On Wednesday, April 2, 2025, President John Dramani Mahama signed the Public Financial Management Amendment Bill, 2025, into law, a significant step towards strengthening fiscal discipline and ensuring long-term economic stability in Ghana.
The new law amends the Public Financial Management Act of 2016 (Act 921) with the aim of refining fiscal responsibility rules and enhancing the management of public finances. One of the key provisions of the bill is the establishment of an independent Fiscal Council, tasked with monitoring fiscal policies to ensure budget credibility, macroeconomic stability, and debt sustainability.
The amendment introduces crucial operational rules, including a mandate for an annual primary balance of at least 1.5% of GDP on a commitment basis. Additionally, the law sets a target to reduce the public debt-to-GDP ratio to 45% or lower by 2034. These measures are intended to curb fiscal slippages and ensure the country stays on a sustainable financial path.
The new law also imposes stringent sanctions on ministers and heads of public sector entities whose actions or negligence lead to the breach of these fiscal rules, underscoring the government’s commitment to holding officials accountable for fiscal mismanagement.
The Public Financial Management Amendment Bill is expected to consolidate and streamline the laws related to fiscal management, closing gaps and removing redundancies in previous regulations. This move is seen as a vital step in strengthening Ghana’s financial governance and ensuring more effective use of public resources.
