Ghana enacts Public Financial Management Act to enhance fiscal discipline

The Ministry of Finance has announced the Public Financial Management (Amendment) Act, 2025. This law aims to improve fiscal discipline, accountability, and economic stability in Ghana.

The new law introduces strict oversight mechanisms and fiscal responsibility measures. It also establishes an independent Fiscal Council for better transparency and compliance with financial regulations.

One key provision imposes tougher sanctions for fiscal mismanagement. The Minister of Finance may face censure under Article 82 of the Constitution for breaching fiscal rules.

Ministers of State and Heads of Covered Entities could face imprisonment for financial recklessness. This marks a strong stance against poor public administration practices.

The Act includes new measures to protect the country’s economic future. It mandates a primary balance rule requiring an annual surplus of at least 1.5% of GDP.

A public debt ceiling has been set at 45% debt-to-GDP ratio by 2034. These provisions aim to promote fiscal discipline and reduce excessive borrowing risks.

To enhance oversight, the legislation creates an independent Fiscal Council. This body will monitor adherence to fiscal responsibility rules and maintain budget credibility.

Additionally, the Minister of Finance must seek approval before suspending fiscal rules due to unforeseen events.

The amendment consolidates Ghana’s fiscal management laws into one framework. The Fiscal Responsibility Act, 2018 (Act 982) is repealed, and the Presidential Fiscal Advisory Council is dissolved.

These changes streamline governance and centralize oversight under the new Fiscal Council.

With these reforms ahead of the September 2025 IMF deadline, the Ministry reaffirms its commitment to restoring fiscal discipline in Ghana.

The government promises full implementation of this law and collaboration with stakeholders for sustainable growth.