Parliamentary Oversight Key to Fiscal and Monetary Stability – Prof. Gatsi
Dean of the University of Cape Coast Business School, Professor John Gatsi, has emphasized the crucial role of Parliament in Ghana’s fiscal and monetary policy management.
Speaking during the NorvanReports and Economic Governance Platform (EGP) X Space Discussion on the topic, “Fiscal Vs Monetary Tug-of-War: Economic Salvation or Damnation?” on Sunday, Prof. Gatsi underscored Parliament’s oversight responsibilities in scrutinizing and approving fiscal policies, taxes, and expenditure levels.
“When we are dealing with fiscal policy, taxes cannot be executed if Parliament does not scrutinize and pass them. The level of fiscal deficit, total revenue, and expenditure must all be examined and approved by Parliament before implementation,” he stated.
He further highlighted Parliament’s oversight role in ensuring compliance with approved fiscal policies. “When implementation begins, Parliament has a duty to oversee and ensure that things are done as approved,” he added.
On monetary policy, Prof. Gatsi noted that despite the central bank’s independence, it remains accountable to Parliament. “The monetary authorities present reports to the Finance Committee semi-annually, allowing for scrutiny and questioning,” he explained.
Addressing Ghana’s inflation concerns, Prof. Gatsi stressed the need to analyze inflation in the context of the International Monetary Fund’s (IMF) targets. “The IMF’s inflation target for Ghana by the end of 2024 is about 15 to 18 percent. There is a concerted effort to ensure inflation declines to meet this target,” he stated.
He acknowledged disagreements over recent policy rate increases but noted that they are intended to curb inflationary risks. “While we may disagree with the monetary policy authorities, their decision to raise the policy rate aligns with efforts to contain inflation,” he observed.
Prof. Gatsi also pointed to ongoing structural reforms, particularly concerning State-Owned Enterprises (SOEs), as a key factor in Ghana’s economic outlook. “The finance minister has indicated that several structural reform benchmarks have not been met, especially regarding SOEs. This is being worked on seriously ahead of the IMF’s major review,” he remarked.
He warned that failure to meet IMF benchmarks could delay the disbursement of funds, impacting economic stability. “If we do not meet these targets, the IMF may grant us additional time, but the negative effects on economic management would have already been felt,” he cautioned.
Prof. Gatsi concluded by emphasizing the importance of aligning Ghana’s economic policies with IMF expectations to ensure financial support and economic stability.
