The government’s economic growth and revenue projections contained in the 2026 Mid-Year Budget Review and Economic Policy are unrealistic and require a review, the Institute of Fiscal Studies (IFS) has said.
The Institute argued that the projections did not adequately reflect the stronger-than-expected performance of the economy, particularly after Ghana recorded real GDP growth of more than five per cent in 2025.
The Executive Director of the IFS, Dr Said Boakye, said the government must ensure that its macroeconomic assumptions were firmly grounded in available economic evidence to improve the credibility of the national budget.
Presenting the Institute’s assessment of the 2026 Mid-Year Budget Review, Dr Boakye said some of the government’s projections for GDP growth and revenue mobilisation did not correspond with the current economic realities.
He explained that a stronger economic performance should have informed more realistic fiscal targets, rather than conservative assumptions that could weaken budget planning and execution.
“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 said.
He added that weak forecasting could undermine confidence in the budget and affect the government’s ability to properly plan expenditure.
“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,” he said.
The IFS also called for independent review of government forecasts before they were incorporated into budget statements to improve reliability and transparency.
Dr Boakye said although the economy had shown signs of recovery, challenges remained in revenue mobilisation, particularly from the rapidly expanding small-scale gold mining sector.
According to the IFS, Ghana’s gold exports more than doubled in 2025, increasing by 103.3 per cent from $10.31 billion to $20.98 billion.
He said small-scale miners accounted for $10.8 billion, representing 51.5 per cent of total gold exports.
However, the Institute noted that the growth in gold exports had not translated into corresponding fiscal benefits for the state.
Mineral royalties increased by only 21 per cent, from $364 million in 2024 to $441 million in 2025, despite the significant expansion in gold exports.
Dr Boakye said available data from the Minerals Income Investment Fund showed that royalties collected from gold production in 2025 came entirely from the large-scale mining sector.
“This situation should not be allowed to persist,” he said, stressing that the country’s mineral resources were public assets held in trust for citizens.
“The state must enjoy a fair share of the benefits from the extraction of these mineral resources by whoever extracts them,” he added.
The IFS urged the government to develop a clear strategy to capture revenue from small-scale mining, including strengthening monitoring systems and improving compliance.
The Institute also acknowledged some positive developments in the economy, including declining inflation and interest rates.
However, the IFS expressed concern about weak budget execution in the first half of 2026.
It said total expenditure was below the budgeted amount by GH¢35.6 billion, while capital expenditure recorded a shortfall of GH¢14.35 billion.
The Institute warned that delays in implementing planned spending, including arrears payments, could affect economic activity and growth.
Dr Boakye urged the government to align expenditure decisions with approved budget plans, improve fiscal data reliability and ensure that the country’s growing gold sector contributes meaningfully to national development.
BY KINGSLEY ASARE
Follow our WhatsApp Channel now! https://whatsapp.com/channel/0029VbAjG7g3gvWajUAEX12Q
