IMF calls for amendments to Ghana's Fiscal Act to strengthen fiscal discipline 



The International Monetary Fund is calling for amendments to Ghana's Fiscal Responsibility Act to strengthen fiscal discipline.

According to the Fund, fiscal policy will be strengthened by adding debt targets to control fiscal spending. The fiscal policy limits the country's budgetdeficit in relation to gross domestic product (GDP) at 5.0%.

According to the Fund, the law will be simplified by focusing on a single employment law. "Fiscal law will be strengthenedby adding debt targets and broader coverage to control fiscal spending. It will be simplified by focusing on one labor law. The details of the escape phase and thecorrection process will be specified.

The current Advisory Council will also be reformed to improve the credibility of macro-financial policy and ensure that fiscal policy is properly implemented and implemented, adding that IMF technical assistance can be deployed to support reforms. a. The SOEs impose direct budget obligations 


The fund also said that public sector enterprises (PEs) imposefiscal obligations directly on the central government and are a source of fiscal risk.

This reflects both weak institutional arrangements and unsustainable sector policies. These problems are exacerbated in the energy and cocoa sector.

Therefore, the fund shows that the institutional structure for the management and monitoring of public companies must be reformed to improvecompetition and efficiency. “Thefinancial statements of government agencies should be submitted to the MoF [Ministry of Finance] in due course. Given the diversity of SOEs, strengthening the capacity of the State Interests and Governance Authority (SIGA) to identify risks in the area is important and has already started with assistance. Heexplained that a fiscal risk statement will be issued that assesses various macro-economic and sustainable risks and a clear mitigation plan will be issued regularly to improvetransparency and clarity.

A significant exception in the energy sector 


The fund also said deficits in the power sector were high due to low recovery tariffs, highdistribution losses and limitedcapacity under take-or-pay contracts. This has cost the central government about 2.0% of GDP in transfers every year since 2019 and has also led to increased costs for IPPs and oil exporters.

He stressed that the planningand implementation ofcomprehensive energy sector reform is an important part of the government's agenda,therefore the Government of Ghana's aim is to update its energy strategy. Energy sectorRecovery (ESRP) by end-June 2023 (structural benchmark).

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Assan Richard Odum

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