Parliament has approved under a certificate of urgency, the Fiscal Responsibility Bill.
The Bill, which has been touted by the government as one of the instruments through which it will maintain fiscal discipline as the country exits the IMF Program.
It seeks to ensure fiscal responsibility, macroeconomic stability, and debt sustainability.
There were however concerns about the provision which makes it possible to pass a vote of censure on the Finance Minister when spending exceeds the defined limits. MPs who were present in the house as it rose for the Christmas break, approved the bill.
Finance Minister, Ken Ofori Atta, who was on the floor of Parliament in explaining the relevance of the bill said the bill will also give guidance to anyone who takes over management of the economy to avoid plunging it into distress.
“As we exit the IMF Program this year, we want to ensure that investors are comfortable and that we will manage our economy well. This bill will give us some guidance and ensure that the future management of our economy is well done,” he said.
Dr. Bawumia in an earlier public address indicated that by the end of the year, the government would set up an independent Fiscal Council and an independent Financial Stability Council to enforce the law.
Dr Bawumia said: “Government will soon pass a law to prevent politicians from sacrificing prudent economic management on the altar of political expediency.”
He said the lessons learnt by the Akufo-Addo government since it assumed office about 23 months ago had shown the urgent need to pass such a law to safeguard Ghana’s economic gains in the future.
He said there was the need to have a clear understanding of the future of work on Sub-Saharan Africa, and roll out policies to sustain the macroeconomic stability, which underpinned fiscal and debt sustainability, saying; “President Nana Akufo-Addo has decided not to leave fiscal and debt sustainability at the discretion of the politicians”.
“This has never been done by any government since independence, and this law will tie the hands of politicians, including ourselves to maintain fiscal and monetary discipline,” the Vice President said at the Ghana Economic Forum.
In a related development,
President Akufo-Addo stated that to ensure his government decision on Fiscal Discipline thrives he will make sure a law is enacted to prevent any government from generating fiscal deficit in excess of 5% in any given year.
“We will in this meeting of Parliament Legislate a fiscal rule that will outlaw any attempt by a government to generate fiscal deficit in excess of 5% in any given year”
President Akufo-Addo also stated that he will establish Presidential Fiscal Advisory Council to help check and advice the government on