Communiqué: Workshop on Ghana’s Fiscal Council

On Tuesday February 19, 2019, the Economic Governance Platform (previously the Civil Society Platform on Ghana’s IMF Programme) in collaboration with Oxfam and the World Bank organized a Roundtable Workshop, on the theme “The Suitable Model of A Fiscal Council for Ghana: Learning from Best Practices” at the World Bank Office, Accra.

The workshop brought together 50 participants from Civil Society, Professional Associations, Development Partners, Academia, Media, and other identifiable groups in Ghana. The speakers and workshop participants shared research, analysis, viewpoints and ideas for consideration by Government to internalize fiscal discipline and making it irreversible in order to avert another need for a stabilization programme with the IMF in future.

Mr. Henry Kerali, World Bank Country Director for Ghana, Liberia and Sierra Leone opened the workshop while the IMF Resident Representative for Ghana, Dr. Albert Touna Mama and Mr. Tijani Hamza, Country Director of Oxfam addressed participants.

Economist, Dr. John Kwakye presented the discussion paper. Dr. Joe Abbey, Executive Director, Centre for Policy Analysis (CEPA), Prof. Godfred Alufar Bokpin, Dean of Students’ Affairs at the University of Ghana and Mr. Vitus Adaboo Azeem, Chairman of the Tax Justice Network-Ghana led the discussions at the workshop. Below is the communiqué issued at the end of the workshop:

Communiqué

Preamble

Having participated fully in the Roundtable Workshop on the theme: “The Suitable Model of A Fiscal Council for Ghana: Learning from Best Practices”, hereby adopt and approve as a “Civil Society Position,” the following Communiqué to ensure that Ghana’s Fiscal Council serves the purpose of a domestic agency of fiscal restraint in line with international best practice.

Acknowledging:  

1. The relevance of civil society inputs and contributions in the discourse of development dialogue; 
2. The commitment of the Government and Development Partners to provide space and opportunity for the involvement and participation of civil society through focused dialogue and discussions;
3. The need to forge stronger ties, cooperation and relationship between Citizens, Government and Development Partners towards quality assurances for efficient and effective quality decisions on behalf of the people of the Ghana. 

Hereby agree to  

1. Continue with the advocacy for an Independent Fiscal Council (IFC).
2. In the interim take full advantage of the dialogue spaces that have been created.
3. Commit to pursue independent analysis and engagement with others for good economic governance.

And recommend

The following overarching themes, as “Citizens’ Positions” to be considered and adopted by the Government to enhance fiscal responsibility in Ghana:

• Fiscal indiscipline in Ghana

1. Ghana has a record of fiscal indiscipline characterized by persistent deficit bias (an average of 6.2 percent of GDP since 1990).
2. The deficit bias is the result of failed discretionary policy, lacking rules, independent analysis and effective oversight.
3. Having sought IMF bailouts 16 times in its history, Ghana had reached a point where it had to create the necessary institutional and policy regime that would help internalize fiscal discipline rather than delegate the role to the IMF.

• Interventions to strengthen fiscal discipline

1. The Government has taken commendable steps towards instituting internal mechanisms for entrenching fiscal responsibility and fiscal discipline in Ghana.
2. This is evidenced by the passage of the Public Financial Management Act (Act 921), the roll-out of the Ghana Integrated Financial Management System (GIFMIS), the Fiscal Responsibility Act (Act 982) which, among others, stipulates a fiscal rule in the form of a deficit ceiling of 5% of GDP, followed by the establishment of a Presidential Fiscal Responsibility Advisory Council (FRAC).

• Call for an Independent Fiscal Council (IFC)

1. CSOs have reservations about the nature and role of the Presidential Fiscal Responsibility Advisory Council (FRAC) which, in their view, do not fully meet their expectations and international best practices.
2. The reservations relate to what CSOs perceive as lack of independence of the Presidential Fiscal Responsibility Advisory Council (FRAC) from the Executive and its potential ineffectiveness in exercising its important role as watchdog over Executive policy given the Council’s advisory mandate. 
3. The key challenge as the country exits the IMF-backed bailout programme is how to ensure that Government adheres to the principles of fiscal responsibility embodied in the reforms and laws alluded above and which is necessary for continued policy credibility. It is to ensure adherence to fiscal principles that 39 countries including 3 in sub-Saharan Africa namely; South Africa, Kenya and Uganda have established Independent Fiscal Councils (IFCs).

1. In spite of the diversity of Independent Fiscal Councils (IFCs), the international experience suggests IFCs share one thing in common; their independence as institutions of democratic accountability and fiscal restraint, holding Government to public account.
2. Hence, civil society is recommending an Independent Fiscal Council for Ghana, akin to the ones being promoted by the OECD, IMF, etc., tailored to Ghana’s own context as is the case in South Africa, Kenya and Uganda cited above.

