In an effort to tackle cost overruns during election year, the Senior Presidential Advisor, Yaw Osafo-Maafo, has proposed that the government reconsiders the introduction of the Fiscal Responsibility Act.

He said elections in the country, since the inception of the Fourth Republic Constitution, had been characterised by budget overruns where the governments spent beyond their budget.

“To me, it is such a serious problem that we need a law on fiscal responsibility. In some countries, if you spend more than a certain percentage in the previous year’s expenditure, the Minister of Finance gets into trouble. The whole idea is to ensure that you spend within your budget and the figure they use is 5%,” he said.

“I think that in Ghana we should certainly implement this Fiscal Responsibility law very well because when you create distortions in the economy, people would be called upon to tighten their belt and that means hardship and we should avoid it,” he added.

The Senior Presidential Advisor said this on the sidelines of the Open Government Partnership (OGP)- Construction Sector Transparency (CoST) Initiative Stakeholder Meeting in Accra.

Parliament suspended the implementation of the Fiscal Responsibility Act, 2018 (Act 982) in 2020 due to the COVID-19 pandemic.

The Act charges the government to ensure that the overall fiscal balance on a cash basis for a particular year does not exceed a deficit of five percent of the gross domestic product for that year.

Mr Osafo-Maafo noted that these budget overruns were usually caused by promises made by politicians in an election year; therefore, most projects in that period were unbudgeted for.

“A budget is simply your total expenditure and total revenue. If you are not able to match additional revenue, you don’t go in for additional expenditure because there’s going to be cost overrun and that creates a lot of distortions in the economy,” he explained.

“So, in every election year except one, we have a situation where we have serious cost overruns and this cost overruns is arising out of political promises which brings about pressure. In the cause of it, government literally carry out a lot of unbuddgeted programmes that is the source for cost overruns and it create problems. A country works responsibly with a budget and you should obey your budget,” Mr Osafo-Maafo added.

Touching on the OGP-CoST initiative, he said it promotes transparency, participation, and accountability in the delivery of infrastructure projects.

“This is done through multi-stakeholder working, disclosure of data, an independent review known as CoST assurance, and social accountability,” he said.

The project has been piloted in the Sekondi-Takoradi Metropolitan Assembly. Through the project, he said, the Assembly earned a strong reputation for transparency and accountability as one of the sub-national OGP members.

Mr Christiaan Poortman, the Board Chairperson for CoST, said his outfit aimed at enhancing capacity, promoting effective governance in local infrastructure projects, and fostering engagement with stakeholders.

He said Ghana’s hosting of the 51st CoST Board Meeting in Ghana underscored the collective commitment to transparency, accountability, and good governance in infrastructure development.

Source: newsworldgh.com