Poor budget execution could hurt economic growth – IFS warns govt

The Institute for Fiscal Studies (IFS) has cautioned that poor execution of Ghana’s 2026 budget could negatively impact economic growth, especially if the government keeps cutting spending on capital projects and arrears payments. In their Policy Brief No. 26, titled An Analysis of the Government of Ghana’s 2026 Mid-Year Budget Review, the IFS examined the budget's implementation in the first half of 2026.

However, Dr Samuel Addo, a Research Fellow at the IFS, reported that total revenue and grants fell short of the budgeted amount by 1.1 per cent. He explained that tax revenue was lower than expected, while foreign grants also did not meet targets. On the expenditure side, total government spending, including arrears payments and discrepancies, was 20.6 per cent below the budgeted figure.

Dr Addo highlighted that arrears clearance and capital expenditure were the areas with the largest shortfalls. Dr Said Boakye, an IFS Fiscal Policy Researcher and microeconomist, emphasized that poor budget execution is one of the major challenges identified in the mid-year review. He cautioned that restricting spending on capital projects and arrears payments could have significant ramifications for economic growth, as these areas play crucial roles in economic activity.