The Ghanaian economy might take a hit due to the failure of parliament to approve the first quarter budget of 2025 technically known as Expenditure in Advance of Appropriation.
Economist, Dr. Daniel Amateye Anim is raising concerns about the potential impact of the stalemate on the budget on investor confidence, business planning and the entire governance of the entire nation going into 2025.
He tells The High Street Journal that the stalemate on the budget does not send positive signals to businesses and investors that rely on official fiscal numbers and projections to make informed decisions. Without the first quarter budget, businesses and investors face uncertainty on the government’s tax and spending priorities and the economic direction in general, he noted.
The situation, the economist believes could negatively impact Ghana’s standing in the eyes of international investors who might look for other alternatives.
“Businesses are equally monitoring. They want to see how the indicators at the end of the fiscal year have fed and certain projections and so that they equally plan accordingly,” he indicated adding that, “if that is done, you see the international community will be certain now indeed our macroeconomic environment has improved in a manner that whoever takes over, applying or continuing with certain policies, Ghana should be able to be a best destination for businesses.”
Dr. Anim further argued that the stalemate further undermines the credibility of the outgoing administration’s economic stewardship which the finance minister has claimed to be sterling. The Finance Minister had earlier claimed that his government would be handing over a strong economy to the next government.
However, the economist maintains that the claim should be reflected in the official document to parliament to verify or disprove the government’s stance on the economy.
“It should be able to reflect in the financial statement. If you take the two, the financial statement is more authentic, and it’s a document that if you make any misrepresentation, you could be taken on in the near future. By a mere press statement, nobody can take you on,” he stated.
With Ghana already navigating challenging economic terrain, including debt servicing pressures and post-COVID recovery, and an IMF programme, the delay in approving the budget adds another layer of complexity.
The situation could undermine efforts to create a predictable business environment, jeopardize government programmes, and shake the confidence of international stakeholders in Ghana’s economic prospects.
Dr. Amateye Anim’s call for prioritizing the approval of the budget over political squabbles underscores the urgent need for Parliament to act decisively.
“This is not just a matter of petty politics; they should look at the bigger picture. If that is done, the international community will be certain that indeed our macroeconomic environment has improved in a manner that whoever takes over, applying or continuing with certain policies, Ghana should be able to be the best destination for businesses,” he said.
Meanwhile, the current minority leader, Dr. Cassiel Ato Forson is allaying fears that the incoming National Democratic Congress (NDC) government, led by President-Elect John Dramani Mahama, would act swiftly after taking office on January 7, 2025, to address the expenditure needs for the first quarter.
“Even though there would be no Finance Minister on January 7, 2025, the Vice President could present to the House the Expenditure in Advance Appropriation any time after the swearing-in on January 7,” he noted in an address to the media on Friday.
