The Institute of Economic Affairs (IEA) Ghana has welcomed the government’s plan to review the Fiscal Responsibility Act by enhancing responsibilities and enforcing stricter sanctions, describing it as a step in the right direction.
In a press statement issued in Accra, the IEA recommended that the Act include a clause limiting the duration of suspension in emergencies.
This, the Institute noted, would prevent indefinite suspension, a loophole that has been exploited since 2020.
IEA’s recommendations on debt management
The statement also outlined the IEA’s perspective on Ghana’s 2025 Budget and Economic Policy, which was presented to Parliament by Finance Minister Dr. Cassiel Ato Forson on March 11, 2025.
The IEA lauded the government’s decision to introduce legislation setting a debt ceiling of 60 per cent of GDP, a move that aligns with the Institute’s long-standing recommendations.
Additionally, the Institute suggested incorporating a provision mandating that all borrowed funds be used exclusively for investment purposes.
According to the IEA, such a measure would stimulate economic growth, ensure that loans are directed towards productive ventures, generate resources for future debt repayment, and prevent recurring debt crises.
Govt’s commitment to economic stability
During his budget presentation, Dr. Forson highlighted plans to review several legislative frameworks to strengthen economic stability and promote inclusive growth.
Among these is the Fiscal Responsibility Act, 2018 (Act 982), which will be integrated into a broader Public Management Act.
This new framework aims to enhance fiscal and debt sustainability while restoring confidence in Ghana’s economy.
