Another GHC15.6Bn for Financial Sector Cleanup? – Prof John Gatsi

The principle of separation of powers is fundamentally understood to mean that the executive, parliament and judiciary work in the interest of the nation without interfering nor usurping functions and authority of each other.This foundational Principle makes it clear that parliament has oversight responsibility over implementation of policies, laws and finances of the country. This is why parliament must approve the national budget and its accompanying appropriation bills by 31st December in any fiscal year. Failure to obtain approval by the deadline will bring about shutdown of government.

It is very clear that section 11 of the Public Financial Management Act, 2016(Act921) indicate among others that parliament has oversight responsibility over approval of the national budget and finance. Finance here includes revenue, expenditure and borrowing as in section 56 of Act 921 which explains that there shall not be any borrowing without prior approval by parliament .

The principle of separation of powers means parliament will scrutinize and be convinced before any approval.The financial sector cleanup cost is now alarming only because of the approach adopted.

Approval against a budget is the norm. What at all is the budget for the financial sector cleanup ? The amount requested is about 18% of the total expenditure of the 2020 budget. If this amount is approved then a total of GHC28.9billion would be spent on the exercise which is 34% of the 2020 expenditure budget.

The financial sector would have been strengthened if half of the amount was made available through an alternative approach.

Source: John Gatsi