Democracy Fund: IEA opposes state funding of political parties

The Institute of Economic Affairs (IEA) has rejected a proposal to use taxpayers’ money to finance the non-electioneering activities of political parties, warning against making the state responsible for the routine operations of political organisations.

The position forms part of the IEA’s broader response to proposals contained in the report of the Constitution Review Committee chaired by Prof. H. Kwasi Prempeh, as well as the government’s position on the proposed constitutional reforms.

IEA says ‘no’ to broad state funding

The Prempeh Committee proposed the creation of a Democracy Fund to support the non-electioneering activities of political parties.

The fund would be administered by an Independent Registrar and Regulator of Political Parties and Campaigns (IRRPC).

Although the government has accepted the idea in principle, it prefers the fund to be established through legislation rather than being entrenched directly in the Constitution.

The IEA, however, has rejected the proposal for broad public financing of political parties.

‘Taxpayers should not finance party operations’

The IEA’s position is that political parties should not routinely depend on public funds to finance their organisational and non-election activities.

The institute argues that political parties are political organisations and should therefore bear responsibility for financing their normal operations rather than placing that burden on taxpayers.

The proposal has consequently opened another important debate over the relationship between public financing and Ghana’s multiparty democracy.

But IEA makes one major exception

Interestingly, the IEA has not completely shut the door on state support for political parties.

It says limited and clearly defined assistance could be considered for specific democratic activities.

One example it cited is the possibility of the state paying the Electoral Commission (EC) to supervise internal elections of political parties if Ghana eventually abolishes the existing delegate system.

This, the institute believes, would be different from giving parties unrestricted access to public funds for their routine activities.

IEA pushes wider constitutional reforms

The Democracy Fund issue is only one part of the IEA’s 18-point position on Ghana’s proposed constitutional reforms.

The institute has also called for measures to reduce presidential appointment powers, strengthen Parliament and the Judiciary, deepen local democracy and improve accountability in public institutions.

It has supported stronger asset declaration rules, including lifestyle and wealth audits for public officials, and wants greater institutional independence in areas such as national development planning.

Concern over rushed constitutional amendments

The IEA has also raised concerns about the government’s proposed timeline for implementing the constitutional reforms.

It says reforms of such magnitude require sufficient time for public education, consultation, national debate and consensus-building, warning against rushing the process.

The government is targeting February 2027 for amendments to non-entrenched provisions and plans a referendum on entrenched provisions alongside the 2027 District Assembly elections.

The bigger question: Who should finance democracy?

The IEA’s latest position has brought a fundamental question to the centre of Ghana’s constitutional reform debate: should taxpayers be required to finance the political parties that compete for political power?

While proponents of a Democracy Fund could argue that public financing may strengthen political parties and make democratic participation more sustainable, the IEA is drawing a firm line between supporting democratic processes and funding the routine activities of political organisations.

For now, the institute’s message is clear: Ghana can strengthen its democracy without making the taxpayer the automatic financier of political parties.