Over the period 1993-1999 the Auditor-General's Reports identified disturbing trends in the management of public accounts. The Reports revealed several instances of wasteful expenditure, extravagance or lack of economy in the administration of financial resources, poor standards of accounting despite previous criticisms, and the tendency to transact financial businesses and activities without regard to applicable rules. The findings had serious implications for macro-economic stability. To what extent did the various instances of financial malfeasance, negligence and waste compromise macro-stability? Focusing largely on the fiscal dimension, this paper identifies aspects of the reports that impact on the macro-economic aggregates of the economy.

This Legislative Alert reviews the remaining clauses of the proposed amendments: dual citizenship; vacancies in the membership of parliament; the compulsory retirement age of Public Servants; chairmanship of the Police Council, Prison Service Council and the Armed Forces Council; participation of Chiefs in Politics; the definition of a Minister; the exercise of discretionary power.

Using the Auditor General's Reports for 1995- 2000, this paper seeks to identify the types of malfeasance in financial management over the period under review, while suggesting solutions to improve the situation. It identifies the various categories of financial malpractices within the Agricultural Sector, and examines the conditions and reasons that gave rise to such malfeasance. It concludes by suggesting means of minimizing and preventing financial malfeasance within the Agricultural Sector.

The Business Sector Advocacy Challenge (BUSAC) Fund and its development partners (DFID, EU and USAID) supported IEA to carry out a project on the Ghanaian business environment. Under the project, 178 businesses based in Greater Accra, Ashanti, Western and Eastern regions and engaged in activities in agriculture, industry and services, were surveyed in February 2018 The survey identified several key constraints facing Ghanaian businesses, which had varying effects on their confidence and performance. Recommendations were made to address the identified constraints. Follow-up advocacy programmes were organised to bring the findings and recommendations to the attention of policymakers and other stakeholders to promote their buy-in and acceptance.

On the 14th of February, 2019, the Ministry of Finance announced what is described as the biggest oil find in Africa, 450 million – 550 million barrels, with potential reserves of nearly 1 billion barrels of oil. Fortuitously, this new “find” has occurred when Ghana has a President who has shown total disgust for colonialism and its underlying philosophy of extracting Ghana’s natural resources under insidious and oppressive contracts with a few crumbs left to the people of Ghana (the colony).

The Institute of Economic Affairs (IEA), with support from the Center for International Private Enterprise (CIPE), conducted a case study of a loan negotiated between the Government of Ghana and the People’s Republic of China. This was a $3 billion loan agreement signed in 2011 and is to date the largest single loan ever contracted in the history of Ghana.

Africa is poor, but we can try to help its people. It's a simple statement, repeated through a thousand images, newspaper stories and charity appeals each year, so that it takes on the weight of truth. When we read it, we reinforce assumptions and stories about Africa that we've heard throughout our lives. We reconfirm our image of Africa. Try something different. Africa is rich, but we steal its wealth.

Assets Declaration Regime has been generally utilised since the 1970s as one of the most effective compliance mechanisms adopted by nations to prevent or cure the incidence of conflict of interest and corruption. It acquired renewed international focus since the passage of the UN Convention Against Corruption (UNCAC), which was adopted by the UN General Assembly in 2003. The Convention’s articles specifically require countries to adopt legislation for public officials to declare their assets.

Once again, Ghana has underscored her reputation as a model African democracy – a standing which owes much to the peaceful change of governments through the ballot box. It is, however, ironic that previous changes in government through the democratic process have exposed serious shortcomings in our country’s governance institutional framework.

The post-2012 election period presented the first test for implementing major aspects of the Presidential (Transition) Act. Following the transition, the Institute of Economic Affairs (IEA) initiated research to critically evaluate the process. The findings provided encouraging evidence of the Act being put into practice. However, challenges were highlighted and recommendations were outlined. The IEA's proposed reforms were presented to Government - in the form of a draft Bill to fine-tune the Transition Act. This is what forms the crux of the Presidential (Transition) (Amendment) Bill, 2016 currently before Parliament.

