Ghana considers ‘fiscal responsibility law’ to curb spending limits
The law would limit fiscal deficit to 5% of GDP and have provisions to punish government officials who over-spend
Accra — Ghana is considering passing a law that will restrict government’s fiscal deficit to not more than 5% of GDP, the country’s senior minister Yaw Osafo-Maafo said on Monday.
The proposed "fiscal responsibility law" will have provisions to punish government officials who exceed spending limits, Osafo-Maafo told a meeting of business leaders in the capital Accra.
Ghana, which exports cocoa, gold and oil, is following a three-year programme with the International Monetary Fund to restore fiscal balance to an economy dogged by a high fiscal deficit and large public debt, after a period of exuberance during the oil boom years.
"We are proposing a fiscal responsibility law that will restrict government spending within a band of 3% to 5% fiscal deficit — anything above 5% should be considered an infringement," he said.
The government of President Nana Akufo-Addo, which assumed office in January, plans to lower fiscal deficit to 6.3% in 2017, from 9.3% in 2016, saying: "The essence of the law is to get the economy back on track and make it impossible for any government to reverse the motion ... so people who break the limit would be made to suffer for it."