CHAPTER 1: EXECUTIVE SUMMARY

1.1 Committee’s Mandate

His Excellency, the President of the Republic of Ghana, John Agyekum Kufuor, in the discharge of his Constitutional duties as stipulated under Article 71 of the 1992 Constitution, established the Chinery-Hesse Committee to review, determine and make recommendations on the Emoluments for Article 71 Constitutional Office Holders as described in Article 71 of the 1992 Constitution. The President named as the Chairperson of the Committee, Dr. (Mrs.) Mary Chinery-Hesse, a former Deputy Director-General of the International Labour Organization (ILO). Other Members of the Committee are Messrs. Fred Oware, Financial Consultant, and Alhassan Andani, Managing Director of Stanbic Bank, Ghana.

The Committee was established in October 2004. In the face of difficult economic realities confronting the Nation in 2001, when the Government assumed office, the president deemed it inappropriate and unconscionable to set in motion drastic restructuring of the conditions of service of Article 71 Office Holders, without similar adjustments to general public sector pay structure. Such action would have undermined the macro-economy and delayed the recovery of the Country from HIPC status. It should be noted, however, that salaries of Article 71 Office Holders continued to be adjusted upward progressively throughout the years through January 2005.

In addition, however, the Committee re-examined the existing method of the computation and identified a number of anomalies and inequities for the 2001 Parliament. The Committee, therefore, recommended payment of an improved ex-gratia package for the Article 71 Office Holders who qualified. The Committee as well recommended the payment of Non-taxable Resettlement Grant to them, thus, the Committee, after consultation with the affected parties fully discharged its mandate with respect to the emoluments of the 2001 Article 71 Office Holders. A fuller explanation is attached to this Report as an Annex A

The recommendations of the Committee cover the Parliament of 2005 and are not intended to be retroactively applied.

Given the challenging nature of the Committee’s assignment, it was considered imperative to adopt a systematic approach which would enable the Committee to painstakingly obtain all the necessary information, and to undertake extensive consultations of all stakeholders in order to guarantee that a thorough job would be done. The intention was to facilitate the work of similar future Committees which would be formed to deliberate on conditions of service of Article 71 Office Holders. We sought to establish a platform and a knowledge base which would reduce the lead time needed for the formulation of recommendations by future Committees. In our opinion, it has been well worthwhile.

In view of the urgency for decision-making in respect of the Committee’s remit related to salaries however, the Committee decided to segment the assignment into two Phases. The First Phase covered Salaries and Allowances, with the Second Phase focusing on Facilities and Privileges. The Committee completed the First Phase of the assignment in December 2005, and submitted a Report to the President, for immediate implementation. It is important to state that the first Phase Report and this Second Phase Report should be taken in conjunction as one consolidated Report.

The Committee, with the support of UNDP engaged the services of the following consultants to assist in fashioning the Report:

Professor Ato Ghartey, Professor and International Consultant; former Controller and Accountant-General of the Republic of Ghana; and former UNDP Principal Regional Adviser,

Professor Osborne Jackson, Professor, Methodist University; former Government Statistician of the Republic of Ghana; former Deputy Governor of the Bank of Ghana and Deputy Chief of the International Civil Service Commission of the United Nations,

Mr. Austin Gamey, CEO, Gamey & Gamey, former Member of Parliament and Deputy Minister of Manpower and Employment,

Mr. Sylvester Zigah, International Consultant; former Advisor to the Director and Vice President, The World Bank; former Executive Officer, Lloyds Bank, New York,
Mr. Cornelius Dzakpasu, International Consultant; former Director, International Labour Organization; former Senior Officer, Commonwealth Secretariat, UK; Former Executive Secretary, AAPAM.

Mrs. Eudora Koranteng, Legal Consultant and Corporate Lawyer; former Senior Official of Ghana Stock Exchange and Ghana Leasing Company; former Chief Executive, Ghana Securities and Exchange Commission.

Mr. Daniel Domelevu, Director, Controller and Accountant General’s Department,

Mr. Samuel Sarpong, CEO, OXIA (Ghana) Ltd,

Mr. Sylvester Acquah, Principal Accountant and Deputy Head, Public Accounts, Controller and Accountant General’s Department,

Ms. Grace Adzroe; Deputy Controller and Accountant-General, Controller and Accountant-General’s Department,

We would also like to thank Ms. Dinah Dadzie and her team at the Secretariat of the Presidential Committee on Emoluments for their services.

