A former Minister of Finance and Economic Planning, Yaw Osafo Maafo has blamed the current Minister of Finance, Seth Terkper and Parliament, for creating a messed fiscal regime in the country. According to him, they have looked on and allow the fiscal regime to deteriorate.
Mr. Maafo, who was the first finance minister in the erstwhile Kufuor government, expressed this sentiment at Institute of Economic Affairs (IEA) roundtable discussion on public financial management in Accra.
He maintained that the current “Minister of Finance is too powerful” and questioned “Who in Ghana takes the Minister of Finance’s budget and tears it into pieces?”
“I see as a first major problem the lack of capacity of our Parliament to analyze the budget. In US Congress their budget support unit is as powerful as that of the treasury. You have a situation where Parliament can look at the budget and have the alternative. In our situation we have a Parliament that relies on the Minister of Finance to make a presentation and invariably approve it.
“Parliament must do its own budget and do a comparison with that coming from the Minister of Finance,” according to Mr. Maafo.
He called for the strengthening of Parliament to be able to produce its own budget and be able to scrutinize the one presented by the Minister of Finance.
Mr. Maafo and his colleague participants at the day’s event were convinced that the discretionary powers given to the country’s Finance Ministers in terms of fiscal policy decisions have led to the huge budget deficits in the country, and called for a punitive sanction regime that would keep government’s finances in check.
According to them, if we want to run the system by discretion, knowing our nature, we will be in trouble. If we have rules like these there should be sanctions.
The country must begin to adopt the Fiscal Responsibility Act in Brazil which makes it a punishable offence for public officers to exceed expenditure targets, adding, for the country to be left at the discretionary whims of a powerful Finance Minister are almost suicidal, Mr. Maafo noted.
A renowned Senior Economist at the IEA, Dr. John Kwakye, in a presentation noted that weak fiscal management had undermined the country’s economy for decades, except for 2004.
According to him, every election year has come with a huge fiscal indiscipline.
For instance, the 2012 election year recorded the highest fiscal deficit with its attendant repercussions including debt crisis.
Dr. Kwakye lamented that it was also true that the country only becomes financially disciplined only when it is under International Monetary Fund (IMF) programme.
To address these fiscal challenges, he called for the passing of fiscal policy rules, as well as the setting up of independent fiscal policy council; similar to Parliament Budget Office (PBO) could improve the fiscal performance of the country’s financial management system.
Dr. Kwakye was quick to add that a law has to be promulgated to give the Council the needed legislative backing and the power to regulate revenue and expenditure activities in the country.
Source : The Chronicle