Government to establish fiscal responsibility law

The government is taking the necessary steps to put in place safeguards to ensure the macroeconomic gains made in the last 21 months are not reversed, Vice President Dr Mahamudu Bawumia has disclosed.

A key component of the measures is the expected passage, by the end of the year, of a Fiscal Responsibility Law to cap the budget deficit not to exceed 5% for a fiscal year, as well as the setting up of regulatory and advisory bodies to guide government’s fiscal and financial sector management.

The Vice President of the Republic made the disclosure when he addressed the Ghana Investment & Opportunity Summit 2018 in London on Tuesday, October 23, 2018.

The two-day Summit is being organised by the Ghana High Commission in the UK, in collaboration with the Ghana Investments Promotion Centre (GIPC).

“Cognizant of the tendency to backtrack on our progress, Government is putting in place measures to ensure the irreversibility of the gains we have achieved so far. To this end, we are implementing structural measures to tackle some of the long-term structural issues. We intend to urge Parliament to pass, by the end of this year, a Fiscal Responsibility law to cap the budget deficit not to exceed 5% for a fiscal year," Dr Bawumia said.

“We will also ensure complementary monetary management and establishment of institutional safeguards such as an independent Financial Stability Council, Fiscal Council, and an International Economic Advisory Council.

“The overarching objective,” according to Vice President Bawumia, “is to 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.”