A recent research report by IMANI Ghana has ranked the Ministry of Finance as the most fiscally reckless among all Ministries, Departments, and Agencies (MDAs) from 2015 to 2023.
The study highlights the Ministry’s repeated budget overruns, excessive borrowing, and mismanagement of public funds during the period under review.
According to IMANI’s findings, this poor fiscal discipline has contributed to Ghana’s rising debt levels and economic instability.
“Per our findings, the Ministry of Finance is the most fiscally reckless ministry from 2015-2023,” a Senior Research Associate at IMANI Centre for Policy and Education, Dennis Asare said.
Mr Asare disclosed this at an event to disseminate the findings of the report to stakeholders on October 23, 2024.
According to IMANI Ghana, “Financial irregularities by Ministries, Departments and Agencies (MDAs) reported between 2021 and 2023 are estimated at GHC4.89 billion, almost ten times the cost of the Livelihood Empowerment Against Poverty programme in 2023. While the financial irregularities have declined compared to GHC13.94 billion recorded between 2015 and 2020, the incidence of financial irregularities linked to taxes has worsened between 2021 and 2023.
It therefore recommended that “Plugging the leakages has become increasingly important considering the current macroeconomic circumstances.”
Background
Since 2016, IMANI Centre for Policy and Education with the support of OXFAM (Ghana) has assessed the fiscal recklessness of MDAs using its Fiscal Recklessness Index (FRI) to advocate for fiscal prudence and accountability in the use of public funds.
The third edition of the FRI examines financial irregularities by MDAs between 2021 and 2023, and critically analyzes the implications of political parties’ manifestos for fiscal discipline.
The report calls for urgent reforms and stricter fiscal policies to restore financial prudence within the Ministry and other MDAs to ensure sustainable economic growth.
Ghana is yet to achieve a stable and predictable macroeconomic environment despite the fiscal consolidation interventions implemented under the 17th IMF programme supported by a new Public Financial Management Strategy. The threat of poverty remains high, and the business environment is far from being conducive for the private sector. Fully restoring macroeconomic stability requires effective and accountable public financial management systems, however, the Auditor General’s reports continue to show persistent weaknesses in internal controls and oversight institutions.
Ahead of the 2024 elections, political parties have proposed numerous interventions in their manifestos to restore macroeconomic stability and strengthen fiscal accountability. However, these promises must be benchmarked against the critical reforms needed to reverse the current fiscal challenges considering the historically high risk of policy slippages before and after election cycles.
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