Tensions in Parliament could heighten investor uncertainty, warns Prof Mensah
Financial economist at the University of Ghana Business School (UGBS) Professor Lord Mensah has expressed concern that ongoing political disagreements in Parliament could exacerbate investor uncertainty regarding Ghana’s economic future.
He pointed out that crucial fiscal policies, which are essential for stabilizing the economy, risk being delayed due to the ongoing power struggle between the National Democratic Congress (NDC) and the New Patriotic Party (NPP) over which party holds the majority in Parliament.
Prof Mensah emphasized that Parliament’s role in approving key expenditure and revenue lines is vital to maintaining investor confidence. “If these internal political disagreements are not resolved quickly, it could send negative signals to investors and businesses considering operations in Ghana,” he cautioned.
He further highlighted that investors typically avoid countries with political uncertainty, especially when such instability clouds the economic outlook. Delays in passing necessary fiscal policies could ultimately derail investor confidence and hinder decisions on whether to invest in Ghana or look elsewhere.
“Time is a crucial factor for investors,” Prof. Mensah explained. “If there are delays in passing important fiscal laws and policies, it could undermine investor confidence. As we approach November, Parliament needs to conclude budget discussions for the next fiscal year. Any further delays will be damaging.”
Potential impact on Ghana’s budget and investor decisions
Using the upcoming November budget as an example, Prof. Mensah stressed the importance of timely fiscal planning. “If delays persist, it will not only affect committee compositions but could also disrupt our budget preparations for next year, leading to prolonged uncertainty.”
He warned that such uncertainties could continue to cast a shadow over the country’s economic prospects, potentially deterring long-term investment and economic growth.
Parliament’s sitting adjourned
Adding to the uncertainty, Speaker of Parliament Alban Bagbin indefinitely adjourned the October 22, 2024, sitting of the House amid a controversy over vacant seats. The tension arose when NDC legislators occupied the Majority side of the aisle, following a walkout by NPP Members of Parliament. The NDC had asserted that they constituted the majority in Parliament, leading to the standoff.
During the brief session, the Speaker agreed with MP Francis-Xavier Sosu that the official records should reflect that the NPP was in the minority when it walked out of the chamber.
Before the adjournment, Effutu MP Alexander Afenyo-Markin, who led the NPP walkout, said the group had retreated to their offices, awaiting further directives from Speaker Bagbin. Afenyo-Markin explained that the NPP chose the path of peace to avoid any confrontation, stressing the importance of maintaining Ghana’s reputation as a peaceful country. The indefinite adjournment leaves key legislative decisions hanging, potentially impacting fiscal policies and further fueling uncertainty in the investment climate.
