EM Advisory Warns of Looming Fiscal Test for Ghana

Economy

Ghana faces mounting fiscal pressures contempt caller macroeconomic gains, with converging indebtedness obligations and ambitious spending plans threatening to undermine stableness gains achieved nether the International Monetary Fund (IMF) programme, according to improvement consultancy EM Advisory.

The firm’s reappraisal of the 2026 fund highlighted 3 captious challenges: important indebtedness maturities peaking successful 2027, uncertain financing for flagship initiatives including the Big Push and 24-hour system programmes, and risks surrounding Ghana’s imaginable instrumentality to planetary superior markets pursuing its indebtedness restructuring.

Dr. Abudu Abdul-Ganiyu, Managing Partner and Development Policy Lead astatine EM Advisory, described the convergence of these obligations arsenic among the astir important fiscal tests Ghana has encountered successful 10 years. He noted that portion authorities has achieved credible stabilisation, with a projected superior surplus of 1.6 percent of Gross Domestic Product (GDP), a fiscal shortage adjacent 1.5 percent and ostentation declining to azygous digits, these achievements stay susceptible without disciplined stewardship.

The state confronts outer indebtedness repayments totalling astir GH¢20 cardinal successful 2026, rising sharply to GH¢50.3 cardinal successful 2027 and GH¢45.8 cardinal successful 2028. These obligations coincide with important home refinancing requirements, including astir GH¢137 cardinal successful Treasury bills rolled implicit annually and GH¢71 cardinal needed for the 2026 budget.

Ghana is positioned to exit the IMF’s US$3 cardinal Extended Credit Facility (ECF) programme erstwhile it ends successful May 2026, adding urgency to the request for sustained fiscal subject beyond outer oversight.

Dr. Abdul-Ganiyu expressed interest that maturing indebtedness figures necessitate superior beforehand planning. He acknowledged that portion the sinking money provides immoderate cushion done accordant contributions, disposable resources stay constricted comparative to the standard of obligations. Without capable provision, helium warned, the concern could escalate into a large occupation by 2027.

The consultancy besides questioned whether Ghana’s existent backing capableness tin enactment the government’s maturation agenda. The 2026 fund allocates GH¢30 cardinal toward the Big Push infrastructure initiative, with expanded backing for lipid thenar industrialisation and the projected 24-hour economy. However, Dr. Abdul-Ganiyu argued these ambitions indispensable beryllium weighed against constrained fiscal realities, peculiarly wherever feasibility studies, fiscal appraisals and hazard assessments stay incomplete.

He emphasised that due task mentation proves important to avoiding past mistakes wherever programmes ran retired of funds and were near incomplete. Such outcomes, helium said, are costly and erode nationalist value. Transparent task blueprints and well-structured public-private concern arrangements volition beryllium indispensable for attracting backstage assemblage financing. Without wide documentation, robust word sheets and realistic execution timelines, investors volition stay reluctant to participate.

Regarding Ghana’s imaginable instrumentality to Eurobond markets, Dr. Abdul-Ganiyu urged caution contempt persistent expectations. He acknowledged that Ghana cannot trust solely connected home borrowing and indispensable equilibrium home and outer sources. However, helium stressed that marketplace re-entry indispensable beryllium based connected improved indicators alternatively than unit oregon sentiment.

He identified dependable superior surpluses, a credible way to indebtedness sustainability, favourable recognition standing actions and durable expenditure subject arsenic indispensable preconditions for palmy re-entry. A premature marketplace quality could exposure Ghana to prohibitively precocious involvement rates oregon awesome desperation to investors, undermining credibility built since 2025. The state should contiguous a coherent indebtedness absorption communicative backed by existent data, wide task pipelines and impervious of organization discipline.

Dr. Abdul-Ganiyu stressed that marketplace effect depends connected the quality to pay. When indicators are strong, the marketplace volition respond favourably. However, expectations indispensable beryllium managed truthful authorities is not pushed into unnecessary spending oregon premature borrowing.

These concerns look contempt notable macroeconomic improvements. Inflation continues declining, the cedi has stabilised comparative to caller years and maturation is projected astatine 4.8 percent successful 2026. Revenue is besides expected to emergence to 16.8 percent of GDP.

EM Advisory noted that gross projections contiguous a important country of concern. The fund assumes full gross of 16.8 percent of GDP, up from humanities averages astir 15 percent. This 1.8 percent constituent summation would beryllium singular if achievable, yet the steadfast noted that specifics of however this windfall volition materialise stay frustratingly vague.

The consultancy’s appraisal comes arsenic Ghana navigates a captious modulation period, balancing the request to prolong macroeconomic stableness with pressures to present connected ambitious improvement promises. How authorities manages these competing demands volition signifier the country’s economical trajectory successful coming years.