The Africa Centre for Energy Policy (ACEP) has said that there is an urgent need for a performance audit of all state agencies to establish optimal numbers of staff and administrative budgets for their operations.
Also, ACEP said, the government must establish mechanisms to assess the effectiveness of expenditure and the capacity of projects to deliver value that facilitates loan repayments.
The energy think tank said these in a paper titled “Breaking the cycle of IMF support: Addressing governance inefficiencies and drivers of public debt in Ghana.
It said the government has identified revenue-generating measures through additional taxes, but these have not significantly contributed to the worsening debt distress and economic challenges.
“The leading causes of Ghana’s public debt have been identified in this paper as stemming from inefficiencies in governance, which have been revealed in weak procurement practices, poor contingency planning and excessive spending over revenues, inadequate state institutions, and insufficient loan monitoring mechanisms. These must be addressed through long-term solutions to avoid a recurring cycle of seeking IMF support.
“The discussion highlights that resolving Ghana’s debt requires more than just IMF programs. The governance structure needs significant changes to ensure accountability, efficiency, and effective policy implementation. Therefore, this report proposes the following recommendations for the government to consider,” ACEP stressed.
It further stated that “There is a need for a national dialogue on the most effective procurement system that aligns with the Ghanaian context and delivers value to citizens. Ghana should align its expenditures with its revenue to reduce deficit spending. Merely relying on GDP as a benchmark is insufficient, particularly when the disparity between expenditure and revenue is widening from 21% in 2018 to 52% in 2021.
“There is an urgent need for a performance audit of all state agencies to establish optimal numbers of staff and administrative budgets for their operations. The government must establish mechanisms to assess the effectiveness of expenditure and the capacity of projects to deliver value that facilitates loan repayments.
“It is imperative that the private sector participates in the power sector with effective regulation by the state to ensure their delivery of value. Tier-two pension investments could be an option to mobilise domestic revenue for power sector investments. It is unacceptable for the government to spend billions of dollars to meet payment obligations resulting from poor management and procurement-driven investments.
“The government should enforce laws transparently to encourage investments and assure investors of fair treatment in the energy and extractive sectors.
“There is a need for active citizenship and frequent conversations on how governance addresses the country’s fiscal challenges. This requires the participation of the private sector, media and Civil Society on the broad governance challenges that could lead to debt unsustainability.”