From Arrears to Accountability: Inside Ghana’s New Public Financial Management Agenda
In a bold declaration of fiscal responsibility, Ghana’s Finance Minister, Dr Cassiel Ato Forson, unveiled sweeping new strategy to restore trust in public finance management, clamp down on unregulated spending, and prevent a repeat of the alarming build-up in government arrears witnessed in 2024.
Speaking at the 2025 Spring Meetings of the International Monetary Fund and World Bank, Dr Forson introduced what he described as a “comprehensive public financial reset”, designed to reinforce expenditure control and discipline across Ministries, Departments, and Agencies (MDAs).
The multi-pronged strategy, anchored on real-time auditing, legislative reforms, and the operationalisation of a new compliance monitoring regime, marks the clearest signal yet that the Mahama-led administration is seeking to draw a line under past fiscal indiscipline and re-establish macroeconomic credibility with both citizens and investors.
“We are not just clearing arrears—we are closing the loopholes that created them in the first place,” Dr. Forson asserted.
A System Under Strain
By the close of 2024, Ghana’s public finances had come under renewed pressure. Unverified claims and unbudgeted commitments from various MDAs contributed to a fresh stockpile of payables, exacerbating the strain on treasury operations and delaying payments to contractors and service providers.
The situation drew sharp concern from international partners and domestic stakeholders alike, triggering urgent calls for structural correction.
Four Pillars of Reform
- Emergency Audit of Legacy Arrears
A key component of the reform is a rapid audit operation led by the Auditor General in collaboration with two private audit firms. The eight-week exercise is aimed at verifying the legitimacy of outstanding claims, identifying duplications or fraudulent entries, and recommending legal or administrative sanctions where necessary.
This intervention, according to MoF insiders, is designed not just to sanitise the books but also to signal a shift toward integrity in public expenditure reporting.
- Prior Commitment Control
A consequential amendment to the Public Procurement Act now mandates that all government contracts must receive prior written authorisation from the Ministry of Finance before any commitments are made. The provision, which took effect on April 3, 2025, is a watershed development in Ghana’s procurement and budgeting space.
The new measure aligns with international best practices and aims to break the cycle of unauthorised commitments—one of the key sources of uncontrolled arrears.
“We’re reversing the order; commitments must now precede contracts, not the other way around,” a Ministry official explained.
- PFM Act Reforms: Debt and Surplus Targets
Further anchoring the reforms is a revised Public Financial Management Act (Act 921), which now introduces two key fiscal rules:
- Debt Rule: Cap Ghana’s public debt at 45% of GDP by 2035
- Operational Rule: Maintain an annual primary surplus of at least 1.5% of GDP
An Independent Fiscal Council, with a mandate to publish annual compliance reports, will be established to provide credible oversight and technical assessments of fiscal performance.
These rules, if adhered to, could provide Ghana a fiscal anchor comparable to global debt sustainability frameworks such as the Maastricht Criteria of the European Union.
- Compliance Monitoring and League Tables
Perhaps the most novel development is the institutionalisation of a PFM Commitment Control Compliance League Table—a public-facing ranking of MDAs based on their adherence to spending protocols and reporting obligations.
This initiative is being driven by the newly established Compliance Division within the MoF, headed by a Director with the authority to sanction and recommend disciplinary action for persistent breaches.
“We want fiscal discipline to be measurable, comparable, and competitive,” the Minister said, hinting at a future where transparency is embedded in government performance.
Investor Reception and Political Stakes
At investor meetings held on the sidelines of the Spring Meetings in Washington, the reforms received cautious praise. International bondholders and development partners were especially encouraged by the visible efforts to tighten commitment control and institutionalise transparency.
However, some analysts remain sceptical about enforcement capacity, pointing to historic instances where legal provisions failed due to weak institutional follow-through.
“The success of these reforms lies in sustained political will and the independence of oversight institutions. The rules are only as strong as their enforcement,” noted one senior IMF economist familiar with Ghana’s programme.
A New Social Contract?
Beyond technical adjustments, the reforms gesture toward a deeper reconfiguration of the social contract between the state and its citizens. With the painful memories of delayed salaries, unpaid contractors, and ballooning arrears still fresh, the Ministry’s aggressive posture on accountability is as much a political necessity as it is an economic imperative.
As Ghana continues its economic recovery under the IMF-supported Extended Credit Facility, the test of its fiscal reforms will not be in their design but in their durability—especially in the run-up to the 2028 general elections.
Until then, the spotlight remains firmly on the Ministry of Finance. Can it sustain the momentum and institutionalise discipline, or will political expediency once again prove a formidable obstacle?
Sidebar: Key Fiscal Discipline Tools at a Glance
| Reform Measure | Objective | Status |
| Audit of 2024 Payables | Verify claims & identify irregularities | In progress (8 weeks) |
| MoF Pre-Commitment Authorization (Procurement) | Prevent unauthorized contracts | In effect (April 3) |
| Revised Fiscal Rules (PFM Act) | Cap debt at 45% GDP, ensure primary surplus | Passed, 2025 |
| Fiscal Council | Independent oversight and transparency | To be established |
| Compliance League Table | Rank MDAs on adherence to PFM rules | Launching in Q3 2025 |
What’s Next?
As Ghana navigates its post-debt restructuring recovery under the IMF-supported programme, the success of these reforms will be judged not just by their announcement but by their enforcement.
The political will to penalise non-compliance, publish rankings without fear or favour, and fully empower the upcoming Fiscal Council will be key indicators of reform seriousness.
For now, the Ministry of Finance has taken the first bold steps. The coming months will reveal whether Ghana can move from arrears to accountability—and stay there.
Stay with NorvanReports for exclusive coverage of Ghana’s fiscal reforms, IMF engagements, and investor response from Washington and Accra.
