In brief
- Fiscal prudence turns constraints into credibility. Ghana delivered a stronger-than-expected fiscal performance in 9M2025 as disciplined expenditure control more than offset a 4.7% revenue shortfall, driving a sizeable fiscal adjustment of 5.5% of GDP. The authorities suppressed spending by 13.8%, enabling the primary surplus (on commitment basis) to reach 1.6% of GDP, well above the 0.6% target, and reinforcing the credibility of the 2026 outlook.
- Conservative macro targets with a promising undercurrent. We view the 2026 budget as an effort to broaden ongoing reforms, sustain macroeconomic stability, and deepen post-IMF resilience. In our opinion, the 2026 real GDP growth target appears conservative given the recovery in household spending, planned infrastructure investment, and stronger agricultural activity. We expect inflation to remain anchored within the Bank of Ghana’s target band, supporting a steady but cautious easing cycle through 2026.
- Revenue switches with built-in compensation. We estimate that removing the COVID levy will forgo a potential GHS 5.3bn in 2026 (FY2025: GHS 3.87bn), but this should immediately release equivalent spending power to households and firms, strengthening demand and supporting medium-term revenue through tax buoyancy. The gap will likely be offset by the full-year yield from the GHS 1.0/litre fuel levy, which we expect to generate roughly GHS 6.2bn, more than covering the loss and providing additional fiscal space to finance power-sector fuel purchases and advance the authorities’ target on Energy Debt Recovery Levy.
- Stronger ECG remittances to the Cash Waterfall Mechanism unlocks fiscal space. The sharp 49.3% fall in expected energy sector shortfalls to GHS 15.2bn in 2026, driven by stronger ECG remittances under the Cash Waterfall Mechanism, creates fiscal room for capital spending, particularly the Government’s GHS 15.3bn own contribution to the “Big Push” programme. The completion of IPPs’ debt restructuring further reduces energy sector risk, with USD 1.1bn now spread over three years and USD 345.0mn (GHS 4.76bn) provided for 2026 after an initial USD 300.0mn payment in 2025. This significantly eases our concerns over energy-sector stability and future fiscal pressures.
Downloads
Download Full Report