Government to impose 5% fiscal deficit capping on state - Senior Minister

This he said will prevent the situation Ghana faced after 2011 when it recorded declining growth after being touted as the fastest growing economy at 14%.

He said government intends to do this by introducing a Fiscal Responsibility Act and a Fiscal Responsibility Council to regulate and monitor the government.

The phenomenon of governments overspending their budgets and the failure of the Central Bank to monitor the sector and ensure discipline in expenditure in his view formed the basis of the current situation the nation is facing.

Buttressing his point, Yaw Osafo Maafo referred to the BoG's own laws which prevent governments from spending more than 10% of the previous year's revenue but this was abused by 36% in the past by a government without any rebuke from the Central Bank.

In line with ensuring discipline in expenditure and streamline government spending, Yaw Osafo Maafo hinted of a law soon to curb the bad practice.

He asserted that government intends to impose a 5% capping to prevent successive governments from going beyond that.

Flouting the yet-to-be-introduced law the Senior Minister disclosed will attract severe sanctions to those involved to serve as a detriment to others and ensure sustained economic growth.

“Our fiscal deficit will not be above 5%. We are imposing this 5% on the country by law so that anybody who runs the country will keep within it. I think we need such discipline to make sure that we are able to get the full benefit of the processes of our resources."

The Senior Minister made these remarks at the first day of the on-going Ghana Economic Forum which brought together tycoons from the business world particularly private sector to deliberate on various aspects of the economy and present government with a list of recommendations.

Addressing the media after the event Yaw Osafo Maafo defended government's increased trading activities with the Chinese especially the decision to sign a $2 billion barter agreement with them.

Under the deal the Chinese will mine Ghana's bauxite, construct a refinery to process the resource and be repaid with the refined product. The money is expected to be used to finance Ghana's infrastructure deficit.

The President during his recent visit to China signed close to 8 MoUs with the Chinese government that will see trade boost between the two countries.

"Ghana is around the 70% mark. Literally, if we want the economy to run smoothly, we cannot borrow any longer. We have bauxite, now if I can exchange the bauxite and somebody comes to spend his resources to develop the bauxite into alumina so that I use the alumina to pay him, that's thinking outside the box. I am not borrowing but I am using my resources to create employment for the exploration and development of my resources. After our meeting in China, the English are now interested in it."