AN ASSESSMENT OF THE CONTRIBUTIONS OF THE LEGISLATURE TO GOVERNMENT BUDGET UNDER THE FOURTH REPUBLIC: A STUDY OF THE NDC BETTER GHANA AGENDA PHASE I (2008- 2012) Introduction
In almost all political systems, it is generally accepted that the executive has the primary role in developing an annual budget and presenting it to the legislature. The legislature has the right to review, debate, in some cases amend, and approve or reject the spending plan proposed by the executive. Within this broad framework, the actual workings of the budget process vary from nation to nation based on the constitution, laws, legislative rules of procedure, balance of political power, tradition, past experiences and expectations of the political actors and the people. The budget determines who gets what and when, provides funds to implement new initiatives, and often sets policy.
The budget is an important instrument of economic management. It is an intricate and complex process that is used as a tool of accountability and management and also an instrument of economic policy. The Budget as an operational document, spells out the cost and the nature of expected results. The budget is an important instrument of economic management because it is annual decisions taken in the budget process, both within and outside government relates to either an amount of stimulus or restrain to be exercised in the economy. It is also the standard by which the actual achievements of government and its departments are measured in a given time period.
The budget process is regulated by a set of laws that makes it mandatory for governments to prepare and execute national budgets according to set rules of procedure. The supreme law of the land as enshrined in the constitution sets out general principles for governance of Ghana, and it is from it that all other laws and regulations derive authority. The general principles in the supreme law are supplemented by other Acts, for example the Local Government Act, the Financial Management Laws and Regulations, the Budget Act and the Standing Orders of Parliament which are all aimed at ensuring efficient fiscal management, accountability and transparency in the budget process.
The budget in Ghana derives its authority from three main legal documents. These are the 1992 Constitution (specifically articles 174-182), the Financial Administration Act (FAA, 2003) and the Financial Administration Regulations (FAR, 2004). Other supporting laws, procedures and regulations such as the Audit Service Act, 2000 (Act 584), the Bank of Ghana Law 2002 (Act 612), and tax laws (IRS, CEPs & VAT Acts) exist to complement the general provisions. The Standing Orders of Parliament (Order no. 138-150) are also an important guide to the budget process especially with regard to legislative approval.
Budget Preparation in Ghana
The Constitution mandates the President of the Republic to submit a budget to Parliament each year for approval. The Ministry of Finance and Economic Planning (MoFEP) prepares the budget on behalf of the President. Guided by the Medium Term Expenditure Framework (MTEF) approach to budgeting, a three year rolling budget is prepared with a focus on the first year budget. Budget preparation begins with an advertisement in the print media by MoFEP requesting interest/pressure groups, Civil Society Organisations (CSOs) to submit memoranda on issues worthy of consideration in the coming year’s budget.
The Ministry of Finance and Economic Planning then undertakes a revision of the macroeconomic framework taking into consideration provisions of the National Development Plan (NDP), Cabinet/Executive directives and other policy paper(s) of Government and international agreements. The Ministry of Finance and Economic Planning facilitates a cross-sectorial meeting of MDAs to discuss cross-sectoral issues and to scrutinise activities to avoid duplication and overlaps of actvities and programmes.
Based on the...
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