Government is seeking approval to secure the loan facility from the National Investment Bank for the initiative.
The website also reports that beneficiaries of the $3.5 million dollar agreement are expected to repay 40% of the principal amount of the loan, while the government of Ghana will pay 60%.
Per the document, the MPs will also take care of only 40 percent of the principal sum, while the government will bear 60% of the principal sum and all the interest that will accrue on the loan.
“The repayment of the facility by the beneficiaries shall be made from deduction at source by the Parliamentary Service of Ghana to the NIB. The repayment by the beneficiaries and the Government of Ghana shall be made at the end of every month for the duration of the agreement,” portions of the agreement read.
The loan agreement is expected to be considered by the Finance Committee of Parliament.
Meanwhile, a private legal practitioner and professor of accounting, Professor Stephen Kwaku Asare, popularly known as Prof. Kwaku Azar believes the deal is a gift disguised as a loan.
“Government gives the beneficiaries $27,500,000 (i.e., $100,000 * 275) and the beneficiaries pay government $11,000,000 ($40,000 * 275) over 45 months. The difference of $16,500,000 plus the interest of $4,561,666 are non-taxable wealth transfer from government to the beneficiaries.”
“You cannot give someone $100,000 plus interests and ask that they give you $40,000 over 4 years and call that a loan. Plainly, you are giving the person a non-taxable gift of $60,000 plus interest structured to disguise its substance. Let us call a loan a loan and a gift a gift,” he posted on his social media page on Thursday, July 8, 2021.
Ghanaians have also expressed anger and displeasure by the decision to give MPs loan for vehicles when the country has pressing needs.