IFS questions Ghana 2026 budget credibility

The Institute of Fiscal Studies (IFS) has cast doubt on the credibility of Ghana's 2026 budget due to a substantial accumulation of funds in the Sinking Fund, exceeding the initial financing plan. This accumulation contributed to a significant shortfall of GH¢34.45 billion in domestic financing during the first half of 2026. Dr. Said Boakye, the Executive Director of the IFS, expressed concern over the government's budget planning and execution, noting that the accumulation of funds in the Sinking Fund while underspending on key budget items raised questions about the adequacy of budget assessments.

The IFS found that domestic financing fell short of the GH¢51.28 billion target by 67.2 per cent, and the Minister of Finance had disclosed that the Sinking Fund had accumulated GH¢15.6 billion by July 22, 2026, without this being included in the initial 2026 Budget. This discrepancy in budget planning has led to lower-than-programmed government expenditure, with actual expenditure falling short by GH¢35.60 billion, or 20.6 per cent, compared to the programmed GH¢172.54 billion.

Furthermore, capital expenditure was GH¢14.38 billion below target, while arrears payments were 61.8 per cent below budget. The IFS attributed the significant spending shortfall mainly to a major shortfall in domestic budget financing, cautioning that continued restrictions on government expenditure could impede economic growth.

The IFS urged the government to align expenditure and financing decisions with the approved budget to maintain budget credibility and support economic development.