The World Bank has linked Ghana’s fiscal challenges to weak budget discipline, which has fueled unchecked public spending, rising interest payments, and growing financial pressures.
In its latest Public Finance Review Report launched at the Movenpick Ambassador Hotel in Accra, the Bank points to excessive election-year expenditures, costly financial and energy sector bailouts, and pandemic-related spending as major factors straining Ghana’s fiscal space and limiting funds for productive investments.
They indicated that, government spending has consistently outpaced GDP growth, with nearly 70% of total expenditure between 2010 and 2023 allocated to public sector wages, interest payments, and statutory transfers.
As borrowing costs climbed, mounting interest payments squeezed out essential capital investments needed for infrastructure and economic growth.
The report stresses the urgent need for Ghana to realign its fiscal strategy by increasing domestic revenue, curbing tax exemptions, and tightening expenditure controls.
Without deeper reforms, the Bank warns, Ghana risks undoing recent economic progress and facing prolonged financial instability. To ensure long-term stability, policymakers must rein in non-essential spending, enhance public financial management, and adopt a disciplined fiscal framework to restore economic confidence and attract sustainable investments.
