IERPP D. Frank Bannor says 2026 Budget Lacks Credibility as Revenue Underperforms and Expenditure Overshoots
Senior Research Fellow at the Institute of Economic Research and Public Policy (IERPP), Dr. Frank Bannor, has delivered a rigorous and data-driven critique of the government’s 2026 Budget, describing it as a document that “lacks credibility” and fails to inspire confidence in Ghana’s fiscal direction.
Addressing the media during IERPP’s post-budget assessment at the Ghana International Press Centre on Thursday, November 20, 2025, Dr. Bannor argued that the Budget, when measured against the government’s own figures, exposes worrying gaps in revenue performance, expenditure management and job creation prospects.
According to him, the Minister relied on data available from the first three quarters of 2025 in preparing the 2026 Budget. He cited page 18, paragraph 112 of the Budget Statement, which reports that total revenue and grants for the first three quarters amounted to GH¢154.9 billion. However, the revised fiscal framework had projected GH¢162.6 billion for the same period. Dr. Bannor stressed that this GH¢7.7 billion gap is not only a clear shortfall but also a direct contradiction of the Minister’s public assertion that the abolition of the electronic transfer levy (e-levy) had no impact on government revenue.
He insisted that the numbers alone expose the inaccuracy of that claim. He explained that if projected revenue for the first three quarters stood at GH¢162.6 billion and actual inflows amounted to GH¢154.9 billion, then it is impossible to argue that the removal of key taxes—including the e-levy—did not affect revenue mobilization. He also pointed out that despite the introduction of several new taxes, including the increase in the Growth and Sustainability Levy to 3 percent on the gross production of mining companies, the GH¢1 levy on every litre of fuel under the amended Energy Sector Act, and the 15 percent VAT on non-life insurance premiums, the government still failed to meet its own revenue target. He added that even with these new taxes, the government still recorded a shortfall of GH¢7.7 billion, which raises serious questions about the efficiency of these tax handles and the Ministry’s empirical basis for abolishing the previous ones.
Dr. Bannor further noted that the Budget’s appendices reveal another implication of the tax abolitions. He referenced data showing that the COVID-19 Health Levy yielded approximately GH¢2.73 billion before it was abolished. When combined with revenue previously generated from the e-levy and other cancelled taxes, the government forfeited nearly GH¢4.83 billion. He argued that if these abolished taxes had remained in place, the revenue discrepancy within the first three quarters would have been closer to GH¢2 billion rather than GH¢7.7 billion. He described this as clear evidence that the decision to scrap these taxes has taken a significant toll on revenue mobilization.
He also challenged the government’s explanation for its lower-than-targeted expenditure. The minister had stated that reduced spending was due to prudent fiscal measures aimed at narrowing the deficit. However, Dr. Bannor insisted that expenditure cuts were simply a reaction to weak revenue performance. He argued that if revenue does not perform, the logical response is to cut expenditure, not because government intends to spend prudently but because it has no choice. He warned that despite the cuts, government still intends to borrow GH¢75.7 billion from the domestic treasury market in the last quarter, which, in his view, contradicts the government’s narrative of fiscal discipline.
He also explained that increased domestic borrowing undermines private sector access to credit and contradicts the government’s own pledge to support private sector-led job creation. According to him, when the government aggressively borrows from the domestic market, it competes directly with local businesses for the limited pool of available funds. This, he said, ultimately stifles the private sector and weakens job creation—the very outcome government claims it seeks to avoid.
Dr. Bannor then turned to the issue of compensation and wages, stressing that the Budget exposes contradictions in the government’s long-standing pledge to run a lean administration. He reminded Ghanaians that prior to the 2024 election, the then opposition party vowed to avoid operating what they described as an “elephant-sized government.” Yet, he revealed from Appendix 4A of the 2025 Budget that GH¢362 million was allocated for compensation under the Office of Government Machinery. In the 2026 Budget, this figure has ballooned to GH¢540 million. He argued that this contradicts the promise of a lean government and raises serious questions about who is truly benefiting from these increases, especially given the admission by the Minister of Health that 150,000 health workers cannot be employed, and the lack of clarity from the Ministry of Education regarding the promised recruitment of 60,000 education sector staff.
He further criticized the continued dominance of two major expenditure items—compensation and interest payments—which together consume nearly half of all government spending. He explained that compensation alone accounts for about 30 percent, while interest payments account for about 19 percent. He warned that this leaves little fiscal space for capital investments, rendering the government’s promises of major infrastructure, technology expansion, and job creation impractical. He cited Appendix 2C, noting a significant drop in capital expenditure from 26.6 percent to 10.9 percent, which he described as evidence that the much-touted “big push” infrastructure agenda lacks financial backing.
Turning to job creation, Dr. Bannor said the Budget offers “little hope” for Ghana’s unemployed youth. He explained that although the government claims it will create roughly 800,000 jobs, its allocation to support the 24-hour economy—only GH¢110 million out of the US$4 billion required—is woefully inadequate. He stressed that this allocation shows the policy is more political rhetoric than a practical strategy for mass employment.
He also raised concerns about the government’s plan to procure four helicopters and an aircraft for the Ghana Air Force beginning in 2026. Although the Minister announced the intention to proceed with procurement, he provided no cost details. Dr. Bannor described this omission as troubling, especially after the Majority Leader hinted during parliamentary debate that the package could cost over US$1.2 billion. He questioned why the Budget Statement failed to disclose this cost, calling on journalists and citizens to demand clarity.
Dr. Bannor added that when viewed cumulatively—from the revenue shortfalls and expenditure inconsistencies to the contradictions in compensation, the inadequate allocation for job creation initiatives, and the lack of transparency regarding military procurement—the 2026 Budget cannot reasonably be described as credible. He insisted that the data presented by the Minister himself undermines the government’s narrative and reveals a fiscal plan that falls short of the transformative expectations it promised Ghanaians.
