Investor Confidence and Ghana’s Political risk are at a crossroads as the two major political parties in parliament battle for the majority side.
The High Street Journal can confirm that already tensions are high in the parliament this morning with a heavy security presence comprising the police, military, and marshals to maintain law and order.
Ghana has attracted the attention of the international media with Bloomberg, Reuters, and other prominent media organizations keenly monitoring the turn of events today.
With the rising political tensions, some analysts have described the situation as a clear case of a constitutional crisis. Investors, both foreign and local, are also keenly following the development of today.
The parliamentary deadlock adds to the uncertainty for a country which already grappling with economic recovery after a severe downturn in previous years leading to inflationary pressures, rising public debt, exchange rate instability, and soaring cost of living.
Experts believe that the development in parliament today will be a decision point for many investors as happenings will send signals about the political stability of Ghana ahead of the 2024 crucial parliamentary and presidential elections.
The events today will not only affect investor confidence but will also play a significant role in the country’s political risk going forward. Credit rating agencies evaluate the political risk of a country when determining its creditworthiness.
If the current deadlock persists and the authorities fail to manage the situation well, the political tensions might escalate which could cause the country to be downgraded on the back of high political risk. Such a downgrade will increase the cost of borrowing for the country and also deter lenders from offering favourable terms to the country.
Already Ghana is slowly rising after years of downgrade due to the country’s default in honouring its debt obligations hence undertaking a debt restructuring. Moodys and Fitch upgraded the ratings of Ghana last week but the political tensions could necessitate another downgrade.
The ongoing standoff in Ghana’s Parliament follows a decision by Speaker Alban Bagbin to declare two seats held by the NPP, one seat by the NDC, and one independent seat vacant. The ruling was made by the speaker on the grounds that the affected MPs had crossed the carpet. This decision has effectively shifted the majority in favor of the NDC.
The NPP, which vehemently opposes the Speaker’s ruling, has sought intervention from the Supreme Court, leading to a ruling that stays the Speaker’s declaration. Despite the court’s ruling, Bagbin maintains that the NDC is the new majority, raising the stakes for a significant confrontation in Parliament today.
As tensions rise with both parties vying for control of parliamentary seats, a heavy security presence has been deployed in Parliament this morning. This high-profile clash could have far-reaching consequences, particularly for investor confidence and Ghana’s standing in international financial markets.
Source:thehighstreetjournal.com