He said the ministry would be guided by the Public Financial Management Act (PFMA) 2016 (Act  921) to a more robust framework for macro-fiscal policy formulation, control and management of all public funds.

“My team and I are committed to delivering that. We believe that if we achieve macro-economic stability and direct economic policy through allocative efficiency, we will create the necessary environment and opportunities for the private sector to take advantage and work,” he said at the opening of a two-day National Policy Summit (NPS) in Accra yesterday.

The PFMA seeks to regulate the financial management of the public sector by defining the responsibilities of persons entrusted with the management and control of public funds, assets, liabilities and resources to ensure that public funds are sustainable and consistent with the level of public debt.

Mr Ofori-Atta said the ministry was not only implementing sound policies “but also working at transforming the institution, so that we can deliver better services”.

“We are building a new image, value system and culture; a culture of integrity, service and care,” he stressed.

Sow seeds

In pursuit of that, he said, the latest budget was aimed at sowing the seeds for growth and jobs, ensuring fiscal discipline, creating fiscal space, reprioritising government expenditure, promoting prudent use and care of the public resources, as well as ensuring improved service delivery. 

To deliver these, he said, the Finance Ministry was focusing on five pillars, namely:  focus on reforms, including revenue, expenditure, debt and wage management and earmarking of revenue.

Mr Ofori-Atta said the challenge with the economy had to do with spending more than what was generated, as well as borrowing to finance those expenditures.

“Over the years, revenue generation has become stagnant due to many factors. In the meantime, we earmarked a significant portion of the revenues. Added to that is an increasing expenditure, especially in wages and salaries and interest payment,” the minister noted.

Challenges and solution

He said the situation led to very limited investment in the critical sectors of the economy, provision of needed infrastructure and investment in the real sector to generate and facilitate economic activity and create opportunities for people.

“What we saw was a persistent and consistent decline in economic activity and increased unemployment. The impact was high inflation, high and unstable exchange rates, high interest rate and short, scarce and expensive credit for private sector to invest.

“This situation was compounded by poor service delivery and complex and unfriendly regulatory requirement with regard to business licensing and granting of permits. This led to a loss of confidence by investors and the private sector,” he stated. 

Mr Ofori-Atta said the government was determined to change that narrative by working around five key pillars to increase revenue, reduce exemptions, stop leakages, simplify tax process to ensure compliance, control expenditure, implement the PFMA, as well as strengthen commitment to control, among other initiatives.