In a bold move to assert fiscal discipline and credibility, Ghana’s Finance Minister Hon. Mohammed Amin Adam has declared that the country will manage its fiscal affairs for the remainder of the year without supplementary funding.
This decision, as emphasized by Minister Adam, is designed to demonstrate to both Ghanaians and the international community that Ghana can maintain fiscal stability even under challenging conditions.
Speaking to the media today, Minister Adam emphasized the significance of this approach, especially considering the electoral cycle, which is often marred by fiscal indiscipline. He aimed to reassure both domestic and international stakeholders, including Ghana’s official creditors and Eurobond holders, about the government’s commitment to fiscal discipline and credibility.
“First of all, you want to demonstrate to the whole world; I mean most of our financiers, our official creditors, our Eurobond holders, but even our own citizens who want to see fiscal discipline, who want to see fiscal credibility in the way we manage our fiscal affairs.”
Hon. Mohammed Amin Adam, Finance Minister
Hon. Adam underscored the government’s intention to maintain fiscal prudence and demonstrate to the world that it is possible to adhere to budgetary constraints even under the pressure of election-related expenses.
Hon. Adam also highlighted a common issue where countries often face higher fiscal deficits during election years due to uncontrolled expenditure. He criticized the practice of incurring deficits that necessitate borrowing, thereby increasing the debt burden.
“In the negotiation with the Bond Holder, they paid particular attention to physical management because if you are asking them for a reduction in the interest rate, they also want to be sure that you can repay in what is to be left of in the near future.”
Hon. Mohammed Amin Adam, Finance Minister
The Finance Minister’s declaration followed the Mid-Year Budget Review presented on Tuesday, July 23, where he announced that the government would not seek supplementary funding for the remainder of the year. This decision aligns with the government’s commitment to maintain fiscal discipline and avoid unnecessary borrowing.
A New Era of Fiscal Management
The decision is also intended to send a strong message to international creditors and investors. By demonstrating fiscal discipline, the government hopes to maintain favorable relationships with financiers and possibly secure better terms for future borrowing if needed.
“We can even work within our appropriation when you have the pressures of having to spend on things you are rather curtailing spending and that for us is a demonstration of a very high level of fiscal management.
“That is for us very high levels of fiscal prudence and, therefore, the confidence that you want to see in the economy will continue to be there.”
Hon. Mohammed Amin Adam, Finance Minister
Domestically, this move is expected to resonate with citizens who have long called for better management of public funds. Fiscal discipline, especially during election years, is a significant concern for many Ghanaians who fear the economic repercussions of unchecked government spending.
Ghana’s decision to manage its fiscal affairs without supplementary funding this year marks a significant step towards greater fiscal discipline and economic stability. As the country navigates an election year, this move by Finance Minister Mohammed Amin Adam sets a new standard for responsible fiscal management, aiming to build confidence both at home and abroad.
With this declaration, Ghana positions itself as a model for other nations grappling with similar fiscal challenges, particularly in the face of electoral pressures. The success of this strategy will be closely watched by both domestic and international stakeholders as a testament to the country’s commitment to fiscal prudence and economic stability.
READ ALSO: Economists Urge Immediate Action as Ghana’s Debt Reaches Critical Levels
