The Government of Ghana has taken a bold step toward enhancing fiscal responsibility with the passage of the Public Financial Management (Amendment) Act, 2025. The legislation introduces sweeping reforms aimed at reinforcing accountability, transparency, and economic stability in the country’s public financial system.
“With the enactment of this law, the Fiscal Responsibility Act, 2018 (Act 982) has been repealed, and the Presidential Fiscal Advisory Council dissolved, streamlining oversight under the newly established independent Fiscal Council.
“The passage of these critical reforms, well ahead of the September 2025 deadline for the IMF-supported program, demonstrates the Ministry of Finance’s unwavering commitment to restoring fiscal discipline, enhancing transparency, and securing Ghana’s long-term economic resilience,” said Finance Minister Cassiel Ato Forson.
Key Reforms Introduced
The new law is set to transform Ghana’s fiscal management landscape by implementing the following measures:
1. Stricter Sanctions for Fiscal Mismanagement:
The Minister of Finance will be subject to censure under Article 82 of the Constitution for violations of fiscal rules.
Ministers of State and Heads of Covered Entities could face imprisonment for actions contributing to fiscal mismanagement, ensuring greater accountability in government financial operations.
2. Strengthened Fiscal Responsibility Framework:
A new primary balance rule mandates an annual surplus of at least 1.5% of GDP to promote fiscal sustainability.
The introduction of a public debt ceiling will cap the debt-to-GDP ratio at 45% by 2034, addressing concerns over rising public debt and ensuring long-term financial health.
3. Establishment of an Independent Fiscal Council:
A fully autonomous Fiscal Council will be tasked with monitoring compliance with fiscal rules, improving budget credibility, and ensuring macroeconomic stability.
4. Tighter Oversight and Accountability Measures:
The Minister of Finance must seek Parliamentary or Cabinet approval before suspending fiscal rules due to force majeure or unforeseen economic conditions.
Enhanced compliance mechanisms will hold government entities accountable for financial mismanagement, fostering a culture of transparency and efficiency in public financial administration.
5. Consolidation of Fiscal Management Laws:
The Act repeals the Fiscal Responsibility Act, 2018 (Act 982), and dissolves the Presidential Fiscal Advisory Council. All fiscal rules will now be unified under a single legal framework, eliminating redundancies and strengthening enforcement mechanisms.
A Commitment to Economic Stability
The Ministry of Finance has pledged to work closely with stakeholders to ensure the successful implementation of these reforms, positioning Ghana for sustainable economic growth and greater investor confidence.
