In a critique of the 2026 Mid-Year Budget Review, the Institute for Fiscal Studies (IFS) has observed that the Government of Ghana may be choosing ‘optical credibility’ over economic honesty.
The IFS is sounding the alarm on what it describes as unrealistic targets and “ghost revisions” in the 2026 Mid-Year Budget Review, accusing the government of clinging to dead-in-the-water projections simply to protect the budget’s public image.
The 16% Ceiling: Chasing a Revenue Ghost
The most glaring example of this face-saving or maintaining appearance strategy is the government’s refusal to budge on its revenue targets. Despite failing to hit a 16% revenue-to-GDP ratio since 2015, the government has stubbornly kept its 2026 target at 16.8%
The IFS notes that between 2021 and 2025, revenue outturns averaged a mere 15.6%, consistently falling short of both initial and mid-year targets.
By refusing to revise this figure downward, the IFS argues the government is merely following a “budgetary tradition” of over-projection rather than facing the reality of its actual collection capacity.
The Growth Paradox: Why Hide a Success Story?
In a move that seems counter-intuitive, the IFS observes that the government has also refused to revise its real GDP growth rate upward, keeping it at a conservative 4.8%. This is despite clear evidence that the economy is performing far better.
Actual growth in 2025 reached 6.0%, as year-on-year growth for the first quarter of 2026 hit a robust 6.4%. IFS cannot fathom why the government chooses to keep the target low when the reality is high.
The institute suggests this is a calculated under-projection designed to protect the credibility of the original figure, even when the data proves it is obsolete.
The “Denominator Trick”: Artificially Inflating Success
The IFS further reveals a more technical, and perhaps more cynical, reason for these “ghost revisions”. By under-projecting the nominal GDP, which is the total value of the economy, the government creates a smaller denominator for its fiscal equations.
This math trick artificially inflates the revenue-to-GDP ratio, making the government’s collection efforts look more successful than they truly are. The IFS warns that the reported 7.8% revenue outturn for the first half of the year is likely an inflated figure resting on these unrealistic GDP projections
The Impact: A Budget Built on Weak Foundation
The IFS is very clear about the consequences of what can be described as “cosmetic” budgeting. By ignoring evidence-based forecasting, the government, the institute says, is undermining the true credibility of the budget. By sticking to unrealistic figures, it is actually weakening trust in the budget rather than protecting it.
The situation, it adds, is a recipe for poor planning. When the foundational numbers are wrong, the entire fiscal strategy is compromised.
The Institute is therefore calling for an end to these “budgetary traditions.” They recommend that the government subject its forecasts to independent review and update its figures whenever new data emerges, ensuring that the 2026 budget reflects the pulse of the nation rather than a polished, but hollow, image.