In the cause of its work, as well, the Committee benefited from comments and inputs of an Advisory Board which it convened for the purpose of brainstorming on issues as follows:

Mr. Andy Asamoah, Member, Pensions Commission; former Director of Human Resources, World Health Organisation (WHO),

Professor Stephen Adei, Rector, Ghana Institute of Management and Public Administration (GIMPA); former United Nations Resident Coordinator and UNDP Resident Representative,

Mr. Kwasi Adu-Amankwah, Secretary General of Trades Union Congress,

Dr. Kenneth Andoh, former Regional Representative, International Labour Organization, and

Nana Oye Mansa Yeboah, Dompiahene of Akwapim; former Deputy Governor, Bank of Ghana; former Deputy Minister of Finance and Economic Planning, and former Ambassador of Ghana to Belgium and the European Union


1.2 FACILITIES AND PRIVILEGES

Article 71 (1) of the 1992 Constitution enjoins the Committee to determine the Salaries and Allowances payable, and Facilities and Privileges available, to Article 71 Office Holders. Article 71 (3) states as follows: “For the purposes of this article, and except as otherwise provided in this Constitution, ‘salaries’ includes allowances, Facilities and Privileges and retiring benefits or awards.”

It is evident therefore that the term “emoluments” as used in the Constitution does not refer only to cash benefits due to an Office Holder, but also to other perquisites. Although the Committee, in the cause of the First Phase of its work, consolidated various allowances into the overall salary package of Office Holders, there still remain several items which do not lend themselves to such consolidation. These are what we have defined as Facilities and Privileges, many of which constitute non-cash aspects of the package for Office Holders. These Facilities and Privileges include:

• Residential Accommodation
• Office Accommodation
• Staff Support
• Personal Security
• Transportation
• International Travel for Official Business
• Medical Services and Health Insurance
• Maternity/Paternity Leave
• Retirement Facilities and Privileges

The Committee noted in the First Phase Report that an important hallmark of long-established democracies is the appropriate constitutional and legal provision of adequate Emoluments during the tenure of office, and Retirement Packages for political leaders, especially Heads of State, once they leave office. It further noted, in this regard, that it is now generally recognised that those incumbent leaders who accept democratic change in African countries should be eligible for similar benefits, privileges and protection enjoyed by former constitutionally elected Heads of State/Governments in these same long-established democracies.

It should be noted that the need for such arrangements is even more valid in African countries. Whereas former political leaders in long-established democracies may be assured of a reasonable income from sources other than the State after leaving office, the opportunities and options seem to be somewhat limited in the case of African countries. And truly, we have been witnesses to the penury that has been the plight of some former constitutionally elected Heads of State/Government who have been denied such support from the State after leaving office.

Such Emoluments and Retirement Packages can also be an incentive to political leaders, who might otherwise be tempted to perpetuate themselves in office as a means of guaranteeing their material well-being. They should be encouraged to relinquish power and to adhere to Presidential Term Limits. One would hope that an appropriate Emoluments package and the expectation of a decent and fair retirement package, as we have sought to recommend would also discourage corruption during the period of incumbency.

Equally important in this regard are issues related to Security, Diplomatic Privileges and Protocol arrangements. The Committee has given attention to these items as well in the course of its work.


1.3 GOOD GOVERNANCE

It now accepted that good governance is an essential ingredient for the sustainable development of any nation. This is why the Government of Ghana has made the promotion of good and democracy governance one of the main priorities of its medium and long term development strategy.

The 1992 Constitution sets out the framework for good governance. It provides for checks and balances among the Executive, Legislature and Judiciary. The Constitution further provides for the establishment of other autonomous bodies as the basic framework for good governance. These bodies are listed in Section 1.10 of this Report, and the Mandate of the Committee covers all these bodies.

