A former Director at the Ministry of Finance, Eva Mends, has stressed the need for fiscal discipline and coordinated economic policymaking to safeguard Ghana’s macroeconomic stability.
She cautioned that calls for increased government spending must always be weighed against broader macroeconomic implications, warning that expanding the fiscal deficit could trigger negative economic outcomes.
“If the pressure mounts and government decides to increase the deficit and borrow more just to satisfy demands, all the indicators will shift,” she said.
Ms. Mends made the remarks while delivering a presentation on Ghana’s public financial management framework during a workshop for members of the Parliamentary Press Corps (PPC) in Koforidua.
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According to her, excessive borrowing to finance increased spending could lead to rising inflation, higher interest rates and broader macroeconomic instability.
She stressed that fiscal discipline requires careful balancing of competing demands and urged journalists and the public to appreciate the full policy framework rather than focusing on isolated issues.
The workshop, sponsored by the World Bank and the Foreign, Commonwealth & Development Office (FCDO) of the United Kingdom under the auspices of the Parliament of Ghana, aims to enhance the capacity of journalists covering parliamentary proceedings to report accurately on public financial management and national budget issues.
The initiative seeks to equip parliamentary reporters with the technical knowledge required to interpret complex financial data and translate it into clear and accessible reports for the public.
It is also expected to strengthen transparency and accountability in governance by ensuring that citizens are better informed about how public resources are allocated and managed.
Ms. Mends noted that positive macroeconomic indicators often depend on strict control of government expenditure.
“When the cedi gains strength, everybody is happy. When inflation falls, everybody is happy. But you cannot at the same time ask for increased expenditure,” she stated.
She emphasised that maintaining economic stability often requires difficult policy choices between expanding public spending and protecting fiscal balance.
The former finance official also highlighted the crucial role of the Finance Minister in enforcing fiscal discipline across government.
She explained that while ministers and Members of Parliament frequently advocate for increased funding for projects in their sectors, the Finance Minister must ensure that spending decisions align with the broader macroeconomic framework.
“There is nothing wrong with MPs asking for more funds to improve sectors like education,” she said, adding that the Finance Minister must ultimately control expenditure with the backing of the President.
According to her, effective economic management requires a strong finance minister who commands the confidence of the President and can coordinate fiscal decisions across government institutions.
She warned that when state institutions or state-owned enterprises make financial commitments outside the national budget framework, it can destabilise government finances.
Such commitments, she said, often force government to divert resources from planned programmes to settle unexpected obligations.
Ms. Mends explained that economists rely on internationally recognised indicators such as inflation, interest rates, economic growth and fiscal discipline to assess the health of an economy.
She noted that lower interest rates, for instance, allow the private sector to borrow and invest more competitively.
However, she acknowledged that economic management in developing countries like Ghana remains challenging due to competing development needs and limited resources.
“When government spends in developed countries, the money circulates within their economies,” she explained. “But in our case, much of the increased demand goes into imports, so we do not get the full multiplier effect.”
She added that global exposure through technology and social media has heightened public expectations for rapid development.
“We see lifestyles in developed countries every day on our phones and we want the same things, but we do not yet have the resources to provide them,” she said.
The participants at the workshop received training on analysing fiscal data, understanding budget frameworks and improving public reporting on government spending.