STOPPING EXCESSIVE SPENDING BY GOVERNMENTS

The government has hinted that it would soon place before Parliament an amendment bill that will seek to prevent the current and future governments from excessive spending.

The Public Financial Management (Amendment) Bill which has been approved by cabinet, will make it illegal for any government to spend beyond five per cent of the country’s Gross Domestic Product (GDP) beginning 2018.

The purpose for the law is to place a cap on the country’s fiscal deficit to ensure prudent public use of public funds and greater fiscal discipline, Vice President, Dr Mahamudu Bawumia said when he announced the government’s decision.

The decision to enact the law primarily is said to have been based on the back of the high debt to GDP ratio, and a generally unfavourable economic outlook from the previous government.

Indeed, Ghana’s budget deficit has remained high over the last few years, hitting 9.3 per cent in 2016.

As a matter of fact, budget deficits have always been a concern to the country and its development partners over the years.

The reason is that, the country has always depended on development partners to finance our budget and, therefore, any deficit should be a source of concern not only to the partners but also successive governments who have tried not to spend excessively, but often over spend the budget.

The decision by the government to cap spending is a good idea which should be applauded by all Ghanaians.

It is without doubt that excessive spending by previous governments have been a major challenge facing the country and any decision to halt it is welcome.

The Ghanaian Times urges the government to push the amendment quickly to Parliament for the law to be passed as soon as possible.

Excessive spending has been the bane of most successive governments and it is time to put a stop to it once and for all.

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