…Says Private Sector Benefits Immensely from Political Stability but Contributes Little to Election Cost

…The Proposal Will Certainly Not Fly…LCCI Boss

…It Will Cause Turmoil…EMB Chiefs   

A report on the spiralling cost of elections, in six states in the West African sub region, which has proposed the imposition of Election Tax on national and foreign corporate entities operating in the respective countries, as a way of reducing the burden on government, is already generating ripples.

While alluding to “The high administrative and technology integrity cost of their elections as a major component of the escalating election cost in the six countries,” the report notes that, “The private sector provides little support for election cost funding,” though they are “major beneficiaries of political stability.”

It called on “ECOWAS Commission and Parliament to pass resolution requesting member states’ Executive and Legislature to introduce legislation imposing Election Tax on the private sector.”

The report also proposed the setting up of an Election Management Body (EMB) Trust Fund and the exemption of EMBs from provisions of national procurement law

Pooh-poohing this report as balderdash, former President, Lagos Chamber of Commerce and Industry (LCCI), Mr Paul Babatunde Ruwase says the proposal will certainly not fly. He says the proposal pushing for Election Tax to be imposed on the private sector would be a “disincentive and undesirable burden” for the following reasons;

“Elections are primary responsibility of governments at various levels, which contrary to one of the reasons given by ECONEC, have no direct relationship with business activities as much as the provisions of Security, Infrastructure, Human Capital Development and Healthcare which are funded partly through taxes and levies paid by businesses.

“Elections are periodic activity of governments which usually involved the general population. It would therefore be unfair for businesses to bear the burden alone.

“Imposition of Election Tax would increase operating costs of businesses, which shall eventually be passed on as increases in prices onto the ultimate consumers of goods and services” Ruwase says.

He counsels that the idea which is likely to generate a lot of controversy be jettisoned

Speaking in the same vein, Chairperson of Electoral Commission of Ghana, Ms Jean Mensa, her counterpart in Burkina Faso, Mr Ahmed Newton Barry and the former Chairperson, Electoral Commission of South Africa, Ms Pansy Tlakula have strongly counselled against any plans to impose Election Tax in any country on the African Continent, arguing that such a plan being muted to mitigate the rising costs of elections can cause turmoil and social disorder.

Speaking as panellists on the topic “Managing Elections in Africa–How Can Social Media Help or Hurt Elections Management” at the West Africa Media Excellence Conference and Awards (WAMECA), organised in Accra, Ghana by the Media Foundation of West Africa (MFWA), the trio were agreed that this move is capable of over burdening the people, further pauperising them and may lead to chaos.

“Doing that will cause some trouble. The people of Ghana will not take that lightly as they are already over taxed,” says Ms Mensa. Echoing this view, Mr Barry, whose country along with Ghana, Togo, Gabon and Cote d’Ivoire will hold elections next year, says, “Taxing the people for elections will not be the issue because people are already reeling from taxes. We cannot overburden them by imposing an Election Tax.”

Not too warm to the call by some experts for Election Tax to be imposed on corporate entities in Africa as a way of reducing the huge cost of elections on governments, Tlakula, also a former chairperson, African Commission on Human and Peoples’ Rights (ACHPR), says that will lead to lots of ligations in South Africa.

“The corporate entities are already paying taxes, imposing an Election Tax which they will eventually pass on to the people will cause crises. And they will challenge this in courts. The country will end up being entangled in series of law suits rather than focusing on elections,” she quips.

Some electoral experts who graced the International Conference on “Opportunities And Challenges In The Use Of Technology In Elections: Experiences From West And Southern Africa,” organised by the Independent National Electoral Commission (INEC) in Abuja in April 2018, had posited that it was better to impose tax on corporate entities to support elections rather than mobilising huge resources when such countries become consumed by conflicts.  

“The corporate organisations need to share the debilitating cost of elections. They are not presently investing in elections but you need elections to sustain democratic stability in Nigeria or any other African country. The private sector should invest in stability”, says Prof Liasu Adele Jinadu, former INEC commissioner.

Stirring the hornet nest with his paper on Cost of Elections in Africa, Jinadu, also a former dean, Faculty of Social Sciences, Lagos State University (LASU), Ojo argues that it was necessary to “Consider the feasibility of ECOWAS member countries imposing an Election Tax on the private sector in the region, to be administered and used to defray election costs, as part of their corporate social responsibility and investment in the region’s democracy and development”.

Leaning on similar rational that led to their investment in Education in Nigeria via the imposition of Education Tax, he contends that “The private sector stands to benefit from, and should invest in elections as mechanism for consolidating peace and stability in the region. Collective pressure and agreement at the REC (Resident Electoral Commissioners) level will send a powerful message to the private sector”.

Decrying the little investment of the private sector on elections, it was the view of Jinadu, a professor of Political Science that “We need to tell them that investment in elections would bring good returns. You can see the results; Africa is not what it was 10 years ago. The private sector makes a lot of money within and takes a lot out of several countries in Africa. It must therefore invest in its stability. As a business you need to take risks”

While sharing the view that the corporate organizations need to invest in elections, Mrs Notemba Tjipueja, chairperson, Electoral Commission of Namibia, points out that the problem of not investing in “inclusive democracy and a peaceful society is the crises and conflicts which becomes prevalent thereafter” . “Investment in election is worthwhile because it ensures a stable environment for business to thrive”, she said.

