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Government tables $3.5M car loan agreement for Council of State members

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Even before the debate on the car loan agreement for Members of Parliament settles, it has emerged that the Ministry of Finance actually tabled before Parliament a similar loan agreement with the National Investment Bank Limited, NIB, for the purchase of vehicles for Council of State members.

Documents on the loan agreement sighted by citinewsroom.com indicate 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%.

Under this agreement, the government is expected to bear any rate differences arising from fluctuations in the cedi to the dollar exchange rate as a result of the beneficiaries making monthly repayment in Ghana cedis.

“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 of the facility by the government of Ghana shall be a direct payment to NIB,” the documents stated.

The details of this loan agreement come days after the Finance Minister tabled a $28 million loan agreement to Parliament for the purchase of vehicles for Ghana’s legislators.

The total interest expected to be paid on this loan agreement is $533,020.83, while the average monthly interest is valued at $12,690.97.

Based on the amount, each of the 275 MPs is expected to receive over $100,000 for the purchase of a vehicle.

The Finance Committee of the House is expected to consider the loan agreement and report to the House.

Some Ghanaians are livid over this agreement and have taken to social media to express their displeasure about it.

There have been situations of MPs failing to pay back car loans.

In 2017, the Microfinance and Small Loans Centre (MASLOC), was on the heels of some Members of Parliament who bought their vehicles on loan but had defaulted in paying back several years after.

Reports indicate that letters had been written to the MPS for them to honour their obligations, but they did not reply.

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