Ghana considers law to limit fiscal deficit to 5%

Ghana is considering passing a law that will restrict government’s fiscal deficit to not more than 5 percent of GDP, the country’s Senior Minister Yaw Osafo-Maafo said yesterday.

The proposed Fiscal Responsibility law will have provisions to punish government officials who exceed spending limits, OsafoMaafo told a meeting of business leaders in the capital Accra. Ghana, which exports cocoa, gold and oil, is following a threeyear program with the IMF to restore fiscal balance to an economy dogged by a high fiscal deficit and large public debt, after a period exuberance during the oil boom years. “We are proposing a Fiscal Responsibility Law that will restrict government spending within a band of 3-5 percent fiscal deficit-anything above five percent should be considered as an infringement,” Osafo-Maafo said. The government of President Nana Akufo-Addo, which assumed office in January, plans to lower fiscal deficit to 6.3 percent in 2017, from 9.3 percent in 2016.

“The essence of the law is to get the economy back on track and make it impossible for any government to reverse the motion ... so people who break the limit would be made to suffer for it,” he added. — Reuters