Ministry of Finance is the most fiscally reckless institution

According to the IMANI Centre for Policy and Education, the Ministry of Finance leads the list of the most fiscally reckless state institutions. A recent study by the centre lists five ministries that occupy the top spots in the ranking with the Finance Ministry as the leader.

Per the findings of the study by IMANI Ghana which covered from 2015 t0 2023, the Ministry of Finance tops all Ministries, Departments and Agencies. With an FRI score of 0.9038, the Ministry of Finance beats all other MDAs as the most fiscally reckless institution.

However, it is not the only ministry in the top 5, as the Communication, Roads and Highways, Health and Food and Agriculture ministries add to make up a power pack of reckless institutions.

“The Ministry of Finance tops the list of MDAs as the most fiscally reckless institution between 2021 and 2023. The Ministry of Finance recorded an FRI score of 0.9038, which translates to about 90 per cent of financial infractions traced to the Ministry of Finance. The Ministry of Finance is followed by the Ministry of Communication, the Ministry of Roads and Highways, the Ministry of Health, and the Ministry of Food and Agriculture as the top five fiscally reckless institutions for the period of assessment.”

As a result, IMANI recommended the establishment of an Independent Fiscal Council by amending the Fiscal Responsibility Act 2018 (Act 982) to tackle the issue.

Establish and legislate an Independent Fiscal Council by amending the Fiscal Responsibility Act 2018 (Act 982). The historical trend of fiscal recklessness evidenced by the positive growth in financial irregularities lay credence to the fact that the existing accountability measures in the PFM system have failed to reduce the infractions by MDAs, and thus there is the need for an independent body with the oversight over government financial decisions.

“The independent fiscal council must be clothed with the power to oversee and stop some of the fiscal decisions of the government and MDAs. In addition, the independent fiscal council must have the power to oversee all the big-ticket expenditure items of the government and supervise the macro-fiscal planning activities of the Ministry of Finance. This can potentially minimize the incidence of overstatement revenues by MDAs leading to tax and cash irregularities, where MDAs have to withhold expected government revenues to undertake some of their budgeted activities.”

However, former Auditor-General Daniel Yao Domelevo argued that establishing an Independent Fiscal Council is not the solution. He said the current institutions mandated to fight such issues need to wake up and the mess will stop. According to Domelevo, institutions such as the Auditor-General, Attorney-General, the Public Accounts Committee and the Director-General of Internal Audit Agency have the power to put the MDAs on their feet but these offices are sleeping thus allowing others to play on their own terms.

Speaking during an event held by IMANI Ghana on October 23, Daniel Domelevo said, “The tendency in Ghana is that we establish state institutions and they are also a burden on the same public funds. They don’t perform, then we create another one. In my considered opinion, the Attorney-General, the Auditor-General, the Director-General of Internal Audit Agency and Public Accounts Committee, these institutions, we should wake them up.”

He added that “if they are up and doing, the Ministry of Finance itself will repent. In 2021, I targeted the Ministry of Finance, surcharging the Minister of Finance and his Chief Directors. and I think that would have brought discipline.”

While agreeing that there is the need to force discipline at the MDAs, establishing new institutions would just be a burden on the public purse.

“I agree with you that we should ensure indiscipline comes down but I don’t think it is in creating another burden on the consolidated fund. We have done that too often. Let’s look at the mandates that already exist and see whether it cannot be executed within the mandates so that it will be cost beneficial,” Domelevo suggested.