By: Godfred Amoaful
IMANI Africa has partly attributed the country’s current macroeconomic challenges to what it called “the reckless management of public finances and the lack of commitment to long-term public reforms rather than the blame on COVID-19 and the Russian-Ukraine war”.
This was contained in the 2021–2023 IMAN’s Fiscal Recklessness Index report.
Presenting the report in Accra, a Senior Research Associate at IMANI, Dennis Asare, said Ghana has not built stronger institutions enough to address fiscal indiscipline resulting in financial irregularities among Ministries, Departments, and Agencies, MDA’s.
The 2021 to 2023 Fiscal Recklessness Index Report by IMANI is the 3rd time the think tank has released its assessment report on the financial irregularities by Ministries, Departments, and Agencies (MDAs), since 2015.
The 2021–2023 report is a composition of Auditor General’s reports on those institutions.
It reveals that between 2021 and 2023, financial irregularities amounted to about 4.9 billion cedis, equivalent to 2.36 percent of the country’s GDP in 2023.
Surprisingly, the report indicates that 90 percent of these irregularities are tax-related, indicating there is more tax revenue not accrued as a result of weak revenue enforcement.
According to Dennis Asare, these irregularities also represent at least more than two times the country’s expenditure on poverty reduction programs like LEAP and the Ghana School Feeding Program. He said as Ghana strives to be more fiscally prudent, there is a need to implement measures that will ensure that public institutions are compliant with the Public Financial Management Act.
He also recommended the “establishment of an independent fiscal council that will have the power to oversee and stop some of the reckless expenditure activities undertaken by the government”.
Meanwhile, former Auditor General Daniel Yaw Dumelovo was of the view that establishing an independent fiscal council is not the way to go in addressing fiscal recklessness in the public space. Instead, Mr. Dumelovo proposed, “the Attorney General, the Auditor General, the Director General of Internal audit, and the Public Accounts Committee must be up and doing in dealing with financial irregularities, which are cost beneficiary rather than creating new institutions that will, in turn, take a toll on the country’s finances.”
The report also revealed that among the MDAs in the country, the Ministry of Finance was the most fiscally reckless institution.
This is because almost 90 percent of the financial irregularities are being traced to the ministry.
The report found that the irregularities were a result of shared negligence, lack of enforcement, and limited commitment on the part of public officials to execute their work by way of collecting revenue and enforcing the rules.
