Ghana Cracks Down on Unbudgeted Public Spending

12 Apr 2012

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Finance Minister, Kwabena Duffuor


Ghana's government is barring public institutions from spending plans that were not included in the 2012 budget, Finance Minister Kwabena Duffuor said on Wednesday, in a bid to ensure fiscal discipline ahead of elections later this year.

The West African nation holds presidential and parliamentary elections in December, and there are fears that the government could bow to pressure for wage hikes and other spending ahead of the vote, Reuters report said.

"The government is committed to maintaining fiscal discipline and not repeating the mistakes of previous election years," Duffuor told journalists.

Duffuor said President John Atta Mills had told ministries, departments and agencies in a directive to refer all contracts to the Attorney General's office for clearance before they are signed.

Earlier this month, the IMF told Ghana that higher than expected wage claims and fuel subsidies meant it should take further steps to ensure it meets its 2012 deficit target of 5.2 percent of non-oil gross domestic product.

Duffuor said unbudgeted spending in the past had undermined the effective implementation and control of the national budget.
Ghana's economy grew 14.4 percent in 2011, helped by the start of commercial oil production, and the country has managed to keep inflation below 9 percent for nearly two years.

Under the new guidelines, government agencies are also barred from signing deals including the procurement of vehicles, equipment or services unless approved by the cabinet and covered in the budget, Duffuor said, adding that any violation of the directive would heavily punished.

Tags: World, News, Ghana Cracks

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