Accra, Ghana – In the first quarter of 2026, Ghana’s government failed to spend GH₵24.0 billion of its allocated budget, representing approximately 27 percent of the total GH₵89.97 billion approved for the period. Simultaneously, revenue collection fell GH₵2.7 billion short of the programmed GH₵60.3 billion, marking a 4.5 percent shortfall, according to data from the Ministry of Finance on central government operations for January to March. This fiscal performance occurs amidst a public dispute between the Finance Ministry and the Ministry of Food and Agriculture regarding the actual disbursement of funds to spending agencies.
Context of Fiscal Performance
The first quarter of 2026 budget was intended to cover essential government expenditures, including spending on goods and services, debt repayment, and the clearance of arrears. The Finance Ministry reported actual spending of GH₵65.97 billion, leaving a substantial portion unutilized. This under-spending and revenue shortfall come at a critical juncture, raising questions about the government’s fiscal management and its ability to meet its financial obligations and developmental targets.
Capital Projects Bear the Brunt of Spending Cuts
Capital expenditure experienced the most significant reduction, falling by 41.9 percent. The government had planned to spend GH₵12.6 billion on capital projects but only disbursed GH₵7.3 billion. The ‘Big Push’ initiative, a key developmental program, saw its capital expenditure fall short by over GH₵1 billion against a planned GH₵4.25 billion. This shortfall was predominantly on the foreign-financed side, with only GH₵0.6 billion of a planned GH₵5.3 billion spent, indicating a sharp slowdown in project loans and donor grants. Domestically financed capital projects, however, performed relatively better, missing their target by only 8.4 percent.
Statutory Funds Face Funding Gaps
Transfers to other government units, which channel funds to various earmarked statutory funds, also fell short. A total of GH₵12.3 billion was released against a programmed GH₵15.2 billion, a shortfall of 19.1 percent. Major funds were directly impacted, with the National Health Insurance Fund receiving GH₵1.6 billion against a programmed GH₵2.7 billion (a 39.2 percent gap). Similarly, the Ghana Education Trust Fund received GH₵1.6 billion against GH₵2.3 billion (down 29.9 percent). The Road Fund and the District Assemblies Common Fund also reported shortfalls.
Operational Spending and Wages Lag
Spending on goods and services, crucial for the day-to-day operations of ministries and agencies, decreased by 35.3 percent, from GH₵2.0 billion to GH₵1.3 billion. Compensation of employees, typically a rigid budget item, came in at GH₵21.1 billion against a programmed GH₵22.7 billion, a shortfall of 6.8 percent, largely driven by lower-than-budgeted wages and salaries. Social benefits, which had a programmed allocation of GH₵0.5 billion, were entirely unspent during the quarter.
Debt Servicing Obligations Unmet
The government’s debt servicing budget also lagged significantly behind targets. Amortisation, the repayment of loan principal, amounted to GH₵3.0 billion against a scheduled GH₵8.8 billion, leaving roughly two-thirds of the planned repayments outstanding. Interest payments also fell short, reaching GH₵17.2 billion against a programmed GH₵21.7 billion, a deficit of 20.4 percent. This gap was concentrated in external interest payments, where only GH₵0.3 billion of a GH₵3.0 billion bill was paid, leaving 91.4 percent unpaid. Domestic interest payments, however, were largely in line with projections.
Revenue Shortfalls Across Key Sectors
The GH₵2.7 billion revenue shortfall was primarily driven by domestic taxes on goods and services, which missed their target by GH₵2.6 billion, a gap of 13.1 percent, with Value Added Tax accounting for GH₵0.8 billion of this miss. Taxes on international trade brought in GH₵6.2 billion against an expected GH₵7.2 billion, reflecting softer import receipts. Non-tax revenue, including fees and dividends, also fell short by 17.7 percent. Oil revenue was a notable underperformer, realizing GH₵2.8 billion of a programmed GH₵4.5 billion, a gap of 37.6 percent. Programmed grants of GH₵0.6 billion failed to materialize entirely.
Dispute Over Fund Releases and Budget Execution
The discrepancy between budgeted and actual spending has fueled a public disagreement between the Finance Ministry and the Ministry of Food and Agriculture. The Finance Ministry claims to have released over GH₵1.67 billion to the agriculture ministry for goods and services and capital expenditure, asserting high execution rates. It presents these figures as evidence of strong budget implementation, stating that fund requests were processed through the government’s GIFMIS financial management system.
Conversely, the Ministry of Food and Agriculture disputes these figures, accusing the Finance Ministry of fabricating data and using propaganda. It argues that critical food security programs have been starved of funds while the Treasury inflates disbursement figures. The agriculture ministry’s records indicate a much lower actual spending ceiling, capped at GH₵910 million for the first half of the year, with actual expenditure limited to approximately GH₵453 million to cover compensation, operations, and contractual obligations. It maintains that no subsequent authorization or revised allotment supports the Finance Ministry’s claim of over GH₵1.6 billion released.
Implications for Ghana’s Economy
The substantial unspent budget and revenue shortfall in the first quarter of 2026 signal potential challenges for Ghana’s economic stability and development agenda. The underfunding of capital projects could delay critical infrastructure development, while shortfalls in statutory funds may impact essential services like healthcare and education. The public dispute between ministries highlights potential coordination issues within the government’s fiscal management framework. Stakeholders will be closely monitoring how these fiscal pressures are managed in subsequent quarters and whether the government can bridge the revenue gaps and improve budget execution. The performance of foreign-financed capital projects and debt servicing will be key indicators to watch, particularly in light of Ghana’s ongoing economic recovery efforts.
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