Ghana Rolls Out Bold Reforms to Clear Payables and Reinforce Fiscal Discipline

Finance Minister Dr. Cassiel Ato Forson has unveiled a comprehensive reform strategy to tackle Ghana’s growing stock of unpaid government commitments, while restoring investor confidence in the country’s fiscal framework.

Addressing investors in Washington DC on the sidelines of the IMF/World Bank Spring Meetings, Dr. Forson emphasized government’s commitment to prudent economic management, stronger oversight, and enhanced transparency to stabilize macroeconomic conditions and drive sustainable growth.

Auditing Outstanding Payables

At the heart of the reforms is an intensive audit of all government arrears and pending commitments. According to the Minister, the Ministry of Finance, in collaboration with the Auditor General and two independent audit firms, is undertaking an eight-week review to validate the accuracy and legitimacy of these claims.

“The objective is to verify the legitimacy and accuracy of these claims,” Dr. Forson stated. “The findings will guide the implementation of corrective actions to resolve any irregularities and improve accountability going forward.”

Blocking Unapproved Expenditures

As part of broader reforms to curb fiscal slippages, the government has amended the Procurement Act. From April 3, 2025, no government contract will be approved without prior commitment clearance from the Ministry of Finance.

“This measure is critical for enhancing spending controls and ensuring full compliance with the Public Financial Management Act,” Dr. Forson said.

Reinforcing the PFM Framework

Key amendments to the Public Financial Management Act, 2016 (Act 921), have also been enacted, introducing two crucial fiscal rules: a debt rule targeting a debt-to-GDP ratio of 45% by 2035, and an operational rule mandating an annual primary surplus of at least 1.5% of GDP.

To enhance oversight and ensure adherence to these rules, an Independent Fiscal Council has been set up, providing external validation of Ghana’s fiscal path.

New Compliance Division and League Table

A newly created Compliance Division at the Finance Ministry is now monitoring fiscal discipline across Ministries, Departments, and Agencies (MDAs). A director has been appointed to lead the unit, which will soon launch a Public Financial Management Commitment Control Compliance League Table. This initiative will publicly rank MDAs on their budget adherence and financial discipline.

Investor Confidence Reassured

“These actions underscore our commitment to resolving legacy financial obligations, enforcing spending discipline, and creating a transparent and credible financial management system,” Dr. Forson affirmed.