Government expenditure in 2025 fell significantly short of projections, underscoring an intensified fiscal consolidation drive anchored on strict spending controls and curtailed capital investment.
The January 2026 Monetary Policy Report published by the Bank of Ghana showed that total outlays for the year amounted to GH¢194.36 billion, representing a 24 per cent shortfall relative to the programmed estimate of GH¢250.311 billion.
Expenditure on Compensation of Employees, covering salaries and wages, pensions and gratuities, as well as other wage-related costs, reached GH¢71.274 billion, slightly exceeding the budgeted GH¢70.037 billion.
This performance was 1.8 per cent above target and marked a 16 per cent increase compared to the previous year.
In terms of revenue allocation, compensation consumed 38.2 per cent of domestic revenue generated during the period, highlighting ongoing structural pressures within the expenditure framework.
Tighter operational spending
Spending on Goods and Services amounted to GH¢5.271 billion, falling 16.8 per cent short of the projected GH¢6.335 billion.
The lower outturn suggests tighter controls on discretionary operational expenses.
It was also markedly below the GH¢38.438 billion recorded over the same period in 2024, reflecting a sharp year-on-year contraction of 86.3 per cent.
Interest costs totalled GH¢46.211 billion, below the programmed GH¢57.869 billion for the review period.
Nonetheless, the figure was 5.8 per cent higher than the GH¢43.682 billion recorded in the corresponding period of 2024.
The moderation relative to target was largely attributed to declining domestic interest rates and the strengthening of the cedi, which reduced the local currency burden of external debt servicing.
Transfers to Other Government Units comprising allocations to the National Health Fund, GETFund, Road Fund, Energy Fund, District Assemblies Common Fund (DACF), retention of Internally Generated Funds, transfers to GNPC, the Ghana Infrastructure Fund and other earmarked accounts amounted to GH¢50.805 billion.
This was 3.7 per cent above the budgeted GH¢48.978 billion and represented a year-on-year growth of 24.2 per cent.
Capital spending for the period stood at GH¢12.978 billion, equivalent to 0.9 per cent of GDP, significantly below the programmed GH¢31.401 billion, which represented 2.2 per cent of GDP.
The outcome was 58.7 per cent under target and reflected a 50.6 per cent decline compared to the 2024 outturn, pointing to subdued public investment activity during the year.
Other expenditure over the eleven-month period totalled GH¢14.499 billion, undershooting the target of GH¢35.689 billion by 59.4 per cent.
This compares with GH¢24.766 billion recorded in the same period in 2024.
Taken together, the fiscal outturn underscores a consolidation drive centred on expenditure containment, with significant reductions in capital and non-essential spending helping to offset rigid wage and statutory obligations.
Source:
www.graphic.com.gh
