The Institute for Fiscal Studies (IFS) is raising a fresh concern over the state of Ghana’s public finances as reported by the Minister of Finance in the 2025 Mid-Year Budget Review.
The IFS is reporting that the expenditure and deficits reported by the government could be worse since there was an underreporting of its actual expenditure and deficit levels in the 2025 Mid-Year Budget Review.
At the heart of the concern is the recently announced GH₵2.45 billion support package to recapitalize the struggling state-owned National Investment Bank (NIB). The government said the package comprised a GH₵450 million cash injection, GH₵1.5 billion in bonds, and GH₵500 million worth of its shares in Nestlé Ghana Limited assigned to the bank.
While the government’s own commitment-based fiscal reporting framework requires both cash and non-cash spending to be fully captured, only the GH₵450 million cash component was recorded in the official expenditure data. That means GH₵1.5 billion in bonds, which is a direct liability, has been left out of the books.
“The government announced in the mid-year review that it has recapitalized the state-owned National Investment Bank (NIB) with a support package worth GH₵2.45 billion. This amount comprises a cash injection of GH₵450 million, bonds worth GH₵1.5 billion, and GH₵500 million of government shares in Nestlé Ghana Limited assigned to the bank. The breakdown suggests that GH₵1.95 billion (i.e., GH₵450 million + GH₵1.5 billion) of the support package involves direct expenditure or the incurrence of debt by the government,” the IFS analysis cited by The High Street Journal noted.
It added, “Under the current commitment-based fiscal reporting framework of the government, which requires recognition of both cash and non-cash outlays, all the GH₵1.95 billion ought to be reflected in expenditure, and thus the deficit. However, only GH₵450 million is recognized in the fiscal data in the mid-year review statement. This implies that the reported expenditure and deficit positions for the first half of the year understate the full amount of the government’s commitments during the period.”
The implication of this “misrepresentation” is that the true deficit and expenditure numbers could be much worse than reported. IFS insists that under the rules of fiscal reporting, the entire GH₵1.95 billion involving cash and bonds should have been reflected and by not doing so, the official accounts may present a rosier fiscal picture than reality suggests.
The situation raises tough questions that if such a major item like bank recapitalization is only partially captured, what does it say about the credibility of the government’s deficit projections? And what does it mean for Ghana’s already fragile fiscal consolidation efforts?
For ordinary Ghanaians, this technical oversight is far from abstract. A higher deficit today could mean more borrowing tomorrow, translating into heavier debt service, more taxes, and less fiscal room to support jobs, infrastructure, and social programs.
IFS is concerned that a major expenditure like the NIB bailout being underreported not only undermines transparency but also risks a dangerous repeat of the fiscal misreporting episodes that worsened Ghana’s last debt crisis.
To address the situation, the IFS is calling on the government to ensure that, in accordance with the commitment-based fiscal reporting framework, the ministry should report all expenditures related to the NIB recapitalization in the fiscal accounts. In addition, any future support to the financial sector should likewise be recognized in the accounts to give a complete picture of the fiscal position.
