Vice-President Dr Mahamudu Bawumia has said the President Nana Addo Dankwa Akufo-Addo-led government has for two years in a row, achieved a positive primary balance – the first in 10 years.
Primary balance, Dr Bawumia explained, is the tax revenue exceeding all government expenditure, excluding debt service payment.
Speaking at an Economic Management Team town hall meeting at the College of Physicians and Surgeons in Accra on Wednesday, 3 April 2019, Dr Bawumia said the primary balance had a surplus of 0.5 per cent of GDP in 2017 and 1.4 per cent in 2018 compared to a deficit of 1.1 per cent to GDP in 2016.
He explained that a positive primary balance is important because it means "a slowing down of debt accumulation".
To maintain fiscal discipline, Dr Bawumia said the government has, for the first time in the country’s history, passed a law – the Fiscal Responsibility Act – that limits the fiscal deficits, in any year, to a maximum of 5 per cent to GDP, and requires by law a positive primary balance.
“In addition, a Fiscal Council has been established to provide oversight and advice in the implementation of fiscal policies,” he added.
The town hall meeting is on the theme: “Our progress, our status, our future”.