Business News of Wednesday, 26 July 2017
Economist, Dr. Lord Mensah has advocated stricter sanctions to persons whose negligence could result in Ghana exceeding the proposed cap on the government budget deficit target.
In his view, the possible prosecution of such officials will pin economic managers down to responsible expenditure.
The Economist’s suggestion comes on the back of the government’s quest to peg its budget deficit for each year at a rate between 3 and 5 percent.
Cabinet has approved the capping of hoping to take effect from next year. This is however subject to approval by Parliament as an amendment to the Public Financial Management Act (PFMA).
“Once it is a law, it is one as such and once you go beyond it, the punishment should not just be going to Parliament to answer questions. If we look at that tangent with a different eye and say that once a Finance Minister who is the economic manager of this country exceeds that, then it means you are not managing the economy very well. Then, of course, it calls for question,” Dr. Mensah stated.
Suggesting some possible punishment for defaulters, he hinted that such persons could possibly be prosecuted to deter perpetrators,
“We can have punitive measures and even imprison you for some few months as a result of that and in that case it will keep people on track…Going beyond that target should be a crime for all our financial managers.”
The NPP government is targeting to end 2017 with a budget deficit target of 6.5 percent.
This is the 8.5 percent that the erstwhile NDC government ended its administration with in 2016.
Economist, Dr. Eric Osei Assibey has cast doubt over the government’s ability to meet this target by the end of 2017.
Meanwhile, Dr. Lord Mensah has describes the move as laudable.
He explains that aside strengthening the current PFMA, the capping will also reduce the country’s debt burden currently at 137.2 billion cedis.
“It is a good thing to look at provided the Parliament will buy into it…we have the PFMA which is quite open and if we should restrict on the budget deficit that we should create at the end of the year, then I think it should help us because this will more or less control the kind of borrowings that we do,” he again remarked.