Last week, Ghana’s Finance Minister Dr Cassiel Ato Forson presented to Parliament, the President Mahama administration’s budget and economic policies for the 2026 fiscal year and medium term framework for the next three years. TOMA IMIRHE provides a summary of the targets and how the government aims to achieve them
The theme for the 2026 budget is: “Resetting for Growth, Jobs, and Economic Transformation.”
Delivering the budget presentation, Dr Cassiel, Ato Forson, the Minister for Finance asserted that the 2026 Budget marks a decisive shift from recovery to transformation; from resilience to productivity; and from stability to jobs.
He promised that over the next year and beyond, Government will focus on three strategic priorities to reset for growth, jobs, and transformation:
One is the consolidation of macroeconomic stability by sustaining fiscal discipline, strengthening revenue mobilisation, and ensuring responsible debt management. This aims to ensure that Inflation will remain on a firm downward trajectory towards optimal levels as exchange rate stability will continue to be prioritised, and government’s medium-term debt strategy protects the economy from future shocks.
Another is the acceleration of economic transformation and job creation. To do this government plans to – according to Dr Forson – “invest boldly in energy, infrastructure, commercial agriculture, aquaculture, and agribusiness, and expand transformative programmes like the 24-Hour Economy and Big Push Infrastructure Agenda. These investments will create sustainable jobs and unleash opportunities across all 16 regions.”
The third priority involves strengthening security and social sectors for inclusive growth by which government plans to “modernise education, improve healthcare access, retool the security forces, and extend electricity, water, and sanitation to every community, while protecting the environment for generations to come.”
2025’s track record of progress
To be sure, the Mahama administration has presented the 2026 budget with plenty of credibility gained among the populace, having achieved a lot more success during the first 10 months of 2025 than most people expected.
While an overall real GDP growth of at least 4.0 percent was originally targeted, the economy expanded by 6.3 percent in the first half of 2025, far exceeding even the non-oil annual growth projection of 4.8 percent. Indeed, non-oil GDP surged to 7.8 percent, highlighting the growing role of domestic production and consumption in sustaining Ghana’s recovery. “This performance reaffirms the structural shift underway, from dependence on extractive industries toward a more diversified, inclusive growth model anchored in local enterprise and productivity, Dr Forson has claimed.
An end-year inflation rate of 11.9 percent was targeted but this was widely believed to be overly ambitious since inflation was still above 20 percent at that time. However, inflation has declined sharply to 8 percent in October 2025, returning Ghana to single-digit inflation for the first time in four years, reflecting the combined impact of improved food supply, exchange rate stability, and decisive monetary and fiscal coordination. In response, the Bank of Ghana reduced the monetary policy rate by 650 basis points, during the third quarter of 2025, from 28 percent to 21.5 percent, while maintaining a strong monetary anchor to prevent a resurgence of inflation. “This has lowered the cost of credit, improved liquidity conditions, and supported business recovery and job creation” enthuses Dr Forson.
A primary surplus of 0.6 percent of GDP on commitment basis, was aimed for as proof of fiscal prudence and restored credibility – an ambitious reversal of 2024’s primary balance deficit of 3.0 percent of GDP – and as the year draws to a close, this target is firmly on track to be even bettered, with the surplus standing at 1.6 percent as at September.
The overall fiscal balance (commitment basis) has registered a deficit of 1.5 percent of GDP, significantly better than the target deficit of 3.2 percent while the overall fiscal balance (cash basis) recorded a deficit of 2.3 percent of GDP against a target of 4.0 percent.
Government set out to maintain gross international reserves of no less than three months of import cover, and the strong build-up of reserves during the year (to US$10.7 billion as at August) has enabled them to now cover about 4.7 months of imports.
.Ghana’s sovereign credit ratings have improved across all major international agencies, reflecting growing confidence in its ongoing macroeconomic reforms and policy direction
Fitch Ratings upgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating to ‘B-’ with a Stable Outlook on 16th June 2025, lifting the country out of “Restricted Default” status. Fitch cited Ghana’s strong fiscal discipline, successful external debt restructuring, a resilient cedi, and improved external buffers as the key drivers of this upgrade. Moody’s Investors Service, in October 2025, followed with an upgrade of Ghana’s long-term foreign and local currency ratings to ‘Caa1’ from ‘Caa2’, maintaining a Stable Outlook. The agency credited Ghana’s progress on fiscal consolidation, growing reserves, and consistent policy execution under the IMF- supported programme. On 7th November 2025, S&P Global Ratings also raised its long- and short-term foreign and local currency sovereign credit ratings on Ghana to ‘B-/B’ from ‘CCC+/C’ with stable outlook. They also revised up transfer and convertibility assessment on Ghana to ‘B-‘ from ‘CCC+’.
“These upgrades represent a collective vote of confidence from the international financial community” Dr Forson told Parliament last week. “They validate the results of government’s prudent economic management, structural reforms, and commitment to transparent debt restructuring.”
