As the first quarter of the 2026 fiscal year gradually grinds to an end, Ghanaians can now have a full picture of how the government performed in its budget execution for the 2025 fiscal year.
This can give a fair idea and a projection into how 2026 fiscal operations might look based on the 2025 performance, all things being equal.
An analysis of the government’s 2025 budget execution by Policy Analyst Alfred Appiah paints a revealing picture of how projections compared with actual reality. To put it simply, it is an assessment of what the government ordered for the year against what it actually got when it comes to fiscal operations.
A closer look at the analysis highlights areas of discipline, shortfalls, and structural pressure points within the public purse.
Using outturns as a percentage of budget projections, the assessment offers a straightforward test. The bigger question is, did the government deliver what it planned? Ghanaians will be the best judges.
On the Revenue Side: Strong in Pockets, Slightly Below Target Overall
On the revenue side, performance was mixed but can be described as broadly resilient.
Tax revenue: The backbone of domestic resource mobilisation reached 97% of its target. This near-target performance suggests steady collections but also underscores how even small shortfalls can widen fiscal gaps.
Grants: Grants underperformed significantly, meeting just 68% of their target. This reinforces Ghana’s long-standing vulnerability to unpredictable external inflows.
Social Contributions: This also lagged, reaching 73% of the 2025 target. This indicates weaker-than-expected payroll-based collections.
Non-tax revenue: This inflow, however, exceeded expectations at 105%, while other revenue outperformed strongly at 108%. These gains provided some cushion against underperforming grants and tax revenues.
Overall, total revenue and grants reached 98% of the projection. This was very close, but not fully on target. In an economy like Ghana, missing just two percentage points is laudable but has far implications on the fiscal gap.
On the Expenditure Side: Tight in Some Areas, Pressured in Others
On the spending side, the story is equally nuanced, just like the revenue side.
Total expenditure: The government spent only 87% of its budgeted amount, suggesting expenditure controls or implementation delays across several sectors.
Capital expenditure: This expenditure item reached just 62% of its target. This is a significant shortfall for a country prioritising infrastructure-led growth; underspending on capital projects can slow development momentum.
Other expenditure: This line item was also executed at only 50%, pointing either to deliberate restraint or bottlenecks in planned programs.
Interest payments: Expenditure on servicing of loans reached 83% of the planned target for 2025. This reflects the weight of debt servicing obligations, even if slightly below projection.
Spending on goods and services (91%) and social benefits (90%) remained relatively close to target, indicating the government’s effort to maintain core operations and social commitments.
Yet two areas overrun their budgets: Compensation of employees (104%) and Grants to other government units (106%). Wage pressures and statutory transfers continue to show rigidity upward, limiting fiscal flexibility.
The Big Picture
In summary, the 2025 fiscal outturn reveals a government that largely maintained disciplined and stayed within aggregate revenue bounds and underspent overall.
However, there are structural imbalances beneath the surface. Capital spending lagging is a major concern and the disappointment of Grants is an indication that the country cannot continue to rely on external support. This is even more profound at a time that geopolitical tensions have heightened.
For Policy Analyst, Alfred Appiah, “Overall, the budget deficit came in at 2.7% of GDP on cash basis, compared to a projected 3.8% of GDP. The overall picture shows significant fiscal restraint. Going forward, we will see how this evolves as the government begins to expand spending on key flagship initiatives.”
In simple terms, what was “ordered” was not entirely what was “delivered”, but what was delivered wasn’t bad.
