Ghana’s improving fiscal outlook is coming under fresh scrutiny after the Institute of Statistical, Social and Economic Research (ISSER) warned that the country’s drive toward macroeconomic stability may be coming at a significant cost to long-term economic growth.
While the government has largely met its fiscal targets for the first half of 2026, ISSER argues that the gains have been achieved primarily through deep expenditure cuts, particularly in capital investment, rather than stronger revenue mobilisation. The Institute believes this raises critical concerns about whether the current path of fiscal consolidation can support sustainable economic transformation.
Speaking during the presentation of ISSER’s assessment of the 2026 Mid-Year Budget Review, the Institute’s Director, Professor Robert Darko Osei, challenged policymakers to look beyond the encouraging headline figures. “The question you need to ask is: how were those targets achieved?” he asked.
Fiscal Targets Achieved Through Spending Cuts
ISSER’s analysis shows that total revenue and grants for the first half of 2026 fell only marginally below target by 1.03 percent, indicating that domestic revenue mobilisation remained relatively stable despite economic challenges.
However, the expenditure side of the budget tells a far different story.
According to the Institute, government spending during the first six months of the year was 20.6 percent below what had originally been budgeted. This sharp reduction in expenditure played a major role in improving Ghana’s fiscal balance and helping the government outperform programme targets on both the fiscal deficit and the primary balance.
Professor Osei noted that the fiscal improvement cannot be attributed to exceptional revenue growth.
“Revenue targets were missed by only about one percent. But expenditure was significantly lower than programmed,” he explained.
The findings suggest that the government relied heavily on expenditure restraint to stabilise public finances rather than expanding its revenue base.
Capital Investment Suffers the Biggest Blow
The most striking concern raised by ISSER relates to capital expenditure, which finances infrastructure projects, roads, schools, hospitals and other productive investments that stimulate long-term economic growth.
The government had planned to spend approximately GH¢36.6 billion on capital projects during the first half of 2026.
Instead, only about GH¢21.7 billion was actually spent.
This represents a staggering 41 percent shortfall in planned capital expenditure, leaving nearly GH¢15 billion in infrastructure spending unrealised.
For ISSER, this is where the real cost of fiscal stabilisation becomes evident.
“Capital expenditure is critical for growth and development. We planned to spend GH¢36 billion, but only spent about GH¢21 billion in the first half of the year.”
Professor Robert Darko Osei
The Institute warned that persistent underinvestment in productive infrastructure could eventually weaken Ghana’s productive capacity and reduce the economy’s ability to generate sustainable growth.
Big Push Programme Faces Fresh Questions
The decline in capital spending has also cast doubt over the implementation pace of the government’s flagship Big Push infrastructure programme.
The initiative has been promoted as one of the central pillars of Ghana’s long-term economic transformation strategy, with promises of accelerated infrastructure development across the country.
However, ISSER believes the significant reduction in capital expenditure appears inconsistent with those ambitions.
“The delayed capital expenditure goes against the Big Push programme that the government has emphasised,” Professor Osei observed.
The warning comes at a time when Ghana’s construction sector continues to record modest growth despite expectations of stronger activity under the infrastructure programme.
Construction Sector Reflects Investment Slowdown
The Institute highlighted that Ghana’s construction sector expanded by only 1.3 percent during the first quarter of 2026.
Such subdued growth suggests that many infrastructure projects remain either delayed or are progressing more slowly than originally planned.
Construction has traditionally served as a major source of employment and economic activity, creating demand across industries including manufacturing, cement production, transportation and engineering services.
A prolonged slowdown in infrastructure development could therefore have ripple effects throughout the broader economy.
ISSER believes that without stronger capital investment, Ghana may struggle to create the productive assets needed to sustain high levels of economic growth over the coming years.
The Price of Fiscal Discipline
Although expenditure restraint has strengthened Ghana’s fiscal indicators, ISSER insists policymakers must carefully weigh the long-term consequences of relying too heavily on spending cuts.
The Institute acknowledged that improved fiscal discipline remains important for restoring macroeconomic stability, especially after years of fiscal pressures and debt restructuring.
However, it cautioned that achieving stability by reducing productive public investment could ultimately prove counterproductive.
“The first-half fiscal performance has largely been driven by lower-than-budgeted expenditure. Revenue mobilisation has not performed particularly strongly.”
Professor Robert Darko Osei
He added a question that now sits at the heart of Ghana’s fiscal debate.
“The key question is: at what cost? Capital expenditure was the hardest hit, and that raises serious questions about the cost of stabilisation.”
Professor Robert Darko Osei
Balancing Stability With Growth
ISSER concluded that Ghana’s progress toward macroeconomic stability is encouraging, but maintaining that momentum will require a more balanced fiscal strategy.
The Institute believes future fiscal consolidation should increasingly depend on stronger domestic revenue mobilisation while protecting investment in infrastructure and other productive sectors that support long-term development.
Without that balance, today’s fiscal improvements could come at the expense of tomorrow’s economic growth.
As Ghana continues implementing reforms under its economic recovery programme, the challenge facing policymakers is becoming increasingly clear. Delivering sound public finances while maintaining adequate investment in roads, schools, hospitals and productive infrastructure may ultimately determine whether the country’s fiscal recovery becomes a lasting success or a missed opportunity for sustainable development.
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