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The bill takes effect beginning the next fiscal year after it was passed Saturday night.
The Fiscal Responsibility act caps the budget deficit at a ceiling of 5 percent.
The move, according to finance minister Ken Ofori-Atta, is to engender confidence in Ghana’s economy even as it exits the IMF program.
Commenting on the act, the ranking member for the Finance Committee Cassiel Ato Forson said provision in the law which gives Parliament the powers to impeach the finance minister when the 5% cap is exceeded by 1% may also be extended to the President and other ministers.
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The investor community have raised concerns about Ghana's fiscal discipline post Ghana’s International Monetary Fund (IMF) programme.
The new act comes timely to lay their fears.
As part of the law, an independent Fiscal Council to oversee the implementation of fiscal policy.