Spend more in 2027 to boost growth – PwC to govt

The government must use the 2027 Budget to increase efficient spending and prioritise resources towards productive sectors to stimulate economic growth without undermining the gains made in stabilising the economy, the Country Senior Partner of PwC Ghana, George Arhin, has said.

Mr Arhin, who took office nearly a month ago, explained that with the 2026 Budget having achieved its objective of stabilising the economy, the focus of the new budget should be on ensuring that public funds are channelled into sectors capable of generating jobs, boosting productivity and attracting private sector investment under the proposed $10 billion New Economy Programme.

Consequently, he said the government must prioritise investments in agriculture, agro-processing, manufacturing, textiles and tourism in the upcoming budget to drive sustainable growth and accelerate the country's economic transformation.

In an interview with the Daily Graphic in Accra last Friday, ahead of the 2027 budget presentation to Parliament on Thursday, Mr Arhin stressed that the government must put in place measures to translate the stability achieved into private sector-led growth.

“We have recovered and stabilised, but that stability came on the back of robust monetary and fiscal policies supported by external factors like gold prices. That cannot be sustained because if you are not spending, the economy cannot grow.

“So, my expectation is for us to translate the stability we have seen into private sector-led growth.

It is very important because it is the private sector that drives the economy and serves as the engine of growth,” he said.

The Minister of Finance, Dr Cassiel Ato Forson, is expected to present the 2027 Budget Statement and Economic Policy to Parliament on Thursday, marking the third budget of the President John Dramani Mahama-led administration since it assumed office in January 2025.

Expected to carry the title, The New Economy, it is anticipated that the budget will outline how the government intends to translate the recent macroeconomic stabilisation into productive investments, decent jobs, improved incomes and business growth.

A major focus is expected to be the implementation of the government's $10 billion New Economy Programme, covering 2027 to 2030, which seeks to stimulate a private-sector-led domestic production expansion, promote local processing and value addition, strengthen Ghanaian businesses and create employment opportunities.

With about GH¢268.8 billion and GH¢302.5 billion earmarked for expenditure programmes in the 2025 and 2026 budgets, respectively, Mr Arhin stated that the government must be able to spend more next year than it did in previous years, but that spending must be efficient and directed at sectors that would help stimulate growth.

“We cannot grow the economy simply by increasing expenditure; we must ensure that every investment delivers value, creates jobs and strengthens the productive sectors of the economy.

“Agriculture, agro-processing, manufacturing, textiles and tourism were priority areas that required increased government investment to expand productive capacity and create employment,” he said.

He stressed that channelling resources into those sectors would also attract private sector investment and support the government's New Economy agenda.

Mr Arhin added that efficient allocation of public funds would be critical to sustaining economic stability while accelerating growth and transforming the economy.

Describing the government's New Economy Programme as a potential game-changer for the country's economic transformation, the Country Senior Partner stated that its success would depend on how efficiently the funds were deployed.

He said the programme, which focuses on strengthening the real sectors of the economy, presented an opportunity to expand agriculture, manufacturing, agro-processing, textiles, tourism and value addition in the extractive industry.

The PwC Senior Country Partner urged businesses and investors to position themselves to take advantage of the opportunities by identifying sectors expected to receive significant government investment and aligning their activities with the programme's priorities.

Mr Arhin stressed that the programme must go beyond government spending to serve as a catalyst for private sector-led growth, formal employment creation and increased domestic revenue mobilisation.

“The New Economy is a game-changer. If we are able to focus the money dedicated to it and spend it well, we will move the dial,” he said.

Mr Arhin also maintained that agriculture, which contributes about 21 per cent of Gross Domestic Product (GDP) and employs 33 per cent of the population, accounted for only 0.05 per cent of the country's tax revenue.

He said the disparity highlighted the need for policies to formalise activities in the sector, move smallholder farmers towards commercial production and strengthen agro-processing to expand the tax base.

The PwC Senior Country Partner explained that shifting economic activities from the primary sector to the secondary sector would create formal employment opportunities and bring more businesses and workers into the tax net.

“It's not about bringing in new tax handles or increasing the tax rate; it's about widening the database to include the vast majority of people who are not paying taxes,” he said.

Mr Arhin said although the current economic growth rate of about 5.5 per cent was encouraging, the country needed sustained double-digit growth to achieve meaningful economic transformation.

He stated that the economy's ability to record growth of between five and six per cent despite reduced government expenditure and tight monetary policies demonstrated its potential to expand further.

He explained that increased but efficient investment in agriculture, manufacturing, tourism and value addition in the extractive industry would help accelerate growth and strengthen the productive base of the economy.

“We need to grow into the double-digit numbers and sustain that growth to transform our economy,” he stressed.

On the sustainability of the economic recovery, Mr Arhin cautioned that the country could not rely indefinitely on favourable external conditions, particularly high gold prices, to maintain macroeconomic stability.

He explained that the recent stability had been supported by robust monetary and fiscal policies, alongside favourable external developments, including improved gold prices, which could not be guaranteed over the long term.

Mr Arhin urged the government to strengthen domestic revenue mobilisation and create an enabling environment for private sector investment to sustain the recovery and build resilience against external shocks.

“That stability came on the back of robust monetary and fiscal policies supported by external factors such as gold prices. That cannot be sustained if we are not spending to grow the economy,” he said.