Some stakeholders in the financial sector have stressed the need for the newly formed Fiscal Council to operate independently without being influenced by government.
The comments were shared at a roundtable workshop in Accra, on the theme “The Suitable Model of Fiscal Council for Ghana: Learning from Best Practices”.

The workshop which was facilitated by the Economic Governance Platform, The World Bank, and Oxfam, attracted Civil Society Organizations (CSO’s), development partners, private sector players among others.

While commending government for setting up the councils, during the delivery of his remarks the Country Director of the World Bank Henry Kerali, stressed that measures must be put in place to ensure that the Fiscal Council is independent.
“It must not only be seen to be independent, but it has to be independent of government,” he stressed.

The Fiscal Council will also among other things monitor the performance of government’s budget with a focus on governments compliance with fiscal rules and targets such as achieving a budget deficit of not more than 5% of Ghana’s Gross Domestic Product (GDP).

Economics consultant for the Economic Governance Platform, Dr. John Kwakye expressed doubt over the effectiveness of the newly formed Fiscal Council if it remains in its current form.

“If things should remain as they are, I don’t regard this Fiscal Council to be the type that we need to help us establish the institutional framework for maintaining or entrenching long-term fiscal discipline in this country.

That’s my concern. Because based on international best practice I’m saying that the appointment of the council by the president, attaching it to the president, the council being resourced by the president, the tenure of the council being coterminous with the president means that it’s also not a permanent body. We want an institution that will surpass governments and presidents,” he argued.

Over the past almost 30 years, Ghana’s budget has been in deficit every single year.
The deficit to GDP ratio has ranged for the lowest level of 1.3 percent in 1991 to the highest of 11.5 percent in 2012, with the worst performances coming in election years.

Background

In December 2018, President Akufo-Addo established the Fiscal Responsibility Advisory Council and Financial Stability Advisory Council by an Executive Instrument.
The two major councils are to offer independent advice on fiscal responsibility and ensure the stability of the entire financial system.
Their advice will cover areas such as banking, pensions and fund / asset management, insurance, etc.

Both Councils are made up of seven members each, with the Fiscal Responsibility Advisory Council being comprised of Dr. Paul Acquah, Mr Abdallah Ali-Nakyea, Prof. Eugenia Amporfu as well as Dr. Nii Ashong among others. Meanwhile the members of the Financial Stability Advisory Council include; Dr. Ernest Addison and Mrs Elsie Awadzi both of the Bank of Ghana, Charles Adu Boahen – Deputy Minister of Finance, Justice Yaw Ofori – Commissioner of the National Insurance Commission as well as others.

Currently only 39 countries around the world have fiscal councils, with Ghana being the 4 th country in Africa behind the likes of South Africa, Kenya and Uganda.

Credit: citibusinessnews
(By: Bobbie Osei)