Ghana’s fiscal consolidation in 2025 was driven largely by expenditure restraint rather than increased revenue mobilisation, the Institute of Statistical, Social and Economic Research (ISSER), has disclosed in its State of Ghanaian Economy Report 2025.

According to the economic research firm of the University of Ghana, though smaller deficits and lower debt reduce pressure on government financing and create conditions for greater macroeconomic stability, fiscal adjustment achieved through sharp reductions in capital spending may constrain infrastructure development and future growth.

It therefore advised that sustaining fiscal consolidation requires not only expenditure discipline but also stronger domestic revenue mobilisation and improved spending efficiency.

Ghana’s fiscal position improved substantially in 2025, with the overall deficit narrowing from 7.9% to 1.0% of GDP on a commitment basis and the primary balance returning to surplus. The World Bank similarly estimates a general government deficit of 1.2% of Gross Domestic Product (GDP).

Total revenue and grants amounted to 16.1% of GDP, while capital expenditure declined from 2.5% to 1.4% of GDP, raising concerns about public investment.

The public debt also fell from 62.7% to 46.0% of GDP, reflecting fiscal adjustment and the effect of cedi appreciation on the domestic currency value of external debt.

ISSER said Ghana’s fiscal consolidation was substantial, but sustaining it will require stronger revenue mobilisation without sacrificing productive public investment.

Policy Priorities

On policy priorities, ISSER wants the strengthening of revenue mobilisation via the broadening of the tax base, improve compliance and reduce revenue leakages.

Again, it called for the protection of productive investment through improve expenditure efficiency while safeguarding priority infrastructure and social spending.

It also emphasise on sustaining fiscal discipline, calling for improved commitment controls, the prevention of arrears accumulation and the management of debt refinancing risks.