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The Institute of Economic Affairs has proposed to the Government of Ghana to set up a Fiscal Council to help instil fiscal discipline in the nation.

Fiscal indiscipline which often results from the lack of adherence to fiscal rules has for a long time been the biggest cause of persistent macroeconomic instability and mounting public debt stock in Ghana.

The Institute of Economic Affairs (IEA) says the establishment of the Fiscal Council would have to be accompanied by a strong political commitment to support and implement its recommendations.

There is growing interest in the importance of independent Fiscal Councils as a way of improving fiscal performance across the globe.

Indeed this debate was recently ignited in Ghana.

In respect of this, the Institute on Tuesday, May 9, 2017 held a roundtable discussion on the theme "Making Fiscal Council Work For Ghana: Country Experiences And Best Practice".

A Senior Economist and Adjunct Research Fellow of the Institute, Dr. Eric Osei-Assibey addressing a gathering at the forum outlined critical ingredients necessary to ensure a successful fiscal Council.

“Where there is legal independence and a bi-partisanship approach to its establishment, you have the buy-in of all stakeholders and thus it will have unbiased forecasting and credibility in its reports, which will make it more effective,” Dr Osei-Assibey stated.

"Among these are the following Legal and Statutory Backing for the Council, Autonomy and Independence of the Council, Clear Mandate of the Council, Adequate Funding Guaranteed In The Constitution of Ghana and Political Commitment to the Analysis and Advice of the Council".

Mr. Kojo Oppong Nkrumah, a Deputy Minister of Information, commended the IEA for their input on the proposed Fiscal Council, and said the Government was ready to help set up the Council and make it work.

He said though governments always spend money; sometimes to undertake projects, which they believed were politically logical, it was always important to balance that with the micro economic interest of the country; doing it in a manner that did not jeopardise the country’s finances.

He explained that although the Public Financial Management Act addressed fiscal issues to a point, there was the need to put in specific numerical limits that would ensure that debt and deficit numbers were better managed.

Mr Oppong Nkrumah said it was important to get to a point where a law would make it prevent any government from going beyond a certain point.

He called on other stakeholders to also bring up their input and suggestions on the Fiscal Council to inform the Government’s decisions in the setting up of the council. 

 “We want to encourage more conversation and suggestions on the issue,” he said, and also urged the media to create more space for views and input on such critical topics.

The forum was chaired by Dr. Mark Assibey-Yeboah, Chairman of Finance Committee of Parliament.

Present were guests from Parliament, government, academia, development partners, civil society and the media among others.