The Institute for Fiscal Studies (IFS) has advised the government to set realistic budget targets to strengthen fiscal credibility. The think tank emphasized that a credible budget is essential for effective financial management and economic stability.
According to IFS, Ghana has a history of overestimating revenue projections, which has consistently led to missed targets. Between 2013 and 2023, the country’s actual revenue and grants fell short of budget projections every year, with an average shortfall of 7.4%. This pattern, the institute warned, reduces confidence in the country’s financial policies.
The IFS also cautioned the government against rushing to borrow from international markets. Ghana has faced two major debt crises—one in 2001, which required debt relief through the HIPC initiative, and another in 2022, triggered by excessive borrowing and a loss of access to international bonds.
To prevent another crisis, the IFS urged the government to maintain low fiscal deficits and explore alternative ways to boost the economy, such as leveraging natural resources. It highlighted the success of the central bank’s Gold Purchase Programme as an example of how Ghana can increase its financial reserves without accumulating more debt.
The institute stressed that avoiding excessive borrowing, especially from foreign sources, is crucial for long-term economic stability.