Perennial fiscal deficit overruns in Ghana and their adverse effects on the economy have attracted widespread concern. Motivated by this concern, IEA carried out research to assess the processes, arrangements and the legal framework for budget preparation, implementation, and oversight. The study included a survey of selected MDAs and relevant Parliamentary Committees. The study found that budget preparation is largely in conformity with international practice. However, there are severe implementation and monitoring deficiencies, including laxities in spending overruns with no sanctions. The paper makes wide-ranging recommendations for entrenching budget discipline in Ghana.

The Ghanaian financial sector has been growing rapidly in terms of the number of institutions and products offered. Financial institutions contribute to economic growth by channeling surplus resources from savers to borrowers/investors. With the rapid growth of the financial sector, an important question to ask is how “financial intermediation” and “financial deepening” in terms of access to financial services and the use of financial resources in the economy have been evolving. The higher the level of financial intermediation/financial deepening, the greater is the contribution of the financial sector to economic growth. This is because high financial intermediation and financial deepening increase the scope and pace of turning financial resources into real resources. There is not enough empirical evidence on this evolution. Meanwhile, it is known that the cost of credit has been persistently high. In fact, the cost of credit is placed high in the World Competitive Index Reports and Survey by the Ghana Association of Industries among the obstacles to doing business in Ghana and it is considered to be a major impediment to investment and economic growth. This problem has also not been fully investigated.

This paper discusses the role of fiscal policy rules in promoting fiscal discipline and transparency in Ghana. It investigates whether the adoption of fiscal policy rules and independent fiscal policy councils can help improve fiscal performance in Ghana based on international evidence. The results show that fiscal rules, particularly budget balance and debt rules are strongly associated with a higher probability of reducing the public debt to GDP ratio. The paper then calibrates an illustrative simple fiscal rule for Ghana based on the debt sustainability approach with a debt to GDP target of 50 percent of GDP by 2020. Achieving this target requires an average fiscal deficit of about 4 percent of GDP. The paper argues that fiscal rules do not operate in isolation and require supporting institutions and reforms to deliver the anticipated outcome. Key reforms to make fiscal rules effective in Ghana include strengthening budget preparation, appointment and execution; establishing an independent fiscal policy council to provide independent assessment of macroeconomic and revenue forecasts; monitoring and enforcement procedures, and legislative changes to make the fiscal rule legally binding.

The Ghanaian Cedi has been on the decline for the better part of its history, apparently with no end in sight. An IEA study has determined that the long-run decline of the Cedi is influenced by economic fundamentals that drive the real rate towards its equilibrium level. Further, despite the recent sharp depreciation of the currency, there is no clear evidence of misalignment. In particular, contrary to expectation, the study did not find any significant "overshooting" of the equilibrium value or "real undervaluation." The results of the study suggest that to stem the tide of depreciation, policy strategy must focus on strengthening the economy's fundamentals, with sustained macroeconomic stability and growth being at the center.

After achieving political independence in 1957, Ghana set up its own central bank to conduct independent monetary policy among other functions. Since then, various frameworks have been adopted to deliver price stability as the principal goal of monetary policy. Evidence shows that Ghana has had higher rates of inflation compared to most of its African peers during its history. This unenviable record can be attributed to both the causes and management of inflation. The causes have received considerable attention in the literature. High domestic demand fuelled by expansionary fiscal policies and accommodating monetary policies and the high proclivity of the economy to supply shocks particularly with respect to food, which commands a large weight in the consumption basket have been identified as the principal causes of the high rates of inflation. The effectiveness of monetary management, has, however, not been sufficiently investigated. The effectiveness of monetary policy depends to a large extent on the framework chosen to conduct it. A critical analysis of the monetary policy frameworks used in Ghana has been undertaken from which important lessons for the future have been drawn.

