Parliament has passed the Public Financial Management (Amendment) Act, 2025.

The landmark legislation introduces sweeping reforms aimed at increasing accountability and transparency in Ghana’s public finance system.

Among the key features of the new law are stricter oversight mechanisms, enhanced fiscal responsibility rules, and the establishment of an independent Fiscal Council tasked with ensuring compliance. These measures are designed to promote sustainable fiscal management and prevent the mismanagement of public funds.

Key Reforms Under the Public Financial Management (Amendment) Act, 2025:

Tougher Sanctions for Fiscal Mismanagement:

The Minister of Finance can face censure under Article 82 of the Constitution if fiscal rules are violated.

Ministers and heads of covered entities can be imprisoned for contributing to fiscal slippages.

New Fiscal Responsibility Measures:

A primary balance rule will require an annual surplus of at least 1.5% of GDP.

The public debt-to-GDP ratio will be capped at 45% by 2034 to maintain debt sustainability.

Creation of an Independent Fiscal Council:

The new law establishes an autonomous Fiscal Council to monitor compliance with fiscal responsibility rules, thereby enhancing the credibility of the national budget and safeguarding macroeconomic stability.

Stronger Oversight and Accountability:

The Finance Minister will need Parliamentary or Cabinet approval to suspend fiscal rules during unforeseen economic conditions or force majeure events.

Consolidation of Fiscal Management Laws:

The law consolidates various fiscal rules into a unified legal framework, eliminating redundancies and reinforcing enforcement mechanisms.

As part of the reform, the previous Fiscal Responsibility Act, 2018 (Act 982), has been repealed, and the Presidential Fiscal Advisory Council dissolved. These changes aim to streamline fiscal oversight under the newly formed independent Fiscal Council, which will have the authority to monitor and ensure fiscal discipline.

The passage of this bill comes ahead of the September 2025 deadline for the IMF-supported program, reflecting the Ministry of Finance’s commitment to improving fiscal governance. The reforms are expected to bolster Ghana’s economic resilience by ensuring that public financial management remains transparent, accountable, and sustainable.

The Ministry of Finance has expressed its dedication to working with stakeholders to ensure the full implementation of these reforms, thereby safeguarding the nation’s long-term macroeconomic stability and prosperity.