Former Minister for Finance and lead partner of tax firm, PFM Tax Africa, Seth Terkper, has said the suspension of the Fiscal Responsibility Act by government is unnecessary.
In answering a question from norvanreports, Mr Terkper said, per the Act, any government that is unable to meet the 5 per cent fiscal deficit requirement needs only to go to Parliament to explain why it will not be able to stick to the fiscal deficit target on an annual basis.
Something, he says the incumbent government appears to have varied.
His assertion follows the suspension of the Act by government for 3 years in the wake of the Covid-19 pandemic.
The suspension of the Act, according to government became necessary as it has to provide for businesses and Ghanaians stimulus packages and freebies to mitigate the adverse impacts of the pandemic.
Speaking on whether the suspension of the Fiscal Responsibility Act did not fall inline with the Medium Term Budget or Expenditure Framework (MTEF) of government, Mr Terkper noted that while it could be a consideration for the suspension, the MTEF operated on a “rolling annual” basis – that is, a new third year replaces the current year in which the budget is presented – hence the need for it to be presented to Parliament every year for review.
“The Fiscal Responsibility Act should be treated in a manner to ensure that Parliament will continue to exercise it’s fiscal oversight role,” Mr Terkper stated.
“This will also ensure that recoveries, as is happening under Covid or the added 2 new oil fields are not ignored,” he added.
