Standards, risk and parliamentary business in Ghana

Ghana’s parliament has gone on recess until 18 January having passed the appropriations bill and thereby avoiding shut down but without voting on the highly contentious proposed E-Levy. A physical brawl broke out on the evening of 20 December during a procedural vote that led to a suspension of the sitting. This is the apex of disruptions that have characterised the presentation of the 2022 budget however, it should not be assumed that this is the new nature of parliamentary business in Ghana.

Significance – Levy central to government plans

The E-Levy proposes a 1.75% tax on digital transactions, which government estimates will add GHS 7.0 billion (USD 1.1 billion) to revenues and contribute a significant portion of the 44% increase in revenues targeted to reduce the overall fiscal deficit from 9.4% of GDP (GHS 44.3 billion) to 5% of GDP or less in 2022. The plan has been poorly received by the public, the opposition, and operators in the financial and telecommunications sectors[1]. Parliament met on 18 December and was able to pass the Appropriations Bill, which approves government expenditure for 2022 and avoids a feared partial government shutdown come 1 January. But it did so without considering the E-Levy – a serious omission given its centrality in the 2022 public financial management plan.

The ugly scenes in parliament last weekend was an egregious example in a series of disagreements that have become all too familiar in Ghana’s near-hung parliament, especially when important motions are being considered. Central to the contention (including the brawl) is the ability of the first deputy speaker of parliament, Joe Osei Owusu, to vote whilst presiding over the chamber[2].  This seemingly small detail has become pivotal as, if he is not allowed to vote, both the minority and majority sides in parliament will have 137 votes each. Ghana is three years from general elections. Compromise becomes more difficult for members seeking to galvanise their respective bases the closer the country is to polling day, and tempers are already frayed.

Even so, parliamentary leadership[3] has shown a willingness to work together to not only call the house to order but also to find agreement on substantive issues[4]. The passage of the bill to provisionally agree the budget as well as a passage of certain fuel taxes earlier in the year show that there is a willingness to avoid disrupting government business where political interests and theatre allow.

Outlook – No significant disruption

The E-Levy is not yet a past matter. Extraordinary revenue generation is a central short and medium term requirement for government. Attempts to squeeze other presumed cash cows have been tried and failed by other administrations in the past e.g., the mining sector. The New Patriotic Party (NPP) are therefore expected do all within their power to see the E-Levy become law. This may require further compromise on its provisions. During the budgetary debate, some concessions were allegedly made including a willingness to reduce the rate to 1.5% but these have not been reflected in the legislation as yet. Further consultations with stakeholders will be a determining factor.

Meanwhile, the escalation of the discord in parliament does not yet require a revision of Ghana’s political risk rating. Whilst questionable behaviour has been shown by both the minority and majority caucuses of parliament attempting to carry votes, domestic/external legitimacy of the government is not significantly impacted. It is also important to note that such activity has not become the order of the day in parliament. Debates and votes on contested issues such as the Agyapa royalties  agreement and tax exemptions bill that should both be debated in 2022 will likely be contentions but issues bordering on development and social stability are unlikely to attract the same type of discord.
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[1] See: Ghana 2022 budget critical tax mobilisation plans hinge on digital levy

[2] The relevant provisions of the constitution and parliamentary standing orders would seem to suggest that he cannot but a Supreme Court ruling on the matter has yet to be given.

[3] Leaders of the respective caucuses and the speaker Alban Bagbin

[4] This was the case during the debate on the budget where concessions were made by the Ministry of Finance before a technicality derailed the vote.

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