Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, stressed the importance of establishing an independent fiscal advisory council in Ghana, free from government interference.
He defined a fiscal council (FC) as an independent body, typically established by governments to evaluate fiscal policy.
Dr. Kwakye emphasized that fiscal councils could significantly contribute to good fiscal policy if they are structured to guarantee their independence.
“This is very critical, and that’s why we are saying that the fiscal advisory council established by the president is not a true fiscal council because it is under the president and is not an independent body,” he told journalists at a press conference in Accra on Wednesday, June 12, 2024.
He added, “To be an effective agency of fiscal restraint, the FC should be able to exercise an independent watchdog role over the executive’s formulation and implementation of fiscal policy. FC independence is especially important for Ghana and other developing countries where institutional checks and balances over policy tend to be weak.”
However, Dr. Kwakye highlighted that while Parliament is tasked with overseeing proper fiscal policy, it is not particularly effective in fulfilling this responsibility. Consequently, he emphasized the necessity of another entity to aid in executing this mandate.
The IEA director proposed that the fiscal council (FC) should be appointed through a competitive recruitment process involving Parliament and the Public Services Commission.
He cited three countries from which Ghana can draw lessons, especially regarding effective functionalities. These countries include the US Congressional Budget Office (CBO), the UK Office for Budget Responsibility (OBR), and the Swedish Fiscal Policy Council (FPC).
He outlined, “They engage mostly in economic and fiscal forecasting, evaluation of fiscal performance against targets, evaluation of fiscal risks, assessment of the consistency of fiscal policy with long-term fiscal and debt sustainability and sustainable growth, and publication of briefing materials to inform the public about their work.”