Economist, Prof. Peter Quartey believes although President Akufo-Addo has passed the Fiscal Responsibility Act, to anchor fiscal discipline and ensure prudence in the management of the economy as the Act establishes both the Fiscal Council and Financial Stability Council, there is a lacuna which allows the finance minister to overspend.
The former Head of Economics Department at the University of Ghana, states there is a lacuna in the law allowing Ken Ofori-Atta to overspend beyond the 5 percent of GDP threshold in an election year.
He stated since the reports are made quarterly, in an election year, when a report comes out in September, it leaves room from October to December for the politicians to massage figures before offering the final report for the year in December by which the purpose of reining in expenditure could be defeated for the quest of power.
The Fiscal Council and Financial Stability Council is expected to monitor the performance of the government budget with regards to compliance with fiscal rules and targets including a budget deficit of not more than five percent of GDP (as provided by law), a positive primary balance (as provided by law) and a debt to GDP ratio of not more than 65 percent of GDP while tying the hands of politicians in ensuring prudent macroeconomic management.
The two councils Vice President Dr. Bawumia reckons will help, “….safeguard the financial system, deepen financial intermediation, widen financial inclusion, and position Ghana as a West Africa Financial hub and economy with greater policy credibility.”