The International Monetary Fund has urged the government to ensure that spending under Ghana’s planned 2027 Budget delivers measurable economic value, warning that weak project selection, procurement failures and poor expenditure controls could undermine the country’s fiscal gains.
The Fund says the Budget is built on strong foundations and supports the government’s target of achieving a 0.5 per cent primary surplus in 2027.
However, it stressed that the fiscal space created through stronger revenue mobilization must be directed towards well-assessed projects capable of creating jobs, attracting investment and reducing Ghana’s infrastructure deficit.
The IMF made the assessment following the first review of Ghana’s Policy Coordination Instrument, under which the country’s economic policies and reforms are monitored without direct financial support from the Fund.
Investment Plans Must Produce Results
The government intends to use additional fiscal space to finance priorities under its New Economy agenda, including infrastructure development and programmes designed to expand employment and investment opportunities.
The IMF acknowledged that such investments could support Ghana’s economic transformation and strengthen productive activity.
It, however, said every major project must undergo rigorous appraisal before public funds are committed.
Project appraisal would require the government to assess the economic, financial and social benefits of proposed investments and compare them with the costs involved.
The Fund’s position is that Ghana should avoid committing resources to projects that are poorly designed, economically unjustified or unlikely to produce lasting benefits.
Public investments must therefore be prioritized according to their contribution to growth, employment and service delivery rather than short-term political considerations.
Competitive Procurement Seen as Essential
The IMF also called for competitive and transparent procurement in the implementation of the 2027 Budget.
Government contracts associated with infrastructure and other public investments must be awarded through processes that promote competition and secure value for money.
Weak procurement systems can expose public projects to inflated costs, delays and poor-quality execution.
Where contracts are awarded without sufficient competition or scrutiny, the State may pay more than necessary for projects that fail to meet expected standards.
The Fund therefore wants the government to strengthen oversight and ensure that procurement decisions can withstand public and institutional scrutiny.
Spending Controls Must Be Tightened
Strict expenditure controls will also be critical to meeting the proposed primary surplus target.
Government ministries, departments and agencies will be expected to remain within approved budget allocations and avoid entering into commitments without available funding.
Uncontrolled expenditure could lead to the accumulation of arrears and increase pressure on public debt.
The IMF has consequently urged the government to ensure that all spending decisions are properly authorized, recorded and monitored.
The 0.5 per cent primary surplus could be threatened if expenditure rises above approved levels or if state institutions enter into financial obligations outside the established budget framework.
Revenue Measures to Support Budget
The government’s fiscal target is expected to receive support from revenue measures approved by Parliament in July 2026.
The IMF projects that Ghana’s non-oil revenue will increase further in 2027, building on improvements recorded in 2026.
A stronger non-oil revenue base would make government finances less dependent on petroleum earnings, which can fluctuate with international market prices and production levels.
The Fund expects revenue growth to be supported by tax-policy measures, improved administration and changes to customs and excise legislation.
The challenge for government will be to raise more revenue efficiently without placing disproportionate pressure on households and compliant businesses.
Digital Tax Systems to Improve Collection
The rollout of the Integrated Tax Administration System is expected to support the government’s revenue mobilization efforts.
The system is intended to improve the management of taxpayer information, strengthen compliance monitoring and integrate different aspects of tax administration.
Electronic fiscal devices will also be deployed to improve transaction reporting and reduce under-declaration of taxable sales.
The IMF believes stronger digital systems could help close revenue leakages and provide authorities with more accurate information for enforcement.
Their effectiveness will, however, depend on reliable technology, proper implementation and support for businesses required to adopt the systems.
Customs and Excise Laws Under Review
A review of customs and excise legislation will also form part of the revenue strategy underpinning the 2027 Budget.
Customs reforms could improve the monitoring of imports and exports while reducing the loss of revenue through under-valuation, misclassification and other forms of non-compliance.
Changes to excise rules may also affect the taxation of selected products and activities.
The IMF expects these reforms to broaden the revenue base and strengthen the government’s ability to fund development programmes without relying excessively on borrowing.
Authorities will need to balance stronger enforcement with the need to maintain an efficient trade environment for businesses.
Primary Surplus Target Gets IMF Support
The Fund says the proposed 0.5 per cent primary surplus is consistent with Ghana’s commitments under the Policy Coordination Instrument.
A primary surplus is achieved when government revenue exceeds expenditure before interest payments on public debt are considered.
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Maintaining the surplus would demonstrate that the government is controlling its non-interest expenditure and generating enough revenue to support its operations.
It could also reduce Ghana’s need for additional borrowing and contribute to the continued improvement of debt sustainability.
The target will require disciplined implementation throughout the year rather than adjustments introduced only towards the end of the fiscal period.
PCI Performance Broadly Satisfactory
The IMF described Ghana’s performance under the Policy Coordination Instrument as broadly satisfactory.
Most of the quantitative targets assessed during the first review were met, while structural reforms remained generally on track.
The assessment indicates that Ghana has largely maintained the agreed direction of its fiscal and economic policies.
The PCI is intended to help the country preserve macroeconomic stability after the completion of its Extended Credit Facility programme.
Continued satisfactory performance could strengthen investor confidence and provide independent validation of Ghana’s policy framework.
Jobs and Infrastructure Remain Priorities
Government intends to use the fiscal space generated through improved revenue mobilization to finance job creation and close infrastructure gaps.
Investments may target sectors capable of increasing productivity, supporting businesses and expanding economic opportunities.
Infrastructure projects could reduce transportation, energy and service-delivery constraints that limit private-sector growth.
However, the IMF’s warning suggests that the size of public investment alone should not be treated as evidence of success.
The government will need to demonstrate that each project was properly assessed, competitively procured and completed within budget.
Debt Sustainability Must Be Protected
The Fund stressed that expenditure decisions under the 2027 Budget must not weaken Ghana’s debt position.
The country has made progress in restoring fiscal stability and restructuring its public debt, but uncontrolled commitments could reverse those gains.
Large cost overruns, unpaid bills and poorly managed projects could increase the government’s financing needs and place renewed pressure on debt levels.
Preserving debt sustainability will therefore require close monitoring of both direct budget spending and financial obligations generated by state institutions.
The IMF wants the government to pursue development without rebuilding the fiscal imbalances that contributed to Ghana’s earlier economic difficulties.
Budget Faces Implementation Test
The IMF’s assessment provides broad support for the direction of the 2027 Budget, but its success will depend on implementation.
Government must translate revenue measures into actual collections, ensure public institutions remain within their spending limits and select projects that produce tangible economic and social benefits.
The Budget will also need to balance Ghana’s need for infrastructure and job creation with the commitment to maintaining fiscal discipline.
If the government applies strict spending controls and transparent procurement, the additional fiscal space could support investment without undermining macroeconomic stability.
Failure to enforce those safeguards, however, could weaken the primary surplus target and place renewed pressure on public debt.
The 2027 Budget will therefore be judged not only by how much the government plans to spend but by whether the expenditure delivers lasting value to the Ghanaian public.
