Bawumia outline plans to tackle gov't spending, vows to modify fiscal rule

Dr. Mahamudu Bawumia, the New Patriotic Party's (NPP) flagbearer, has laid out his plan to tackle government spending, emphasizing the need for modifications to the fiscal rule.

The fiscal rule, originally capping budget deficits at 5% of GDP, was temporarily suspended during the COVID-19 pandemic to facilitate effective crisis management.

However, Dr. Bawumia contends that the current fiscal deficit framework lacks the necessary teeth to control government expenditure.

Speaking at a gathering with the Trades Union Congress in Accra, he proposed a revision to the existing rule. Under his proposal, the budget deficit would be restricted to no more than 105% of the previous year's tax revenue.

"This revised approach ensures greater fiscal discipline," Dr. Bawumia explained. "By tethering expenditure to previous year revenues, it guards against over-optimistic revenue projections leading to unsustainable deficits."

In addition to this adjustment, Dr. Bawumia pledged to establish an independent fiscal governance council. This move aims to provide oversight over the Ministry of Finance's actions, ensuring accountability and transparency in fiscal matters.

"We need an autonomous body to oversee the Ministry of Finance," Dr. Bawumia emphasized. "Without independent oversight, there's a risk of unchecked spending. The proposed fiscal responsibility council would address this gap, ensuring prudent financial management."

Dr. Bawumia's proposals underscore the NPP's commitment to fiscal responsibility and effective governance, setting the stage for a robust debate on economic policy in the upcoming elections.