The Institute of Chartered Accountants, Ghana (ICAG), a regulatory body of the accountancy profession in the country, has advised the government of Ghana to be disciplined with its expenditure in the year 2023, as it battles to resolve the current economic challenges facing the country.
The President of ICAG, Madam Sena Dake, opined that the government must spend within its means by deliberately balancing its revenue with its expenditure, as specified by the Fiscal Responsibility Act, 2018 (Act 982).
“We admonish the government to stick to fiscal discipline, in line with the Fiscal Responsibility Act 2018 (Act 982).”
Madam Sena
Madam Sena Dake made these comments at the institute’s 40th Graduation and Admission Ceremony in Accra.
Section Two of the Fiscal Responsibility Act, 2018 (Act 982) instruct the government not to maintain a fiscal deficit (the difference between revenue and expenditure) of more than five per cent of gross domestic product (GDP) in a given year.
However, Section Three allows the Minister of Finance to suspend the provision in Section Two in the event of a natural disaster, a public health emergency, drought, war, unanticipated economic shock or where GDP growth rate is one per cent or less. Per Section 3(3) of Act 982, the Minister of Finance must seek parliamentary approval within 30 days after suspending the Fiscal Responsibility Act.
Ghana is stagging under serious economic conditions, with inflation at 54.1 per cent and the public debt at GH¢467.4 billion, representing 75.9 per cent of GDP. The country’s credit worthiness has been severally slashed to near junk status by all the international rating agencies, a situation which has made it practically difficult for Ghana to access finance on the international financial market.
The government is currently negotiating for a $3 billion support from the International Monetary Fund (IMF), and as part of measures, has introduced a debt restructuring programme to enable it (government) to bring the country’s debts to sustainable levels.
Improving Revenue Mobilization
Apart from maintaining fiscal discipline, ICAG also urged the government to continue to expand the tax net and improve revenue mobilization through technological innovations.
“We expect the government to boost its digitalization drive in revenue mobilization and highly automate the process to obtain optimized tax and non-tax revenue.”
Sena
The President of ICAG further opined that one area the government ought to pay attention to was the disparity in the amount of foreign currencies leaving the country for imports and the actual goods coming in. The government, she emphasized, must create a system based on the Bank of Ghana /SWIFT system “to reconcile the volume of foreign currency transferred and the value of goods received into the country”.
Madam Dake noted that, as the regulatory body for the accountancy profession and the training of accountants, the ICAG would continue to improve on standards in the profession and ensure compliance with relevant laws to promote national development.
The President therefore, called on audit and accounting firms, as well as accountants who belonged to other accounting bodies, to register with the ICAG, in line with the ICAG Act, 2020 (Act 1058), as failure to do so was an offence.
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