liberty of each and every citizen.”

President Mills and his Vice say, with tongue in cheek, that ‘Ghanaians have changed to move forward in the right direction.’ A violent twist of logic. ‘Forward’ is actually a direction – one that denotes positive or constructive mobility as opposed to being stabile - a state of motionlessness, static, horizontal mobility or backward movement. You may say it is still early days, however, you may require a superhuman sense of discernment to have anything resembling a remote idea of the direction that the NDC is taking Ghana. That is not to say that the Mills-Mahama team lacks a latent desire for success.

Providing free school uniforms to a ‘privileged’ few conveniently classified as ‘deprived’ in a nation where the majority is described as ‘poor’, is the only new clear policy initiative in tune with the NDC claim of social democracy . Worrying to some of us is that Ghana runs the risk of gaining a reputation as a nation where the gap between professed ideologies and practice is taken for granted as wide.

Ideally, in the thinking of the NPP, a primary duty of the state is to guarantee to individuals (who make up society) substantive freedoms to make them active agents of a positive change for prosperity rather than passive recipients of dispensed benefits. Crucial to this freedom is an inevitable social welfare foundation, which actively ensures the provision of an environment where every individual (particularly from childhood) has the opportunity (in freedom) to gain access (through decent, affordable education, housing and health) to climbing the ladder of self-development, prosperity and security.

Unfortunately, the jury is still out on whether or not the first eight years of NPP rule did anything distinctively and intrinsically profound to significantly promote the realisation of a property-owning democracy, as compared to what was achieved by previous regimes which had clear social leanings, such as the CPP, NRC and SMC. Apart from bettering the macro-economic environment, the underlining vulnerability of which has been recently exposed, very little was achieved in the area of reforming the housing system, from security of land tenure, through better town planning, to access to decent affordable homes.

Indeed, it became a campaign joke on the NPP that, besides grand mansions that deepened the perception of only a few getting richer, the disciples of property-owning democracy (NPP) could not boast of a single completed affordable home for the masses in 8 years.

But, how modest was NPP achievement in housing? The 2008 Manifesto captured it thus: The NPP has committed an unprecedented amount of government funds to address the nation’s housing shortage with GH¢30 million (¢300 billion) for the construction of affordable homes across the country… Within the conducive business environment, the private sector now provides an average of 40,000 homes a year. Government under its affordable housing programme is currently constructing a total of 3500 flats at Borteyman and Kpone in the Greater Accra Region (1,500 flats), Asokore-Mampong in the Ashanti Region (1,192 flats), Koforidua in the Eastern Region (400 flats), Tamale in the Northern Region (400 flats). The construction of an additional 1500 affordable housing units will commence in Sekondi, Takoradi, Sunyani, Cape Coast, Wa, Bolgatanga and Ho by 2009.

The Government now has land banks totalling 50,000 acres across the country for housing development by the private sector. It has also instituted a rural housing scheme for cocoa farmers starting in the Western Region. It has also instituted a housing scheme for civil servants with a US$10 million facility placed with the Housing Finance Corporation (HFC).

For the future, the NPP said, if re-elected for a third term: it would continue with the affordable housing scheme and extend it nationwide. It would create a special Housing the People Scheme to allow employers to receive tax credits for implementation of housing schemes for their workers. The NPP made a radical promise to provide 50,000 affordable houses every year for the next five years. Make many of these houses available for rent for those who can’t afford to buy; construct at least 13,000 units of decent, affordable housing across the North within the first two years; establish a mortgage culture to provide the loan facilities for more Ghanaians to own their own homes; name every street and number every property within our first term; create a new Department of Infrastructure and Physical Planning to ensure better land use and spatial planning in our cities; and, ensure cleaner streets with the development of 20,000 sanitation (Tankase) inspectors per year for the next five years in partnership with the private sector. It would have been the most ambitious mass housing project ever undertaken on this continent – even relatively more than what South Africa did for poor blacks, during the first 5 years of freedom. The NPP was even able to estimate that the quarter of a billion homes in 5 years project it was presenting to the electorate would cost $1 billion, for which it was sure funds could be found. So why was the programme ridiculed or ignored by the media and the party’s own commentators, including the Flagbearer? The NPP campaign team treated it as if it was smuggled into the manifesto. A lot of work went into it, and yet it was made to lack credibility. Unhelpful remarks from the Manifesto Committee Chairman that it was not government’s job to provide homes for the masses, coupled with the faint attempt at doing so in the previous two terms, contributed to such a vital socio-economic programme not tickling the voter. This was a programme if believed and voted for and implemented could have surely modernised Ghana and directly connected the NPP full-square to the needs of the so-called ordinary Ghanaian.

