With more vigilance and prudence in the management of public financial resources, Ghana could have avoided signing up with the IMF in 2015 for an Extended Credit Facility of US$918million, according to the Senior Minister, Yaw Osafo-Maafo.
This is because the huge sums of government funds – being about GH¢5.9billion which could not be accounted for – captured by the Auditor General’s Report for 2012 and 2014 could have provided the ‘financial capacity’ for which the IMF deal was negotiated.
The Senior Minister said two critical aspects of the country’s governance regime have been a source of drain on national resources, which are “issues relating to public procurement and public financial management”.
He acknowledged that the country has had weak regulatory frameworks in these critical areas, and the effect has been various malpractices resulting in huge losses of scarce public revenue.
Speaking at the Public Financial Management Conference organised by Trust Consult in Accra, he noted that “while some of the infractions may be a deliberate scheme to fleece the state, it may also be entirely possible that there are some genuine errors resulting from lack of adequate understanding and appreciation of public financial management”.
He said it is now a known fact that public finance management practitioners face a big challenge of credibility as the world reels from some monumental governance scandals.
“From the global financial crisis in 2008 to our banking challenges, the importance of effective financial management cannot be overemphasised.”
In Ghana, “we have seen governance failures in the private and the public sectors. We have equally seen the havoc these failures can wreak – threaten jobs, erode taxpayers’ confidence and sometimes affect the appetite of investors,” he added.
But in all these, he said, “how we effectively manage public and even private finances has had far-reaching implications”.
He cited recent developments in the banking sector as a clear case of poor financial management, adding that the effect of this state of affairs created by a few has resulted in some very serious implications for many.
Under this situation, he continued, “we have a responsibility to maximise scarce resources through prudent financial management, so that the many needs of the public such as schools, roads, health facilities, and shelter can be adequately provided”.
He said ensuring value for money through effective public financial management is important, because “our needs as a people are almost infinite in the face of scarce resources” – adding that these are some of the key foundational pillars to achieving Ghana Beyond Aid.
“If we judiciously use our resources and avoid deep-seated abuses which result in poor utilisation of public revenue, we can do more for ourselves with little or no reliance on external sources and support.”