EU withholds £135 budget support to Ghana over payroll malfeasance

The European Union is withholding a £135 million budget support to Ghana due to an alleged payroll corruption scandal it is investigating.

According to a top British newspaper, Sunday Times, published in London on Sunday, the EU anti-fraud agency is probing a mam­moth corruption scandal running into several million pounds in Ghana, being aid package from the EU to support the country's budg­et among others.

The money is said to have found its way into the pockets of 'ghost workers' in government.

Managers of the fund releasing unit of the EU have been charged for as the newspaper put it, covering up the scandal after the Ghanaian government experienced major chal­lenges with its budget and the late knowledge about the extent of the scandal.

Details of the report suggest that "tens, possibly hundreds of thousands of fictitious state employees were kept on Ghana's pub­lic payroll partly financed by the EU and Britain."

With limitations on how to establish the veracity of the allegations, the British and EU authorities are depending on the International Monetary Fund (IMF) to undertake the task through a scrutiny of the country's budget among other channels.

A senior IMF official is quoted by the newspaper as asking rhetorically, "Is there a massive fraud involving foreign aid fund? We will not be able to know the extent of it until a thorough reform has taken place; but it is apparent that the huge increase in the public pay­roll is the main reason for the growing deficit."

The increase in the pub­lic payroll was noted in the wake of the addition of rul­ing party activists on the public sector workers' list through various state agen­cies such as the National Disaster Management Organisation (NADMO), a countrywide phenomenon which came under the pub­lic radar.

The opposition outcry was though unable to have government rescind its deci­sion of creating salary earn­ing channels for some non­existent staffers.

A pro-government newspaper, The Enquirer, last week blew the cover of job for vote project embarked upon by the Mahama administration in order to win the 2012 elec­tion - a decision that has become an albatross on the neck of the president.

Ghana has applied for an IMF bailout following glaring fiscal challenges occasioned by the bad man­agement of the economy by the Mahama administra­tion.

Between 2008 and 2013 the Ghanaian government has been a beneficiary of some £400 million support from the EU, but the huge 2012 overspend by the Mahama administration restrains the EU from releasing further money to the government, until thor­ough investigation as to why the country over-ran its 2012 budget by almost $5 billion.

Earlier this year Presi­dent Mahama was in Brussels, the EU headquarters, cup in hand asking the European authorities to release the £135 million withhold cash, but nothing came out of it.

Now it has come out that the delay in releasing the money was as a result of corruption, resulting from massive payroll fraud.

Government blamed the Single Spine Pay Policy but it has turned out that over 20% of the names on the payroll are 'ghosts' created by the administration osten­sibly to reward party activists.

The all-powerful Euro­pean Parliament - the leg­islative arm of the EU - was last week informed about what the Sunday Times described as "potential irregularities and misman­agement" claims which the anti-fraud agency is already probing.

The Sunday Times reports that "according to estimates, more than 1% of Ghana's GDP - several hun­dred million pounds - was spent on 'ghost workers' last year."

The paper reveals fur­ther that estimates put the percentage of fictitious workers at beyond 20% of the workforce.

The potential abuse of EU aid by those at the helm of affairs in Ghana, the newspaper maintains, is an apt indication that UK funds distributed by the Depart­ment for International Development (DfID) could suffer a similar fate.

The discovery has pro­vided fodder for elements in the British Parliament who have consistently demanded better management of pub­lic funds and especially ask­ing for cuts of such monies.

Ghana, by the develop­ment and pressure on the British government, stands the risk of losing the trust of its former colonial masters resulting in the possible scrapping of the direct budgetary support mecha­nism. Under this system beneficiary countries receive such aid directly devoid of monitoring to determine how the British taxpayers' monies are expended in the recipient nations.

Britain is said to be the largest individual donor to Ghana, having provided according to the Sunday Times, £250 million.

The European Court of Auditors should be patting itself on the back for its fears, having earlier criti­cised what it claimed the inadequate monitoring of aid to recipient countries, especially how these are expended.

The scandal as noted by Pawel Swidlicki of a renowned European think- tank - Open Europe - said, "The scandal demonstrated that pursuing development policies via direct budget contributions is a risky strat­egy - even in a comparative­ly well-governed state like Ghana."

The European Commission is reported to have expressed its con­cern about the corruption to the Ghanaian authorities, something which represents a query.

A spokeswoman of the Commis­sion is quoted as saying, "We are in close dialogue with the authorities, the IMF and other donors to address the issues and find a solution," con­cluding with a diplomatic touch though, "We want to continue help­ing Ghana meet its development goals."

The scandal allegation coming at this stage will not be welcomed by the Ghanaian government which is at full throttle in a bid to deflect what is now constant barrage of accusations of corruption from civil society organisations, the clergy and the ordinary citizens in the street.

President John Mahama has not ceased assuring his compatriots of his readiness to fight the canker- worm which has permeated all strands of public office, with chiefs from his home region of northern Ghana expressing concern about the deep-seethed canker in the adminis­tration of the only homeboy to have risen to become a president.

Those who doubt the President's ability to fight corruption in which some of his appointees are deeply embroiled, point at his inability to ensure that the Supreme Court order for the retrieval of public money from beneficiaries is carried out, including same for monies lost through the ill-fated Savannah Accelerated Development Authority (SADA), among others.

Enquirer Story

The Enquirer in an uncharitable story, "Mahama In A LOGJAM... As Populist Employment In 2012 Turns Bad Headache For Him," narrated how the president is reaping the negative rewards for his hurriedly created salary earning avenues for party activists ahead of the 2012 elections.

The paper in its last Friday, 12th December, 2014 edition, stated that "President John Mahama has found himself sandwiched between the devil and the deep blue sea at the end of a careless romance with pop­ulism in the 2012 election year."

The newspaper went on, "Flagstaff House we gather is seri­ously cogitating on how best to reduce the wage bill without hurt­ing the pro-poor avowals of the rul­ing National Democratic Congress after a frenzied employment drive in 2012 left a bad post-mortem on the economy.

Apparently in 2012, the heated presidential campaign panicked the ruling government into using job offers as enticement for voter sup­port. The result is that the Mahama regime has since been faced with a distended wage bill that is unsus­tainable.

Government pays close to 4:93 billion every month to public sector workers who constitute about two percent of the country's population.

The amount is a mile more than $22 billion that the erstwhile Kufuor-led New Patriotic Party gov­ernment paid to workers.