• Potential Role of an Independent Fiscal Council in Ghana

1. The Independent Fiscal Council (IFC) could publish ex-post analyses of the outcomes of the annual budget. If set targets were not met, to show whether this was the result of external circumstances, unrealistic assumptions, or poor budget execution.
2. The IFC could assess whether the budget is consistent with fiscal sustainability–through simulations of its possible impact on debt and macroeconomic performance over the medium term.
3. If the Government announces a change or departure from its fiscal rules (as provided for in the PFM laws), the Independent Fiscal Council could provide an analysis of whether the departure is really warranted or not.
4. The IFC could therefore help give credibility to Government statements and policies. It could review and comment on the realism of the revenue forecast or produce the revenue forecast, which the Government could use as the basis of the budget.
5. The importance of the revenue forecast function of the IFC is that it is not just a technical question-an unrealistically optimistic revenue is one of the prime means by which politicians inflate the public expenditure budget beyond what is feasible and sustainable.

• The Role of CSOs

1. Civil society will continue to work with all stakeholders in order to give Ghana the type of Independent Fiscal Council best suited to the country’s peculiar needs.
2. In the interim, civil society will continue to carry-out independent analysis, monitoring and evaluation of fiscal policy indicators and produce reports to fill-in the gaps.

ADOPTED THIS 19TH DAY OF FEBRUARY 2019, WORLD BANK, ACCRA

Participants List

No	Name	Organization
1	Francisca Sabbah	P.O.S. Foundation
2	Alex Ampaabeng	Oxfam
3	Harriet Donkoh	GIZ
4	Michael Boadi	Ghana Integrity Initiative (GII)
5	Nicholas de-Heer	Institute of Fiscal Studies (IFS)
6	Fred Tetteh	Chartered Institute of Taxation-Ghana (CITG)
7	Leslie D. Mensah	Institute of Fiscal Studies (IFS)
8	Elizabeth Nkrumah	FAT-Africa
9	Matilda O. Kwarteng	University of Ghana Business School
10	Julius Gyimah	Chartered Institute of Taxation-Ghana
11	Mohammed Abubakari	GN Research
12	Jens Hanlischer	GIZ
13	Errol Graham	World Bank
14	Dr.Yakubu Zakaria	Integrated Social Development Centre (ISODEC)
15	Juliet Asante	Penplusbytes
16	Kennedy Fosu	World Bank
17	Prof. Godfred Bokpin	University of Ghana
18	Juliana Abokuma Echii	P.O.S. Foundation
19	Sydney Casely-Hayford	Occupy Ghana
20	Benjamin Boakye	Africa Centre for Energy Policy (ACEP)
21	Diana Klu	Friends of the Nation (FoN)|
22	Adnan A. Mohammed	Economy Times
23	Vitus Adaboo Azeem	BSF Consult
24	Dr. Joseph Abbey	Centre for Policy Analysis (CEPA)
25	Tijani Hamza	Oxfam
26	Teresa Schwarz	GIZ
27	Ebenezer Kofi Adu-Lartey	DGI Foundation
28	Donald Mphande	World Banak
29	Nii Ayi Aryeetey	Chartered Institute of Taxation-Ghana
30	Nicholas Adamtey	TAI
31	Faustina Djabatey	Ghana Anti-Corruption Coalition (GACC)
32	Michael Adisu	Ghana Anti-Corruption Coalition (GACC)
33	Godson Korbla Aloryito	Economic Governance Platform (EGP)
34	Dr. John Kwakye	PEC
35	Philip Banini	IWatch Africa
36	Demba Tounkora	Ghana Anti-Corruption Coalition (GACC)
37	Charlotte Kpogli	Integrated Social Development Centre (ISODEC)
38	Petrine Addae	Abibiman Foundation
39	Samuel A. Baaye	Ghana Centre for Democratic Development (CDD-Ghana)
40	Muniratu Adams Zanzeh	G.N.A
41	Kodjo Adams	G.N.A
42	Dundas Whisham	Goldstreet Business
43	Joyce Abbey Reichmann	Centre for Policy Analysis (CEPA)
44	Bobbie Osei	Citi Fm/TV
45	George Wiafe	Joy Fm
46	Eben Agyekum-Boateng	TV3
47	Agyemang Duah	UTV
48	Osei Owusu	Starr Fm
49	Benedicta Biankie Nartey	Tax Justice Coalition
50	Nii Martey Botchway	Daily Graphic