Fiscal Reponsibility Critical For Ghana's Economy

Source: Graphic Online
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Source: Graphic Online

6/12/2012 7:03:02 PM -

A round table discussions by civil society organisations and think tanks on the national economy have called for fiscal responsibility on the part of the government to ensure that the economy does not experience fiscal slippages to cause structural effects on the gains made so far.

The round table discussions organised by the Centre for Policy Analysis (CEPA) was attended by representatives of civil society, trade unions and the private sector met to identify and promote solutions for better fiscal responsibility in the country, through an inclusive process. In pursuance of this objective, the participants discussed issues concerning fiscal slippages, particularly in election years, and their structural causes and effects.

After various presentations have been made by experts, including the experiences of other countries, the participants agreed that applying the principles of fiscal responsibility is particularly critical for Ghana at this stage of its development. These principles include political commitment to the transparency of budget processes and fiscal reporting, effective oversight of fiscal operations and mechanisms in order to ensure full accountability of public officials and institutions, including enforcement of sanctions where necessary.

The participants also agreed that the costs of fiscal indiscipline to the country have been significant. These costs include declining value of income, reduced purchasing power for families, and higher costs and reduced access to credit for business owners. The social consequences are school drop-outs, declining health and insecurity, which affect vulnerable citizens the most. Other effects of fiscal mismanagement are the poor use of public funds and the arbitrary hold-up or abandoning of on-going development projects, especially during political and administrative transitions.

The participants agreed that citizens, bear the costs of fiscal indiscipline, which they are also convinced that it undermines the equitable spread of the development dividends of Ghana’s growing economy. Consequently, the participants demanded greater fiscal responsibility as prerequisite to accelerating national development in order to tackle the problem of persisting inequalities in our society.

In a communique issued at the end of the discussions said “We are concerned that the problem of sustaining fiscal responsibility has persisted over the years and adversely affected both revenue mobilisation and the quality of public spending and service delivery. Weak commitment to fiscal responsibility undermines our ability to pursue consistently our long-term development vision. Furthermore, spending and borrowing more than can be afforded by the nation and, worse still, doing so without the prior authorisation of Parliament, as has occured in the past, have contributed to the culture of impunity on the part of our political leaders”.

The communique further stated that “during an electoral year, the fiscal indiscipline behaviour worsens, increasing the risks that decisions will be made for short-term political gains, rather than the advancement of long-term developmental goals. The only way to break this costly cycle is to create broad national awareness and consensus about the imperative of fiscal responsibility”.

“With this awareness, we demand that our political leaders, government and political parties lead by example and make decisions in the national, as opposed to partisan interest. In the same vein, civil society organisations, including trade unions and employers, chiefs, ordinary citizens and the media should support a process of cultural transformation that puts the national interest first”, the commuique stated.

Accordingly, the participants declared that:
1. We believe in the laws and institutions of this country and, therefore, call for their strengthening through reforms and innovations, including the prioritisation of human capital development in order to empower our people to manage our institutions well and deliver their mandates effectively. Our state and public service institutions should be well resourced to maintain the highest standards of fiscal responsibility.

2. We urge our leaders to improve fiscal discipline in the interest of inclusive national development, based on good quality information that is accessible to all. Consequently, we call for the expeditious passage and implementation of the right to information law.

3. We call on the government to take measures to strengthen the public service while we expect public officials to demonstrate impartiality and professionalism in the management of national affairs and be held accountable for the provision of statutory information and the delivery of services.

4. We require that the principles of fiscal responsibility apply to all levels of government, including district assemblies, state owned enterprises and other public entities.

5. We pledge full support for a strengthened and efficient tax administration; a requirement for all citizens to fill annual tax returns; expansion of the tax base from self-employment particularly in respect of professionals; and the commitment to the collection of property taxes. The objective is to ensure the needed revenues for self-reliant development.

6. We call upon our political leaders and the parties to demonstrate strong commitment to the principle of fiscal responsibility at all times and particularly the promises that they make during election years.

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