But perhaps the most surprising achievement has been the sharp appreciation of the cedi against the United States dollar, between April and now. It currently trades at just under GHc11 to a dollar, compared with close to GHc15 at the turn of the year, (a cumulative year to date appreciation of about 36%) making it one of the best performing currencies in the world so far this year, despite a major blip during the third quarter of the year and the arguments of government’s political opponents that this has been achieved chiefly through central bank supply interventions which they claim are unsustainable.
The game plan going forward
“As we enter 2026, our foremost task is to consolidate the hard- earned gains of 2025 and turn stability into lasting progress.”Dr Forson told Parliament last week. “Government remains fully committed to translating these macroeconomic gains into better livelihoods, decent jobs and real opportunities for every Ghanaian.
To this end the Mahama administration’s Resetting Agenda is built around three central pillars:
- Restoring hope and trust in the country’s democracy, in public institutions and in the ability of every Ghanaian to fulfil their potential;
- Extending a trusted hand to the vulnerable, especially women and the youth, while laying the foundation for a more inclusive and compassionate economy; and
- Stimulating demand and productivity through the 24-Hour Economy and Accelerated Export Development Policy, which promotes Made-in-Ghana goods, expands jobs and keeps the economy active, day and night.
These overall strategies are meant to take form in the key medium term (2026 – 2029) macroeconomic performance targets:
- Real GDP to rise steadily, averaging annually about 4.9 percent;
- Non-oil GDP to grow around 5 percent;
- Inflation to stay within the 8±2 percent target band;
- The fiscal balance having a primary surplus of 1.5 percent of GDP from 2026 onward:
- Gross International Reserves (including oil funds and encumbered/pledged assets) to provide at least three months of import cover to anchor external resilience.
For the 2026 fiscal year, government aims to achieve:
- Overall real GDP growth of at least 4.8 percent, driven by continued expansion in services, manufacturing, and agriculture;
- Non-oil real GDP growth of at least 4.9 percent, underscoring a commitment to diversifying growth and reducing dependence on extractives;
- End-year inflation of 8.0 percent, to consolidate the progress made in bringing prices under control and ease the cost of living for households;
- A primary surplus of 1.5 percent of GDP on commitment basis, in line with its fiscal responsibility framework to sustain discipline and debt sustainability; and
- Gross international reserves of not less than three months of import cover, ensuring a strong external sector and a strong defense for the Ghana Cedi.
Key Drivers of Growth and Jobs in 2026 and the Medium-Term
To achieve our 2026 growth target, Dr Forson revealed in his 2026 budget presentation that government is implementing “a focused set of policies to unlock private investment, diversify the economy, and drive inclusive, job-rich growth.”
“These measures are not about short-term stimulus, they are about building a stronger, more competitive and future-ready Ghanaian economy” he insists. “We are making it easier to do business and attracting new investment into productive sectors of the economy.”
To this end government has submitted to Parliament the regulations for the Public-Private Partnership Act, 2020 (Act 1039) and the Corporate Insolvency and Restructuring Act, 2020 (Act 1015) to make it simpler, faster and safer to start and grow a business in Ghana. Government is also establishing 24/7 business registration centres and digital helplines, reviewing port charges, and submitting new Consumer Protection, Competition, and Business Regulatory Reform Bills to Parliament to level the playing field for entrepreneurs.
“Through the 24-Hour Economy Programme and the Economic Transformation Agenda, we are promoting modern agriculture, agribusiness, and value addition to transform raw materials into finished products for both domestic use and export” Dr Forson said last week. “Government will roll out a five-year Trade Sector Support Programme and help Ghanaian firms fully leverage opportunities under the African Continental Free Trade Area (AfCFTA).
“These actions will create more jobs, strengthen the cedi through higher export earnings and make Ghana a key hub for regional trade and production. We are investing heavily in our people and skills, because sustainable growth depends on a capable workforce.
“The Free Secondary Education Programme will be made more efficient and equitable, while the National Apprenticeship Programme will expand access to vocational training in partnership with the private sector.
“To unlock agricultural potential, the Agriculture for Economic Transformation Agenda will anchor the Feed Ghana Programme, supported by Farmers’ Service Centres and new Farm Banks to enhance access to inputs, finance and irrigation.
“To ensure that capital reaches those who create real value, we are improving access to finance through the Development Bank Ghana and the forthcoming National Employment Trust, which will de-risk investment in high- potential sectors and support women-owned and youth-led enterprises.
Dr Forson also announced that the new Women’s Bank will be capitalized to the tune of GHc400 million in line with the minimum capital requirement for commercial banks in Ghana
Furthermore he stated that “We will accelerate digitalisation through initiatives such as the One Million Coders Programme, Regional Digital Centres, and a FinTech Growth Fund, expanding digital skills, entrepreneurship, and financial inclusion across the country.”
