Parliament Approves Suspension Of The Fiscal Responsibility Rules For 2020 Financial Year

The request for suspension of the fiscal responsibility rules contained in the financial responsibility Act, for the 2020 financial year has been adopted and approved by parliament.

The Act was laid in the august house on Wednesday , 29th July,2020 by the Hon. Minister responsible for parliamentary affairs, Mr. Osei Kyei-Mensah-Bonsu on behalf of the minister for finance.

The committee met with the Minister for Finance, Hon. Ken Ofori Atta, Two Deputy ministers for finance, Hon Mrs. Abena Osei Asare and Hon. Kwaku Kwarteng and officials from the ministry of finance to consider the report.

The fiscal responsibility Act, the landmark legislation passed in December 2018, four months before Ghana exited its four-year protracted IMF bailout programme, was intended to safeguard the gains the country has made in achieving macroeconomic stability. 

The fiscal responsibility act makes it an offence for the annual budget deficit to exceed five percent of GDP.

However, the finance minister in the mid-year budget review indicated that the expected revenues from taxes and grants dropped by 26% to GHS 22BN in the first half of the year, attributing the shortfall to the outbreak of covid-19.

The fiscal responsibility act makes it an offence for the annual budget deficit to exceed five percent of GDP.

 However the minister made known his intentions to suspend the rule in the mid-year budget review due to the impact of covid-19 on government’s projections resulting in an unexpected deficit of 11.7% of GDP.

As such, Finance minister, Ken Ofori Atta requested to parliament to suspend the fiscal responsibility Act.

Rt. Hon speaker referred the request to the financial committee for consideration and report.

However, it has been successfully adopted by  parliament today after the finance committee had considered the report.

By : Isaac Otoo

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