Ghana to Establish Independent Fiscal Council to Strengthen Public Finance

Speaking at the event, Patrick Nomo, Chief Director of the Ministry of Finance, said the Council will function as a fiscal watchdog, providing independent oversight of fiscal policy formulation and implementation.

Ghana's Ministry of Finance has announced plans to establish an independent Fiscal Council as part of wide-ranging reforms aimed at tightening oversight of the country's public finances and restoring long-term fiscal discipline. The initiative, unveiled at a policy roundtable in Accra, is a key element in the government's strategy to rebuild credibility in fiscal management and prevent future crises of macroeconomic instability.

A Watchdog for Fiscal Discipline

Speaking at the event, Patrick Nomo, Chief Director of the Ministry of Finance, said the Council will function as a fiscal watchdog, providing independent oversight of fiscal policy formulation and implementation.

"As part of the reforms, we are establishing an independent Fiscal Council for improved oversight of fiscal policy. We are also introducing enforceable sanctions for fiscal mismanagement and setting new fiscal rules, including a debt-to-GDP ceiling of 45 percent by 2034," Nomo stated.

He emphasized that the Council's mandate will focus on:

• Monitoring fiscal policy to ensure adherence to fiscal rules.

• Providing independent analysis of budgetary and debt management practices.

• Enhancing transparency in government's fiscal decisions.

• Ensuring accountability through sanctions for non-compliance.

Legislative Backing and Structural Reforms

The Fiscal Council will be backed by amendments to the Public Financial Management (PFM) Act, ensuring that its authority is anchored in law. According to the Ministry, the amendments provide stronger enforcement mechanisms, including sanctions against fiscal indiscipline, which in the past has eroded investor confidence and weakened macroeconomic stability.

The Council is part of a broader set of structural reforms under the leadership of Finance Minister Dr. Cassiel Ato Forson, who has prioritized institutional changes to restore trust in Ghana's economic management.

"Stability is gradually being restored to the economy, and this Council will play a central role in safeguarding that progress," Nomo added.

Learning from the Past

Ghana has faced recurring episodes of fiscal slippage, often characterized by overspending, excessive borrowing, and mounting debt. These challenges have contributed to periods of currency volatility, high inflation, and strained relations with international creditors.

Observers note that previous attempts at fiscal consolidation were often undermined by weak enforcement and political interference. The establishment of an independent Fiscal Council is therefore seen as a critical safeguard, insulating fiscal policy from short-term political pressures.

Debt Sustainability and Long-Term Targets

One of the Council's key responsibilities will be to monitor Ghana's progress toward its newly set debt-to-GDP ceiling of 45 percent by 2034. The target reflects the government's ambition to restore debt sustainability following years of fiscal strain and high borrowing costs.

By enforcing fiscal rules, the Council is expected to help Ghana avoid a return to unsustainable debt dynamics and create conditions for stronger, more resilient growth.

Collaboration with Think Tanks and Development Partners

The announcement was made during a roundtable discussion hosted by IMANI Ghana and the International Institute for Sustainable Development (IISD). Both institutions have long advocated for stronger fiscal institutions to anchor Ghana's economic reforms.

Experts at the event welcomed the creation of the Council, noting that its success will depend on genuine independence, adequate resourcing, and political commitment to respecting its oversight role.

Looking Ahead

The establishment of the Fiscal Council aligns with global best practices where independent bodies provide oversight of fiscal policy, such as in the United Kingdom and Chile. By embedding fiscal discipline into Ghana's governance framework, the Ministry of Finance hopes to create a more transparent, accountable, and sustainable public finance system.

As the reforms move forward, attention will turn to the composition of the Council, the scope of its powers, and the credibility of its enforcement mechanisms — factors that will determine whether it can truly serve as a bulwark against fiscal mismanagement.