It is emerging that Ghana could save as much as GH₵1.7 billion annually by cutting back on a few expensive social programmes to free up some fiscal space for the government.
The freed fund, according to the Chief Executive Officer (CEO) of the Ghana Association of Banks (GAB), can be redirected to fund industries that create jobs and stabilize the economy.
In an advice to the Minister of Finance, John Awuah urged the government to be bold and pragmatic in the 2026 National Budget by “biting the bitter bullet”. He says the government must take politically difficult but economically sound decisions to strengthen Ghana’s fiscal position and propel industrial growth.
Redirecting Spending from Consumption to Production
The banking executive makes a strong case that Ghana must move from spending on consumption to investing in production. He believes that many of the country’s current social spending programmes, while well-intentioned, have become fiscally unsustainable and yield limited economic returns.
He therefore demonstrated that by scrapping or reforming four major initiatives, the government could free up about GHC1.7 billion per annum.
The social intervention programmes include the Free First-Year Tertiary Education, Trainee Nurses Allowance, Teacher Trainee Allowance, and Free SHS Policy.
The savings made, he proposes, should be channeled into industrial growth, particularly into companies producing goods that substitute imports.
“Hon. Minister of Finance, as you finalise work on the 2026 National Budget, please be bold and take some difficult decisions to continue your fantastic start to your Job as the MoF. I encourage you to bite the bitter bullet and CANCEL some special programmes and redirect the money saved to propel industrial growth in targeted import substitution companies to scale their operations and create more jobs for the many unemployed graduates,” John Awuah noted.
The Big Four Cuts
John Awuah broke down his proposed cost-saving measures. He indicated that scrapping the Free First-Year Tertiary Education Scheme (No Fees Stress Policy) could save about GHC450 million annually.
He added that scrapping the Trainee Nurses Allowance could also result in saving around GHC480 million yearly.
Scraping the Teacher Trainee Allowance, he estimated, could free up savings of about GHC210 million a year.
For the Free SHS Policy, he rather called for a review. Per his review metrics, the exercise could save the country about GHC600 million yearly.
Together, these adjustments could generate an estimated GHS1.7 billion in fiscal space each year, and the funds could be redirected toward manufacturing, industrial expansion, and job creation.
Investing in Industry for Sustainable Jobs
The CEO of GAB says this should lead to a targeted industrial transformation programme where government partners with private sector firms in key import substitution industries such as agro-processing, pharmaceuticals, and light manufacturing to scale operations and employ Ghana’s growing pool of graduates.
“With this money, identify a maximum of 10 companies that have the capacity to scale their operations in the manufacturing of import-substituting products for the local market and give them concessionary loans at 5%. Each company gets at least GHS150 million for equipment and other inputs,” he proposed.
He added, “Within a year, they will be employing our youth in large numbers; we will give our graduates hope for the future, and the country will benefit from taxing the workers and the companies and further reduce the pressure on our currency.”
According to him, such a strategy would not only create thousands of jobs but also broaden Ghana’s tax base, strengthen the local currency by reducing import dependence, and foster long-term economic resilience.
Fiscal Discipline and Tough Choices
John Awuah praised the Finance Minister for what he described as a “fantastic start” in office but urged him to stay focused on fiscal consolidation, curb wasteful spending, and “work aggressively on corrupt procurement practices.”
He emphasized that while his suggestions may be politically unpopular, they are economically necessary.
As to whether the government will to these politically unpopular proposals, only time will tell.