After rebasing in 2010, Ghana's per capita GDP rose to Middle-Income Country (MIC) level as defined by the World Bank. The per capita income measure is, however, seen to be too narrow as it does not even include key economic indicators let alone important social and development indicators. The IEA has assessed Ghana's MI status in comparison with Malaysia and South Africa based on wide-ranging economic and social indicators, including: the domestic macroeconomy, real economy, financial sector, external sector, infrastructure, competitiveness, education, health, and poverty. It is found that Ghana trails these two major MICs on almost all the economic and social indicators investigated. The paper recommends some of the policy interventions that would be needed to improve Ghana's economic performance and social indicators to the levels commensurate with its new MIC status.

Ghana has a long history of high inflation rates, popularly attributed to supply not keeping up with demand. However, Ghana's current single digit inflation can be attributed to a number of factors including the reduction in global inflation rate and a stable exchange rate for a period of time. This single-digit inflation has spurred the discussion as to whether it is a true reflection of the situation on the ground. This article throws some light on the measurement of inflation and explains why there should be a dichotomy between the statistical measurement of inflation and the cost of living.

The paper examines the reasons for the recent sharp depreciation in the cedi, while placing the problem in a long-term context. The paper offers both short-term and long-term solutions to safeguard the cedi's value. As a bottom line, the paper argues that the only way to stem the cedi's continual weakness is to strengthen the fundamentals of the Ghanaian economy, particularly by fortifying the export and industrial base, and the fiscal position.

The IEA has assessed Ghana's middle income status in comparison with Malaysia and South Africa, and found that Ghana trails these two major MICs on almost all the economic and social indicators investigated. The paper recommends some policy interventions that would be needed to improve Ghana's economic performance and social indicators to the levels commensurate with its new MIC status.

More than half a century after independence, the Ghanaian economy remains dependent on cocoa and gold for its survival. The country has failed to diversify the economy's production base all these years. In essence, the economy has retained its colonial “Guggisberg structure.” The endurance of the Guggisberg economy has come with considerable costs. These include direct costs such as near-stagnation of export receipts, import dependency, aid dependency and external debt burden as well as indirect costs, including high unemployment, high cost of living, and weak currency. Unless a serious effort is made to break away from the Guggisberg economic structure, Ghana will continue to suffer its perils and fail to achieve true middle-income status. This article suggests ways of making this break and placing the economy on a path of growth and development.

For more than a decade, a process to deregulate the domestic petroleum sector remains uncompleted. This is because successive Governments have not been able to muster the necessary political courage to implement it fully. At best, the policy has been implemented on a piecemeal basis. In the process, Tema Oil Refinery (TOR), Ghana National Petroleum Corporation (GNPC), and the National Petroleum Authority (NPA) have maintained their dominance over importation and retail price setting. On the whole, ex-pump prices have not been allowed to fully reflect industry costs. This implies that Governments have been subsidizing petroleum products, ostensibly intended to cushion consumers and the economy against price shocks. The question, however, is whether continued regulation and subsidization of the petroleum sector can be justified on economic or even social grounds. This paper argues that the petroleum subsidy that is provided universally can only be defended on political grounds but not on economic or social grounds as the costs outweigh the benefits. The paper suggests that full deregulation of the petroleum sector and depoliticization of the pricing scheme will serve the national interest better.

This Legislative Alert examines the fiscal provisions of Ghana’s mining code. It briefly examines the changes that have been made in Ghana since the first code was enacted in 1986. Noting the recent change in royalty rates, as well as the imposition of ad-hoc levies, the Legislative Alert argues that in the context of the Government’s current commitment to review the fiscal regime, serious consideration should be given to the introduction, indeed reintroduction, of a windfall profits tax. Such taxes, if effectively implemented and administered, could ensure that Ghana would benefit from times of high commodity (particularly gold) prices, whilst at the same time providing a stable and sustainable fiscal policy environment to promote investment.

