The government’s latest decision to reduce public spending in 2025 might help balance the books, but it could also hit closer to home than many Ghanaians realise.
In an interview with The High Street Journal (THSJ), Dr. Daniel Amateye Anim, Chief Economist at PIED Africa, said, though fiscally responsible could slow down the creation of jobs, delay infrastructure projects, and even limit services in sectors like health and education, the result would lead to fewer economic opportunities and delayed improvements in the quality of life for ordinary citizens.
“This decision means that government will not be spending more money this year, which is good for stabilising the economy, but let’s be clear, it also means fewer roads will be built, fewer contracts awarded, and less money circulating in the economy,” Dr. Anim said.
Fewer Projects, Fewer Jobs
Speaking on fewer projects and jobs, he said government spending is not just about numbers in a budget, it is often what drives economic activity. From construction workers and engineers to suppliers and banks, many Ghanaians rely on government projects to keep money flowing.
“When public infrastructure projects slow down, contractors don’t get paid, suppliers lose income, and service providers like engineers or financial institutions see a dip in business, that affects employment, especially in the private sector,” Dr. Anim explained.
Manufacturers who supply materials for public works, as well as transport companies and food vendors who benefit from construction-related activity, could also feel the pinch.
Impact on Health, Education and Public Services
Moreso, reduced spending could also stretch critical public services. If the government delays investing in new hospitals or school buildings, communities may be forced to rely on aging or overcrowded facilities for longer than expected.
“In the health and education sectors, we may not see major expansions this year, it means the government must find ways to maintain what we already have, because new infrastructure spending will be limited,” Dr. Anim warned.
This could impact access to healthcare and education in underserved areas, widening existing inequalities and delaying progress in key social sectors.
Why Government is Holding Back
However, Dr. Anim explained that the strategy is largely driven by necessity. Ghana’s high debt levels and limited access to affordable credit on the international market mean the government cannot borrow cheaply to fund new projects.
“With the global capital markets essentially closed to Ghana due to our debt situation, the government’s only option is to tighten spending to improve the fiscal picture,” he noted.
By consolidating the economy in the short term, keeping inflation under control, stabilising the cedi, and cutting back on interest payments, the government hopes to position itself for a comeback in 2026.
“This may be the right move now, to restore confidence and put our house in order,” he said.
“But it won’t bring immediate relief to citizens who are looking for more jobs, better roads, or improved public services.”
A Sacrifice Today for Growth Tomorrow?
Dr. Anim believes that while the decision to spend less could limit growth this year, it may set the stage for more robust development later.
“If the government succeeds in restoring economic stability, then 2026 could be the year we begin to see more spending, more infrastructure, and more opportunity,” he said.
Until then, he urges policymakers to be transparent and provide safety nets where possible, so that the average Ghanaian isn’t left carrying the weight of fiscal consolidation alone.
