Context
Ghana is enjoying a period of sustained economic growth. The country has been an oil exporter since 2010 and it now counts among the lower-middle-income countries. Despite these developments, public expenditure still exceeds revenues, and only around 50 per cent of the necessary budget is available for carrying out the national strategy, the Ghana Shared Growth and Development Agenda.
The country's taxation and budgeting systems are not sufficiently transparent, and they do not fully adhere to clearly defined rules and regulations. At the same time, the mechanisms of public accountability and control still demonstrate shortcomings, and they do not offer adequate incentives for improved public financial management.
Objective
The public revenue and budget system and the observance of public accountability are increasingly transparent, rules-based and effective. Stakeholders are accountable to parliament and the general public.
Approach
Commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ), the Good financial governance programme is closely coordinated through the relevant sector working group with bilateral financial cooperation measures, and with the activities of other donors working in Ghana’s public finance sector. Included in this group are Canada, Denmark, the EU, Japan, the Netherlands, Switzerland and the United Kingdom, as well as the African Development Bank, the International Monetary Fund, UNICEF and the World Bank. Since it was launched, the programme has also entered into co-financing arrangements with the Swiss State Secretariat for Economic Affairs (SECO) and the United States Agency for International Development (USAID).
The programme pursues a systemic approach that supports improvements to Ghana’s public finances in three core processes of the sector: revenue management (tax administration and policy); budget management (budgeting and budget processes); and domestic accountability and transparency in the extractive industries. Through targeted sector advice it promotes reform processes in the respective partner institutions, and at the same time it provides general advice on process management.
Two consulting companies have also been contracted: Particip GmbH provides short-term specialist consultants to respond to specific needs of the partners, while GOPA GmbH provides experts for the organisation of training measures and modules.
Results achieved so far
Through its involvement in the public finance reforms, the programme has contributed to a number of substantial achievements.
Tax administration and policy
• The Tax Policy Unit under the Ministry of Finance has become established as a more professional unit. It is responsible for the provision of expert advice and the completion of analytical studies.
• A number of legal acts have been implemented, including the Ghana Revenue Authority Act and the Petroleum Revenue Management Act.
• The Ghana Revenue Authority has developed a strategic and a modernisation plan, which now serves as a foundation for future reform projects.
• Around the country, the Ghana Revenue Authority has opened medium and small-scale taxpayer offices
• A standardised human resource strategy and a code of conduct have been developed to improve integrity in the Ghana Revenue Authority.
Budgeting and budget processes
• A contracts database and a macro-economic forecasting model have been introduced, thereby improving the planning and monitoring of the budget by the Ministry of Finance. Furthermore, the Ministry now compiles Citizens’ Budgets to increase the transparency of its budget documents and to keep citizens and civil society informed about government policies.
Domestic accountability
• The level of awareness among citizens has increased with respect to revenues from the extractive industries.
• Public bodies are better informed about the potential possible uses of revenues from the extractive industries.
• The Public Accounts Committee has cleared a six-year backlog of outstanding audit reports.
Downloads und Weitere Informationen (optional) Downloads
Externe Links
(Weitere Informationen)
Ministry of Finance, Ghana
www.mofep.gov.gh
Ghana Revenue Authority
www.gra.gov.gh
Ghana Audit Service
www.ghaudit.org
Institute of Financial & Economic Journalists (IFEJ), Ghana
ifejghana.org
Extractive Industries Transparency Initiative (EITI)
eiti.org
Public Interest and Accountability Committee (PIAC)
piacghana.org
A SECO Documentary on the Tax Reform Project in Ghana (in German):
http://www.seco-cooperation.admin.ch/aktuell/highlights/05189/05474/index.html?lang=de