Not all multi-year contracts require parliamentary approval — Majority Leader

The Majority Leader, Alexander Afenyo-Markin, has urged the Minority Caucus to refrain from issuing threats of taking on state-owned agencies and companies that are signing multi-year contracts with private sector businesses.

He said such acts only obstructed government business and scared away investors from investing in the economy, thus affecting its outlook. In the view of the Majority Leader, issuing unwarranted threats on grounds that the transactions state entities signed with businesses supposedly breached section 33 of the Public Financial Management Act and, therefore, required parliamentary approval was wrong.

“By your act, you are only obstructing government business, scaring investors and that affects the economy,” he stated. Addressing the press in Parliament yesterday, Mr Afenyo-Markin said it was not every contract state entities signed with businesses such as the one the Ghana Revenue Authority signed with Strategic Mobilisation Ghana Limited (SML) that had to be put before Parliament for approval.

It was because such contracts were not international commercial transactions and did not require parliamentary scrutiny as required by Article 181 (5) of the Constitution, he posited.

“It is not every contract with a multi-year value that should come to Parliament. So, the National Democratic Congress (NDC) should stop misleading the public and spreading falsehood. Local contracts, memorandums of understanding or agreements of multi-year value that are local cannot come under the anticipation of Article 181 (5),” Mr Afenyo-Markin said.

Article 181(5) requires that all international business or economic transactions to which the government is a party must be laid before Parliament for approval before it can come into effect. 

Minority’s demand

The Minority, in a statement released last week, issued a stern warning to ministries, departments and agencies to refrain from signing long-term contracts without first seeking approval from the Legislature, as required by the Public Financial Management Act, 2016 (PFMA Act 921).

The caucus' Spokesperson on Mines and Energy, John Jinapor, described as worrying the trend among the agencies to commit the state to such contracts without following proper procedure and cautioned that such actions would not go unpunished, should they assume the reins of power.

He said such multi-year contracts were a breach of Section 33 of the Public Financial Management Act as well as article 181 which required that such contracts should go to Parliament.

Don’t obstruct govt business

However, in a rebuttal, the Majority Leader urged members of the NDC to refrain from spreading falsehood since their utterances about those contracts were undermining the government’s efforts to attract investors.

“If businesses are hearing such news, basically, they are not going to give of their best and people will keep money and that will affect the good people of Ghana,” Mr Afenyo-Markin said.  

The Majority Leader posited that every government engaged the private sector and the object of that was to create space for economic growth. “So, if you recklessly scare the businessmen and when you know that what you are putting out is not true, then what you are trying to do is to sabotage the economy.”

“So, I want to encourage the Minority that yes, we know it is an election year but let us put out the facts,” Mr Afenyo-Markin stated.  Without prejudice to the general powers of Parliament to oversight, Mr Afenyo-Markin reminded the Minority that they ought not make Parliament “a busy body nosing for things that are not part of the mandate of Parliament.”

Acknowledging the effect of  the Minority’s pronouncements on businesses and the economy, the Majority Leader said some of their utterances were affecting industries.

“We know the situation with our cedi and if a politician who does not understand business would come out and just for the sake of politics make any pronouncement, the market would respond.

“And it is as result of such unreasonable comments that seems to be affecting the business environment,” Mr Afenyo-markin said.