A former Finance Minister Seth Terkper, is advising the government to tighten the rules of the Public Financial Management Act to cut the country’s budget deficit significantly.
Ghana’s budget deficit has been consistently high, ending 2022 with a gap of about 9.0% of Gross Domestic Product.
Mr. Terkper also wants the government to adopt a comprehensive approach to managing the country’s finances to reduce the high fiscal deficit.
According to him, enforcing the Public Financial Management Law is key to addressing all these financial infractions.
The government is taking some extra measures to limit the amount of debt that can be incurred by any administration.
It has therefore proposed a debt target as part of fiscal reforms under the IMF programme.
But Mr. Terkper tells Joy Business, enforcement of the PMF Law will be the game changer.
“As we continue, I would like to know from government documents if it is a memorandum of economic or financial policy. I’m saying that we do have the provisions; they’re already in the Public Financial Management Act which was passed in 2016 (Act 921) and the budget responsibility Act which you mentioned is an extract from the PFMA”.
“So there’s the need for tightening the rules”, he added.
He further stated the Public Financial Management Law is to regulate the financial management of the public sector by vigorously ensuring that all rules and regulations are adhered to.
“The debt is from borrowing and the borrowing is from your deficit and the deficit is from revenue minus expenditure and this is the purpose of the Public Financial Management Act; to cover this in one loop which you know amended the financial administration act.
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