Government has moved to strengthen Ghana’s fiscal transparency and accountability with the passage of the Public Financial Management (PFM) Regulation L.I. 2378.
Although the document was published by the Ministry of Finance last week, the Provision in the Regulations took a retrospective effect from March 12, 2019.
The Regulation forms part of the International Monetary Funds (IMF) recommendations during its final Extended Credit Facility (ECF) assessment of the country on the fiscal structural reforms.
The passage of the PFM Regulations will further underpin stronger cash management, spending execution and budget monitoring.
The PFM Act, 2016 (Act 921) is to regulate the financial management of the public sector within a macroeconomic and fiscal framework.
Going forward the Ministry is expected continue to build the capacity of staff of key PFM stakeholders by training and re-training to bring them up to speed on some to the reforms being undertaken with respect to budget implementation, payroll, Internal Audit, procurement and the Ghana Integrated Financial
Information System (GIFMIS) in line with the objectives of the PFM Regulation strategy.
The Ministry will further seek to improve the quality of budget analysis and reporting by deploying an Oracle Business Intelligence Suite Enterprise Edition system to facilitate real time fiscal and budget reporting.
Furthermore, to improve the quality of budgeting in all MDAs and to facilitate adherence to PFM Act, the Ministry intends to transform the current Institute of Accountancy Training (IAT) into a globally structured PFM training centre in future.
Fiscal Structural Reforms
As part of fiscal structural reforms, government in December 2018, enacted the fiscal rules and announced the creation of a fiscal council.
The Fiscal Responsibility Act, 2018 (982) establishes two numerical fiscal rules, limiting the overall fiscal deficit on a cash basis to 5 percent of GDP and mandating a positive primary balance.
The rules cover the central and local governments, autonomous agencies, and statutory bodies. The law allows for suspension of the rules in circumstances of force majeure, severe economic shocks (including commodity price shocks), and periods when the GDP growth rate is one percent or below.