It would have provided jobs for tens of thousands and direct homes for a million Ghanaians. The spiralling effect of creating a vibrant mortgage environment, expanding the building materials market and bringing down rents and house prices would have meant greater access to better shelter to some 10 million Ghanaians. Ghana would have clearly changed in 10 years! The NPP was targeting mainly the bond market, with contributions from tax revenue and the housing project’s private partners to raise money for the 50,000 housing units per year project. Even in light of this year’s credit crunch, I posit that an Akufo-Addo government would still have been able to raise $1 billion domestically in five years by adding two percentage points to VAT. The government would have had the moral authority to demand some 15% rise in VAT to pay for such an important social programme, provided it could convince the people of its commitment to the project and spending discipline specific. In 2006, total VAT revenue was GH¢588 million. By 2008, it increased to a little over GH¢1 billion, nearly double in 3 years. Going even modestly under this trend, at least GH¢1 billion extra VAT revenue could be raised from the 15% rise in the next five years to help fund the scheme to house the masses. The difficulty in President Mills funding such a housing scheme mainly with VAT proceeds is the lid he placed on his own money-lending bucket. He has made a categorical manifesto promise that the individual tax burden on the Ghanaian shall not be increased, including income tax and VAT, during his four-year term.

The Tory government managed to build a property-owning democracy in the United Kingdom ( a policy continued by ‘New’ Labour) because the state had in decades past built ‘Council Housing’ for rent to the working class, which they were later encouraged to purchase, at subsidised prices, with the help of mortgage financing.

Margaret Thatcher

In June 1987, Times reporters Christopher Ogden and Frank Melville interviewed the just re-elected (for the third term) Prime Minister of Britain, Margaret Thatcher, after only four hours of sleep and a day spent thanking campaign workers and consulting with colleagues. Below are excerpts from the interview: Q. How do you interpret the election? A. It means that the policies we were pursuing, which we put openly and frankly before the people, were thought to be right for Britain. They were policies which were a partnership between government and people -- namely, we do the things which only governments can do, running the finances in a sound way, keeping inflation down, cutting controls and giving tax incentives. And we got the response in an increasing enterprise and competitiveness from the British people. And that produced a higher standard of living. Q. Why do people accuse you so bitterly of lacking compassion?

A. Some people think that to be compassionate and caring you have to talk a lot about it. We've always taken the view that you should be judged by what you do and not by what you say, and we're prepared to be judged on that -- any day of the week.

Q. What are the most important accomplishments of your first eight years?

A. First, we have reduced the fantastic number of controls that there were over the life of our society. The greatest driving force in life, which is individual energy and effort, was becoming really cocooned. Secondly, people do need incentives to encourage them to work harder, and if you take too much away in tax, then you will not get that driving incentive. Plus the trade union law…We now know that the spirit of enterprise is there. The economy is doing well and catching up with our European competitors.

Q. What are your plans for a third term?

A. I will extend opportunities to people who never had them before. As you know, we are building a property-owning democracy. Far more people own their own homes now. We are nearly up to the United States -- not yet quite -- but now one in five of our people owns company shares. Far many more people have savings accounts. That's all extending opportunity ever more widely. End What comes out clearly from this interview was the ideological clarity and discipline in the programme of the Tory government for the two previous consecutive terms and for the new term ahead.

