The World Bank Group on Wednesday urged the Ghanaian government to anchor its fiscal consolidation on aggressive domestic resource mobilization to ensure sustainability.
The bank acknowledged in its latest Ghana Economic Update, launched in Accra, the Ghanaian capital, that the country had achieved a strong fiscal turnaround in 2025 and remained ahead of the targets set in the reform program backed by the International Monetary Fund (IMF).
It said fiscal consolidation remained on track, driven by strict expenditure discipline, amid revenue shortfalls.
“The 2025 fiscal results showed a big improvement from the problems in 2024, with the government’s actions leading to a primary surplus of 2.5 percent of gross domestic product (GDP) by the end of 2025, which is much higher than the 1.5 percent of GDP target set in the IMF-backed reform program,” the report said.
Subsequently, according to the report, Ghana recorded a primary surplus of 0.9 percent of GDP during the first half of 2026, against a planned deficit of 0.2 percent.
The achievements notwithstanding, the report noted that the strong fiscal consolidation was not due to a broad-based improvement in revenue generation or recurrent spending efficiency.
The report explained that the better-than-expected results were mainly due to a significant reduction in capital spending, which was 38 percent less than what was planned, as the government denied some payment claims after an audit and slowed down project work after finalizing debt restructuring deals.
It added, however, that the government also contained current expenditure through wage caps, restraint on goods and services spending, and a reduction in energy-sector transfers.
“Fiscal adjustment anchored primarily in spending cuts—particularly capital expenditure—is less sustainable than adjustment supported by structural revenue gains,” it added.
The bank said since fiscal consolidation has been anchored on expenditure compression, there is an underlying necessity to strengthen revenue mobilization to sustain the fiscal gains.
“The government deserves credit for the difficult decisions that made these results possible. Yet the report is candid: Ghana is not out of the woods,” Robert Taliercio, Division Director for Ghana, Sierra Leone, and Liberia, said.
Taliercio added that the report offers a clear message for the country: “Sustained fiscal consolidation over the medium term will require strengthening revenue mobilization.”
“Growth is led by sectors with limited employment absorption relative to the growing young population entering the labor market in the next decade—a structural imbalance that demands urgent attention,” the World Bank official added.
In a message read on his behalf, Finance Minister Cassiel Ato Forson praised the World Bank for its candid report, which serves as a candle for the country in determining its future direction.
“What we need is a disciplined implementation. I repeat, a disciplined implementation and a kind of sustained partnership that turns potential into real progress for our people,” Forson added.