The quest to move Ghana towards a developmental democracy took a significant turn yesterday, as President John Mahama received the 127-page report from the Constitutional Review Committee. Chaired by Professor Henry Kwasi Prempeh and inaugurated in February 2025 as part of a campaign promise to review the 1992 Constitution, this eight-member body was tasked with proposing reforms to enhance democratic governance.
Its final report outlines numerous proposed amendments, with a particularly consequential section dedicated to public finance. In this chapter, the Committee pinpoints structural weaknesses that have historically contributed to fiscal indiscipline, ballooning public debt, and various institutional distortions.
Below, we break down the key public finance reforms the Committee has put forward to help bridge the gap between the ballot box and the national purse.
- Treating Tax Exemptions as Tax Expenditures
The Committee proposes that tax exemptions, waivers, reliefs, and concessions should be formally recognised as “tax expenditures.” In practical terms, this means that whenever the Government grants a tax exemption, it should be treated as a form of public spending rather than a neutral policy choice.
To reinforce accountability, the Finance Minister would be required to set an annual ceiling on the total value of tax exemptions, subject to parliamentary approval during the budget process. The aim is to make the cost of exemptions visible and prevent unchecked revenue losses that quietly weaken the public purse.
- Introducing sunset clauses for earmarked funds and special levies
An earmarked fund is a pool of public money that is legally set aside for a specific purpose or project. Many earmarked funds and special levies were created to address specific problems, often on a temporary basis. Over time, however, several of these funds have become permanent features of the fiscal system.
The Committee recommends that all such funds should include sunset clauses, meaning they would automatically expire after a fixed period unless Parliament deliberately renews them. This proposal is intended to ensure regular review of whether such funds are still necessary and whether they continue to serve the public interest.
- Placing Constitutional Limits on the Contingency Fund
The Contingency Fund exists to enable the Government to respond quickly to emergencies and unforeseen circumstances. The Committee proposes that the Constitution should specify both a minimum and maximum size for this fund, set between 1% and 3% of total annual expenditure.
This seeks to strike a balance between flexibility and discipline, ensuring that the fund is large enough to be useful, but not so large that it becomes a channel for discretionary spending without sufficient oversight.
- Requiring a clear public debt management framework
In response to Ghana’s recent debt challenges, the Committee proposes that Parliament should be constitutionally required to enact a public debt management framework. This framework would set out borrowing limits and sustainability rules.
Rather than fixing specific debt ratios in the Constitution, the proposal emphasises principles of responsibility and transparency, leaving the technical details to ordinary legislation that can be updated when circumstances change.
- Tightening controls on Bank of Ghana financing of government
The report proposes stricter constitutional conditions for when the Bank of Ghana may provide direct financing to the Government. Such lending would be permitted only:
- in clearly defined emergencies
- upon a written request by the Finance Minister
- and with parliamentary approval by a 60% majority.
In addition, parliamentary oversight of the Bank’s foreign exchange operations would be strengthened through more frequent reporting (once every quarter). These changes are aimed at protecting monetary stability and reinforcing the independence of the central bank.
- Allowing, but not Constitutionalizing, a Fiscal Council
While recognising the value of an independent body to monitor fiscal discipline, the Committee recommends that a Fiscal Council should be created by legislation rather than entrenched directly in the Constitution.
Under this approach, the Constitution would authorise Parliament to establish such a body, while leaving its structure and mandate flexible enough to evolve with economic conditions. This would avoid locking technical policy tools permanently into the constitutional text.
- Reforming Public Sector Pay and Retirement Benefits
The Committee raised concerns about the widespread practice of cross-service benchmarking of salaries and retirement benefits, which has led to a growing number of public officers “retiring on salary,” a privilege historically limited to the judiciary.
To address this, the proposed Independent Public Emoluments Commission would be given a broad mandate to rationalise public sector pay and reverse unjustified distortions. The objective is fiscal sustainability and fairness, rather than uniformity at all costs.
- Depoliticizing State-Owned Enterprises (SOEs)
To improve governance and efficiency in State-Owned Enterprises (SOEs), the Committee proposes a constitutional prohibition on:
- Ministers, Deputy Ministers, and Members of Parliament serving on SOE boards
- political party executives or candidates holding executive or board positions in SOEs
Under the proposal, boards would be responsible for appointing and supervising chief executives, reducing political interference in commercial decision-making.
Closing Note: Modernizing the Financial Architecture
Taken together, the public finance proposals reflect a clear attempt to address long-standing weaknesses in Ghana’s fiscal architecture. The Committee’s approach favours constitutional principles over rigid rules, while placing greater emphasis on transparency, discipline, and institutional restraint.
Whether these proposals ultimately translate into constitutional amendments will depend on the next stages of public consultation and political consensus. What is clear, however, is that public finance reform sits at the heart of the broader constitutional review now before the nation.