Within a week of President J A Kufuor’s re-election in December 2004, Franklin Cudjoe (a founder of IMANI think tank) observed in his article ‘Building a Property Owning Democracy’, “Even though four political parties sought the mandate of the electorate, three of them, all in opposition, had a social democratic agenda whilst the incumbent and re-elected, a liberal democratic party, believed it was practicing a property-owning democracy.”

He said one of the finest institutions that have the propensity to bolster a country's economy is property rights. “If there is one thing many Ghanaians praise the current government for, it is its unwavering commitment to free speech. But free speech ought to translate into free enterprise. Unleashing the potential created in property ownership into capital formation, combined with ease of transactions through very minimum taxation, will be helping to deepen the meaning of a property-owning democracy.”

A story published on the website, myjoyonline, on March 2, 2007 quoted a Professor Ata Britwum of the University of Cape Coast as saying that “the ideology of property owning democracy is inimical to Africans since it serves the interest of the west and not the continent.” Prof. Britwum went on to say that Ghana’s First President, Kwame Nkrumah boosted industrialisation during his rule by opting for a philosophy of communal property ownership.

Kwesi Pratt, Dr Tony Aidoo and others were allowed by the NPP’s tepid approach to realising the philosophy of property-owning democracy to preach to Ghanaians that property-owning democracy was a ‘feudal’ concept which reduced the eligibility to vote to the very few landowners. They cited new buildings in the plush areas of Accra, like Cantonments and Airport Residential Area, to bastardise the philosophy of the NPP to make the NPP ‘Property-Grabbing (-Looting) Democrats’.

This led the disciples of the ideology like Washington-based Baffour Ennin to ask a profound question in 2007: ‘What’s Wrong with Property-Owning Democracy?’ He pointed out in his article with the above title, “In Ghana, the most successful enterprise is privately owned. I’m not talking about giant factories. I’m talking about the cocoa farm. Next time you go to any farming village in Ghana, ask to see the communal farm…There is no truth to Professor Britwum’s statement that property owning democracy is inimical or pernicious to the African. In my ancestral towns and villages of Akrofuom, Akrokerri, Bobiriase, Sikaman, Domiabra, Ayaase all in Adansi and Techiman and Kwapong in the Brong Ahafo Region, every cocoa farm is privately owned. Every farm belongs to somebody. In the cocoa industry as a whole, every segment that is government dominated or owned is beset with corruption and mismanagement… I dare any government to follow his misguided advice and nationalise all cocoa farms in Ghana, make them communal property and see what happens.”

He charged, “A small minority within our academic clerisy is notorious for propounding unworkable and unsustainable political and economic models purportedly to advance and protect the interests of Ghana’s hoi polloi… These aging left wing ideologues should post on their bedroom walls Bernard Shaw’s favourite quote ‘a man who is not a socialist at age 20 has no heart and a man who is a socialist at age 40 has no head’. It should be the first thing they see when they get up in the morning and the last thing they see when they retire to bed each night. They need to examine their heads because the unexamined life is not worth living.”

There is nothing wrong in being rich, he said, adding, “Property owning democracy created the likes of Bill Gates, Warren Buffett, Larry Ellison and Steve Jobs. Better than convincing Ghana’s 22 million people to stop chasing filthy lucre or looking for creative ways to confiscate it, we should understand that wealth is an enabler of everyone’s success. The so-called philosophy of communal property ownership rewards mediocrity, it also stifles initiative, creativity and competition and it almost invariably engenders laziness and dependency. What Ghanaians want is less government.”

For the sake of a better Ghana for the masses, property-owning democracy must come back in the shortest possible time and big time next time!

The author is the Executive Director of the Danquah Institute, an Accra-based right-wing think tank