This Legislative Alert draws attention to African countries’ addiction to foreign aid. It points out that this has not entirely helped the continent’s development because aid has been inadequate and has increased Africa’s indebtedness with considerable servicing costs. Further, aid volatility, bureaucracy, and “tying” have often curtailed and frustrated African budgets. The paper encourages African countries to explore alternative means of mobilizing resources to avoid the pitfalls of aid and better foster the continent’s development. Among the vehicles suggested to this end are: the budget; domestic capital markets; remittances; other Diasporean capital; future foreign exchange flows; and “reverse capital flight.”

The persistence of high interest rates in Ghana is the collective responsibility of banks, the fiscal authorities, and the monetary authorities. High bank lending rates and large spreads are of particular concern; not only can they not be justified in terms of the costs and risks in the industry, they also reflect industry inefficiencies, low and ineffective competition, and collusive practices. The monetary authorities cannot remain aloof but must exercise their regulatory authority to correct an obvious market failure in the credit system by capping interest rate spreads at the minimum. In this paper, the reasons behind high interest rates in Ghana are highlighted and measures to address the problem are suggested.

This Legislative Alert argues that the current system of levying taxes through fuel prices to pay the Tema Oil Refinery Debt is seriously flawed. Not only is the process cumbersome and inefficient, but it also puts an unnecessary burden on consumers. The paper suggests that a tidier, more pragmatic, and more effective way of liquidating the debt would be for Government to take over the debt, securitize it, use the proceeds to pay the creditors and redeem the securities over a period of time.

This Legislative Alert argues that neo-liberal “Washington Consensus (WC)” policies prescribed by the Bretton Woods Institutions (BWIs) to African countries receiving their financial assistance that favor free markets and private enterprise over systems characterized by economic controls and “statism” come with costs and do not always deliver maximum economic and social welfare. For these reasons, African countries should not swallow these policies “ hook, line and sinker” but should intervene directly in their economies to mitigate the associated market failings and socio-economic costs.

The global financial crisis that emanated from the United States is the worst financial crisis since the Great Depression of the 1930s. This crisis started in late 2007 and intensified throughout 2008. From early 2008 on wards, the value of shares in major markets around the world dropped significantly compared to previous years levels. This Legislative Alert reports on the preliminary observations of the global financial crisis. It briefly discusses the possible impacts of the crisis on Ghana and suggests steps that the Government of Ghana can take to alleviate the negative impacts.

The otherwise serene existence of Sub-Metropolitan District Councils as the first levels of the metropolitan structures of the metropolitan assemblies has been thrown into confusion as a result of the enactment of four pieces of subsidiary legislation which sought to reconfigure their structure, composition and functions. This paper by Kwamena Ahwoi argues that sufficient reconciliation was not done between the Amendment Legislative Instruments and the original Legislative instruments, leaving the legislative frameworks for the establishment and operations of SMDCs clumsy and confusing. It assesses the current structures as presently constituted and the problems created by the amendment legislative instruments. The paper concludes by proposing a repeal of the new instruments, and a policy review by all stakeholders in local government and decentralization.

Political parties are the heart and soul of a democracy. In the case of Ghana’s budding multi-party democracy, political parties perform key roles such as the formation of the government, grooming leaders at the national and sub-national levels and holding government accountable (when they are in opposition) among others. Yet, political parties are among the most neglected of the political institutions of state. They are made to operate as if they are purely private organisations with no state or national interest in their establishment, maintenance, well-being and extinction. By their very nature, poorly established and poorly maintained political parties produce poor quality leadership, both at the party level and at the government level. For these reasons, it is important to ensure that political parties are not just electoral machines for achieving electoral victories but also function effectively as vehicles for public education, leadership training, national integration and skills acquisition during interelection years.

