Ghana’s 2027 Budget: Three important policy questions about the New Economy

On November 12, 2026, Ghana's Finance Minister, Dr. Cassiel Ato Forson, is set to unveil the 2027 Budget, which the government touts as the launch of a New Economy. Central to this plan is a proposed US$10 billion investment program over four years, aimed at boosting infrastructure, agriculture, manufacturing, and other key sectors.

The transition from macroeconomic stabilization to investment-driven growth is a promising policy move. With considerable progress achieved in restoring macroeconomic stability, Ghana now has a chance to improve upon these achievements by tackling structural barriers to growth, boosting productive capacity, generating sustainable employment, and raising household incomes.

Nevertheless, the proposed New Economy raises three crucial economic policy questions: How much of the announced investment is truly new? How will the government fund the wider fiscal deficit? And how will the investment program align with the government's ambitious foreign reserve expansion strategy? These matters require thorough examination before the budget gets presented.

Firstly, the extent to which the New Economy investment is genuinely fresh is uncertain. The government plans to lower its primary surplus goal from 1.5% of GDP to 0.5% in 2027, generating extra fiscal space equivalent to roughly 1% of GDP. Preliminary reports also hint at an additional revenue stream of 0.5% of GDP, potentially enlarging total fiscal space by 1.5 percentage points.

However, the 2026 Budget had already forecasted capital expenditure of 4.6% of GDP for 2027, a figure that may be insufficient for an economy grappling with substantial infrastructure gaps and a pressing need for productive investment. The key query, thus, is how much supplemental investment the New Economy will generate above this already limited allocation.

With the announcement of the New Economy, it is vital to ascertain whether the proposed investment plan will raise this allocation or merely finance projects already part of the government's existing expenditure programs. If the entirety of the additional fiscal space were dedicated to capital expenditure, the public investment-to-GDP ratio could theoretically climb from 4.6% to 6.1%.

The crucial question is whether the upcoming budget will yield such a significant increase or if the New Economy will primarily encompass projects already included under the Big Push Infrastructure Program, the 24-Hour Economy initiative, and other ongoing commitments. If the government is truly dedicated to investment-led growth, the bare minimum expectation should be that the full additional fiscal space of 1.5% of GDP is directed towards growth-enhancing spending, with a capital expenditure increase from 4.6% to roughly 6.1% of GDP serving as a tangible benchmark.

The true test, however, is whether this extra spending augments productive capacity, stimulates private investment, and fosters enduring employment.

Secondly, the means by which the government will finance the larger fiscal deficit is a significant issue. Cutting the primary surplus from 1.5% to 0.5% of GDP would, assuming other fiscal components remain unchanged, broaden the overall cash deficit from around 2.5% to 3.5% of GDP. This poses an important financing question, particularly given Ghana's considerable debt repayment commitments and the government's stance against returning to the international Eurobond market.