Accra: Deputy Minister of Finance Thomas Nyarko Ampem has hailed the government's Commitment Authorisation policy as transformative in bolstering fiscal discipline. He disclosed that under its inaugural year, requests to procure vehicles worth GHS1 billion were denied.
According to Ghana Web, the Commitment Authorisation framework has notably enhanced public spending oversight by mandating ministries, departments, and agencies (MDAs) to secure approval from the Minister for Finance before committing the state to any financial obligations. Ampem emphasized that this policy has been crucial in fostering financial discipline and managing the economy effectively.
The policy was implemented following amendments to the Public Financial Management Regulations (PFMR), which now require all public institutions to obtain Commitment Authorisation prior to entering procurement contracts. Ampem explained that the Finance Minister evaluates proposed expenditures based on whether they are budgeted and if funds are available.
Moreover, the reforms are tied to a new fiscal responsibility requirement mandating the government to maintain a 1.5 percent primary surplus on a commitment basis, with potential parliamentary sanctions if the Finance Minister fails to meet this target.
Highlighting the policy's impact, Ampem revealed that authorities rejected requests from MDAs, metropolitan, municipal and district assemblies (MMDAs), and state-owned enterprises (SOEs) to acquire vehicles worth GHS1 billion. He described this decision as part of broader expenditure controls to protect public finances.
Ampem also criticized the inefficient use of donor-funded resources, particularly loans from the World Bank, which were often perceived as "free money" by some public institutions. The government has engaged the World Bank to redirect these funds towards infrastructure and productive investments instead of recurrent expenditures.
The Deputy Minister disclosed that requests for using donor funds on non-essential activities like conferences, foreign travel, vehicles, and consultancy services are now being rigorously scrutinized. He noted that many MDAs are beginning to understand the rationale behind these tighter controls.
Additionally, Ampem mentioned that the Presidency has directed state institutions to reduce overseas training programs for boards of state-owned enterprises. While funding will continue for projects with strong economic impact, the government remains committed to enforcing prudent expenditure controls.