The Finance Ministry is confident that by end of year, it will submit to cabinet a draft of the Public Financial Management (PFM) Bill, which among other things is expected to punish fiscal indiscipline arising from public sector managers.

The passage of the FFM law, which is expected to check persistent fiscal indiscipline, is a key requirement under the country’s ongoing economic reforms programme under the International Monetary Fund (IMF).

Experts say the law will zoom-in on chief directors, budget officers and other key officials in MMDAs who are instrumental in the preparation and execution of government.

According to him, one of the main functions of the PFM law will be to prescribe defined roles for individuals such as chief directors of ministries, budget officers, Treasury officers and others who play key roles in budget preparation and implementation.

The minister said with aid of the Attorney General, it is hoping to introduce a system that penalizes public sector managers who fail to discharge their duties as far as implementation of the Public Financial Management law is concerned.

Citing the need for the law, the Fund said in its September report on the country that government's several reforms to enhance budget execution have not prevented arrears accumulation, mainly due to inadequate financing resulting from uncovered auctions.

The Fund said it is confident passage of the PFM law will improve commitment controls; adding that new law, for instance, will ensure that only duly authorised purchase orders generated from the Ghana Integrated Financial Management Information

System are recognised as valid commitments of government, and are therefore payable from budgetary allocations.

The draft bill, which is currently being prepared by the Finance Ministry with assistance from the Attorney General's Department and two experts provided by DFID, has become particularly necessary to arrange some of the practices that have emerged with the implementation of major reforms in government's budgeting and accounting processes among others.

Eva Mends, Head of Budget Reforms at the Finance Ministry, told B&FT the law will govern management financials and is essential due to its main focus on the formulation of fiscal policies, a situation the current regime fails to address.

"If you look at the Financial Administrative Act, 2003, a lot of the provisions in there are for ensuring compliance in the use of government's resources; very little deals with how fiscal policies are to be determined," she said.

The Ministry of Finance last year commissioned a local consulting firm — M/s Shawbell Consulting Firm – to undertake a review of the country's PFM legal framework. The ministry's team has also received support from the IMF legal team.

Ghana's programme with the Washington-based lender enjoins government to make sure t the final draft bill of Public Financial Management is presented to cabinet by December this year, and for Parliament to pass it into law in 2016.


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