The government’s plan to review the Fiscal Responsibility Act has been welcomed by economic analysts as a necessary step toward strengthening financial discipline and preventing reckless spending. However, concerns remain about whether the review will translate into real reforms or become another policy adjustment with limited impact.
During the 2025 Budget Statement on March 11, 2025, Finance Minister Dr. Cassiel Ato Forson announced the government’s intention to review and integrate the Fiscal Responsibility Act into a broader Public Financial Management Act. The objective, according to the government, is to ensure better oversight of public finances and introduce stricter spending controls.
Speaking on Newsfile on March 15, 2025, Dr. Priscilla Baffour, an economist at the University of Ghana, Legon acknowledged that revisiting the Fiscal Responsibility Act is an important move. However, she cautioned that unless strong institutions are put in place to check government spending, this review may not achieve its intended purpose.
“The minister is indicating a review of the Fiscal Responsibility Act, and that is a good step. But there has to be institutions that properly check how governments spend. If this review does not give real legal backing to enforce fiscal discipline, then we are back to where we started,” she stated.
She further explained that merely appointing a Fiscal Responsibility Committee without legal backing will not be enough. For the review to be effective, the committee must be independent of political influence and have binding authority over government spending decisions.
“One of the propositions we made was that the Fiscal Responsibility Committee should not just be an advisory body or based on appointments by the Office of the President. It should have legal status with binding constraints on the executive,” she explained.
Dr. Baffour also raised concerns about Ghana’s rising debt levels, stressing that without a legally mandated debt ceiling, excessive borrowing will continue to threaten the country’s economic stability.
“There should be a debt ceiling so no government is allowed to borrow beyond a certain level. Without such restrictions, we will keep seeing excessive borrowing and debt accumulation,” she warned.
Although some fiscal reforms have been included in the budget, Dr. Baffour pointed out that most of these measures are medium- to long-term solutions. She stressed the need for immediate actions to stabilize inflation, interest rates, and the cedi to create a more stable economic environment for businesses and individuals.
“These are good steps, but we have to see real enforcement. It’s not just about making laws; it’s about ensuring they are followed. That’s where the real challenge is,” she concluded.
