The 2026 budget proposals, presented to Parliament last week by Finance Minister Dr Cassiel Ato Forson confirms that Ghana is now in a new era with regards to financing public expenditure.
On cash basis, the budget contains a fiscal deficit of GHc64.2 billion (4.0% of GDP) but it will require domestic financing of GHc71 billion since foreign financing of the budget is expected to result in a net repayment (outflow) of GHc 6.6 billion (0.4 percent of GDP).
Nevertheless, there are some expected foreign disbursements, including those from the IMF Extended Credit Facility (US$360 million), the World Bank Development Policy Operation and other bilateral partners of US$313.2 million.
On cash basis, the primary deficit stands at GH¢6.5 billion (0.4 percent of GDP).
However, measured on commitment basis, the overall fiscal balance is projected at a deficit of GH¢34.4 billion, equivalent to 2.2 percent of GDP. The corresponding primary balance targets a surplus of GH¢23.3 billion, representing 1.5 percent of GDP, in line with government’s medium-term fiscal target.
Total Revenue and Grants for 2026 is projected at GH¢268.1 billion, up from GH¢226.5 billion in 2025. This projection is based in part on new non-oil tax policy measures expected to yield at least 0.6 percent of GDP as the tax revenue to GDP ratio is projected to rise from 16% to 16.6%, although is still lower than the average for sub Saharan Africa of close to 18%.
See centerspread for detailed breakdown key performance indicators targets, projected revenues and expenditures and key policy initiatives
Non-Oil Tax Revenue, which accounts for about 80.6 percent of total revenue, is projected at GH¢216.1 billion, reflecting a robust 18.8 percent annual growth. Non-Tax Revenue (non-oil) is estimated at GH¢20.9 billion, representing about 7.8 percent of domestic revenue.
Of this amount, GH¢18.2 billion will be retained by Ministries, Departments and Agencies to support operations, while GH¢2.8 billion will be lodged into the Consolidated Fund.
The Internally Generated Funds Capping Policy is expected to yield an additional GH¢329.6 million to the budget.
Oil and Gas receipts are projected at GH¢13.6 billion, while other revenue, including SSNIT transfers to the National Health Insurance Levy and Energy Sector Levies (ESL), is expected to amount to GH¢14.4 billion.
Grants from Development Partners are projected at GH¢3.1 billion, equivalent to 1.1 percent of total revenue and grants. The expected disbursements from grants are entirely project-related.
Total Expenditure on commitment basis for 2026 has been programmed at GH¢302.5 billion, representing 18.9 percent of GDP, and an increase of 20.1 percent over the 2025 projection of GH¢251.7 billion (17.8 percent of GDP).
Dr Forson explained, when presenting the budget that “This allocation reflects a deliberate balance between fiscal consolidation and strategic investment in infrastructure, human capital, and social protection.”
Primary Expenditure – expenditure excluding interest payments is projected at GH¢244.7 billion, equivalent to 15.3 percent of GDP. Compensation of Employees, covering wages, salaries, pensions, gratuities, and social security contributions, is projected at GH¢90.8 billion (5.7 percent of GDP). Use of Goods and Services is projected at GH¢13.2 billion (0.8 percent of GDP).
Grants to Other Government Units, comprising transfers to earmarked funds such as Ghana Education Trust Fund, National Health Insurance Fund, and District Assemblies Common Fund, are estimated at GH¢63.6 billion (4.0 percent of GDP).
Interest Payments are projected at GH¢57.7 billion (3.6 percent of GDP), of which GH¢50.1 billion represents domestic interest and GH¢7.6 billion external interest.
Capital Expenditure (CAPEX) is projected at GH¢57.5 billion (3.6 percent of GDP). Of this, GH¢45.5 billion (2.8 percent of GDP) represents domestically financed capex, comprising GH¢15.5 billion for MDAs and GH¢30.0 billion for the Big Push Infrastructure Programme.
Foreign-financed capex, mainly project loans and grants, is projected at GH¢12.0 billion (0.8 percent of GDP).
Other Expenditures, including ESLA transfers, payments to Independent Power Producers (IPPs) are estimated at GH¢19.7 billion (1.2 percent of GDP).
Based on these allocations, the total appropriation for the fiscal year ending 31st December 2026 amounts to is GH¢357,105,639,079.87
By Toma Imirhe
