Gov’t Dissolves Presidential Fiscal Advisory Council After New Act

The Presidential Fiscal Advisory Council established under former President Nana Addo Dankwa Akufo-Addo has been dissolved by the current government following the enactment of the Public Financial Management Act.

The Ministry of Finance in a press statement on April 2 said the new Act which is to streamline fiscal prudence, has also affected the Fiscal Responsibility Act.

“With the enactment of this law, the Fiscal Responsibility Act, 2018 (Act 982) has been repealed, and the Presidential Fiscal Advisory Council dissolved, streamlining oversight under the newly established independent Fiscal Council.”

The Fiscal Council was established in 2019 with the mandate to “develop and recommend to the President fiscal responsibility policies for the maintenance of prudent and sustainable levels of public debt, ensuring that the fiscal balance is maintained at a sustainable level, and the management of fiscal risks in a prudent manner, to achieve efficiency, effectiveness and value for money in public expenditure.”

Meanwhile, the Fiscal Responsibility Act passed in 2018 was to provide fiscal responsibility rules to ensure macroeconomic stability and debt sustainability and to provide for related matters.

Public Financial Management (Amendment) Act
According to the Ministry of Finance, the passage of the Public Financial Management (Amendment) Act, 2025, will bolster fiscal discipline, and accountability, and ensure long-term economic stability in Ghana.

The Act described as a landmark legislation introduces stricter oversight mechanisms, enforces rigorous fiscal responsibility rules, and establishes an independent Fiscal Council to enhance transparency and compliance.

“The passage of these critical reforms, well ahead of the September 2025 deadline for the IMF-supported program, demonstrates the Ministry of Finance’s unwavering commitment to restoring fiscal discipline, enhancing transparency, and securing Ghana’s long-term economic resilience.”

Key Reforms Introduced by the PFM (Amendment) Act, 2025:
1. Enhanced Sanctions for Fiscal Mismanagement:
* The Minister of Finance faces censure under Article 82 of the Constitution for any breaches of fiscal rules.
* Ministers of State and Heads of Covered Entities are subject to potential imprisonment for actions contributing to fiscal slippages.

2. New Fiscal Responsibility Measures:
* Implementation of a primary balance rule mandating an annual surplus of at least 1.5% of GDP on a commitment basis.
* Establishment of a public debt ceiling, capping the debt-to-GDP ratio at 45% by 2034 to ensure debt sustainability.

3. Creation of an Independent Fiscal Council:
* A legislated, autonomous Fiscal Council tasked with monitoring adherence to fiscal responsibility rules, thereby ensuring budget credibility and macroeconomic stability.

4. Strengthened Oversight and Accountability:
* Requirement for the Minister of Finance to obtain Parliamentary or Cabinet approval before suspending fiscal rules due to force majeure or unforeseen economic conditions.

5. Consolidation of Fiscal Management Laws:
* Unification of all fiscal rules under a single legal framework, eliminating redundancies and enhancing enforcement mechanisms.

Source: opemsuo.com/Hajara Fuseini