Ghana has successfully navigated its way out of the 2022 to 2023 fiscal and exchange rate crisis, but the 2026 Budget reflects a preference for consolidation over bold economic transformation, according to Dr. Dennis Nsafoah, Assistant Professor of Economics at Niagara University in New York. The economist, who serves on the Research Committee of Tesah Capital, argues that while macroeconomic indicators demonstrate clear recovery, the Budget fails to chart a course toward the inclusive and transformative growth the country requires.
Finance Minister Dr. Cassiel Ato Forson presented the GH¢302.5 billion Budget Statement and Economic Policy to Parliament on November 13, 2025, under the theme “Resetting for Growth, Jobs, and Economic Transformation.” The fiscal framework targets total revenue and grants of GH¢268.1 billion, projecting an overall deficit of 2.2 percent of GDP on a commitment basis and a primary surplus of 1.5 percent of GDP.
The macroeconomic turnaround appears evident in official data. Growth reached 4.8 percent in 2025, beating government targets. Inflation declined from 23.8 percent in 2024 to 8.0 percent in 2025, returning to the Bank of Ghana’s (BoG) target band. Public debt fell sharply from 69.0 percent of GDP to 45 percent. The cedi, which experienced severe depreciation during the crisis years, has stabilized and recovered significantly.
However, Nsafoah emphasizes that the 2026 projections introduce little fresh ambition beyond maintaining current performance levels. The targets for growth, inflation, and fiscal policy remain largely flat compared to 2025 outcomes, signaling that government priorities center on consolidation rather than expansion. The economist contends that Ghana has stabilized but chosen to maintain the status quo rather than pursue more ambitious development.
The Budget’s expenditure structure reveals limited movement toward productive investment despite the return to stability. Capital expenditure averages just 2.6 percent of GDP across 2025 and 2026, barely different from recent years. Meanwhile, the wage bill stands at 5.7 percent of GDP, meaning Ghana continues spending approximately twice as much on salaries as on projects that expand economic capacity and infrastructure.
Nsafoah warns this allocation pattern preserves stability without building the foundation for long term growth. Infrastructure development, technology investment, industrial upgrading, and job creation receive insufficient resources despite being essential pillars of economic transformation. The structure maintains fiscal discipline but does little to drive the productive investments needed for structural change.
Social sector allocations show nominal increases in education and health spending. However, inflation erodes these gains, resulting in real declines in purchasing power. Social protection programmes including the Livelihood Empowerment Against Poverty (LEAP), School Feeding, and the National Health Fund face both nominal and real cuts, with some sectors losing up to 25 percent of their effective value.
The economist argues this means vulnerable populations are not experiencing the benefits of macroeconomic stability. Social programmes are being sustained at current levels but not strengthened or expanded, leaving Ghana without the enhanced safety nets needed to support its most vulnerable citizens during the transition period.
One development that raises concern is the reappearance of central bank financing in government accounts. The 2026 Budget records GH¢1.44 billion in support from the BoG, representing approximately 5.8 percent of net domestic financing. While the amount remains relatively small, it carries symbolic significance given Ghana’s previous overreliance on central bank financing during the 2022 to 2023 crisis period.
Nsafoah cautions that any return to this practice requires clear explanation and tight controls to preserve policy credibility and maintain market confidence. The precedent of excessive monetary financing contributed to inflationary pressures and exchange rate instability during the recent crisis, making transparency around such measures critical for sustaining investor trust.
The economist credits the Budget for securing stability, restoring investor confidence, and maintaining Ghana on a disciplined fiscal path. What it lacks, in his assessment, is the boldness to transform the economy and expand opportunity for citizens. The fiscal framework should be viewed as transitional rather than transformational, he argues.
Ghana has stabilized its macroeconomic fundamentals but has not yet undertaken the deeper structural reforms needed to drive long term productivity growth, industrial development, and shared prosperity. The challenge facing future budgets is building on this foundation not by preserving current arrangements but by shifting decisively toward investment, innovation, and inclusion.
The 2026 Budget builds on significant fiscal consolidation achieved under Ghana’s International Monetary Fund (IMF) supported programme. The country successfully completed a domestic debt exchange programme and external debt restructuring that helped reduce the debt burden. Gross international reserves improved from approximately $9.8 billion in early 2025 to around $11 billion by the end of the third quarter, providing about five months of import cover.
The fiscal strategy emphasizes revenue mobilization through the Medium Term Revenue Strategy (MTRS), with the Ghana Revenue Authority (GRA) establishing a special recovery unit to reclaim lost revenue. On the expenditure side, government plans to enforce sanctions under the Public Financial Management (PFM) Act to penalize breaches related to arrears accumulation and non compliance with commitment controls.
Major initiatives in the Budget include the Big Push Infrastructure Programme, a multi year US$10 billion initiative designed to expand strategic roads, bridges, digital infrastructure, and energy facilities. The education sector receives GH¢33.3 billion, with an additional GH¢9.9 billion allocated for the Ghana Education Trust Fund (GETFund). The government has also abolished the COVID levy, expected to return GH¢3.7 billion to individuals and businesses, while reducing Value Added Tax (VAT) from 21.9 percent to 20 percent.
Despite these measures, Nsafoah maintains that the overall direction emphasizes stability over transformation. Ghana may have successfully turned the corner from crisis to recovery, but the journey toward fundamental economic transformation and inclusive growth remains ahead. Future policy decisions will determine whether the country leverages this period of stability as a platform for bold structural change or continues with incremental adjustments that preserve current arrangements.
