Finance Minister Unveils Plan to Clear Ghana’s 2024 Payables and Strengthen Fiscal Discipline

Finance Minister Unveils Plan

Ghana’s Finance Minister, Dr. Cassiel Ato Forson, recently laid out a series of steps aimed at tackling the growing backlog of unpaid government bills in 2024. Speaking to investors during a meeting in Washington, D.C., he presented a detailed strategy designed to restore fiscal discipline, build confidence in Ghana’s public financial system, and enhance transparency. The government’s objective is not just to clear the debts that have accumulated over the years, but also to put in place robust systems that prevent similar problems in the future.

One of the key initiatives Dr. Forson discussed involves a comprehensive audit of all outstanding financial obligations the government has yet to honor. To ensure this process is both thorough and independent, the Ministry of Finance has enlisted the Auditor General as well as two separate audit firms to conduct a focused eight-week review of these liabilities. According to Dr. Forson, this audit will help determine which claims are valid and which might be irregular or inflated. The findings are expected to serve as a roadmap for resolving discrepancies and improving overall financial accountability across government institutions.

He stressed that cleaning up these commitments is a necessary step toward creating a more stable fiscal environment. “We’re not just reviewing these obligations to pay them off,” Dr. Forson explained. “We want to understand where things went wrong, address the root causes, and ensure such problems don’t persist in the future.” This kind of retrospective analysis, he said, is crucial for rebuilding trust with both domestic and international stakeholders.

In addition to addressing existing payables, the government is taking action to prevent the future accumulation of unauthorized expenditures. A significant step in this direction is the amendment of Ghana’s Procurement Act. Under the new law, which comes into effect on April 3, 2025, no government contract can be approved unless it receives prior authorization from the Ministry of Finance. This rule aims to tighten spending controls and ensure strict compliance with the Public Financial Management (PFM) Act, which governs how public resources are handled in Ghana.

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These measures are part of a broader push to overhaul the country’s public financial management framework. Another major development is the amendment of the Public Financial Management Act of 2016 (Act 921). With the recent changes, two critical fiscal rules have been introduced. The first is a debt rule, which targets reducing the debt-to-GDP ratio to 45% by the year 2035. This is a long-term goal aimed at lowering Ghana’s public debt burden to more sustainable levels. The second rule requires the government to maintain an annual primary budget surplus of at least 1.5% of GDP, calculated on a commitment basis. In simple terms, this means the government must ensure that its revenue exceeds its spending, excluding interest payments on existing debt.

To make sure these new rules are followed, the government has set up an Independent Fiscal Council. This body will track fiscal performance and publish reports, adding another layer of transparency to the system. Dr. Forson noted that this kind of independent oversight is essential for building credibility and ensuring that the new policies are not just words on paper, but actually implemented and followed.

In a further move to reinforce accountability, the Ministry of Finance has created a Compliance Division. This division is specifically tasked with monitoring how well Ministries, Departments, and Agencies (MDAs) are adhering to their financial responsibilities. A new Director has already been appointed to lead this division, and their mission is to ensure that MDAs stay within their budgets and meet their financial obligations in a timely manner.

To make this monitoring process more visible and competitive, the government plans to roll out a Public Financial Management Commitment Control Compliance League Table. This tool will publicly rank MDAs based on how well they manage their expenditures and stick to financial guidelines. The goal here is to foster a culture of fiscal responsibility by recognizing those who perform well and highlighting areas that need improvement.

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Dr. Forson emphasized that all these efforts demonstrate the government’s serious commitment to fixing past issues while laying a strong foundation for the future. By actively resolving unpaid bills, enforcing new financial regulations, and increasing transparency, the government hopes to rebuild investor confidence and promote sustainable economic growth. “We’re not just interested in quick fixes,” he said. “We’re creating a system that will work now and continue working long into the future.”

The Finance Minister’s message to investors was clear: Ghana is taking decisive steps to improve its fiscal health, manage public resources more effectively, and create a transparent system of financial governance. These reforms, if fully implemented, could go a long way in stabilizing the economy, attracting investment, and fostering long-term development.

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