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Business News of Wednesday, 19 August 2015

Source: myjoyonline

IMF proposes Fiscal Council to check gov't expenditure

The International Monetary Fund (IMF) is proposing the establishment of an independent body to help check the country’s rising debts and expenditure.

The body which will be known as the Fiscal council is expected to start work by next year.

Joy Business’ George Wiafe reports that the Fiscal Council will be made up of some distinguished economists from Ghana and abroad.

They will act as a check on government when it comes to how it spends monies raised through taxes.

The council is also expected to have some sort of legal backing to take on government officials who consistently spend outside the budget.

Some have welcomed the move to establish the council saying that this could not have come at a better time as Ghana’s debt is inching to levels that could soon result in the country being classified as HIPC.

However, those who are opposed to the plan, say it might just be another bureaucratic move which might come with another cost all together for the state.

They are also of the view that with laws such as the Financial Administration Act, Ghana does not need another body to check government’s expenditure and revenue mobilization.

But with the recent budget overruns in the last three years, it is argued that the time is right for the Council to begin work.

This is not the first time a suggestion of this nature is being made to reign in the country's spending.

Vice-Presidential nominee of the opposition New Patriotic Party, Dr. Mahamudu Bawumia, has previously proposed the enactment of a Fiscal Accountability Law to check unbridled spending by government.

The suggestion was dismissed by government as totally unnecessary.

But rising debt and increasing fiscal deficit have remained a worry for the economy.

According to the central bank, Ghana’s public debt as at June this year, stood at 90 billion Ghana cedis and there are even predictions that it could hit 100 billion before the end of the year.