Ghana Public Finance Review - Building the Foundations for a Resilient and Equitable Fiscal Policy - 4.1 - Weaknesses in Ghana’s public financial management

Jul 19, 2026

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Improving public financial management in Ghana focuses on how systemic weaknesses reduced spending effectiveness and undermined macroeconomic stability. The review explains recurrent budget preparation delays, weak linkage between the Medium-Term Expenditure Framework and program-based budgeting, and poor interinstitutional efficiency caused by fragmented IT functions. It also covers inadequate Treasury Single Account and GIFMIS coverage that weakens cash management and commitment control, then outlines Ghana’s reform history and remaining implementation gaps.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages25

Reading Time1 h 3 min

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4. Improving Public Financial Management for Better Spending Results

4.1 Weaknesses in Ghana’s public financial management

PFM reform journey and key challenges

Recommendations for reform

4/ Improving Public Financial Management for Better Spending Results Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized G Review Foundations forhana Pub lic Finance Building the a Resilient and Equitable Fiscal Policy 4/ Improving Public Financial Management for Better Spending Results 105 4.1/ Weaknesses in Ghana’s public financial management The recent economic crisis, characterized by a buildup of arrears, exposed systemic public financial management (PFM) challenges in Ghana, such as weak budget planning, preparation, and execution. This chapter reviews selected aspects of the institutional weaknesses that characterize Ghana’s PFM system and are relevant to the country’s efforts to restore macroeconomic stability. The following systemic weaknesses are prevalent throughout the PFM cycle: • The budget preparation schedule is routinely delayed and does not comply with the legal framework, and indicative budget ceilings are not strictly adhered to in the final expenditure allocation. • The Medium-Term Expenditure Framework (MTEF) and program-based budgeting (PBB) estimates do not inform the medium-term budget. • The lack of a coherent information technology (IT) ecosystem and overlapping mandates undermine interinstitutional collaboration and efficiency. • Cash management and commitment control is undermined by inadequate coverage of the Treasury Single Account (TSA) and the Ghana Integrated Financial Management Information System (GIFMIS) . Ghana Public Finance Review | Volume 2 / Detailed Analysis 106 The chapter is organized as follows: the first section presents the history, recent reforms, and current challenges of PFM in Ghana; the next sections focus on two areas: budget credibility and the IT ecosystem. The final section presents recommendations for reform. Ghana’s early PFM reforms date back to more than two decades ago. In the late 1990s, the country developed an integrated Budget and Public Expenditure Management System, aiming to integrate the national budget’s preparation with financial accounting, reporting, and cash management. The attempt had limited success due to “major delays and setbacks that resulted from the lack of a coherent strategy and inadequate ownership among the key stakeholders.”55 A second wave of reform, dubbed Short and Medium Term PFM Action Plan (ST/MTAP), took place between 2006 and 2009. The ST/MTAP introduced a coherent strategy for the implementation of PFM reforms, building on the lessons learned from previous attempts, and laid the foundation for the introduction of information and communication technology (ICT) tools to improve reform efficiency and transparency. Further reforms in 2015–2020 focused on establishing an integrated legal framework. These included the enactment of the PFM Act, 2016 (Act 921), preparation of the PFM Regulations, 2019 (L.I. 2378), as well as the repeal of the Financial Administration Act, 2003 (Act 645) and Loans Act, 1970. GIFMIS functions were expanded, and the PFM Strategy (2022–2026) was finalized. Despite these advances, several challenges remain such as the exclusion of internally generated funds (IGFs), statutory funds, extrabudgetary funds, and donor funds. Moreover, there is also weak adherence to the requirements of the PFM Act, including the lack of uniformity in the use of GIFMIS by budget entities. 55 World Bank. 2011. Financial management information systems: 25 years of World Bank experience on what works and what doesn’t. Washington, DC: World Bank 4/ Improving Public Financial Management for Better Spending Results 107 | Figure 4.1. Snapshot of Ghana’s PFM reform journey since the 1990s | | | | | | --- | --- | --- | --- | --- | | 1997-99,
2002-03 | 2006-2009 | 2010-2014 | 2015-2020 | 2022-2026 | | PFM Reform Program (PUFMARP) | Short and MediumTerm PFM Action Plan(ST/MTAP) | GIFMI

FAQs

What major reforms in Ghana’s PFM journey are summarized here?

The text traces reforms from an integrated budget and public expenditure management system in the late 1990s, to the Short and Medium Term PFM Action Plan (2006–2009), GIFMIS expansion and related projects in subsequent years, and the establishment of a legal framework including the PFM Act (2016) and PFM Regulations (2019), culminating in the PFM Strategy (2022–2026).

Which challenges remain despite advances in GIFMIS and the legal framework?

Challenges include exclusion of internally generated funds, statutory funds, extrabudgetary funds, and donor funds, along with weak adherence to PFM Act requirements and lack of uniform GIFMIS use across budget entities.

Jul 19, 2026

Upload by Finn