The Committee was seized by the fact that the structures which underpin good governance in new democracies such as Ghana’s tend to be weak and as such need to be strengthened. Allocation of the necessary resources for this purpose is thus justified. In this regard, we would like to quote from the “Venner” Report on Emoluments for similar Public Office Holders of St. Vincent and the Grenadines, in December 1999, which stated as follows:

“The important questions which have to be asked and answered in this regard are the following:

• What price are we prepared to pay for good governance?
• What are the requirements for an acceptable level of governance, taking into consideration international best practices, as we proceed into the 21st century?”

The Report further stated:

“The citizens’ central role is to participate in the process of government by casting their vote. The naïve question to be asked then is, ‘In exchange for what?’ The equally naïve answer, of course, is, ‘Good Governance.’

“The next question then becomes, ‘What is good governance and what does it cost?’ Good governance has certain basic elements such as the maintenance of law and order, an acknowledgement of the importance of equity and fair play, and an environment in which citizens have the opportunity to grow to their fullest potential. The actions of government and the private sector must be transparent and accountable and corruption should be strongly discouraged.”

We conclude from the above that good governance and democracy are essential for orderly development of society. We conclude at the same time that it comes at a cost which the National Budget must bear.

There is obviously however an issue as to what is reasonable as cost of such Emoluments and Retirement Packages to be paid to political Office Holders. It has been important in this regard to take into account what the National Budget could support. We have kept in mind relativities dictated by general remuneration levels and retirement benefits in the country. The Committee has been conscious, as well, of the risk of the cascading effect that the remuneration level of Political Office Holders could have on general wage levels in the Country.

The Committee has examined successful models and good practices in countries with similar conditions as Ghana’s, and garnered lessons, as appropriate. The work of the Committee has, however, been driven by circumstances and imperatives of the Ghanaian situation.

We have also borne in mind the fact that service to one’s Country in such exalted political positions is the highest privilege that a people can confer on a citizen. Such honour should, in itself, attract a certain degree of altruism and sacrifice in terms of expectations of what should constitute an acceptable Emoluments Package. This having been said, the Emoluments and Retirement Benefits should be such as would guarantee a certain quality of life that will ensure that the dignity of the high office is protected. There is, in our view, no better way for a people to express appreciation for the contribution of such Office Holders than to reward them appropriately.

We have had the wisdom of hindsight in terms of how the current existing conditions of service of political Office Holders have played out in practice. The Committee has taken these into account as it sought to move the process forward. In this respect, our recommendations in this Report, taken all together, represent a bold attempt to shift from the current regime of Emolument Packages which rely on a catalogue of allowances to cushion low salary figures that ultimately negatively impact on Retirement Benefits.

PRINCIPLES

In 2002, the Parliament of Jamaica adopted “Seven Principles of Public Life” drawn from a United Kingdom Report dealing with Standard in Public Life, when that Country undertook a similar task. These Seven Principles are:

1. “Selflessness: Holders of public office should take decisions solely in terms of public interest. It should be an offence to do so in order to gain financial or other material benefits for themselves, their families and friends.

2. Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organizations that might influence them in the performance of their official duties.

3. Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

4. Accountability: Holders of public office should be accountable for their decisions and actions to the public, and must submit themselves to whatever scrutiny is appropriate to their office.

5. Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly so demands.

6. Honesty: Holders of public office have a duty to declare any private interest relating to their public duties, and must take steps to resolve any conflicts arising in a way that protects the public interest.

7. Leadership: Holders of public office should promote and support these principles by leadership and example.”

These are the tenets which have informed the deliberations of this Committee. We have strained in our Recommendations to carve out a package of Emoluments to create an enabling environment which will encourage Political Office Holders to live by the noble principles listed above.

On the basis of discussions with various stakeholders, and based on comparative international best practices, the Committee approached this exercise with the following additional principles in mind:

• Responsibility - Create an environment that encourages responsibility and respect for government property;

• Dignity of Public Office – Recognise the need to protect the dignity of high public office, even beyond the retirement of the Office Holder;

• Altruism – Acknowledge the need to balance the level of compensation with the honour of holding high public office;

• Motivation and reward for excellence – Appreciate the sustenance of good governance and good behaviour expected of leaders and role models;

• Productivity and enhanced performance – Recognise that effective human capital and institutional management constitute the pillars of good governance institutions;

• Fairness and equity;

• The ability to pay; and

• Create the environment to attract high caliber professionals into public office.



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