Ghana is preparing its 2027 budget with a focus on transforming economic stability into jobs, investment, and higher production. The government aims to turn years of debt restructuring and spending restraint into tangible benefits for the economy. The International Monetary Fund (IMF) completed its final review of Ghana's $3 billion Extended Credit Facility in July, and the Policy Coordination Instrument provides monitoring without new financing. The budget must show how Ghana intends to sustain its recovery while paying for its next phase of development.
The current economic indicators show gains to protect, with September inflation at 5.2% and provisional public debt at 45% of Gross Domestic Product (GDP) in June. However, these figures do not provide insight into whether new investments will deliver or how comfortably the government can meet its repayments. The budget must convincingly link its promises to financing and results. Five key tests will determine the budget's success, including showing how the New Economy will be financed, explaining the safeguards behind the lower surplus, preparing for repayments, and demonstrating that spending restraint is not delaying delivery.
The published Fiscal Strategy Document proposes investment equivalent to 1.5% of GDP annually for four years, approximately $10 billion. The government 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, including which projects are ready to begin, who will implement them, and when the public can expect results. A program intended to create jobs needs measurable employment and production targets alongside its costs.
The government proposes lowering the primary surplus on a commitment basis from 1.5% to 0.5% of GDP from 2027. Reducing the primary surplus leaves more room for expenditure but also means a smaller contribution towards containing debt. The government must 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, with GH¢58 billion of Domestic Debt Exchange Programme bond maturities in 2027 and another GH¢53 billion in 2028. The government has announced a Sinking Fund to address these repayments, with GH¢15.6 billion accumulated by July 22. The next budget should reconcile the fund's opening balance, inflows, withdrawals, and planned repayments, distinguishing money saved from money borrowed to build a buffer.
The Ministry of Finance reports a first-half primary surplus of 0.9% of GDP on a commitment basis, but capital spending was 39.3% below plan, while net arrears clearance reached only 38.2% of the programmed amount. The government should show what it committed to spend, what it paid, and what remains overdue. Delayed payment of old arrears does not itself explain a commitment-basis surplus, and unfinished projects and overdue bills have consequences beyond the fiscal tables.
The budget should also show what public liabilities could cost taxpayers, including energy-sector obligations, guarantees, gold-purchase operations, and central-bank recapitalization. The IMF's July review recorded a waiver linked to cost-sharing under the domestic gold purchase program and reaffirmed the commitment to recapitalize the Bank of Ghana by 2032. These issues need an explanation of their cost and financing, with liabilities already included in public debt distinguished from claims that might become government obligations.
Key points
- The 2027 budget must demonstrate how Ghana plans to finance its New Economy and achieve economic transformation.
- The budget must show how the government will meet its debt repayments and invest in development projects.
- The budget's success will depend on its ability to convincingly link its promises to financing and results.
