From stability to transformation: 5 tests for Ghana’s 2027 Budget

Ghana is preparing a budget with a different promise. After years of debt restructuring and spending restraint, the government wants to turn economic stability into jobs, investment and higher production. But the repayments coming due in 2027 will compete for the same public money.

The International Monetary Fund (IMF) completed the final review of Ghana’s US$3 billion Extended Credit Facility in July. Its successor, the Policy Coordination Instrument, provides monitoring without new financing. The coming budget must show how Ghana intends to sustain its recovery while paying for its next phase of development.

There are gains to protect. September inflation was 5.2%, while provisional public debt stood at 45% of Gross Domestic Product (GDP) in June. But these figures cannot tell us whether new investments will deliver or how comfortably government can meet its repayments. Judge the budget by how convincingly it links its promises to financing and results. Five tests matter.

The published Fiscal Strategy Document proposes investment equivalent to 1.5% of GDP annually for four years, approximately US$10 billion. It identifies two sources of financing: an additional 0.5% of GDP in revenue and room created by reducing the primary surplus.

The budget must now show what the money will be used for. Which projects are ready to begin? Who will implement them, and when should the public expect results? A programme intended to create jobs needs measurable employment and production targets alongside its costs. Any private investment expected to follow should be distinguished from money government has actually committed, with public guarantees disclosed.

The government proposes lowering the primary surplus on a commitment basis from 1.5% to 0.5% of GDP from 2027. A primary surplus is the excess of revenue over spending before interest payments. Reducing it leaves more room for expenditure, but also means a smaller contribution towards containing debt, other things being equal. Productive projects can justify greater investment. The harder task is selecting those projects and protecting the budget if expected revenue fails to arrive. Government should explain how the proposed target fits the applicable fiscal rules, what safeguards accompany it, and which spending would be reconsidered if conditions deteriorate. Independent scrutiny by the Fiscal Council would help establish confidence in those choices.

The repayment calendar is demanding. Government has announced GH¢58 billion of Domestic Debt Exchange Programme bond maturities in 2027 and another GH¢53 billion in 2028. A reassuring debt ratio does not remove the need to find money when bondholders are owed it. Building a Sinking Fund is therefore reasonable. Government reported GH¢15.6 billion accumulated by 22 July, while the Institute for Fiscal Studies questioned its treatment in the approved budget. The next budget should reconcile the fund’s opening balance, inflows, withdrawals and planned repayments. It should distinguish money saved from money borrowed to build a buffer. Borrowing ahead of maturity can ease immediate pressure, but it brings interest costs and another repayment date.

Preparing for repayments must also leave room to deliver today’s budget. The Ministry of Finance reports a first-half primary surplus of 0.9% of GDP on a commitment basis. Yet capital spending was 39.3% below plan, while net arrears clearance reached only 38.2% of the programmed amount. The improved balance deserves recognition; the shortfalls deserve explanation. Delayed payment of old arrears does not itself explain a commitment-basis surplus. Nevertheless, unfinished projects and overdue bills have consequences beyond the fiscal tables. Contractors waiting for payment may struggle to pay suppliers and workers. Communities waiting for infrastructure continue to bear the cost of its absence. Government should show what it committed to spend, what it paid and what remains overdue. Where spending fell below plan, the explanation should distinguish genuine savings, rejected claims and delays in delivery. Spending less is not automatically evidence of failure, neither is it sufficient evidence of efficiency.

Even a well-executed budget can be disrupted by obligations elsewhere in the public sector. The Fiscal Strategy Document already includes a Fiscal Risk Statement. The budget should build on it by showing how much major exposures could cost taxpayers, when support might be required and who is responsible. Energy-sector obligations, guarantees, gold-purchase operations and central-bank recapitalisation need clear treatment. The IMF’s July review recorded a waiver linked to cost-sharing under the domestic gold purchase programme and reaffirmed the commitment to recapitalise the Bank of Ghana by 2032. These issues need an explanation of their cost and financing. Liabilities already included in public debt should be distinguished from claims that might become government obligations, so that disclosure neither hides exposures nor counts them twice.

The 2028 election-year budget will be presented in late 2027. The coming budget is therefore an opportunity to establish safeguards before political spending pressures intensify. Its credibility will depend on what happens after the speech: whether projects progress, payments arrive and emerging risks are reported promptly.

None of these asks for less ambition. It asks government to cost its promises, explain its fiscal choices, prepare for repayments and account for delivery. Ghana’s next phase of development needs a budget that connects ambition to evidence. It should survive an audit.

Daniel is a PhD student in Accounting at the Muma College of Business, University of South Florida, a qualified Chartered Accountant (ICAG) and Chartered Management Accountant (CIMA). He previously worked as a financial analyst at Deloitte.