Conducted in Cape Verde and Guinea-Bissau (Lusophone); Benin Republic and Senegal (Francophone); and Liberia and Nigeria (Anglophone), representing the three official linguistic zones in ECOWAS, the report was commissioned by ECONEC, the umbrella body for Election Management Bodies (EMBs) in the region.

The report observed that “There is a trend towards the escalating cost of elections in the six countries, confirming a trend across Africa that “the new era of competitive politics…increasing number and regularity of elections has raised election funding costs” in the continent.”

It also says, “Reliance on international donor support for elections shows a progressive decline over election cycles, although this is offset by high donor support for national budgets in most of the countries.”

Other key findings presented by Jinadu who is also the lead consultant, at the official launch of the Cost of Elections Study Report, during the Sixth ECOWAS Network of Electoral Commissions Biennial General Assembly and Symposium on the Promotion of Inclusivity in the Electoral Process, held in Abuja on August 5^th, 2019 include:

“The major source of funding the cost of elections is the national government in each country.

“The bureaucratic politics of the election budgetary and procurement process, including the opportunities it provides for rent-seeking activities, is a major encumbrance on the administrative and financial independence of the EMBs, and their ability to rein in election cost

“Delayed budgetary appropriation and their delayed releases have tended to contribute to escalating election cost.

“The ability and flexibility of the EMBs in the countries to generate internal revenue are constrained by law.

“The private sector in the six countries provides little support for election cost funding.

“There is increasing awareness among the EMBs on the need for strategic planning, targeted at internal administrative and financial reform, to reduce or stabilize election cost in the medium- to long-term, and reduce the integrity cost of elections.

“The high integrity cost of elections is a major challenge, perhaps more so than the structural challenge of underdevelopment, which intertwines and reinforces it in a vicious cycle.

“Although there is general concern about the rising cost of elections in their countries, many stakeholders who participated in our focus group discussions in some of the countries, expressed hope in the medium- to long-term potential contribution of democratic elections as a form of social and political investment in democracy and sustainable human-centered development.

The report asked National Government to “Adopt 3-year election budget rolling plan, 3 years before next election cycle begins.” It also proposed granting “EMB autonomous internal revenue generating power, paid into escrow account supervised by a Board.”

Others include: “Coordination and integration of the budget line items of the different bodies and institutions involved in the administration and management of elections, in countries with more than one EMB, to avoid duplication of similar activities and parallel spending.  

“Establish EMB Trust Fund, if not in existence

“Exempt EMB from provisions of national procurement law.

“Impose Election Tax on the private sector

The report impressed on EMBs to “Prepare and submit timeously election budget

“Strengthen internal control mechanisms: plug leakages in procurement of election materials, undertake post-election audit of election materials and resources, including storage of reusable election materials.

“Decentralize deployment of logistics and staff, including recruitment of ad hoc election staff.

“Establish in-house think tank and.

“Explore election-cost saving strategies, such as importation of election materials from ECOWAS and other African countries that have comparative advantage in the production of such materials.

It also proposed that ECONEC/ECOWAS “Engage ECOWAS member states to comply with ECOWAS and African Union standards and codes on democracy and elections, particularly independence of EMBs.

“ECOWAS Commission and Parliament to pass resolution requesting member states’ Executive and Legislature to introduce legislation imposing Election Tax on the private sector

It also wants the regional organisation to “Establish Working Group to monitor regularly trends in cost of election funding in ECOWAS member states and devise strategies for stabilizing or reducing the administrative and technology cost of elections integrity.”    

According to the executive summary, the country study of the cost of elections in each of the six countries reported in this publication was commissioned by ECONEC. Founded in October 2008, ECONEC’s major objective is “promoting credible elections and advancing democracy in the ECOWAS Region.”

To this end, ECONEC’s mission includes the following:

* Supporting the ECOWAS Commission in the pursuit and realization of the mandate of promoting regional integration, strengthening the electoral process, deepening of and advancement of democracy and good governance practices in West Africa, premised on provisions of the 1999 ECOWAS Protocol relating to the Mechanism for Conflict Prevention, Management, Resolution, Peacekeeping and Security, and the 2001 Supplementary Protocol on Democracy and Good Governance;

* Sharing of experience, information, technology and election documents; and

* Rationalization and pooling of resources to reduce the cost of conducting elections.

It observed that “The period since the adoption of the 2001 ECOWAS Protocol on Democracy and Good Governance and, before it, the ECOWAS Protocol relating to the Mechanism for Conflict Resolution etc., and after it, the African Union’s 2007 Charter on Democracy, Elections and Governance, has witnessed steady if fragile and faltering progress in the use of elections as a mechanism for resolving the crisis of political succession, which was endemic in the region in the immediate post-independence years between the 1960s and 1980s.  

“Not only have general (legislative and presidential) elections been held regularly, and presidential term limits respected in most ECOWAS member states, there have also been alternations of power from one party to another, such as in Benin Republic, Cape Verde, Guinea-Bissau, Liberia, Nigeria and Senegal,” the report notes.