The Right Diagnosis, an Incomplete Cure: The 2027 Budget and Ghana’s Boom-and-Bust Cycles

"These boom-and-bust cycles must cease"On the evening of Thursday, November 12, 2026, the Minister for Finance, Dr Cassiel Ato Forson, when presenting the 2027 budget told Parliament that Ghana's boom-and-bust cycles must cease.

Few Ghanaians would disagree. Too many times we have lived through hope followed by hardship, a stable cedi followed by sharp depreciation, and a recovery followed by another crisis.

I have read the full 2027 Budget Statement, and I want to answer one question. Does the Minister appreciate why the boom-and-bust cycles happen, and does his New Economy programme remove the cause?

My answer is that the Minister has made the right diagnosis but prescribed an incomplete cure. The budget sees two causes clearly. It misses a third, and the third is the one that will bring the next bust.

The budget statement is more candid about the causes of our instability than most budgets before it. It says the cedi came under pressure "when prices dropped or fiscal discipline weakened" (para. 161).

It concedes that "temporary booms had financed permanent commitments" (para. 168), and it blames reckless spending, weak revenue and expensive debt for the crisis of 2022.

Most important, the budget statement admits that past governments repaired the public finances "but did not use the recovery to alter the structure of the economy," and so "the cycle began again" (paras. 186–187). It even pledges that fiscal discipline "will apply throughout the election cycle" (para. 239).

So the Government does understand two causes: our dependence on raw commodity exports, and fiscal indiscipline. I accept both. My quarrel is with what is missing.

The machine that is not in the planRead the eight pillars of the New Economy and one thing stands out. The only imports the budget counts as a drain on the cedi are things we consume: rice, sugar, poultry, fish, vegetables and medicines.

It says the food import bill "weakens the cedi" (para. 260). It promises that when Ghana grows and processes more, "the cedi will face less pressure" (para. 336). It demands that every cedi of fiscal space answer the question: "what imports will it replace?" (para. 191).

The budget never asks that question of the factories themselves. Throughout the statement, machines are things to buy and finance:

• the "manufacturer investing in new machinery" is offered equipment leasing (paras.228, 231);

• the rice hubs receive tax incentives for "irrigation, mechanisation, silos, modern mills" (para. 276);

• GH¢800 million is allocated "to procure agriculture machinery" (para. 1543);

• the review of Chapter 98 of the Customs Tariff concerns duty concessions on imported "machinery and other inputs" (para. 860);

• the textiles pillar promises jobs for machine operators, not machine makers (para. 448);

• for the nuclear plant, "international partners will only provide technology, finance, engineering and specialist services" (para. 380).

Cocoa grinding mills, gold refineries, alumina plants, rice mills, garment lines and pharmaceutical plants are all capital goods.

Ghana makes almost none of them, and few of their spare parts. Every one will be imported and paid for in dollars, and every one will be kept running with imported spares, also paid for in dollars.

The budget's own figures show where the capacity to make machines stands in the Government's order of priorities.

New Economy programme, 2027 outlay (para. 249) GH¢30 billion Procurement of agricultural machinery (para. 1543) GH¢800 million Completion of the Foundry and Machine Tooling Centre (para. 1582) GH¢51 millionGRATIS Foundation, whole year, no capital expenditure (Appendix 4A) about GH¢3 million

The Foundry and Machine Tooling Centre is the one line in this budget about making machines rather than buying them.

The Centre dates from my time as Minister for Environment, Science, Technology and Innovation, and six years after I left office it is still waiting to be completed.

In 2027 it receives about 0.17 percent of the New Economy outlay, and one-sixteenth of what we will spend on imported farm machinery in the same year.

GRATIS, built to carry engineering capability into the regions, receives less than half of one percent of the machinery budget.

Nothing in the New Economy programme is set aside for machine tools, foundries, spare parts or engineering manufacturing.

Suppose the New Economy succeeds exactly as planned. By 2030 Ghana processes all its cocoa, refines all its gold, processes all its manganese and bauxite and mills its own rice. Food imports fall, export earnings per tonne rise, and the cedi strengthens.

But each of those plants was built with imported equipment, and each needs a steady flow of imported spares, replacement parts and, in time, replacement machines.

When a mill breaks down, it cannot wait for the cedi to recover. It must buy the part at whatever the exchange rate happens to be. This demand for foreign exchange is stubborn, and it grows with every factory we open.

The budget itself names commodity price volatility as the first of its five principal risks (para. 1025). When commodity prices next fall, export earnings will drop, but the bill for machines and spares will not.

The cedi will come under pressure again, and the cycle will begin again, at a higher level of output but under the same ceiling. That is the trap of an economy that assembles but does not make. Value addition on imported capital goods moves the bottleneck; it does not remove it.

There is a fiscal test as well. The programme is financed partly by lowering the primary surplus target by one percentage point of GDP (para. 247), beginning in the year before an election.

The Government will answer that a surplus of at least 0.5 percent of GDP remains (para. 221), and that is a fair answer. But the pledge of discipline "throughout the election cycle" will be tested in 2028, and Ghanaians have heard such pledges before.

What a complete cure would requireThe modern world economy is knowledge-based and driven by science and technology.

Societies that produce, adapt and commercialise knowledge have achieved sustained growth and rising living standards. Raising money to pay foreign contractors to build infrastructure, good as the projects may be, cannot by itself lead to sustained economic development. Ghana has to develop the capacity to build the machines its industries run on.

The cure is not to abandon value addition. It is to add the pillar the plan lacks: the capacity to make the machines.