Economist and Finance Lecturer at the University of Ghana Business School, Professor Lord Mensah, is advocating for the reinstatement of the Fiscal Responsibility Rules enshrined in the Fiscal Responsibility Act, 2018 (Act 982).
His call comes as Ghana prepares to exit the $3 billion International Monetary Fund (IMF) programme in May next year.
The Fiscal Responsibility Act was introduced to enforce discipline in government spending by preventing excessive borrowing that could widen the fiscal deficit beyond 5% of Gross Domestic Product (GDP).
However, the government suspended these rules in the wake of the COVID-19 pandemic, citing the need for increased expenditure to manage the health crisis and its economic impact.
Professor Mensah believes that reviving these fiscal rules should be a key focus of the upcoming National Economic Dialogue, a forum expected to shape policy discussions on Ghana’s economic trajectory post-IMF.
“I remember at the exit of the 2018 IMF programme, we had the Fiscal Responsibility Act and then also fiscal responsibility supervision team made up of some economic professors at the University of Ghana and all those places. At the end of the day, we ask ourselves what has been the function of this body and then the Act?
“I think we should bring it back and ensure strict enforcement of the Act. That will be able to help us because within the Act, all the things the IMF may want us to do is in the. If the Act tells you to reduce your budget deficit to about 5% to your GDP, strictly they are telling you to be measured in your expenditure and try to enhance your revenue generation,” he said.