Growth, revenue targets of 2026 Mid-year budget unrealistic - IFS

Ghana's economic growth and revenue projections for the 2026 Mid-Year Budget Review are unrealistic and require revision, according to the Institute of Fiscal Studies (IFS). The institute argues that the government's targets do not adequately reflect the economy's robust performance, especially after Ghana achieved a real GDP growth exceeding five percent in 2025.

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We believe that the nominal GDP, real GDP growth rate and total revenue and grants to GDP ratio targets for the 2026 budget period are unrealistic.

Dr. Said Boakye, Executive Director of the IFS, stressed the need for the government to ensure its macroeconomic assumptions are firmly based on available economic evidence to bolster the credibility of the national budget. He noted that some government projections for GDP growth and revenue mobilization are out of sync with current economic realities. Boakye suggested that stronger economic performance should lead to more realistic fiscal targets, rather than conservative assumptions that could hinder budget planning and execution.

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Government should ensure that its macroeconomic and fiscal projections are fully informed by all available evidence. GDP projections should be updated when new data point to a materially different outlook than previously envisaged.

"We believe that the nominal GDP, real GDP growth rate and total revenue and grants to GDP ratio targets for the 2026 budget period are unrealistic," Dr. Boakye stated. He warned that weak forecasting could erode confidence in the budget and impede the government's ability to manage expenditures effectively. The IFS recommends that government projections be fully informed by all available evidence, with GDP projections updated when new data indicate a significantly different outlook.

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This situation should not be allowed to persist.

The IFS also advocated for an independent review of government forecasts before their inclusion in budget statements to improve reliability and transparency. While acknowledging signs of economic recovery, the institute pointed out persistent challenges in revenue mobilization, particularly from the rapidly expanding small-scale gold mining sector. Ghana's gold exports more than doubled in 2025, yet mineral royalties saw only a 21 percent increase, with data suggesting these royalties came solely from large-scale mining operations. The IFS urged the government to develop a strategy to capture a fairer share of benefits from mineral resource extraction.

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The state must enjoy a fair share of the benefits from the extraction of these mineral resources by whoever extracts them.