Strengthening Economic Accountability in Ghana: The Need for an Independent Budget Monitoring Framework
By Nancy Adzo Akpene Avevor
Ghana is currently experiencing fiscal and economic extremism. Over the past decade, the country has accumulated enormous budgetary deficits, precipitating a rapid and alarming debt increase. According to the Ministry of Finance’s Annual Debt Report, from 2017 to 2021, Ghana’s total public Debt to GDP Ratios were 55.5%, 57.6%, 62.4%, 76.1%, and 80.0%, respectively. The narrative has not significantly improved. Ghana’s current fiscal deficit for the 2023 budget is GH¢61 Billion due to GH¢205 Billion in expenditures and GH¢144 Billion in revenue, while her current debt stock is approximately GH¢575.7 Billion. According to the 2022 Auditor General’s Report, Ghana successfully mobilized GH¢21.8 Billion from international and domestic sources to mitigate the effects of COVID-19, and GH¢10 Billion of this sum went towards budget support.
Consequently, the current economic situation in Ghana is unquestionably a source of concern for the government and international partners, but an institutional perspective has yet to be examined and addressed. The country’s economic trajectory necessitates a budget monitoring framework that is independent, established, and structurally and temporally distinct from any other political or government office. Now more than ever, Ghana must prioritise budget accountability and transparency by setting up a budget monitoring authority whose mission is to strengthen and ensure economic transparency and accountability in government.
The 2020 Corruption Watch report highlighted the Auditor General’s Report, which revealed approximately GH2.1 billion in government financial irregularities. In 2021, the Open Budget Survey, conducted annually by the International Budget Partnership, rated Ghana’s budget transparency at 52 percent. These data indicate that substantial effort is required to accomplish budget transparency, which benefits the country’s economic growth and development.
How effective are the existing frameworks?
The President established the Financial Stability Advisory Council and the Fiscal Responsibility Advisory Council on December 28 (Ghana Gazette No. 173) under his constitutional authority under Article 58. Both instruments provide independent advice on fiscal responsibility and ensure the stability of the entire financial system. Each Council consists of seven members, with institutional representatives constituting the plurality of the latter’s membership. Unless the President resigns or is removed/terminated before that date, the mandates of each Council member expire concurrently with the President who appointed them. Each of these councils comprises seven state officials who are otherwise engaged or employed elsewhere. Members are mainly university professors and busy professionals who meet periodically to discuss the committee’s or council’s mandate. There is also the issue of the Council’s tenure beginning and ending with the sitting President’s term of office. The probability of such a council pandering to the whims and fancies of the President at the expense of the country leans heavily on the high side. The members are selected and appointed by the President and can be terminated as he sees fit.
Let us take a look at some useful models.
Ghana’s economic reality requires a robust budget monitoring framework that is an independent institution dedicated to reducing, if not eliminating, the massive fiscal deficits Ghana has been racking up for the past decade and making budgetary processes more transparent and officers accountable. Ghana could model its budgeting process after two countries with exemplary budget-monitoring frameworks and agencies with effective openness and accountability systems, even if these governments routinely overturn budgets.
The UK’s Office of Budget Responsibility (OBR) is the first. The OBR has 45 civil servants, three leaders, and a board. The economic, fiscal, welfare forecasting and analysis, sustainability analysis and strategy, communication, and operational teams work together. It was founded in 2010 to analyse the UK public budget independently and authoritatively. It evaluates economic and fiscal forecasts, performance against targets, fiscal risks, etc. The US Congressional Budget Office is second. It provides impartial, non-partisan data to support budgeting and economic planning.
These two institutions can operate independently due to their recruitment and establishment requirements, which, while not perfect, are nonetheless more efficient and productive than African frameworks. They have full-time, permanent employees selected based on merit and an open application process. The Ghanaian context necessitates a full-fledged institution with a complete complement of staff members who work around the clock to provide objective, non-partisan, impartial, and accurate professional services dedicated to bolstering economic transparency and accountability mechanisms in government and governance.
What possible steps could the government take?
BudgIT Ghana recommends the government take the following approaches:
- Dissolve the Existing Fiscal Council: It is in Ghana’s and the government’s best interests to dissolve the current fiscal Council. It is not impartial, as the President has direct control over its tenure, appointment, and dismissal procedures. The Council can only serve the people of Ghana without fear or favour if it continues to serve as the President’s institutional puppet.
- Establish the Office of the National Budget via a parliamentary act: Ghana requires a fully-fledged institution established by a parliamentary act, with the authority to directly influence the budget drafting process, abdicate and reject risky or problematic budgets, and provide economic forecasts, risk analyses, and budget revisions. It would require a complete personnel complement, with management and recruitment based on the strictest meritocracy, zero political affiliation, and competence.
- Create a National Budget Bulletin: To accomplish economic transparency and accountability, citizens must have access to budget information and a public publication that provides streamlined, objective, and transparent analyses of budgets. Not only must the populace be aware of allocations, but they must also understand what those allocations will imply for them and the economy.
- Build partnerships with Civil Society Organizations: As the fifth branch of government and the most trustworthy economic watchdog, Civil society groups such as BudgIT Ghana have resources to promote government transparency and accountability. We encourage the Government of Ghana to harness the expertise of budget advocacy groups to enhance the country’s economic growth.
Establishing an independent framework in Ghana is imperative and urgent as the economy faces a possible recession. Roaring fiscal deficits and debt stock necessitate a full-fledged, energetic, and robust institutional authority dedicated to objective analysis, impartial oversight, and public reporting that is staffed through the most rigorous and meritocratic recruitment system.