The State-owned airline, Ghana Airways, was created in 1958 soon after the country gained independence. It was the first national airline in sub-Saharan Africa when it began its operations, but for a number of years it has been on a downward spiral. Several African nations now have superior airlines, including Ethiopia, Kenya, and South Africa. In recent years, Ghana Airways has been plunged into a severe crisis that has culminated in a partnership between the Government of Ghana and Nationwide Airline of South Africa, in an attempt to improve performance. This paper examines inefficiencies in the operations of Ghana Airways as highlighted in the Auditor General's Report (1996-1997). It also provides policy recommendations on improving Ghana Airways' operational efficiency and overall performance.

This paper reviews the Auditor General's Reports on the Consolidated Fund (1994-1999) with the aim of assessing whether its recommendations have been adopted and thus helped in improving financial accountability in public administration. State audits aim to ensure accountability in public finances in order to prevent a country from losing huge sums of moneys through corrupt practices of State officials and weak public finance management. An issue of special concern to the author is the recurrence of problems in the various reports and the extent to which remedial actions were taken on the basis of the Auditor General's recommendations.

This paper seeks to ascertain whether Houses of Chiefs and Traditional Councils have submitted up-to-date accounts of revenue collection and expenditure in order to ensure internal control over expenditure has been exercised. It begins by reviewing how diligent Traditional Authorities (TAs) are in preparing and submitting annual accounts and yearly estimates for validation. It also aims to find out if Traditional Authorities (TAs) are complying with the legal requirement concerning submission of annual expenditure and approval expenditure plans before undertaking any expenditure for the year in question. Finally, the paper suggests methods to improve the accountability of Traditional Authorities.

Since 1963, the Companies Code, 1963 (Act 179) has been in force without undergoing any major amendment. Most of the amendments that have been made have been targeted at, and have revised upward, the financial provisions of the Code. In particular, the amendments have generally tended to raise the minimum capital requirement (section 28 of the Code) and the fees listed in the Eighth Schedule of the Code. Only few amendments have been made that do not directly deal with the financial provisions This paper briefly catalogues and discusses the amendments made so far to the Code. It points out some of the drafting inelegances and proceeds to review some of the policy considerations that have informed the Code as presently drafted. In the light of the policy review, the paper makes proposals for policy review as well as broader institutional reforms. Finally, it reflects on the process of reform.

In almost all countries, the world over, it has been the experience of the various inhabitants that, for most of their problems, a trial and error approach with appropriate correction has been the significant hallmark that stamps them all as progressive and civilised societies. The stated idea behind the serious fraud office bill is the establishment of an investigative agency of government. It is to be a specialized agency which will be vested with duties to monitor, investigate and on the authority of the attorney general to prosecute what is compendiously classified as “suspected complex frauds and serious economic crimes”. The traditional role of maintaining law and order, which is reposed in the Police Service by Article 200 of the Constitution admittedly, encompasses these duties. The Attorney General also under Article 88 of the said Constitution is responsible for the prosecutions of all criminal offences. The dichotomy of complex frauds and serious economic crimes is unknown to our criminal system. Moreover, the Attorney General fulfils his constitutional role under the criminal justice regime by having all offences prosecuted in the name of the Republic at his suit or any other person authorised by him in accordance with any law. To justify the duplication of the constitutional duties of both the police service and the attorney general by the establishment of a serious fraud office, to perform functions already vested in these other bodies, necessitates the provision of data showing the weaknesses that have engendered failings in these institutions. With the error and correction progressive attitude abandoned, a new institution like a Serious Fraud Office stands the same chance of also developing similar faults as the old institution and a retrograde step is all that would result from the new creation. Furthermore, the serious fraud office bill contains provisions that demonstrate beyond all possible doubts, that it cannot survive a test of constitutional propriety. It must therefore be rejected as unconstitutional!

The author provides an overview of Ghana's housing market, noting the challenges that it is facing. The role of the Government in the market is considered and the article concludes by suggesting that while some intervention by Government has been well-intentioned, they may nonetheless be counter-productive.