The Institute of Economic Affairs (IEA) is advocating a fiscal responsibility law to prescribe sanctions for those who breach public finance legislation.
This, according to them is because the existing legislation on public finance is weak, thus allowing its flagrant abuse.
Ghana’s debt currently stands at about GHc88 billion, close to 70 percent of Ghana’s debt to GDP ratio, a situation many economic analysts have described as unsustainable.
Speaking at a forum on improving fiscal management in Ghana, a Senior Economist at the IEA, Dr. Kwakye emphasized the need for an independent fiscal policy council, backed by a fiscal responsibility law to save the nation from its current economic decline.
Ghana according to Dr. Kwakye, has a track record of high fiscal deficits partly reflecting a pro cyclical fiscal policies in good times and electoral cycles.
According to him, a review of the country’s review of fiscal performance in Ghana over the past two decades shows that the country has not been under control.
He explained that addressing Ghana’s macroeconomic challenges require an ambitious fiscal consollidation strategy to quell what is a very high fiscal deficit with rising public budget.
The IEA inisist that there is the need to implement a fiscal rule that has broad coverage of the budget more generally and further reduce discretionary policy interpretations.
To them key reforms key reforms make fiscal rules effective include the establishment of an independent fiscal policy council, strengthening budget preparation, apportionment and execution, enhancing revenue forecasts, improving monitoring and enforcement procedures, and legislative changes to make the fiscal rule legally binding.
For his part a Former Finance Minister, Yaw Osafo Marfo charged government to ensure it lives within it means.
For him it is proven that in Ghana discretion is always abused so any law enacted fiscal management should take away discretionary spending powers.
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By: Raymond Acquah/citifmonline.com/Ghana