The Institute of Economic Affairs (IEA) is proposing stringent measures to guide Ghana’s fiscal policies and prevent amongst others recurrent reliance on International Monetary Fund (IMF) bailout programmes.
IEA is proposing a 3% fiscal deficit cap as against the current 5% in the Fiscal Responsibility Act, 2018 (Act 982), a 60% of debt to GDP ratio and a borrow investment rule which will mandate all borrowings to be channelled into investments rather than recurrent expenditures
Additionally, IEA is also calling for an independent fiscal council to play a watchdog role over government fiscal activities
Speaking to journalists in Accra on Wednesday, Director of Research with IEA, Dr John Kwakye said “We recommend the following: An overall deficit ceiling of 3% of GDP.
“A public debt ceiling of 60% of GDP (on a continuous basis). Both rules must be subject to Parliamentary approval for breaches and duration for their restoration after they are breached.”
“We recommend the following: The Fiscal Council should be appointed by the Public Services Commission and approved by Parliament. The Council should comprise experts in economics, public finance, statistics or allied disciplines. The Council should be directly funded from the Consolidated Fund. The Council should be responsible for functions enumerated in Section 3.”
Read IEA’s full statement on Fiscal Rules and Fiscal Council for Ghana here
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