Dr Forson also confirmed that the Big Push Programme is already in motion, and it is focusing on road infrastructure for the 2025 and 2026 fiscal years. “Across the country, critical highways, feeder roads and bridges are being constructed or upgraded to open-up markets, connect farming communities, and boost trade. The energy sector will power Ghana’s growth in 2026 and beyond, fueled by new investments in gas, renewables, and transmission upgrades. Alongside major investments in energy, irrigation, and digital infrastructure, the Big Push is transforming Ghana’s landscape, creating jobs, improving mobility and laying the groundwork for faster, more inclusive growth.
Outlook for the Monetary and External Sectors
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According to government’s plan, the Bank of Ghana’s balance sheet is projected to expand moderately, driven by higher foreign assets from gold and forex purchases. Improved access to external financing under the IMF-supported programme will help rebuild reserves and strengthen macroeconomic stability. Reserve money growth will be anchored on stronger external inflows and tighter liquidity management. This aims to preserve the downward momentum in inflation while ensuring enough liquidity to support growth.
Private sector credit is expected to grow in 2026 and improve steadily over the medium term. As government’s domestic financing needs ease, banks are expected to lower risk aversion, expand lending to productive sectors, and support small businesses. This measured recovery in credit is expected to drive private investment and job creation.
Gross international reserves are projected to cover at least three months of imports, supported by improved export earnings, remittances, and FDI inflows. “The Ghana Gold Board will continue to be a key anchor, with record small-scale gold exports adding to FX inflows and boosting reserve accumulation” predicts Dr Forson.
The current account is projected to sustain a surplus in 2026, driven by robust gold exports and higher remittances. Gold exports are expected to stay strong, supported by prices above US$3,000 per ounce and increased production.
Cocoa export earnings are expected to improve on the back of higher output from new plantations and reforms at COCOBOD, though global prices may soften with higher supply.
Crude oil exports, however, are expected to remain moderate due to lower production volumes and subdued global prices.
“These dynamics point to a more stable cedi, lower inflation, and stronger investor confidence, conditions that will underpin growth and improve living standards for Ghanaians” enthuses Dr Forson
2026 Fiscal Framework
Government will target a primary surplus of 1.5 percent of GDP, consistent with the fiscal anchor set under the amended Public Financial Management Act. The overall fiscal deficit on commitment basis is projected at 2.2 percent of GDP, reaffirming government’s commitment to fiscal prudence, growth, and debt sustainability.
On a cash basis, the overall fiscal deficit is projected at 4.0 percent of GDP, with a corresponding primary balance estimated at a deficit of 0.4 percent of GDP. This fiscal stance balances consolidation with growth, maintaining discipline while safeguarding resources for productive investments under the Big Push Infrastructure Programme and other national priorities.
Total Revenue and Grants for 2026 is projected at GH¢268.1 billion, up from GH¢226.5 billion in 2025. This represents an anticipated strong revenue performance supported by new non-oil tax policy measures expected to yield at least 0.6 percent of GDP. 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 MDAs to support operations, while GH¢2.8 billion will be lodged into the Consolidated Fund. The IGF 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, driven by improved efficiency across producing fields and steady global oil prices.
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 to support key development initiatives in line with government priorities.
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). This allocation reflects a deliberate balance between fiscal consolidation and strategic investment in infrastructure, human capital, and social protection.
Primary Expenditure – that is, 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), reflecting the 9% negotiated increase in base pay for public servants under the Single Spine Salary Structure (SSSS).
Use of Goods and Services is projected at GH¢13.2 billion (0.8 percent of GDP) to enhance efficiency in service delivery across MDAs.
Grants to Other Government Units, comprising transfers to earmarked funds such as GETFund, NHIF, and DACF, 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. Continued debt restructuring and liability management will further reduce the interest burden over the medium term.
Capital Expenditure (CAPEX) is projected at GH¢57.5 billion (3.6 percent of GDP), reflecting Government’s commitment to growth-driving investments. 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.
2026 Budget Balances and Financing
The overall fiscal balance on commitment basis is projected at a deficit of GH¢34.4 billion, equivalent to 2.2 percent of GDP. The corresponding primary balance records a surplus of GH¢23.3 billion, representing 1.5 percent of GDP, in line with the medium-term fiscal target.
On a cash basis, the overall deficit is projected at GH¢64.2 billion, equivalent to 4.0 percent of GDP, while the primary deficit stands at GH¢6.5 billion (0.4 percent of GDP).
The cash deficit of GH¢64.2 billion will be financed from a balanced mix of foreign and domestic borrowing sources.
Foreign financing is projected as a net repayment of GH¢6.6 billion (0.4 percent of GDP). This includes expected disbursements from the IMF Extended Credit Facility (US$360 million), the World Bank Development Policy Operation and other bilateral partners of US$313.2 million.
Domestic Financing will amount to GH¢71.0 billion (4.4 percent of GDP) and will be sourced primarily through issuances of long- and short-term government securities. This strategy will support domestic market development, ensure debt sustainability, and maintain financial sector stability.
