The government of John Dramani Mahama’s quest to set up an independent fiscal council has received a timely boost, with the International Monetary Fund (IMF) pledging not just advice but hands-on technical assistance to make it work.
The new government is vowed to tackle the menace of fiscal indiscipline, which mostly leads to slippages, rising debt, high deficits, and unstable macroeconomic with a robust legal framework.
As part of the legal framework is an agenda to establish an Independent Fiscal Council to put the government in check.
Speaking at an event by IMANI Africa and IISD on the establishment of this fiscal council, the IMF’s incoming Resident Representative, Dr. Adrian Alter, indicated that experience across Sub-Saharan Africa shows that while fiscal rules look good on paper, enforcing them has often been the weakest link.
With this, he cautioned that Ghana must anticipate this challenge as it seeks to strengthen its public finances.
Although he admitted that rules are important, however, he was quick to add that rules alone don’t deliver discipline. For him, what matters is how well they are enforced, and that starts with reliable, comprehensive data, especially on debt.
Given the government’s vision, he announced that the IMF is willing to extend a helping hand by offering technical assistance in the establishment of the council and the fiscal rules.
He noted that the IMF is open to helping with the rule design and enforcement. Dr. Alter noted the Fund is willing to help Ghana craft rules that are realistic, credible, and adapted to its economic realities.
Aside from the design, the IMF representative further announced that capacity building is another area the further is willing to offer support. This capacity-building support is expected to strengthen institutions to gather and manage reliable fiscal data, so policymakers have the full picture before making decisions.
“We want to work closely with the government on technical assistance for the Fiscal Council. We are here to support every effort. You can always reach out to me, and we will bring in the needed expertise to get things up to speed,” he indicated.
Dr. Alter also suggested that Ghana’s fiscal council could go beyond monitoring spending and borrowing limits. It could review the fiscal implications of new tax policy proposals before they are rolled out, ensuring that government revenue strategies are both sustainable and evidence-based.
This, he argued, would not only improve policymaking but also prevent costly surprises that erode public trust.
The IMF offering a helping hand comes at a crucial time since it will help the country establish a council and draft rules that work effectively in keeping fiscal indiscipline under control.
