A government shutdown is on the horizon with Ghana’s executive and legislature currently involved in an impasse that could bring businesses to a halt.

The Legislature, through its leader Alban Bagbin, has served notice of its decision not to approve the 2021 budget if the Executive does not alter its position on capping the budget of parliament.

Speaker of Parliament Alban Bagbin on Tuesday, March 16, warned that parliament could hold the executive to ransom if it does approve fully the budget of parliament.

This is after the executive through the Executive Secretary of Parliament wrote to parliament informing it of a decision to slash down its budget due to lack of fiscal space.

Addressing the house, Alban Bagbin said, “the budget is not for the executive, we have the final power to approve or disapprove and so what the constitution has done is for them to make recommendations and negotiate during the deliberations of the budget before the House.

“It is not for the executive to impose a ceiling on the judiciary or parliament, they have to do the proper thing. And so during the considerations of the [budget] estimate, particularly the committees concerned, take that on board and at the end of the day come and explain to us the negotiated figure and not the ceiling that has been given by the president, that is not the internment of the 1992 constitution.”

The Speaker of Parliament added, “If you do otherwise, I as your Speaker will not affirm any letter for submission to the president for his assent, I mean what I am saying.”

Possibility of government shutdown

Parliament as per information available to GhanaWeb has barely 13 days to go on recess for the first quarter.

The supplementary budget which was delivered by Finance Minister Ken Ofori in October 2020 will expire on the same day – March 31, 2021.

If by then Parliament and the Executive have not reached a compromise, funding for all government activities will cease.

What is a government shutdown

A government shutdown is when “there is a failure to pass the necessary funding legislation that will finance government for its next fiscal year”.

When there is a government shutdown, non-essential services will cease to operate while essential services such as security and health service providers will continue to operate.

Government institutions may rely on cash reserves to fund their activities but once that is done or in the case there are no reserves, they will have to shut down.

ACEPA worried but hopeful of a solution

In an exclusive interview with GhanaWeb, the Executive-Director of the Africa Centre for Parliamentary Affairs confirms the possibility of a government shutdown but expresses hope that a solution will be reached before March 31, 2021.

“I suspect that nobody would like to get to that stage so I believe there will be a compromise. There could be a government shutdown because there was a vote on account so that government could function in an election year so the first quarter can be taken care of. Beyond March 31, if a solution is not found and the government does not have money, maybe everything will come to a standstill.

“America can afford it because though people depend on government, but not many people depend on government for their daily livelihood. If there is a shutdown in Ghana, people are going to lose lives because most people depend on the government for their daily livelihood. I’m sure our leaders are mindful of this and I suspect some middle ground will be reached and some workable compromise will be reached.”